Is physical gold the real stuff?

Mommies, how many of us are ever-ready to go to the family jeweler’s store? Sometimes planned purchases, sometimes as company to a relative or friend and some impromptu visits often lands us in the jewellery store. And when does a visit translate into a purchase, is something we have all failed to fathom.
What doesn’t help is most jewellers are gifted sellers, plus the charm of yellow metal is too good to resist. Add to that those monthly installments’ schemes perpetually available. A purchase or two is so guaranteed.
Such unplanned visits may return us back with our piece of gold but it also robs us of our small savings. Usually, the purchase is funded partly by accumulated cash from our monthly kharcha and partly by credit. So we empty out our hard saved cash and also come under debt, atleast for a few months.
Secondly, Jewellery is for its emotional value. It can best be used as a gift for momentous occasions like marriag but hardly ever for profits with gold rate appreciation.
Thirdly, the jewellery cost includes making charges which could range between 10-15% above the gold’s value. When you sell it, there is usually 15% deduction again on gold value by the buyer. So effectively you lose out. Let’s illustrate this with an example.
If the gold rate today is Rs. 30000 per 10gms and you buy 10 gms of jewellery, you are charged by conservative estimates some Rs. 350 per gram as making charges. Your total cost here comes to Rs. 33500. Now say gold value appreciates by Rs. 5000 per 10 grams to Rs. 35000 per 10 grams in a few years. You want to sell the same jewellery. While the value is Rs. 35000, the buyer deducts 15% of gold value i.e. 5250. You get Rs. 29750.
What was the realization after a sharp rise in gold price? You had to pay Rs. 33500 but you would get only Rs. 29750.

The idea of this piece is to drive home the point that emptying your savings for jewellery is not the wisest thing to do often. There are certainly better uses of your money.

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