Jeff Clark, Senior Precious Metals Analyst
Where, exactly, should you store your gold at home?
You instinctively know that gold is valuable and understand it must be stored safely. You probably also realize that gold coins and bars come with no replacement policy: if you lose them, they’re gone for good. No claim check to redeem.
This makes your home storage plan critical.
This guide provides hiding tips, the pros and cons of alarms and safes, backyard burial advice, the home storage golden rule, and why insuring your metal is probably not a good idea…
Everyone should have one confidant that knows where your bullion is stored, as well as have the ability to access it. It should be someone you trust implicitly, who knows how to keep a secret. They should have a good idea of how much you have, where it is stored, and the key, passcode, or instructions to access it if your chute doesn’t open from that weekend dare.
Why do you need to share your storage details with someone? Because telling no one about the location of your gold and how to access it poses an obvious risk. If you become ill, incapacitated, have a major accident or even die, the reason you bought and stored bullion to begin with—to preserve and protect your family's wealth—is defeated. You wealth strategy must include one confidant knowing your secret.
But they are the ONLY person who should know you have gold stored in the house. If others find out, your risk just increased. Worse, once the word is out, you have lost control of who knows you have bullion. That’s because of the ripple effect: once someone knows you own gold, you have little control of who they tell—and who those people tell.
|My father had a friend who was a gold coin collector. He had one of those big, fancy combination-lock safes. My Dad said it looked like it would require a forklift to move it. Unfortunately, a couple local thugs found out he had some gold. They forced their way into the house, and held both Robert and his wife at gun point.|
Once they found the safe, they demanded the combination. But Robert refused to give it to them. He’d been collecting gold and silver all his life, and it now represented a large chunk of his net worth. He also planned to leave much of his wealth to his children. He wasn’t about to lose it all to two seedy lowlifes.
The rest of the story is very unpleasant. His wife was brutally tortured until he gave up the combination. They were both shot as the thieves fled.
My Dad’s friend didn’t have loose lips. All it took was word getting around that he was a “gold guy.” People began to talk, and once word was out he had no control over who found out.
We can’t stress it enough: no one else should know you have gold stored at home!
This might never happen to you. But the point is, the greater number of people that know you have gold, the higher your risk.
So, how many people already know you own precious metals? If you’re honest with yourself, it might be more than you think…
• Bullion shop staff; credit card company or bank staff depending on how you paid; security company staff where you bought your safe; or hired hand if you had your safe transported or installed.
• The ripple effect: if anyone other than you and your confidant know you have gold, how sure are you that those people haven’t mentioned it to anyone, even if it’s innocent?
• Have you talked enthusiastically about gold? Have you posted anything positive about gold on social media?
• Is your income or assets high enough to make you a natural target by thieves?
• Do you work in the public eye?
• Do your kids know? Depending on their age and maturity level, could they talk? And who would those kids tell?
• Do you drive an expensive car, live in a fancy house, or wear expensive jewelry?
If you conclude that more than one confidant may know you own gold, or think you may be a natural target, you might want to keep less gold in the house, or at least rethink your home storage plan. Remember, once the word is out, there’s no takebacks. You’re now a potential target, with the risk growing as bullion prices climb.
But can’t I just insure my home-stored bullion?
I shy away from taking out an insurance policy on gold…
1. It breaks the one-confidant rule. Think about it… to insure your metals means you will be required to reveal to strangers the details of your bullion holdings—the forms of gold you own, how many ounces, and where they’re stored. This ranges from insurance agents, office staff, and corporate offices to appraisers and their staff. And how confident are you that they won’t mention it to anyone or that your paperwork is stored securely? Once you go down this path and release your bullion details, how this information is used and who has access to it is out of your control.
2. It’s costly. Professional storage, in many cases, is cheaper. And keep in mind that most home insurance plans may not cover the full value if gold prices rise a lot. If your gold is stolen and the price is over $2,000/ounce at the time, will you be fully compensated? What about at $3,000?
Insurance protects you from one set of risks, but expose you to others. Insuring your home-stored bullion is a personal decision, but I prefer the privacy.
• Home Storage Key: No one beyond your confidant should know you have bullion, where it is stored, and how it can be accessed.
Following this rule will keep your risk low.
One of the advantages of physical gold is that it serves as a financial backstop. You want some bullion readily accessible in an emergency, whether that emergency be a personal one or something on a national scale.
If you have no cash handy… or the bank is temporarily closed… or the internet is down… or there’s an economic crisis… or you even need to barter, having some physical gold could be a lifesaver.
|“I believe everyone should have gold and silver in his or her own private possession, where you can lay your hands on it, because they are one of the few financial assets that can be completely private and not part of the financial system.” - Mike Maloney, Guide to Investing in Gold and Silver|
Keep some gold in a place that is immediately available and easily accessible. If your bullion is two days away, or time-consuming or complicated to get to, its use as an emergency financial asset has diminished.
Unfortunately, most people don’t think too much about where to put it and so just stick it in a sock drawer or cookie jar—it may be out of sight, but this is obviously not an ideal way to store your wealth.
