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Goldmoney Doesn’t Make Sense for Smaller Accounts

Goldmoney Doesn’t Make Sense for Smaller Accounts

In what I describe as an anti-Black Friday sale, Goldmoney announced on the 29th of November a new $10 per month minimum storage fee.

This goes into effect on 1 January 2020.

Goldmoney (formerly BitGold) already had storage fees, but they were proportional. Now, smaller accounts might not make financial sense anymore.

I’ve determined that Goldmoney doesn’t make sense for me anymore.

Goldmoney Fees are Too Darn High

It is always important to understand the fees a financial services company charges, and Goldmoney has plenty. There is a 0.5% gold buy/sell fee and a $20 wire transfer fee for withdrawals (funding can be free with EFT).


Storage fees vary by location and the lowest cost locations are .01% per month (London, Hong Kong, Zurich, Singapore).

However, this new a $10 per month minimum fee is a killer. In order to pay just .01% per month, you’d need to have at least $100,000 in gold stored.

As a simple example, $10 per month fee on $120 worth of stored gold would be equal to the value of the gold stored after just one year.

Some other considerations, which in my view don’t help enough, are that Goldmoney does offset the minimum fee with commissions paid and the accounts are insured.

However, your homeowners insurance or renters insurance might cover your safe deposit box as well.

If you have a larger account, insurance is important to you, or conduct a lot of transactions, Goldmoney might make sense.

Goldmoney Doesn’t Make Sense for Smaller Accounts

I was previously an advocate of this low cost way to store physical precious metals around the world. With this new development in fees I have decided to withdraw my endorsement of Goldmoney.

Because of the smaller amount of Gold I have with Goldmoney, I’ve elected to sell all my gold in their custody. At this time I have no intention of doing business with Goldmoney again.

The insurance is an important consideration, however, a safety deposit box or other secure location is going to be much more cost effective for the small investor.

I Own Too Much Gold

I Own Too Much Gold

I own too much gold.

I’m an advocate of holding gold. I think it is a key part of my portfolio but I own too much as a percentage of my other assets.

too much gold
Datta Phuge

Not counting retirement-specific accounts, gold (and silver) make up 54% of my liquid net worth.

That is way too high for me!

So I decided to read what some public figures have said or written in regard to the percentage of a portfolio that should be gold (and silver).

The following is educational only and NOT SEC-investment-advice. So make up your own mind with the help of an appropriately licensed, registered, and SEC-anointed financial advisor.

If you think you can’t own too much gold as a percent of your asset allocation here are five reasons why you can own too much gold.

Warren Buffett – Berkshire Hathaway – 0%

Warren Buffett doesn’t like precious metals. He has several famous quotes regarding why he doesn’t like the shiny stuff. While I wouldn’t be surprised if he actually did own some precious metals, but the way he speaks he acts like he doesn’t own any. I’m not a Buffett fan but I think you can learn from him if you carefully sift what he does from what he says or writes.


Jim Cramer – CNBC – No More than 10%

Mad Money host Jim Cramer recommends no more than 10% in gold. He recommends owning gold via an ETF unless you have enough money to buy physical in bulk.

I’m not a Jim Cramer fan, but I include him because he is a big-time stock guy and yet he still recommends holding some gold. I think there is reason to believe the ETFs don’t hold the gold they claim to so I don’t like gold bullion ETFs. I also disagree that gold is just an insurance policy. Pure insurance (such as term or homeowners) is not an asset, it’s an expense. I think gold is an asset class in and of itself.


Peter Schiff – SchiffGold and EuroPacific Capital – 5-10%

Peter Schiff recommends 5-10% in physical gold. I was actually surprised by this low number because Schiff talks about gold and silver A LOT. Schiff’s 5-10% allocation to gold and silver does NOT include mining stocks–but that is a different topic.


Tim Price – Price Value International – ~25%

In the September 2016 edition of Price Value International, Tim Price proposes owning roughly 25% in “real assets” like gold and silver.


