Robbed for My Gold: Learn From My Mistakes

 
AUG 4, 2017

Jeff Clark, Senior Precious Metals Analyst

I was robbed of my gold.

True story. I had a bunch of gold Eagles and Maple Leafs stolen from my home – most of my personal holdings at the time. The thing is, I thought they were secure: the coins were stored in a small safe, well hidden from view, with a key kept in a separate room. I never talked about them (this was before I started writing about gold publicly). They had been delivered discreetly.

But all the precautions I’d taken didn’t matter. The thief had searched my home with meticulous desperation. Once he found the safe it was only the work of a crowbar and hammer until my gold was gone.

I’ll never forgot the feelings of violation, anger, and confusion. I’m sure you can relate if you’ve been victim of burglary, too. Yes, the chances of such a robbery are low. I’m just glad we weren’t home at the time… more on that in a minute.

The incident caused me to rethink how I store my precious metals. Hopefully you can learn from my naivety. Even if you don’t think you’ll be burglarized, you’ll probably find you can benefit from all the features of GoldSilver’s new allocated storage program

Because at the end of the day, do you want your gold and silver so much at home you’d hesitate for a second to let go of them? 

It’s Not Good Enough to “Be Careful”

When most investors buy gold, they instinctively know it needs to be kept safe. It’s gold, after all, the same metal that’s held its cachet for millennia. Movies have been made about stealing it, smuggling it, recovering it from shipwrecks, and even just digging it out of the ground.

What most people don’t know is the right way to keep it safe. Many end up hiding most or all of their precious metals at home, or in a safe deposit box at the local bank. But those methods aren’t risk-free, as I painfully found out. In fact, they come with more risk, and more cost, than many investors realize. And keep in mind there’s no replacement policy that comes with your gold: use it or lose it, it’s gone for good. Even insurance policies for home storage fall woefully short.

If you think you’ve been “careful” with your bullion storage plan, see how many of the following risks you’re exposed to with these common methods…

#1: Home Storage

Most beginners start by shipping their gold home. Many even display it proudly for friends and family. You can’t blame them – if you’ve ever held a gold or silver bar, you recognize the inherent emotion in that.

Usually though, common sense takes over, and they at least hide it from prying eyes. But, doing so exposes you to several key risks:

Handheld home safe. Small safes with a handle so it can be easily moved. These are usually designed to hold important household papers—not valuable bullion.

If you carried the safe into your house, a thief can carry it out. All they need do is find it, which is exactly what happened to me.

Large home safe, bolted to floor. Most investors think their bullion is secure with this type of safe, especially if it’s also hidden from view.

Regardless of whether it has a combination lock or a key, what will you do if a thief demands entry—while brandishing a gun or knife? Don’t think this is hyperbole: this happened to a close family friend, and the ending of the story was very unpleasant… his wife was tortured and he was killed, and the thieves made off with over half a million in bullion. Their kids have no recourse and no parents.

How many people know you own gold? You might think you’ve been careful about who you’ve told, but I bet more people know than you think…

  • The local bank staff, when you did a wire transfer
  • Local bullion shop staff, or maybe a neighbor who was just sitting in his car “talking” on his phone your whole trip in and out
  • Those nice guys who helped you load a safe into your truck, or who came to your house and installed it

You get the point.

And don’t forget about the “ripple effect”… if more than one person knows you have gold, or just a sizable safe, who have they told? And who did those people tell? Do your kids know? How certain are you that they don’t blather at school?

Have you talked about gold in an enthusiastic way with anyone? Could they have come away with the idea that you might own gold? If so, did they mention it to anyone? How would you know?

How confident are you that only one other confidant knows you have gold at home? If a would-be thief hears a rumor you might have gold, your entire home storage plan is sunk. Once the word is out, there are no takebacks. You’re now a potential target, with the risk increasing as bullion prices climb.

Backyard Burial. Not safe in the house? Just dig a few holes in the backyard. If you’ve got the luxury of space, it gets gold out of the house. But, consider:

Even if you’re sure the “midnight gardening” went unnoticed, you buried it deep enough (modern metal detectors work to about four feet), and you used an airtight, waterproof, erosion-resistant, insect-proof container…

The problems with home storage don’t end with personal safety. With backyard burial, what happens when something unforeseen happens? Hit by a drunk driver. Heart attack. . You break-up/get divorced and your ex feels entitled to their share, or their new significant other does…  Your kids can’t interpret your treasure map, or they lose it. Or someone else finds it.

Natural disaster. It doesn’t just end poorly with personal tragedy. Bullion stored at home can be lost to fire, flood, tornado, earthquake, and any other natural disaster. Think of the 2011 Tsunami in Japan… any gold stored at home was washed away, lost to the sea, no matter how strong the safe or clever the hiding spot.

