What is the lowest % gain u start to consider u r in a profit

Discussion in 'General Precious Metals Discussion' started by kev, Apr 25, 2020.

  1. kev

    kev Member

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    Hi All,
    After taking into account the below, what is your lowest % gain where you start to say to yourself you are in profit territory:
    1/ tax on gains
    2/ inflation
    3/ lack of interest earned whilst on your stack
     
  2. Tin Can

    Tin Can Member

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    Is not profit any surplus after acquisition costs?

    Some of your other issues deal with opportunity costs (which can be unlimited).
     
  3. spannermonkey

    spannermonkey Well-Known Member Silver Stacker

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    Your looking at it all wrong
     
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  4. kev

    kev Member

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    Lets say you buy $10k gold and the bank pays 5% on cash at the time. And Inflation is reported as 3% (leaving out inflation debates).
    You need gold to go up at least $500 that year to not be behind.
    My question is more in the area of a 10 year hold and having to account for tax and inflation etc. I get that alot of people are stackers for life/long time.
    I just saw that Abc have a 9.5% buy back cost on my Allocated amounts and I have that to add into my 1/2/3 points above.
     
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  5. Ag bullet

    Ag bullet Well-Known Member

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    what's number 1?
     
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  6. Holdfast

    Holdfast Well-Known Member Silver Stacker

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    Flip or not to flip? :D
    There's metal you never sell, there's metal you'd love to sell and there's metal that you'd sell just to get rid of the shite! :eek::D
     
  7. Tin Can

    Tin Can Member

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    In what way? I bought gold in 2018 when spot was about $1800 AUD. Now spot is about $2600. So have I made a profit?

    But I could have bought BBN shares at $1.50, which were in late 2019 about $4.00. So my opportunity cost of gold vs. BBN is what?

    With regards to tax, this is complicated and depends on individual circumstances, and only IF you realise your paper profit.
     
  8. 66rounds

    66rounds Well-Known Member Silver Stacker

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    You have made a fiat profit. Your ounces of gold still weigh the same.
    So if that's what you were after then congratulations
    If you were after long term security of your wealth then the gold is working and as long as you continue to hold you're "profiting"
     
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  9. Tin Can

    Tin Can Member

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    Exactly!
    The OP questions have no simple answer for any of the 3 situations.
     
  10. mel1092

    mel1092 Member

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    I have profited a lot from flipping silver after 6 months to a year but that was with semi numismatic coins . Now I’m thinking of buying bars but worried if they will make me a profit long term if any at all . So I’m not sure what to do .
     
  11. Tin Can

    Tin Can Member

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    So, can you easily answer any of the OP questions?
     
  12. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    Bars can sell for more than coins which is strange to me.
    I never understood that.
     
  13. JNS

    JNS Active Member Silver Stacker

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    If things will work in resilient nominal position, then it is just great to me in return, the profit territory will depend on market changes with no exact predictions. It is not the way things are handled because of magnitude to be consider as of ?3/
     
  14. alor

    alor Well-Known Member Silver Stacker

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    the moon caused 2 change of tides a day
    put a pole on the river to marks them low and high, and what time?
    so the answer have been given to the question

    many ways to approach the profit taking, just put a float that tight to the pole, it is closest to you when the water is high, and easy to get the float (taking profit) and release the bait again, when it is lowest, to buy it back again
    the % question is not in order
     
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  15. Faraz

    Faraz Member

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    Gold is an insurance against fiat money.
    I bought gold in Nov.19 spot was $2130 & now is $2700. My profit is approx %30. However, that can be Superannuation and keep it in in our hand NOT Goverment.
     
  16. Ag bullet

    Ag bullet Well-Known Member

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    ^ A different perspective- fiat has gone down, your preservation was 30%
     
  17. Silverling

    Silverling Well-Known Member Silver Stacker

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    1. They can only take maximum 47% in Capital Gains but if you earn less than 18.2K P/A you won't pay anything so it depends on how much you earn.
    2. Current inflation rate in Australia is 1.9% https://www.in2013dollars.com/Australia-inflation-rate-in-2020
    3. Lack of interest earnt is at best around 1.6% P/A https://www.ubank.com.au/banking-overview/savings-accounts

    As I am a low income earner my capital gains tax falls in 19% bracket (my marginal tax rate). If I hold the items longer than 12 Months then only 50% of the profits is taxed which then reduces my CGT by half.

    In my case I'd have to making 4% P/A on my metals to break even. Anything over 4% or thereabouts and I'm in front.
     
  18. kev

    kev Member

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    All really great points. What kick started the post was the ABC buy back price on 1 kg being $731 with a buy of $856 and then working out the % cost in pool allocated. Then working in other costs to the equation as well.
    Even though i'm not looking at selling, and more of a long term holder, it just got me thinking more transactional costs alone.
    Spent the long weekend reading M Maloney's free Gold/Silver investing book. What a an read. Fantastic.
     
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  19. Silverling

    Silverling Well-Known Member Silver Stacker

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    I tend not to think about it Kev. When I buy something I document it at cost + post included which gives me the exact price per unit. Then when I sell it, anything over that is a plus. Technically I should include all your points above but then it becomes boring and no longer a hobby.

    I've had periods where I bought say a 1 oz gold coin and it has taken me a year just to make $100 on it at sale. That would have returned less than cash in the bank with no risk.

    Then I do question if it's a good idea hoarding gold or not. I really believe you just got to strike a buy when you think the time and price is right. It's much harder say like now when gold is $2700 and wondering if it will keep going up. It can turn around and go much lower anytime or it may shoot up more. It is all a bit of a gamble. It's better to just enjoy your gold and silver and try buying it when it's cheap. The next time silver takes a major dive I will be buying more, if there is no physical available then I'll have no choice but ETF's or Unallocated at Bullion Now or something similar.
     
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