{"id":522,"date":"2014-10-10T19:58:25","date_gmt":"2014-10-11T01:58:25","guid":{"rendered":"http:\/\/www.darelparker.com\/dp\/?p=522"},"modified":"2014-10-10T19:58:25","modified_gmt":"2014-10-11T01:58:25","slug":"the-problem-with-papergold","status":"publish","type":"post","link":"https:\/\/www.darelparker.com\/dp\/the-problem-with-papergold\/","title":{"rendered":"The Problem with PaperGold"},"content":{"rendered":"

\"X7arfua\"If you’ve spent\u00a0enough time on Facebook, you may have seen\u00a0an advertisement or promoted page for PaperGold, “pure gold–pressed into affordable, dollar-sized bills”. \u00a0It’s not actual currency – and they don’t claim that it is – but rather ornately decorated\u00a0bills that each contain a carefully\u00a0measured amount of real\u00a0gold, 1\/10th (0.10) gram to be precise.<\/p>\n

Each of these PaperGold bills costs $10.00 (plus shipping), and the company talks at length about why you should purchase PaperGold as an investment or a gift. \u00a0It’s a unique approach, producing\u00a0an easily stored and traded commodity with a certain amount of intrinsic value, and much of their website is dedicated to explaining the various reasons why gold is such a sound investment. \u00a0Of\u00a0course an equal amount of space\u00a0is dedicated to\u00a0why PaperGold is a great way to start investing, describing\u00a0it\u00a0as “the smart man\u2019s gold” and “gold made simple”.<\/p>\n

As a gift I’ll admit there’s a certain novelty to PaperGold. \u00a0The bills themselves are quite attractive, printed with a dramatic eagle and various seals and currency-like imagery. \u00a0I can think of worse novelty gifts to give, and I’m sure I’ve wasted far more\u00a0money on less useful things (pretty much everything ever purchased at The\u00a0Sharper Image).<\/p>\n

But as an investment, it’s a terrible deal.<\/p>\n

Based on the current spot price\u00a0of gold, that 1\/10th gram contained in each of those bills is worth only around $3.89. \u00a0In other words, the price of gold would have to almost triple just to\u00a0recover your initial investment. \u00a0Sure, you could argue that there are production costs involved in producing the PaperGold bills, but there are productions costs involved in producing gold bars and\u00a0rounds, and they don’t carry a 200% premium over their actual value. \u00a0Moreover, a lot of\u00a0gold buyers won’t bother with such trivial amounts because it’s just not worth their time, and they’re certainly not\u00a0going to pay that premium if you ever decide to cash in your PaperGold “investment”.<\/p>\n

\"\"Another one of their touted “benefits” is that gold bullion is bulky to store and difficult to trade, whereas PaperGold can be stored and traded as conveniently as paper currency. \u00a0The problem with that argument is that a full\u00a0gram of gold (1.0 gram bar) is only about the size of a Micro-SD card and carries with it a current value of around $38.90 depending on the manufacturer of the bar. \u00a0That’s about the cost of dinner for two at The Olive Garden, and anyone who’s seriously considering investing in commodities isn’t going to be put off by a $40.00 buy in. \u00a0You’ll need a stack of ten PaperGold bills to equal that amount of gold, and it’s going to cost you $100.00 to get it. \u00a0I think you can see where I’m going with this.<\/p>\n

The bottom line is that if you’re looking for a fun gift for your grandkids or high school graduate, PaperGold will make a great conversation piece. \u00a0But if\u00a0you’re looking for a serious investment, you’ll probably want to look elsewhere.<\/p>\n\"Bookmark<\/a>