Cash in ISA to Buy Gold?

“Keep my Cash in an ISA or buy Precious Metals instead?”

This is a question that a few people have emailed in to ask:

“I have an ISA that is paying virtually zero interest, would I be better cashing it out and putting the money into Gold / Silver instead?”

In our opinion, Yes absolutely.

Lets clarify that a little, but in general, over a time-frame of the next 2-5 years, yes, putting your money into Gold will be much safer, you will lose less money due to inflation / potential bank / currency failures or devaluations that are sure to continue rocking the financial world, and quite likely make a considerable gain on your money too.

Whatever happens, your current wealth will be preserved, which nobody can now say with any confidence or certainty about:

…ANY OTHER PAPER MONEY OR INVESTMENT.

Of course the nominal price of whatever Paper currency you choose to value your gold in, will fluctuate, but you can be sure that in real terms, Gold will hold your purchasing power of your current wealth intact, at the very least.

If you cannot commit to a longer time-frame with the money, and may need to withdraw it suddenly, it is of course possible the price may have dropped slightly from where you bought it, especially if you buy at a high (which of course you try no to do) but if it is money that you have saved and probably don’t need in too much of a hurry,

…then get it out of the bank now, and into Bullion.

We don’t normally talk about specifics but we’re going to make an exception and discuss the case of a family member because it’s utterly relevant to this post.

Said family member had an ISA with £16,000 GBP (Sterling) in it in a UK bank.  Two years ago there were reasonable interest cheques being received for above £50 GBP per month from this.

Then the credit crunch hit, followed by the financial crisis, banks slashed interest rates on savings, and over the course of 4 months the interest payable dropped firstly to £25GBP, then £5GBP, then  £0.50 (50 pence) then finally to £0.01 GBP – One Penny!!

One measly Penny interest payable, on £16,000 GBP savings!

So of course, we persuaded family member to get out of that arrangement, walk the cash over the road to their current account, set up a Bullionvault account and transfer the money into it, and buy Gold online

This was back in October, and family member bought approx £15,850 GBP worth of Gold (after commission payable and to the nearest gram available) at approximately £630GBP per Oz.

By the end of the first day, the Gold had appreciated to above £16,000 again and covered the commission paid.  Since then, the nominal value of this gold has climbed up to at the peak £1,8000+ GBP, but with the recent Gold correction is now back to just under £17,250.

Measured in Pounds Sterling, Gold climbed straight up from £630 per Oz, to £675 per oz. There it passed for a little while before it’s meteoric climb to peak above £730 per Oz, and has now fallen back to approx £680 per Oz again.

It needs to fall another £50.00 GBP per Oz ($80 per Oz) before this family member’s nominal worth figure would go negative, and even if it does, which is unlikely, unless you actually think the world economy is all fixed and working again, the chances of the price remaining below that level for long are virtually non-existent.

So, as we know that the Gold price doesn’t actually go up, instead it’s the various paper currencies losing their value over time (all paper money falls, measured against Gold) then we can clearly see from this instance that this lump of Gold is protecting it’s real actual value vigorously in the last 2 months, and is still well ahead, currently showing approx 8% gains in just a quarter, even at these “correction” levels.

However, these figures would be the case if we’d just left it untouched.

The beauty of the Bullionvault system  is that you can use the trading system to pre-program trades when the price hits certain levels, and then just forget about it and have it trade automatically for you.

So of course we were selling off percentage slices as Gold made new highs week after week, and then buying back again on the corrections, for less.  The aim is to (forget nominal value figures) but buy back in  ending up with more Gold (in grams) than you had when you sold.

This way it doesn’t really matter which way it goes, up or down, if it’s up, we’re selling percentage slices on the way up, and if it’s down we’re buying back in with cash made from selling at strategic levels on the rallies.

In this manner we have also improved family member’s Gold holdings by more than One Oz from the fluctuations since October, bringing the grand total of current Gold investment to approx 17,850 GBP (priced at the current levels)

Up or down, Win Win… ..and it’s so easy anyone can do it.  Obviously you do have to factor in the sale commission, but we have constructed an easy to use Excel spreadsheet to do the calculations, if anybody wants a copy, please leave a message on this post and we’ll email it to you.

If you’re still not convinced, please also consider “Is Gold a reasonable investment“

Otherwise ..Sell – Sell – Sell  ISA’s  & Buy – Buy – Buy Gold!!

Tagged as: banks, buy silver, Dollar, gold, gold price, inflation, preserve wealth