GOLD (COMEX) gold

Originally posted by Skol: ↑

I'll do this just one more time...........just for you.

I've done it about 50 times before.

Gold price $A in 1979....$200
Gold price $A in 2020....$2600

Up 13 times.

Sydney house price 1979....$50,000
Sydney house price 2020....$1,140,000

Up 22.8 times, and that's excluding 41 years of rent = $1,119,000 (@$525/week) in 2020 dollars, less rates, insurance and repairs.

That's why most people own houses not gold bars, and you get to live in them as well. Nice.

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You are wrong skol with this analysis.

i can see why you are not a financial planner.

Not everybody has the ability to go out and buy an investment property. You have not factored in the fact someone needs to be able service the additional debt and get credit. These assumptions you are posting is nonsence.

You are comparing investing in a large asset requiring a substantial capital input or borrowings conditional on circumstance and affordability vs possibly investing some surplus funds without the need for borrowings.

The majority of people would have to borrow to buy a property from the bank and would have paid the house over in finance costs and interest especially during the periods rates were above 10% for some time in your assumptions. In addition you have not considered the costs of repairs and renovations required to keep the asset. You have also missed all of the holding costs associated with owning a house and have not mentioned costs paid to property managers re advertising for Tennant's and rental property management.

For many people buying an investment property, the first 10-15 years of owning is often negatively geared as the rents cannot cover the costs of borrowing, depreciation and holding costs. This means it is costing them money for a very long time and they have to rely on the capital gain in the future to offset these losses. I know depreciation is one of the biggest non cash items that affects this but it's a deduction that reflects the fact that your asset reduces in value over time due to wear and tear, so essentially you have to replace the depreciable item over time like the hot water service or stove.

You have also chosen a capital city for purchase. Have you considered whether the buyer can afford the inner 10km value ring or buying out in the sticks with very little capital growth.

please before giving financial advice, consider the circumstances of each individual here and their ability to borrow, their risk appetite etc.

Without factoring all of the above your comparison is useless.