Volatile markets coupled with economic uncertainty have made precious metals a popular choice among investors seeking safer investment options. If you own silver or gold bullion and want to store them safely, there are a number of options can you choose from. However, the benefits offered by a private storage vault are too valuable to ignore. Let’s talk about storing your precious metals: and what you should consider before picking a storage vault.
As far as storing precious metals, you can either buy and store it yourself or buy it and let someone else store it for you. While the right option depends on an individual’s circumstances, storing precious metals in a private vault guarantees safety and peace of mind. According to the FBI Uniform Crime Reporting Statistics, property crimes in 2015 alone resulted in $14.3 billion worth of losses.
In this article, we’ll go over a few factors you should keep in mind before picking a private storage vault.
Understanding Your Options
You have three options when it comes to storing your physical precious metals – keep them at home in a secure place, use a bank’s safety deposit box, or pay a private third-party storage company.
At Your Home
Needless to say, the riskiest option is to store it in your home because if you lose or misplace it, it’s gone. Bullion isn’t like a stock certificate where you just pay an administrative fee and have your shares replaced.
The main reason for people storing precious metals in the home is because it gives the owner a sense of security. However, the reality is that this method is fraught with all sorts of problems. For example, if anyone finds out you have precious metals in the house you could become a huge target for burglary. You might think to yourself – I can hide them somewhere no one will ever find them, but that just opens you up to the possibility of violence to extract the information from you. Not a pretty thought.
At The Bank
The second option is to store your precious metals inside a bank’s safety deposit box. This option—despite its drawbacks—is definitely better than the first one.
For one, the boxes are relatively inexpensive and cost anywhere around $100–$300 a year depending on the size of the box and the insurance involved. Although the chances of the bank being robbed and your safety deposit box being penetrated, it is greatly reduced over storing precious metals in your home. The problem lies in the government’s ability to seize your assets anytime they see fit. They do not even need to charge you with a crime. There are thousands of examples of governments not respecting private property laws and taking money for themselves.
In A Private Storage Vault
The last option is to store your bullion in a reputable, private storage vault. Investors with large holdings who want to spread their assets across numerous countries and leverage lax government regulations benefit the most from this option.
With that being said, not all countries that have private vault’s have the same anonymity and private property laws and not all vault companies offer the same quality of services.
The following is a list of considerations you should keep in mind before picking a storage vault.
Independent and international depositories, especially those found in countries with a stable government, guarantee the highest level of safety for your assets. That’s because governments are sometimes known to outlaw the possession of gold bullion and seize millions of dollars’ worth of assets.
Also, the storage vault company must be able to protect their clients’ assets using the latest technology including constant surveillance, state-of-the-art vault storage, seismic sensors, bio metric access, etc. Features such as these prove that the company is reliable and can properly secure your precious metals.
When it comes to transferring assets, the company should also be able to provide armored vehicles with additional security personnel.
Insurance And Auditing
Ensure that the private vault company extends adequate insurance policies and carries out routine audits on all its clients’ assets in the case of open storage. Even if the company operates in a stable environment, you can never be too sure and comprehensive insurance policies protect your possessions from theft, damage, physical loss, and natural disasters.
The best private vault storage companies are associated with renowned insurance providers such as Lloyds of London or Endsleigh Insurance who will work with you if something unforeseen happens. Boutique insurance will differ greatly from place to place. In the case of insuring a safety deposit box make sure to check the amount you are insured to carry in each box. For example, the specific box size you choose is insured up to $500,000 USD, if you store $1,000,000 USD in it and something happens insurance will only cover you for the first $500,000 and there will be no recourse for the remaining $500,000 of loss.
There are two simple workarounds in a situation like this, first, pay for additional insurance to cover the needed amount, the vault company should be able to assist you with this request. And the second easy workaround is to rent two boxes, each covering the contents in full.
Complete Segregation And Allocation Of Assets
Complete allocation means that your bullion is physically present at the stated location i.e. your private storage vault and not owned or placed anywhere else. For example, if you store a 1kg bar of gold in an open vault the serial number of that gold is assigned to you and you alone, there is no fractional ownership and they can not repay you with another 1kg bar of gold with a different serial number.
Complete segregation means that your vault isn’t shared with others or other assets and that your bullion are safeguarded under your name and control and not represented by a mere certificate.
Another feature to look out for in a wealth management company is the ability to quickly withdraw your assets. Such a feature proves invaluable in case you wish to post collateral for a loan or to avoid tax consequences that arise from selling a commodity.
As mentioned earlier, the stability of a country matters a lot. For example, a private vault company that takes international clients is located close to my house in Panama. Panama it has numerous benefits including short flights from major U.S. cities, rigorous privacy laws, supportive government policies, first-world infrastructure, and a duty-free zone.
This also ensures complete protection from political entities and ensures quick access to your assets. Clients must have the option to price-lock or purchase gold and silver via a quick email or phone call. These are the type of things you want to look into when choosing a suitable offshore vault.
Companies with an offshore location that’s outside your local jurisdiction can provide an additional level of security.
To find out who we use to store our precious metals, you can read more about them HERE
Are you consider going offshore with your business, please make sure to read The Ultimate Guide To Going Offshore. I know you’ll enjoy the read.
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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