BullionVault for those with significant wealth?

snafui
By snafui on Thu, Jan 17, 2013 - 9:19pm

I have seen it written a few times, not only here on peakprosperity, but in other places as well that BullionVault is a good option for people with "significant" wealth to protect. For example on this page:
http://www.peakprosperity.com/blog/what-should-i-do-basics-resilience-pa...
it is stated:
"For investors with substantial wealth to protect, we also recommend:" and one bullet point was BullionVault.

As a new precious metals investor I wonder, why the word "substantial"? Flipping it around, let's say I do not have substantial wealth to protect; why would I then NOT use BullionVault? I've looked at it thoroughly and BV's commission is reasonable. Perhaps the $4/mo storage could be considered high and it won't increase until you hit something like $40k worth of gold, but $4/mo is about the cost of a safe deposit box so it doesn't seem unreasonable to me. It seems fairly liquid; rather than having to deal with selling physical bullion I can hit a few buttons and arrange for cash to be transfered to me. I've seeded it with a few K to tinker with and I don't feel like I'm in over my head. Any thoughts? If there are other sites more geared toward small-time players, can you articulate why?

Bonus question: For those who choose to vault some PMs at places like BV, is there a ratio for how much you vault and how much you keep on hand? Any good rationale for those ratios? I haven't decided upon any in particular so I'm just curious if there are any "best practices" out there.

Thanks and love the site!

2 Comments

Travlin's picture
Travlin
Status: Diamond Member (Offline)
Joined: Apr 15 2010
Posts: 1322
I agree

Snafui

I investigated BullionVault and GoldMoney very thoroughly.  Both are good but I invested with GoldMoney.  I judged them to be safer, and I can trade at a set price without going through an internal auction process.  Both are suitable for small investments if you want the features they offer.  If you know what you are doing it can be simpler to buy bullion directly, and you might have lower costs on a round trip cycle of buying and selling.  You would also enjoy the security of having it in your possession.

For your second point, consider how much bullion you are comfortable holding at a bank, or with a professional vault like Brinks.  What purpose does this have?  How much can you effectively use?  How much of a target does this make you?  How much can you afford to lose?  For the excess consider splitting it between GoldMoney and BullionVault to diversify your risk if one has problems.  Both offer the big advantage of having vaults in multiple countries.  Decide what ratios you are comfortable with for all these options compared to your total liquid assets.

Travlin

 

KathyP's picture
KathyP
Status: Bronze Member (Offline)
Joined: Jun 19 2008
Posts: 84
Holding Bullion Options

I use both BullionVault and a safe deposit box at a local bank.  One drawbank to the bank is having to purchase insurance on the coins in case of theft. It's a pretty hefty cost.  Also, there's a privacy penalty to the safe deposit box storage.  Every time it's necessary to use the box, the bank employee has to remove it from the vault to give to you.  Gold coins are very heavy.  I think the employee can figure out that the box contains more than documents.

There's a privacy penalty to BullionVault, too.  When you arrange your wire transfer from your bank, the recipient of the funds is, of course, entered on the wire transfer order.   Again, it's pretty easy for the bank employee who is assisting you to figure out that you're into buying some kind of bullion. 

Having pointed out the privacy issues and despite living in a small town, I am not terribly concerned about them.  There's a price to pay for owning everything, including PM.  

My point is that I like to have a number of options   Relative to the distribution of the holdings, because I have to insure the stuff in the safe deposit box, I keep the least there.  Having a variety of storage options also give me a variety of ways to access the stuff when I need it.  But, that's a whole other topic.

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