The Problems of Storing Gold at Home

The Problems of Possessing Gold

So you’ve researched the various ways in which you can invest in gold, and decided that rather than hold the shares of gold mining companies (that don’t give you the direct exposure you want), or perhaps buy shares of a Gold ETF (you’re not sure that you want your money managed by a fund manager), or trade in futures (an instrument you believe is far too risky), you want to own physical gold yourself. You can see it, touch it, and know where it is.

You’ve looked into the best ways to buy gold, and are already to purchase that first bullion bar. Or are you? Have you considered everything you need to when you buy gold?

Storing your gold

At Home

You might decide to keep your gold at home. That means buying a safe, and then installing it. Will you put it in the floor, or in the wall? If you live in an apartment, then a wall will be the only option, and even then you need to ensure that your wall is thick enough. It’s probable that you will need to hire a specialist to build the safe into the wall, and that’s after paying out for the safe in the first place.

So storing your gold at home poses the immediate problems of how and where, and then there’s the cost of installation.

Assuming you’ve spent the money and had your safe installed, you now have a further problem.  You’ll need to declare your possession to your insurance company. The last thing you want is to have gone to all the trouble of buying and installing your safe, only to have your gold stolen from it with no way to claim against your loss. And, of course, it’s not just theft you have to insure against: flood and fire are also risk to your investment.

Perhaps you’ll decide to take a risk and store it in a safe place, somewhere that no one else would look, perhaps bury it in the garden. The trouble is, you might forget where you’ve put it yourself. You could even move without digging your gold up!

In a Bank or Vault

Another option to store your bullion is to deposit it in a safety deposit box or a vault held by a dedicated safe custodian. This option has many of the advantages of storing gold at home, but is considered to be much safer.

Your gold holding will still be private, and, whilst the possibility of theft from a safety deposit box or vault is less likely than at home, keeping your gold this way is certainly more secure. However, you’ll have to pay fees to keep your gold in this manner, and these could run to $100’s a year.

Another risk with depositing gold in a safety deposit box is the bankruptcy of the bank where you it is kept. Can you be sure that your gold won’t be used for the benefit of creditors, or even confiscated by a government in the case of war, for example?

So, both storing gold at home or in a bank/ vault have their own problems and costs involved which will eat into any profit. While we’re talking about costs, don’t forget the cost of postage, and taking delivery of your gold, and then transport to the bank or vault.

Virtual Gold

Having thought about all of these problems, you may decide to use an online dealer that stores the gold for you, perhaps in a allocated account. The advantages of buying and owning gold this way are clear.

Firstly, you don’t take physical delivery of the gold. This means that the cost of delivery is negated.

Secondly, you don’t have the problem of storing the gold yourself. The headache of remembering the combination to your safe, the worry of possible theft, or the cost of storing in a safety deposit box disappears.

Of course, you won’t be able to see your gold, or pick it and weigh it. But if it’s held in an allocated account then it will be registered to you.

You will still have to pay costs for safe keeping, but these will be less than were you to own the gold and store it in a safety deposit box, for example.

You’ll have to supply personal details for identification and money laundering purposes – it’s not quite as private as keeping the gold at home.

In Conclusion

Buying and owning gold gives you a special feeling. You know it’s there, and that you can use it at any time to raise needed funds. But there are problems with doing so, the concerns of theft or loss, for example, and these will need to be considered. And then there’s the cost of keeping gold under lock and key, which is often overlooked but when set against any profits could deplete those profits quite quickly (and you’ll be unlikely to offset these against any taxes due).

Many investors think that holding gold at home, or in a safety deposit box, is an ideal solution, and for some this may be the case. And many others never give the problems of possession or the costs a second thought. Don’t be one of those that fails to factor in all these concerns when making that investment into gold.