WHY IS MORE AND MORE MONEY FLOWING INTO GOLD?
By definition, saving means giving up present consumption in order to ensure financial security in the future.
The most common ways of saving money worldwide are the following:
- Saving money in cash is considered the worst option because it generates no return over time. After saving cash for “x” number of years, we will still have the same nominal amount of money, but due to inflation, its real value will be significantly lower than at the moment it was accumulated, regardless of the currency involved (EUR, USD, CHF).
- Saving money in a bank, meaning a fixed-term deposit, is only slightly better than keeping cash at home. This form of saving generates a minimal annual return through interest on deposited funds. Interest rates are extremely low, making this method of saving questionable and ultimately unprofitable. In many cases, interest rates do not even cover official inflation. It should also be noted that interest earned on fixed-term deposits in local currency is tax-exempt, unlike interest earned on foreign currency deposits, which is subject to taxation.
- Saving through real estate is considered a fairly good form of saving, since property prices generally increase over time. However, rental income can become questionable once tax obligations and the unavoidable depreciation of rented property are taken into account. The main disadvantages of this form of saving are low liquidity and annual property taxes.
Real estate belongs to the category of low-liquidity assets because selling a property requires time. In addition, capital gains tax of 15% is applied upon sale. Capital gain represents the difference between the selling price and the acquisition value of the property, including standardized costs added to the acquisition value, such as expenses and investments required to make the property functional.
The law also allows taxpayers to deduct standardized expenses amounting to 25% of the calculated capital gain. This is a lump-sum deduction recognized as a selling expense, regardless of whether those costs were actually incurred.
There are certain situations in which we may be exempt from paying capital gains tax when selling real estate:
- Sale of the only property owned:If we sell the only apartment or house we own and invest the proceeds from the sale into purchasing another residential property within one year, we are exempt from paying capital gains tax.
- Ownership for more than 10 years: If we have owned the property for more than 10 years before the sale, we are also exempt from paying capital gains tax.
- Inheritance: If we acquired the property through inheritance, we are exempt from paying capital gains tax upon its sale
If we purchase one or more properties solely for the purpose of preserving the value of money, without intending to rent them out, it is important to consider another tax burden that may arise in the near future in accordance with European regulatory policies. This refers to an additional tax on non-rented properties, which has already been introduced in several countries within our region.
- Money invested in investment gold represents the best — and it can freely be said, an excellent — form of saving. In this way, the nominal value of our money increases over time. Through the growth of its value, gold preserves the purchasing power of money. In many cases, when the value of gold rises significantly, investors can also generate additional profit through gold investments. This profit represents the amount by which the value of gold has increased above the inflation rate during a given period. It is calculated as the difference between the current (selling) value of gold and its purchase value, adjusted for inflation.
The incredible phenomena that marked 2024 and 2025, during which the value of gold increased by an astonishing 90%, positioned investment gold among the most profitable forms of investment. As a result, investing in investment gold has emerged as a superior investment option, incomparable to the forms of saving and investment mentioned above.