Or one of the 999 tornados that touches down every year in the US:

How’s your wall safe holding up?

You have no control—and little recourse—should you become the victim of a natural disaster. In the event of another Katrina, wouldn’t it be nice to know your gold is safe and sound and available to sell with a few clicks? 

What about insurance? Yes, you can insure your home-gold stored on a homeowner’s policy. However, the cost is usually exorbitant—2% or more of the value annually according to our survey (many times what professional vault storage can cost). And it almost never covers a rise in the gold price. Further, insurance typically won’t cover negligence on your part or acts of God.

The truth is simple: while it makes sense to keep a small amount of gold and silver at hand for emergencies, any more than an amount you can afford to hand over willingly is the wrong move. Maybe you are the type who likes to base-jump without a helmet. I’m not, and owe my family much more than that.

#2 Bank Safe Deposit Box

Some investors assume a bank safe deposit box is safe—but are you really comfortable with all these risks and restrictions?

  • No Insurance: Whatever you put in a bank safe deposit box is uninsured against theft and all acts of nature. If something happens, you have little recourse. The risk is yours, not the bank’s.
  • Loss of Access: A government imposed bank “holiday”, or a failure (though cyclical, over 500 US banks have failed since 2010 alone, and 2000+ failed in the 1980s), leaves no access to boxes for often weeks or longer. Another financial crisis is a very real specter, and your gold and silver would be inaccessible for one of the very reasons you bought them: protection against the financial system.
  • Bank Intervention or Seizure: State and federal governments could lock you out of your box or seize its contents on the flimsiest allegation—it’s called civil asset forfeiture and requires no conviction, not even an indictment. They come with no warning and no presumed innocence. Banks are heavily regulated and insured by the government, so they will unequivocally comply with any order from the IRS or other agency, whereas a vault in Singapore has no such requirement.

The bottom line is that storing the bulk of your precious metals at home or in the banking system exposes you to many risks, any one of which could impose financial hardship for an indefinite period.

A crisis hedge should not carry the degree of risk that comes with these methods.

The Optimum Storage Solution

Keeping some bullion close at hand is important. You should have a little readily accessible in the event of an economic or personal emergency. A financial “go bag” if you will. Secure it properly, and tell only one other trusted confidant where it’s located.

However, storing a significant amount of your tangible assets at home or in a bank risks you losing too much in one mishap.

  •   After storing a little gold and silver close to home, the remainder of your wealth should be stored in a private, non-bank, fully allocated, fully insured vault. This offers the best protection during times of financial and social crisis.

And forget about those fractional and pool schemes.

The appeal, in part, is that it’s cheap to store—but you pay for it in other ways. For example, if you ever want to take delivery, you may find yourself facing a “fabrication” fee, in some cases as much as 7% over spot, for the metal you already bought. Imagine what happens if there is ever a rush for the exits.

It’s also slow. The process can take weeks even in a calm market. And all the while, you didn’t own a specific product but were just part of a group of investors with a claim ticket on a large bar.

In contrast, with true allocated storage – what Mike recommends for almost all bullion investors – what you buy is what is stored. No exorbitant fees or protracted delays fees for delivery other than what the postman charges, and with a few clicks your bullion will be shipped within one business day.

The other claim for these pooled schemes is the speed to trade. But, with true allocated or segregated storage, you can buy and sell just as easily and quickly, online or over the phone. Better still, because you’re dealing with whole coins and bars only, you’re not dependent on one company to stay in business to find a market for your gold. You can sell through us to our extensive network of wholesalers and refiners, or take delivery and sell it locally, or on eBay, or anywhere else there’s a bid.

Our program is second to none, and is more affordable than you think. Check out all its features and benefits…

The New and Improved GoldSilver Storage Program

At GoldSilver, we’ve long offered segregated storage. And it’s hugely popular with our customers.

But, for many, it’s been out of reach. High minimums made it impractical for most investors. We’ve heard the requests for safe, true allocated storage available to all, and have spent the better part of the last year rebuilding our systems and processes to make private, non-bank storage affordable and easy to use for everyone.

Here’s why we believe every investor should consider our allocated vault storage for the bulk of their precious metals holdings:

ULTIMATE SECURITY. You simply cannot store your metals in a safer and more secure environment. GoldSilver uses only independent, non-bank, class 3 vault facilities (the highest rating in the industry), with armed guards and 24/7 surveillance.

FULLY ALLOCATED. The gold and silver you buy is shipped directly to storage, and held in full in your account’s name and title (individually, joint, trust, or LLC). No pool accounts, no shared ownership, no fractional claims on large bars—just what you bought, in your title, all the time.

