According to a 2019 World Gold Council report, Gen Zs “are more likely to want to see exponential growth from their investments and are less likely to invest for the long-term.”1
With the cool ‘crypto’ kid in town and his crew of NFTs (non-fungible tokens) and stocks, gold may have lost its shine with Gen Zs. But before you rule out this precious metal that has stood the test of time, here are a few good reasons why you should own gold.
Why should Gen Z own gold?
Gold diversifies your savings
Like anything in life, balance is key and the same rules apply to your finances. As you’re getting started, one of the golden rules of personal finance is to save your money in a few different places e.g. some unit trust, blue-chip stocks, income stocks and some gold. Why? This balances your risk because you can lose all your money if you put all your money in one investment. Think of it like your family, everyone has a role to play (father/ mother/ sister/ brother), the same goes with your financial portfolio, every asset plays a part. For gold, it acts like insurance for your portfolio.
Can start saving with low capital
That means you don’t need a lot of money to start saving. Thanks to technology, you can now buy less than a gram of gold from as little as RM1. That means you can save according to how much you can afford at the time. You don’t have to miss out on building your wealth.
Limited in nature
Unlike fiat currency like the $ or £ , nobody can ‘print’ gold when they need more of it. There is a limited amount of gold in the world and this makes gold far more stable and less prone to market supply and demand manipulation in the long run. This also makes gold an excellent store of value. From 2002 to 2017, the price of 1 gram of Kijang Emas gold in Malaysia increased by approximately 381%.
Gold is one of the most liquid assets in the world, which means it can be easily bought or sold anywhere at any time. Compared to selling a house which may take months, you can sell gold easily and get your cash quickly in an emergency. Live market prices will help you decide when to sell your gold.
Protects you from currency
Currencies of many countries are increasingly freely traded. This means that speculators and traders can sometimes decide that a currency is overvalued and sell that currency. This happened in 1998 in the Asian Financial Crisis to many countries in Asia including Malaysia. Smaller or emerging economies are always unfortunately more at risk to global market sentiments.
When sentiment turns against a currency, the price of gold in the currency becomes higher. For example, in the case of the Malaysian ringgit, if the ringgit weakens against the US dollar, it usually means that gold in Malaysian ringgit has gone up in value. So in recent years, even as gold has dropped in value against the US dollar, because the ringgit also fell against the US dollar, the price of gold in Malaysia has held its value. This is a good reason why storing all your savings in cash is risky. Instead, it’s better to diversify a percentage of your savings into a historically stable and proven asset like gold.
Don’t need to be a gold expert
Unlike volatile platforms such as foreign exchange and high-risk stocks, you don’t need to constantly monitor gold prices and market conditions once you’ve bought some.
This is because gold can never go bankrupt unlike other platforms like stocks or shares and gold will also not devalue like other currencies. In other words, you don’t need to turn yourself into a “gold expert” just to enjoy its benefits. But remember with any asset, you should always be aware and keep your eye on its current performance.
Can be stored securely
Even though gold is a physical object, you don’t need to keep yours in a home safe or around your neck. There are many third party storage vaults and safe deposit boxes that will store your gold safely. Some will even insure it for you. At HelloGold, we handle this for you.
How to get started?
Set your goals
Before you start putting away your money, think about what you need or want your savings to do for you. You can be saving for multiple goals, understand why you want to save and how much you want to save for each goal. This means defining your short and long-term financial objectives.
Short-term – saving for a vacation, buying a car, building an emergency fund
Long-term – saving for retirement, starting a business, buying a house
Once you have mapped out your objectives, you can move on to choose where you want to save your money. Remember to always do your research. Whether it’s through blogs, online forums, TikTok or YouTube, get informed and make sure you check if the information is true. Here are some conventional savings options that could be a good fit for you – savings account, ASB/ASNB, fixed deposit and gold savings account. It also helps to speak with a financial advisor to learn what else is available as they can help to map out your financial plan as well.
Most financial experts recommend that you should save about 10% of your income in gold. Platforms like HelloGold allow you to buy small amounts of physical gold that are safely stored in a vault. Since you’re buying in smaller amounts, you would have more control over how you save.
Gold is a long-term store of value that you can confidently hold onto for years – even decades, while going about your daily life as normal. And while it is a safe haven asset, staying consistent with your savings is key. Your wealth is like a tree, if you keep watering it, it will grow a sustainable financial future for you.
The unforeseen pandemic has greatly affected Gen Z’s ability to earn an income, as they enter the workforce with less experience than previous generations. So the earlier you begin saving and planning for retirement, the more you will be able to save and the more your funds will be able to grow. Remember your financial journey is a marathon not a sprint!
As for gold, it may be old but its true value unfolds when you save it and hold.
1. World Gold Council: Retail gold insights of 2019