You’ve read a million articles about why you should buy gold…
And you’ve read a million others about why you shouldn’t.
But today I’m going to tell you why I think you should buy gold for your children.
First, let me be clear: I’m just talking about physical gold bullion. I’m not suggesting you get your kids into gold stocks or any other “gold-backed” asset; I’m only talking about physical gold coins and bars. Let me explain…
In the ever-evolving world of online trading and digital assets, physical gold is at a disadvantage in terms of liquidity.
Physical gold possesses inherent liquidity, as it can be bought and sold in various forms, and its value is recognized globally.
However, relative to stocks, bonds, forex, and other financial instruments traded digitally these days, physical gold bullion is actually quite illiquid.
Most financial instruments can be traded instantaneously with a few clicks. Physical gold (or any physical bullion) needs to be physically transferred for a transaction to be complete. That might mean physically taking bullion somewhere yourself to exchange for cash or shipping it out. Either way, completing a physical bullion transfer generally requires much more effort than just a few taps on a keyboard.
And while some may argue that physical gold lacks the liquidity of modern assets, its illiquidity can be viewed as an advantage, especially when introducing kids and young investors to the concept of saving money and making prudent financial decisions.
Speaking from experience, it’s very easy to be foolish with cash when we are young. The allure of immediate gratification can lead to impulsive spending and being careless with cash, and the lack of financial experience and long-term perspective can result in overlooking the importance of saving and making wise investments.
One of the major benefits of gold's illiquidity is that it forces disciplined saving and delayed gratification.
Unlike cash kept in a regular savings account, which is easily accessible for impulse purchases, the relative difficulty of selling physical gold acts as a deterrent to making hasty financial decisions.
Saving money is an essential habit to cultivate, and gold investing provides a unique way to reinforce this concept. By allocating a portion of their savings to physical gold, young investors learn to value patience and delayed gratification — which I would argue is more important than ever in an age of instant gratification.
Educating the next generation about financial responsibility and investment is crucial. Introducing kids and young investors to gold investing can instill valuable lessons about long-term planning, wealth preservation, and the importance of diversification.
In addition to teaching kids and young investors about saving, introducing them to gold investing can also emphasize the importance of diversifying their investment portfolio. A diversified approach helps spread risk and can enhance financial resilience.
While physical gold may not boast the same level of liquidity as digital assets in the world of online trading, its illiquidity can be reframed as an advantage when teaching kids and young investors about saving money and making prudent financial choices. By instilling the value of delayed gratification and the discipline of holding onto tangible assets, gold investing offers a unique and valuable lesson that can resonate throughout a lifetime of financial decision-making.
