Money itself is not my motivational trigger. I am motivated by the discipline that is needed to make sound investments and derive reasonable returns over the medium to long-term. It is important my investment should not be with any instrument that causes problems in the world. For example, I knew it was a great time to invest in crude oil futures when it was trading below US$ 30 per barrel. But I would not invest in oil futures because oil is at the root cause of so many problems in the world.
I have always thought of myself as an investor who is willing to take calculated risks. Some of the risks I have taken in the past may seem “high risk” to an outsider but I believe I did my homework and it was just calculated risk. Aligned with the above, I was looking for an investment opportunity which offered:
- A solid alternative or supplement to investment in real estate. I like real estate but I dislike the fact that one gets locked in for a long time (read low on liquidity)
- Medium to high risk & returns over the medium to long-term
- High liquidity i.e. ease of entry and exit. Preferably, I can execute investment or withdrawal decisions over my laptop or smartphone app. Goldmoney does these and also offers fee-free prepaid card linked to your account
- “New thinking” – In other words, high talk value when I engage in money talk with friends or family
- An alternative to bank deposits. When you factor in a millennial’s dislike for big banks, inflation and/or negative interest rates, bank deposits don’t make any sense
- An alternative to buying stocks as I was spending too much time studying companies to stay on top of my investments
Enter Gold money a Canadian start-up that is on a mission to remove entry and exit barriers to not just investing in gold but actually using gold. Goldmoney is about being able to “use gold” something that’s been lost for thousands of years. Through modern technology, it has created a more efficient global debit payment rail that is a better way to exchange value in commerce. So the idea of paying with Gold, earning a wage or payment in Gold as a currency is all new utility. Let’s think of Gold as a currency again, not just a safe haven investment.
“Goldmoney’s underlying technology is about democratizing access to a stable form of savings and making gold accessible to everyone. Our platforms are simply an operating system for user gold, ” says Co-founder and CEO, Roy Sebag. Goldmoney is the parent company of Goldmoney.
As an Indian, I understand gold as money extremely well. This knowledge is passed down from one generation to the other for thousands of years. India’s love affair with gold goes back to Indus valley civilization. There are plenty of references to gold in one of India’s oldest epics Ramayana (7,000+ years old) as well. It is not without a reason that India is one of the top importer and consumer of gold. A large percentage of the gold is with households and not held as government reserves. I am aware of all this not by reading a report but just by being Indian.
What Goldmoney is not
- Get rich quick scheme
- Exchange traded funds (ETFs)
- Where your money is locked in for a certain number of years
- Zero risk. To the best of my knowledge, if you are exposed to a commodity, you are exposed to risk. But given the currency & market volatility after Brexit, Gold is a good place to be.
Gold is truly inflation proof: During 2004 – 2014, due to inept management of the Indian economy, Indian rupee eroded rapidly. If you had parked your savings in gold instead of fixed deposits or savings bank account, you would have built a moat around your savings. You can’t turn back the clock, but you can plan for the future. It is prudent to build some sort of defence against government policies affecting your savings. One sure shot way to do that is to invest at least fifteen percent of your monthly savings in gold (or more if you like Gold).
Gold as Hedge: As investor, we like to drive a high amount of returns on all of our investments. But the unhedged pursuit of those returns is not healthy for any portfolio. Gold is not a place where you will face volatility, high risk or high returns. It is a steady place delivering steady returns. Simultaneously, gold acts as a safety net for you to take risks elsewhere in your portfolio (stock market, mutual funds etc.)
- As of now, Goldmoney offers 5% bonus for first deposit with Goldmoney. This is fantastic value for a consumer. Think of it this way, you buy 100 grams of gold and you get 5 grams of gold as a bonus. The caveat is, bank wire transfers are not eligible for 5% bonus as the time taken for a bank transfer to reach Goldmoney may vary greatly. My position on this is: 5% bonus for the first time deposit should not come with any conditions attached specifically when the customer has zero control over workings of existing banking systems
- Goldmoney can partner with banks in India and issue rupee-denominated prepaid cards. This will give investors in India a compelling reason to buy into Goldmoney and liquidate their holdings on gold exchange-traded funds. Am not a fan of ETFs
- When a customer chooses to redeem 10 grams of a gold cube or above, why not offer them designs like dice or their name engraved on the cube?
Goldmoney may already be working on many ideas get even better than where they are at the moment. Given the fact that innovation is their source code, I am optimistic they will continue to get better.
Recommended Strategy: Expose at least fifteen percent of your monthly savings or investment to gold.
Goldmoney brings something truly innovative and removes plenty of barriers. Also, it is highly disruptive for the existing banking industry.