Money Rehab with Nicole Lapin - How To Profit From Gold's Near-Record Highs

Episode Date: February 13, 2024

The price of gold is nearing record highs; right now, it is over $2,000 an ounce. Today, Nicole teaches you how to turn that trend into profit. $ Investors: Robinhood has the only IRA that gives you a 3% boost on every dollar you contribute when you subscribe to Robinhood Gold. Learn more at Robinhood.com/boost  $ Want the kiddos in your life to become money masters? Check out Greenlight, the best money app and debit card for families (and get one month free!): http://greenlight.com/moneyrehab $ Is mental health a resolution for 2024? Get 10% off your first month of therapy with BetterHelp at: http://betterhelp.com/moneyrehab  $ The secret to health and wealth is in your gut. Literally. Get 20% off a 90 day bottle of Just Thrive Probiotic and Just Calm. Try it at: justthrivehealth.com and use promo code: MONEYREHAB. $ Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you.

I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits

apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. So last week, gold prices hit near record highs. And when prices change in the market, I want us to all get into the habit of asking ourselves, how can I get rich off this trend? Because we always can if we're thoughtful about the strategy. And that's what I'll be teaching you about today. So at the most basic level, there are two ways to profit from high gold prices. You can either sell physical gold or you can invest in the asset. Whichever route you choose, the

strategy is going to be the same. Buy low, sell high. But even though the strategy is the same, it hits different depending on whether we're talking about owning physical gold or investing in it. Now is a great time to sell physical gold, but it's actually a relatively worse time to invest in gold. I'll break that down in a sec. But first, we have to understand the price trend and why gold is having such a moment right now. As we know, the Fed has signaled that they might be able to start lowering interest rates this year. Yay. When interest rates go up or go down, they tend to take the value of the dollar with them. So as interest rates have gone up over the last two years, the value of the dollar has been strong, which is why if you've done any international travel over the last year, you've probably been surprised by just how cheap it was to eat at nice restaurants, depending on the currency,

of course, of where you were visiting. Gold, however, has an inverse relationship with the value of the dollar, meaning gold and the dollar are on two ends of a seesaw. When one goes up, the other goes down. So with the talk of interest rates going down, pros are expecting to see the value of the dollar get weakened. And as a result, the price of gold is on the up and up. Right now, gold prices, like I mentioned, are near record highs. Gold is selling for over $2,000 an ounce right now. And if you're thinking to yourself, how much is an ounce again? Imagine holding 11 pennies in your hand. That's the weight of one ounce. So when we talk about the amount of gold it takes to bring home two grand

that's how much we're really talking about and while i'm on the subject let's double click on selling gold and when i say selling gold i don't just mean solid gold bars although if you have those amazing i'm talking about selling gold jewelry gold picture frames furniture with gold pieces gold vases anything that has a gold component could make you some money right now. The first thing I want you to do if you're considering selling something made of gold is to get it appraised. I know that sounds like something that could be pricey, but you can get a piece appraised for as little as $25 through the American Society of Appraisers. There are a few factors that will determine the value of the piece, and they're all pretty

intuitive. How much your piece is worth will depend on whether the piece is solid gold and how pure the gold is. We have all heard of 24 karat gold. Bruno Mars made sure of that. And the reason Bruno was thinking about 24 karat gold and not 18 karat gold is because 24 karat gold is 100% pure gold. The general rule when we're talking about gold, the lower the carat of gold, the less pure it is. So take 18 karat gold, for example, 18 karat gold is actually 15% silver, 10% copper, and only 75% gold, which is still a lot of gold. But if you're taking your piece to a gold refinery where you know they're just going to melt your piece down into its composite parts they're really only going to be interested in the purest stuff but a refinery isn't the only place that will buy your gold right now consignment stores jewelry stores good old pawn shops will

also pay big bucks for gold right now however just because the price of gold is high doesn't mean you're going to make a lot of money necessarily from this trend. There are also fees, commissions, and taxes to consider. For example, remember our old friend capital gains tax? That's the tax that gets applied when you sell a stock or a house for profit. Well, the same thing applies when you sell valuables too. But if you remember from our last conversation on cap gains taxes, you get taxed significantly less if you hold onto your stock or your house for longer than a year. It's the same thing with valuables. So if you bought a piece of gold jewelry within the last year and the value has appreciated a lot, you're going to probably want to hold onto that thing a little while longer to keep more profit in your pocket when you sell it.

If your piece hasn't appreciated much, then factoring in capital gains matters honestly less. So your first step is understanding how much your piece has appreciated. And again, who are you going to call for that? An appraiser. If you've been listening to this and you're thinking all of this is super cool, lap in, but I didn't grow up with a silver spoon in my mouth and I certainly didn't grow up with a gold one either.

I don't have gold to sell. Who the heck do you think I am? Cool, cool. I get it. And don't worry, I don't have some secret vault of all this gold in some bat cave either. Like most things, my strategy to profit from price fluctuations in gold is through investing. So let's talk about the investing part now. There are two main ways you can invest in gold. First, you can invest in a company that mines gold. Second, you can invest in an ETF that tracks the price of gold or metals as a whole. Can you guess which method I prefer? Yep, ETFs and chill, baby. The most popular gold ETFs out there have ticker

symbols like GLD, BGLD, DBDP, IAUM. BGLD actually had the best annual return for a gold ETF that I saw last year at over 8% ROI. And you might remember from a past episode, one of the greatest investors of all time, Ray Dalio, recommends allocating 7.5% of your portfolio to gold. So there are some really big names co-signing gold as an investment. Now, here is the critical difference between physical gold and investing in gold right now. portfolio to gold. So there are some really big names co-signing gold as an investment. Now, here is the critical difference between physical gold and investing in gold right now. If you have physical gold, it's an awesome time to sell. The price of gold is high. You know, you're probably going to get a good deal. It's not very clear cut if you're looking to invest,

because as I teased at the very beginning of this episode, we want to buy low and sell high. If you were to invest in gold right now, you'd be buying pretty high, which makes it hard to make a profit. But here's the thing that makes it tricky. We don't know if this is the peak for gold right now. Gold could go higher. UBS, in fact, thinks that gold will hit $2,200 per ounce this year. That is the problem with buying low and selling high.

We don't know where the high is. We don't know where the low is either. No one does. Not even Ray Dalio or any other MVP investor. So the best thing we can do is set price alerts on Robinhood or whatever brokerage you use to get notified when the price goes down and therefore maybe a better time to buy. Or to dollar cost average, which is where you spread out your investments over a range of time so you increase your likelihood that you buy on a low and that is how to play the market like a pro for today's tip you can take straight to the bank if a piece of gold jewelry has been in your family for generations and has appreciated a ton let's say you might be

really stressed that you're about to get hit with a major tax bill if you sell it but don't worry there's actually a tax rule in your favor it It's called the step up in basis, which allows you to only count the appreciation that's happened to you since you've personally owned the piece. So if this was your great grandma's necklace from the old country, but you've only had it since 2020, you'd be taxed on the value it increased only since 2020. Finally, a tax rule that works in our favor. I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start,

or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my

house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host, so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make

some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress.

Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you.

No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.