Mike Maloney – – 100%

Mike Maloney is the most pro-precious metals person I know of. He is 100% allocated to precious metals with 90% to silver American eagles and 10% to gold American eagles.


John – – 10-25%

I would like physical precious metals to be around 10-25% of my liquid, non-retirement portfolio. I don’t have an opinion on the amount of silver relative to gold. I am of the opinion that silver is more undervalued than is gold and as a result has more upside potential.

I think gold and silver are a great way to preserve wealth but they are not a great way to build wealth since they don’t pay a dividend or yield. For many readers that might be obvious but I’m still learning!

I purchased a lot of gold in 2013, on the heals of the all-time highs, so much of my gold and silver holdings are worth less in fiat than I paid for them. So I intend to reduce my gold holdings as a percentage of my portfolio by focusing my savings and investments on other asset classes going forward. By doing this I can reduce my gold and silver holdings as a percentage of my assets without selling any of my gold and silver.

On the flip side, if my portfolio did have less than 5% physical gold I would consider adding to my holdings via gold maples, silver American eagles, and foreign-stored physical gold via a Goldmoney personal account held by a trusted and low cost custodian.

A Point of Sale Gold Backed Debit Card

A Point of Sale Gold Backed Debit Card

I get excited about the prospect of a gold backed debit card from that is not prepaid. I call this type of card a “point of sale gold backed debit card”.

Saving and Spending Gold

I believe that gold is going much higher in the coming years and that dollars will continue to lose value. Saving in gold makes a lot of sense.

Goldmoney is an excellent way to buy physical gold online and store it at locations around the world.

The whole point of saving is to have money to purchase goods and services in the future.

I don’t know any retailers that accept gold as payment. If I want to spend gold I have to convert it to dollars. That’s where the debit card comes in.

Prepaid versus Point of Sale

Prepaid gold backed debit card: Gold is sold for dollars in advance, dollars are spent
Point of Sale gold backed debit card: Dollars are spent, gold is sold to cover sale and pay vendor in dollars

Point of Sale Gold Backed Debit Card

I was over on the “social medes” and asked Goldmoney co-founder Roy Sebag about this.

Roy says that this type of point of sale gold backed debit card should be available in 60 days, which would be early October.

Prepaid Debit Card

Goldmoney (formerly BitGold) currently offers a prepaid gold backed debit card. What this means is a person with gold in a Goldmoney personal account could sell all or a portion of his gold, the proceeds from the sale fund the prepaid card (denominated in USD, GBP, or EUR), the card arrives in the mail and then the debit card can be used to buy things just like any other debit card.

The card can be reloaded or auto-loaded by selling additional gold to load the card with dollars (or EUR or GBP).

If price inflation picks up even more this could be an invaluable tool.

Point of Sale Gold Backed Debit Card

What I am even more exited about is a gold backed debit card that sells gold at the point of sale.

The critical difference between a prepaid gold backed debit card and a point of sale gold backed debit card is convenience.

I could get a prepaid card from Goldmoney and then load it right before each purchase by selling just enough gold to cover the purchase.

I could also load it with a set amount of dollars but at that point the card is really just dollars–it’s no longer really gold backed.

For example, if I were to load a prepaid card with $500 and gold goes up 5% I would miss out on those gains. True, it would work in the opposite as well and protect from losses, but I anticipate a rise in the USD price of gold.

If the card is not prepaid Goldmoney does the math for me. When I make a purchase with my point of sale gold backed debit card, my savings remain 100% in gold until the charge comes across and only then is enough gold sold to cover the purchase.

I wouldn’t have to anticipate how many dollars I was going to spend and sell gold to cover it in advance. I could simply make the purchase and the gold would be sold to cover it.

Again, the difference is subtle but in practice I think a point of sale gold backed card provides the maximum convenience and gold exposure.

If you’d like to setup an account where you can save and spend gold, check out and get free gold when you setup and fund an account using this link: