Discussion in 'General Precious Metals Discussion' started by House, Apr 21, 2017.
Sweet jesus, what a prize.
Either way I'm glad for her.
Easy the Apartment, can't rent out Gold (or can you?). Use rent money to buy bullion WIN
She now can't take the bullion offer.. since her face is all over the news media... poor thing, she is no longer safe anywhere now!
You would have to flip a big fat gold coin to make that descision. Would you? ...or see below.
I'd take the gold. Keep 10% worth (circa 4kg), sell the rest and buy other assets which aren't at nosebleed valuations like Sydney apartments.
Completely agree with this. $75,000 a year in rental income? You can put $30k per year into gold, $30k per year into other investments or savings and have $15k left over for anything you want. Remember the average disposable income for an Australian is around $14k. Assuming she's an average Australian, that's double the average disposable income, as well as around an average Australian income into investments every year.
Like, Melbourne appts?
- strata fees
- land tax
- council rates
- property management fees
- water / levies
- income tax
You might be left with $40k net, if you're lucky.
Not enough stats in 2017 to make any estimates for where the year ends, but growth has been slowing since 2014... there are only a small handful of apartments sold in the $2m price range each year in the suburb... chances of it's value remaining at or above $2m in years to come are slim in my opinion.
Fair enough point, but even then, an extra 40k per year would be vastly appreciated by a lot of people. Also, I personally feel that property is the only investment that you may (if you really wanted to) take up more than 50% of your portfolio. Gold is just a bit too volatile for that.
Sydney apartment, can't beat it as an investment, over short term or long term.
Of course in the medium term gold might catch up, but ultimately, negative gearing will allow her to stay ahead of gold.
Though, I'd suggest selling the gold and buying diversified shares.
Not sure if satire or serious, but if you are for real how are you suggesting she negatively gears an apartment she owns outright?
Buy another one with $500k equity and borrow $500k
Even with an external shock and prices come down 50% eventually the prices will go back up due to fundamentals of supply and demand. Ten years on from gfc property prices in USA has on average caught up to pre gfc levels, and will continue to go higher. In Australian context if one factored in negative gearing it would have generated a good after tax return.
Conversely from 2008 to 2018 gold went from $800 to $1800 in 2011, since than backtracked to $1200
Keep in mind when adjusting gold price for inflation, it's the exact same price as it was 30 years ago. Zero growth, zero income in three decades...
The apartment may be overvalued but in 10 years it would have produced min $400k in income... gold would have produced nothing.
Borrow $1m against the property and put it in the highest yielding stock she can find would be another good idea.
Take the gold sell it , cash up & go fishing. Or invest the money in my new business venture of hand condoms. There's enough wankers around to make me 10 million
All true. And yet.
For some reason, gold exploration, mining & processing is still one of Australia's major industries. All over the country we're still literally moving mountains to get at the stuff. Private & corporate investors are gambling their precious capital just on the chance of getting in on the action. For such a poor performer for such a long period, one would think the fundamentals would've killed it off by now... and yet we're still talking about gold.
Ahh the allure of the yellow shiney will never fade ... A bit like the opposite sex they have their problems but its hard to ignore the explainable attraction & the "gotta get me some of that " urge
Could easily be because it's an income producer for everyone that's involved in the delivery line to the physical "investor".
I'd take the gold and convert it all to silver and then pay Guardian Vaults a small fortune to store it all for me.
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