Wealth Cycles: When Should I Invest in Precious Metals or Real Estate?
For the newbie investor, where to invest your money is a tough call. There’s more to investing than simply throwing your extra cash into something that looks good.
So that means you need to consult an “expert” right? Get someone, like an investment advisor, with all the cold hard facts to tell you what to do with your kids’ college fund.
Not always the best choice. Not all “experts” worth being called experts.
There are some legitimate experts you need to follow: Robert Kiyosaki, Warren Buffett, and many other authoritative figures in wealth building. Even some people don’t like them and think their advice is rubbish.
The thing is, following them doesn’t necessarily make you rich; what you need to do is to learn the market, prove the experts’ advice yourself by taking action.
My top choices: Precious metals and real estate
So let’s go back to what this article is all about: What to invest and when? Knowing it sure isn’t easy folks. But if you asked me, I’d invest in these two asset classes: Precious metals or real estate.
Did you notice I didn’t say “AND”, but “OR”, instead? Well, I really meant that; Obviously, you can enter any asset classes you want, but that IF – a BIG IF – you have the resources AND the knowledge.
There are too many people calling themselves “investors” or “experts” because they have an investment portfolio which virtually covers everything. If you ask several of them, I’m not sure they understand how things work; all they do is to take analysts’ and so-called experts’ advice and follow it as-is. Too risky.
To me, it’s better to focus on one – and get proper education on that one asset class. When the time comes,I’ll move on to the next asset class. I can be very wrong, but for an average investor like me, it’s my best bet.
Now, in my opinion, precious metals and real estate are two of the most profitable investment ventures out there. How about Stock investing? Perhaps, but I’d stay away from stock investing simply because I don’t have the knowledge to do so – it’s too volatile for me; I like it slow and old school.
The big question: When to invest in what?
But isn’t today is the era of precious metal investing? Yes – it seems so. But heed this: No investment will last forever.
Jeff Clark, Editor of BIG GOLD, says that the bullish trend of precious metal prices will come to an end; it’s inevitable.
You can invest in gold or silver as much as you want, but if you want to play the game of wealth building well, you need to know when to sell yours and in what form will your next asset be.
Sell? Why? Isn’t gold and silver THE REAL money?
True, but Robert Kiyosaki mentioned in his book, Unfair Advantage, that no investment is without risk. Precious metal investing is risky; stock investing is risky; real estate investing is risky; investing in business? Ditto.
What you need to master is the ability to control your risks.
But then, what’s the least risky of all? Well, the experts agree that precious metals are “safe” investments; but it’s not without risks. The thing is, you need to understand that everything has its own cycle. That how the world goes.
I learn that understanding the cycles will yield you the most of your investments.
Indeed, timing is everything; the timing has to be just right, or you’ll lose your shirt – or at least not getting as much as you want.
Silver investing has its own cycle; gold investing has its own cycle; real estate investing has it, too.
So, how to approach this? What can we do as an average investor to know what to do? Well, there are plenty of advice, but I’ll share what I am doing myself, so you can judge whether it’s useful or not.
- focus on gold and silver, as real estate market bubble will burst pretty soon (at least in where I live)
- I follow the news on gold and silver (we have a good one here on Wealth Noob – updated daily.)
- I note what my mentors say: Robert Kiyosaki, Mike Maloney and David Morgan have a lot to say about the economy and precious metal investing (Robert is more real estate and business than precious metals, though…)
- I plan to keep on investing in silver first and gold second.
I have set in mind that precious metal bullish market will end somehow, and I hope that, somewhere near the top, I will be able to change my asset types and classes, preferably real estate, as recommended by the experts. To recap:
My exit strategy, Part I: When the time comes – e.g. silver to gold price ratio is nearing the historical average, I will sell my silver first and buy more gold with it.
My exit strategy, Part II: When the time comes – e.g. the gold price is nearing the peak, I will sell my gold, convert it to fiat currency, and quickly turn the currency into another asset class, real estate, which market bubble might have already bursted, which means lower price everywhere.
That’s all, really.
It’s quite straightforward. For me, I will continue to invest my budget in gold and silver, and react accordingly for the right time to enter the real estate market.
As always, it’s great to have mentors. So I suggest you to choose the right wealth building mentors to help guiding you to the right path to financial independence.
For further reading (or watching/listening) I suggest these resources:
1. Insider program: GoldSilver.com’s Insider Program
Mike Maloney and his team will share with you insider tips, including the right time to buy and sell your silver and gold.
2. Video series: Hidden Secrets of Money – this site offers Mike Maloney’s valuable insight on the history of money, and how real money becomes fiat currency throught the history of mankind – and turn civilizations upside down when the system failed.
3. Audio: Why silver is a better long-term investment than gold – by David Morgan – https://www.youtube.com/watch?v=M9nRoVtk_I8
4. Website: WealthCycles.com – a must-read for wealth building noob like me: The site explains economics and investing in an easy to understand way.