Gone are the days when investing was reserved for the elite with hoards of cash. As investing becomes more accessible, more people seek investment opportunities to supplement their income, build a nest for retirement and grow their wealth. Having money invested wisely can have tremendous benefits in the long term when you may not be able to work or need access to more funds. Your investments may also save you from needing instant debt consolidation loans to help manage your debt.
While investing has become more inclusive, the type of investment vehicle you choose matters. With a global focus on sustainability and clean investments, many investors are careful about where they put their money. One investment that is considered green or sustainable is gold. Arguably, one of the oldest investments, investing in gold, is still considered a solid investment and has a place in almost all portfolios today.
Gold plays several roles in sustainable clean energy investments, such as the following:
Gold Plays a Role in Socio-Economic Development
Gold mining plays a significant role in developing economies and creating jobs both directly and indirectly for people who live in areas where mines are located and for people who are involved in all aspects of the global gold trade. Apart from jobs relating to the gold mining industry, other jobs are created to provide services for locals and those who come from abroad to work in the mining industry.
The gold mining industry is highly regulated, and when gold is mined responsibly, following transparent processes, it drives foreign investment, increases tax revenue, and drives economic growth on a global scale since gold is typically traded across borders.
Gold mining companies are often based in countries out of the mining location, meaning that foreign investments are made in the country where the mine is located. Besides the mine, foreign investors may also invest in developing infrastructure that will benefit the locals, like better roads, utilities, and resources.
Gold is Durable, Can be Recycled, and can be Passed Down Through Generations
Gold is eco-friendly and is likely an element recycled more than most other materials worldwide. Because of its high value, almost all the gold ever mined can be accounted for, and a large percentage of the gold in circulation today, whether in the form of jewelry, bars, or coins, was mined years ago.
Gold doesn't tarnish or react when it comes into contact with other elements and resists corrosion. It can also be melted and molded repeatedly without losing any valuable properties like weakening or damaging.
Given its hardy nature, it is no wonder that people in the east, particularly the Asian subcontinent, consider gold jewelry an investment. Many people buy gold as an investment to pass on to their children, knowing that it won't lose value.
Since gold never corrodes, people have peace of mind in the knowledge that their investment is safe and they don't need to invest time or money in maintaining it. They also know that their offspring who inherit it will not need to refine it as it will hold its value regardless of how old it is.
All in all, once you purchase gold, there are no steps you need to take that will cost you time or money, and it has no impact on the environment, making it a sustainable investment.
Gold is Resistant to Inflation
Gold has consistently been seen as a sustainable investment as it's one investment that hedges against inflation. When the economy is unstable, costs of living rise, and inflation increases, the value of many stocks and bonds may drop. The value of gold does not decrease and typically holds its value or increases, which means that people who invest in gold do not lose on their investment. Also, the gold price typically increases when fiat currencies start losing value making it a good, sustainable investment in the long term.
You Don't Have to Buy Physical Gold to Invest in the Gold Industry
While you can invest in gold by purchasing gold jewelry, coins or bars, there are other ways to invest in this precious metal without physically owning it. If you prefer your assets liquid and don't want to buy a physical piece of gold, you can purchase stocks or shares in a gold mining company. This way, you can trade them the same way you trade stocks from any other listed company. If you choose this route, remember that it is riskier than buying gold since any gold mining company can face challenges out of its control.
Another option is to invest in EFTs (exchange-traded funds) or gold mutual funds. Buying these investments gives you a broader scope of exposure to the whole industry since they are essentially baskets that include a range of shares from various gold mining companies.
Conclusion
Gold has been considered a safe investment for hundreds of years, and it's not going anywhere. Invest in gold if you're looking to build generational wealth or save for retirement. Buy physical gold, whether a piece of jewelry, coin, or bar, since it requires no maintenance or aftercare apart from making sure it's stored safely. If you prefer not to own physical gold, invest in the gold industry by purchasing stocks in a gold mining firm.
By Kirsten Thomas, for Rough&Polished
References
● Gold.org: Gold’s Contribution to Society
● Incrementum: Gold as a Sustainable Investment
● Investopedia: 8 Good Reasons to Own Gold
● Responsiblemines: Is Recycled Gold an Ethical Choice?
● Capitalmonitor: Is Gold a Responsible Investment?
● Gold.org: How gold can be a major player for socially responsible investing
● Mdpi: Identifying the Role of Gold on Sustainable Investment in Indonesia: The DCC-GARCH Approach
● https://blueandgreentomorrow.com/invest/gold-as-green-investment-things-to-know/
