How I’m Earning Safe & Truly Passive Income with Gold

Today I invested in something called a Gold Lease and I want to share with you what that is and how it works.

Gold is a precious metal that has a track record of over 6,000 years of value and use as currency, money, and a wealth building asset. It is also arguably the most useful element on the periodic table.

The main 3 demands for gold are:

1. As a “tier 1 asset”: This means banks, especially Central Banks, hold on to gold as a reserve asset and consider it one of the safest and most valuable assets they can own. Tier 1 means it is of the highest value and safety and is ranked as safe as the U.S. Treasury bond. In fact, banks often load up on gold as an alternative reserve asset when treasuries are not doing well.

2. Asset/Jewelry use: Gold has always been a sign of wealth and prestige in culture. Because of this, there is a very high demand for gold ownership in the form of jewelry (rings, watches, necklaces, earrings, etc.) and also as an wealth building asset. Gold can be turned into coins, bars, rounds, and other investment grade assets and owned just like the banks do.

3. Industrial usage: Gold has industrial usage as well from everything to phones, equipment for astronauts, and even as a way to help defeat cancer.

I share all of this to establish the irrefutable value of gold and mainly because I have heard more and more as we enter this financially illiterate digital age things like “gold is just a shiny rock” or “what does gold even do?” And the answer is: It does a LOT!

What are the downsides of owning gold?

Well for one, the supply of it isn’t very high and tends not to keep up with the demand, which means gold has a high trading price. However, this can also be a good thing for gold owners. Over the last 5 years, the price of gold has increased by 10.5% per year. Bad news for those sitting on the sidelines, but great news for those who own it.

Gold generally doesn’t produce any income so the typical gold purchaser is going to just buy it and hold it. This also leaves gold owners at the whims of the market price, which can fluctuate up and down at times.

Gold can have storage costs, which also can make it a negative yielding asset.

But, if you paid attention, you probably noticed that I said I did a “gold lease”.

I believe in gold. It’s an asset that I like and understand and want to own. But I don’t necessarily want it sitting there doing nothing while I wait for the price to appreciate it. I want to put it to work and to use it.

This is where gold leasing enters in.

Gold Leasing is an institutional level concept where large banks who own gold will lease their gold to gold dealers, jewelers, banks, etc. to help them fill their inventory until more gold is refined. This goes back to the problem that the supply of gold often does not keep up with its demand.

The result?

Lots of people want to own gold and there isn’t always enough gold being mined and refined to deliver to them.

A large bank or institution that owns gold will lease it to a dealer or jeweler for example.

A lease is a short-term loan or rental on gold and it allows that dealer to fill their supply with the leased gold until they receive more new gold from the refiner, at which point, they pay back the gold they leased.

Let’s say a gold dealer has demand for 100 bars of gold. But on hand, they only have 50 bars. They can get 50 bars made, but it’s going to take some time and they have customers asking for the full 100 bars.

A bullion bank will lease them the 50 bars they need and charge typically 1–4% annual interest on a fairly short term, like 12–24 months.

The dealer now has 100 bars and pays the 1–4% interest as agreed to by the bullion bank. Of course the dealer must insure the gold in case they cannot pay the lease back and they must also prove they have the financial strength to lease this gold (similar to qualifying for business loan or mortgage), and at the end of the term, the dealer owes back the number of ounces that they leased and they’ll pay interest as agreed through the duration of the term.

This concept was always closed off to the individual investor or the “little guy” and was reserved only for Central Banks and the largest bullion banks out there. But in the last 10–15 years, this concept has become available to everyday investors like me and you.

But let’s cut to the chase…what does this mean for me as an investor?

1. I can own physical gold and I can actually buy it for a LOT cheaper than most places. This is due to the fact that I am buying in enough quantity to lease gold out, which is a minimum of 10 oz. I also have the buying power of the others joining in on the lease as well and that brings the total cost per oz down dramatically compared to most gold purchases.

2. I get income from my gold, paid in gold! The problem of gold not producing income is officially solved. A gold lease over the last 5 years would have paid me the 10.5% annual compounding growth rate of gold over that period, but I would have earned an additional 1–4% in lease income. And if gold has a down year, I’m still going to earn that income.

3. I get rid of storage costs. Because my gold is in a lease and with a dealer, it’s not in vault storage. This saves me .50–1.5% per year in storage fees.

So, let’s talk about the deal that I just did. I bought 10 oz of gold for around $22,000 today.

It will go into a lease that is going to pay me 3.5% per year.

I have no storage costs.

My gold is insured and backed with collateral.

And I have a lease management company who is managing the entire thing for me.

In the last 1–2 years, gold increased in price by over 20% in total and I’d add probably 5–6% in lease income on top of that during that period of time.

I plan to do more gold leasing and keep growing my portfolio and my passive income, but I wanted to share this concept with you today because my purpose is to help good people build wealth, thereby contributing to making the world a better place.

If you’re a good person who wants to help make the world a better place and you feel like you’re just missing some education and training on wealth-building strategies to get there, this article is for you, and I hope you truly enjoyed it.

If you’re a client of mine and you’re interested in an opportunity like the one you’ve read about here today, please email my team at Contact@WealthDynamX.com.

If you’re a follower and have not read my book The Blueprint To Financial Freedom yet, that is the place to start. Chapter 7 is all about gold and how to use it as a wealth building tool!

So, if you want to learn more about how you can use the Gold Leasing concept to achieve greater financial freedom, I’d like to offer you a free copy of my book, The Blueprint to Financial Freedom.

Click here to get a copy!

The Blueprint to Financial Freedom by Jerry Fetta

To Purpose, Wealth & Freedom,

Jerry Fetta

Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on over 45 podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.

Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.

Learn more at www.WealthDynamX.com

(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)