FULLY INSURED AND INDEPENDENTLY AUDITED. Your gold and silver is insured for full replacement value (up to $50 million per account). It is audited by a leading, independent commodities inspector and verified regularly. You receive custody certificates documenting your holdings, and of course can log on to view your account 24/7. No storage location in the world is 100% secure from threats like natural disasters, but professional storage is 100% insured.

ANYTIME DELIVERY. Want delivery of some or all of your metal? Just click or call. Metals will be shipped to your address of record, or you can have them delivered to another address almost anywhere in the world (subject to security verification to protect your assets).

You can even transfer some or all of your holdings between vaults—just pay shipping.

OUTSIDE THE BANKING SYSTEM: Your bullion is stored in a professional, private vault, outside of the banking system. Safe deposit boxes can be easily seized, are subject to bank closures, come with no insurance and dubious privacy, and aren’t generally big enough to store silver.

Remember, one reason we own physical bullion is to protect against the banking system. You can scratch that risk off your list by using our allocated storage.

EASY TO OPEN, EASY TO BUY. Just pick your products, select your vault location, and buy online or over the phone. We’ll create an account for you automatically. Once your payment clears, your metal is shipped directly to the vault. No paper forms to complete, no ID or passports to mail, and no waiting at home to sign for a shipment. It’s as easy and straightforward as shopping for delivery, easier even.

EASY SELLING. You can sell back your holdings from storage at any time. This makes your exit plan easy, simple, and quick—no messing with packing up your coins or bars, and no traveling to a dealer’s shop (and worrying if anyone is watching you enter or exit). This convenience makes your metal more liquid than storing at home or in a bank.

INTERNATIONAL OPTIONS. Diversify internationally with the same great service and convenience, and the same low storage rates. Current vault offerings include Salt Lake City, USA; Hong Kong; Singapore; and Toronto, Canada.

VERY AFFORDABLE: Even though allocated storage uses the exact same vaults as segregated storage, allocated is cheaper, thanks to the scale provided by GoldSilver’s status as one of the leading bullion sales and storage providers in world.

Here is the fee for our new and improved allocated program, which Mike Maloney recommends for nearly all bullion buyers:

  • Allocated storage: 0.06% of metal value per month. $4 monthly minimum, per customer account (mix and match metals and vaults as you see fit, no additional charge).

As our founder, Mike Maloney, says: most investors should use allocated due to the lower cost. Here’s how cheap it can be:

Gold and Silver minimum monthly storage fee

1 large Cappuccino

Netflix monthly fee/Basic plan

$4

$4.25

$7.99

2 oz. of gold at $1500 spot price and 166 oz. of silver at $20 price. Real assets that lasts forever.

16 fluid oz. Gone in 20 minutes

New movie releases? Fuggetaboutit

If the value of your metal exceeds the minimums, it’s still very inexpensive—here’s how low the monthly fee would be (at the same $1500 gold and $20 silver spot price)…

10 oz. gold

500 oz. silver

1 large Cappuccino/week

Netflix monthly fee/Premium plan

$9

$6

$17/month

$11.99/month + New ‘4K’ TV (Can you see the difference? I sure can’t)

High net worth investors can store real wealth for about the same cost as coffee junkies and movie buffs…

50 oz. gold

2,500 oz. silver

2 large Cappuccinos/week

Netflix Premium + 1 theatre movie for 2

$45

$30

$34/month

$32/month, without popcorn!

Yes, as metals prices rise so does your storage bill—but that’s what you want! It will mean your net worth is rising exponentially more.

SEGREGATED STORAGE AVAILABLE. Have strict corporation security requirements? Holding assets in trust for clients? Or just prefer additional piece of mind for substantial assets? You can also elect for segregated storage to get all the benefits of allocated, plus your assets will be separately shelved, wrapped, and marked apart from all other assets held by GoldSilver and your chosen vault provider. You can even switch between the plans as required—just call customer service to arrange a transfer, or look for the link to request it yourself on your account page.

The cost? 0.08% of metal value per month. $35 monthly minimum per metal type (i.e. silver, gold, etc.), per vault.

How to Get Started with Storage

We believe every investor should use professional storage once they have a small stash close to home, and we’ve made it as affordable as possible to get started with our vaults. No more excuses.

Get started now… 

  •   Simply add any qualifying metals to your cart, and at checkout select “Secure Vault Storage”—it’s that easy!

We’ll automatically create a storage account for you, and keep you updated as your metals are shipped and received by your chosen vault provider.

Or call us at 1-888-319-8166 (international +1-310-566-6655) to place an order over the phone.

Learn more about our fully allocated storage program.