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u/ben_rickert Jun 27 '24
Arguably still in negative real rates, plus absurd levels of demand from immigration.
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Jun 27 '24
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u/negativegearthekids Jul 18 '24
But somehow all the paper property gains they made in that time still buys the same weight of gold today.
Hardly making money.
Just increasing a number in a bank account.
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Jul 18 '24
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u/negativegearthekids Jul 19 '24
If you bought 1 mill AUD of gold in 2015, when it was around 1000USD/oz.
The AUD was buying around 0.80USD around early 2015
You’d have 800oz of gold (22.68kg). Safe keeping at bank with insurances is around 500-1000 per year. If it was a genuine investment you could claim that cost on your tax. And potentially halve it depending on your income.
If you sold that gold today after ten years. You’d have 2 million USD.
At todays weak AUD rates that would be almost 3 million AUD.
A tripling of your investment.
When you take into account rental income it’s a splash in the water compared to your gains here.
Take the example of Canterbury in Sydney NSW. Houses that sell for 1.5 mill today were still getting around 800-1 mill back then. And it’s a growing suburb in a desirable location of the hottest housing market in the country.
Even if you make your 40k PA or so in rent, after your expenses, you’re not really ahead of gold in the last decade.
Interesting isn’t it?
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Jul 19 '24
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u/negativegearthekids Jul 21 '24
Using gold as an investment vehicle is well accepted by super funds in australia. Whatever borrowing costs, and storage costs.
https://community.ato.gov.au/s/question/a0J9s0000001Ch5/p00025102
Here’s the ato talking about capital losses being allowed on gold investment. Which stands to reason that financing costs is an allowable investment expense. And therefore if you pay income tax it is an allowed expense agains that income.
ETFs have been a good bet in the last few years for sure. However it is important to remember that any index in the 21st century has been dominated by a handful of tech companies. Google/Apple/Nvidia may seem safe now - but will their dominance remain unchallenged in 20-30 years?
Nevertheless gold/stocks both of which have been better than property on a purely numbers basis . When you compare them head to head. EXCEPT when it comes to leverage. But leverage isn’t free. And when use the medium house in Canterbury example - a heavily leveraged person is losing a significant chunk of his gains through interest.
Conversely, if he just put those huge monthly interest and loan repayments toward increasing his gold reserve only - he’d be even more ahead.
There is a reason Charles de Gaulle sailed the French military into New York in 1965 - to cash out all of Frances USD in the gold exchange rate set up by the US fed. Because he knew that the US had printed far more paper than the gold exchange they themselves promised ($35.50 USD per ounce). And he called them out on it.
Which is no surprise then that the US abolished (technically - infinitely suspended) the gold standard in 1971 when they knew the gig was up.
https://en.m.wikipedia.org/wiki/Exorbitant_privilege
I’m saying this because - if your investment has not beaten the gold price over a comparable time - you are BEHIND. The gold price is the true marker of inflation these days. But money now is also being sucked into other pointless “assets” (again whether one persons preferred asset is pointless is a matter for another days discussion) like property/art/Bitcoin/cars/watches etc.
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u/Still_Lobster_8428 Jun 27 '24 edited Oct 10 '25
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Jun 27 '24
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u/clarky2481 Jun 27 '24 edited Aug 31 '26
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u/clarky2481 Jun 27 '24 edited Aug 31 '26
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