• There are 3 basic options for home storage: hide it, bury it, or use a safe.
One of your major risks with keeping gold in the house is theft. You can probably think of dozens of places in your home where no one would think to look. The trick is to hide your bullion in such a way that it isn’t too complicated for you or your heirs to find, but is very hard for a thief to find.
Here are a few tips on hiding locations so that hopefully a persistent burglar leaves empty-handed. (Note these are just suggestions and not necessarily formal recommendations—each person must decide what is right for him or her.)
Nothing Obvious: No fake cookie jars, rocks, or carved out books. They’re too common. One way to know if your hiding location is too obvious is if you’ve seen it in a movie—if so, find another one.
Also, think of places where a plumber, electrician, gardener, or maid won’t stumble across it.
Three Layers Deep. Most burglars look for things they can grab and go. They usually don’t like to spend a lot of time in the house, so one way to combat that is to store your bullion three layers deep. For example, a floor safe, covered by floor boards, with carpet or a china cabinet over it.
Think like a thief. Is your hiding spot clever enough? One way to know is to think like a thief; if you were a desperate and persistent burglar, how long before a specific hiding spot would be located?
Decoys: The more wealth stored in your home, the more you should consider the small cost of obtaining some decoy valuables—maybe some inexpensive jewelry or cheap gold coins. Maybe even a decoy safe, with some extraneous jewelry or coins in it. Anything to make the thief thinks he’s got your stash.
Diversify: Use more than one hiding spot. Just make sure you remember where they all are, or if you move it you tell your confidant.
Alarms and Safes
Here’s a few tips on using safes and home alarm systems…
Home Security Systems
The more metal you have at home, the more you need to consider a security system that offers both video recording and monitoring. They may or may not prevent a theft, but would ideally give you an immediate police response and evidence that is prosecutable.
You could also consider a nanny cam. They're not expensive.
Check out those hidden camera video recorder systems that are disguised as an alarm clock, wall clock, smoke detector, clothing hook, and even a light bulb. Most of these can record many hours of surveillance video and allow you to monitor it live, over the internet, from anywhere in the world, on your cell phone or computer. If you go this route, be sure to get a system with plenty of memory.
If you use a safe, check that it is:
• Has protection against other elements (water damage, for example)
• Not so small that a thief could walk out with it
• If it’s secured to the floor in some way, you and your confidant should discuss how you’ll respond if a thief found it and demanded you open it.
If you use a key safe, hide the key separately from the safe. If you use a combination lock, don’t assume you’re immune from a robbery—remember my father’s story of the robbers pointing a gun to his wife’s head while they demanded the combination.
Another consideration is the weight of the safe. One that weighs around 100 pounds could be stolen by one or two burglars with some basic tools like a dolly or straps. A 300-400 pound safe removes the risk of theft by a single person. Heavier than 500 pounds and you’re probably immune from it being stolen, unless there’s a group of them with a heavy-duty vehicle and equipment. Don’t forget that the contents of the safe increase the weight, especially if you’ve got silver in it. Of course, the heavier the safe the more likely you’ll need it delivered and installed—but this would tip your hand to the installation company that you’ve got valuables in the house.
The term “midnight gardening” comes from people who bury their precious metals at night so the digging won’t be noticed. Here are a couple pointers if you choose to bury your bullion.
• Use a container that is airtight, waterproof, erosion-free, and insect-proof.
• Consider how easy or difficult it is to find. If it’s too easy, a thief could find it. But it it’s too difficult your heirs may have a hard time locating it. Find a place, on property you own, that you’ll always remember but isn’t obvious if someone learns you’ve buried something valuable. It’s probably not a good idea to leave complicated instructions; if you use a “treasure map,” consider giving half of the instructions to one person you trust and the other half to a different confidant.
• Be aware that metal detectors can detect up to a depth of about 4 feet.
• Make sure your digging isn’t noticed or raises your neighbor’s suspicion.
A related option might be to install a safe in the floor of a storage shed. The advantage is that you can access your bullion without being seen, day or night.
One risk that’s hard to avoid…
Regardless of the above methods, keep in mind that you’re still exposed to natural disasters—home stored gold isn’t protected against fire, flood, tornado, earthquake, and other natural calamities. Remember the 2011 Tsunami in Japan? Investors that had gold stored at home saw it washed away, lost to the sea, no matter how strong the safe or clever the hiding spot.
Remember, once you lose your gold, you have no recourse should you become a victim. And consider how badly you’d need your gold at a time like that. That’s why I recommend…
• Home storage can be practical for small quantities of bullion. Large quantities pose too much risk and should not be stored in the house.
You don’t want your physical wealth to be wiped out through one act of misfortune. We recommend storing some of your bullion at or near home, but then diversifying where you keep the rest of it.
The ideal solution would be something that gets it out of the house—and yet held it in such a way that it was still available at any time.
That option is available. Private, non-bank, fully allocated, fully-insured class 3 vaults offer the highest level of security, and are the best protection during times of financial and social crisis.