minimizing gold storage fees

[stpeter]

Having become convinced that PP is the way to go, I am finally getting around to implementation. Naturally, part of that is seeking to minimize fees (e.g., why buy an actively managed stock mutual fund with an expense ratio of 1% or more when I can buy an index fund with an expense ratio of 0.10%?). Looking at the overseas gold storage options described in the book, I notice that many of them have 1% annual fees for bailment services (a.k.a. segregated storage). Although there's some peace of mind in having a significant amount of gold stored in Perth or Auckland or Zürich, it doesn't seem worth the 1%. Basically you're paying for the rough equivalent of active management (physical security, someone placing your bullion in a particular box, etc.). Let's say I have $100k in bullion - it's a lot cheaper to put it in a safe deposit box (maybe $50 a year) vs. paying a 1% fee (that's $1000!). If I want geographical diversification, I can open a bank account in another state and put half the gold in a safe deposit box there. If I want national diversification, I can do the same with an account and box in the nearest Canadian province. As with everything related to security, it's a matter of the threat analysis and attack surface - and for me I just don't see that continental diversification is worth 1% a year. However, I freely admit that I might be missing something, and if so then enlightenment would be appreciated.

[dualstow]

I haven't bothered with overseas storage, either, and I have Canadian cousins. Still, many of those wiser than me -- pretty much everyone here is -- do recommend it.

I pay nothing for my safe deposit box storage just for keeping US$10K in a checking account at the bank. If I open a new box at a different bank, I will try the same deal.

I do think the Perth Mint system is tempting. Maybe someday.

Basically you're paying for the rough equivalent of active management (physical security, someone placing your bullion in a particular box, etc.).

Perhaps we should call it active caretaking. After all, active management should be reserved for someone trading your gold for you. You are still in control of that here.

[stpeter]

I haven't bothered with overseas storage, either, and I have Canadian cousins. Still, many of those wiser than me -- pretty much everyone here is -- do recommend it.

I pay nothing for my safe deposit box storage just for keeping US$10K in a checking account at the bank. If I open a new box at a different bank, I will try the same deal.

I do think the Perth Mint system is tempting. Maybe someday.

Basically you're paying for the rough equivalent of active management (physical security, someone placing your bullion in a particular box, etc.).

Perhaps we should call it active caretaking. After all, active management should be reserved for someone trading your gold for you. You are still in control of that here.

Good point. And maybe that active caretaking is worth 1% a year, but right now I'm not seeing it. However, this is a "Level 4" matter, so I think I'll leave additional research for a time when I have advanced further along the path to PP nirvana. ;-)

[rickb]

I think safe deposit boxes are a fine option.  You might want to think about insurance.  See this thread: http://gyroscopicinvesting.com/forum/go ... your-gold/

(can we get that thread stickied?)

[Libertarian666]

Global Gold (www.globalgold.ch) has storage charges of 0.5% for accounts between CHF 250K and 500K, I believe, and declining slowly for larger amounts. Add 0.2% for segregated storage if you think that would be safer.

[stpeter]

I think safe deposit boxes are a fine option.  You might want to think about insurance.  See this thread: http://gyroscopicinvesting.com/forum/go ... your-gold/

That's a super-helpful thread. Thanks for the pointer!

BTW, here is an updated link for XL Specialty Insurance: http://xlgroup.com/insurance/insurance- ... e/fine-art (notice it's "Fine Art and Specie"). I'll post more in the original thread if I have more to report...