You have probably had the opportunity many times to hear that gold is a good investment.
Throughout history, it has proven that nothing shines like gold. Nothing was different in 2024 either.
Gold has increased by nearly 40% from the beginning of 2024 until today.
Investing in gold is known as the safest long-term investment. In 2024, gold also showed its other side. Therefore, investment gold brought investors who bought it a few months ago a significant financial benefit in the form of added value on their invested money.
The fact that gold has increased its value by 120% over the last five years should not be overlooked either. Geopolitical tensions have a dominant and progressive influence on the movement of gold value.
If we observe and compare investment gold with other investment categories, such as real estate, land, etc., we can conclude that gold represents the investment with the fastest return on invested funds.
Funds invested in gold five years ago have fully returned within five years.
We would like to emphasize that this is not always the case. The average annual growth in the value of gold is around 12%, but there are periods when the growth in value is significantly higher, as happened in recent years. Therefore, if investment gold does not return the invested funds within five years, it will do so within ten years at the latest.
If we analyze investments in real estate, we will conclude that they provide a return on invested funds on average within a period of 15 to 25 years, depending on the location, available amenities, technical equipment of the property, purpose, and similar factors.
The advantages of investing in investment gold compared to investing in real estate are the following:
Gold is liquid and can always be converted into cash.
With investment gold, there are no tax burdens during purchase, ownership, or sale, that is, cashing out.
- All taxes are eliminated.
- VAT = 0%
- Property tax = 0%
- Capital gains tax = 0%
- Depreciation costs are 0%.
When purchasing a new property, VAT is paid in the amount of 10%.
– When purchasing a used property, a Property Transfer Tax is paid in the amount of 2.5%.
– An annual property tax is paid for owning real estate.
The only advantage of real estate is the possibility of renting, which generates monthly rental income. A tax of 20% is paid on the monthly rent.
If we rent out a property to a private individual, we are required to pay a property income tax in the amount of 20% on the agreed net rental amount. Also, if our income from real estate (rent) becomes such that we become liable for annual personal income tax, or if the total of all our income exceeds the non-taxable amount, we are also required to pay annual personal income tax in the amount of 10% and 15% on the amount exceeding the non-taxable threshold established by law.
If the tenant of the property is a Legal Entity or an Entrepreneur, the cost of property income tax (rental tax) is paid by the Tenant. If the income generated from renting out the property exceeds the non-taxable amount, the property owner pays annual personal income tax in the amount of 10% and 15%, depending on the amount earned from renting the property, considered together with other generated income, on the amount exceeding the non-taxable portion.
Renting leads to accelerated depreciation of the rented property, so it is not uncommon to have situations where years of rental income cannot cover the depreciation costs of the rented space.
If we decide to sell a property, it is certain that a certain period of time will be needed for the sale to be completed. This may take days or months. The situation with gold is significantly different. Gold can be converted into cash immediately, that is, on the same day we make the decision.
In fact, that fact sets gold apart from other forms of assets and gives it the status of a PREMIUM ASSET.
Another important advantage of investing in gold compared to investing in real estate is the following. We can start investing in gold with smaller financial amounts, while investing in real estate requires significantly larger financial amounts.
By far the worst option has proven to be saving cash. Capital that is, conditionally speaking, “sleeping,” meaning not investment-engaged, decreases day by day.
For example, if we accumulated a certain amount of money in 2019 and kept it in cash, today, after five years, we would still have the same amount of money, but we could buy far fewer goods than in 2019. The reason for this is global inflation, which has led to an increase in the prices of all goods and services.
Savings in banks in the form of fixed-term deposits are only slightly better than keeping money “under the mattress.” It is widely known that savings deposits in banks generate minimal interest. Savings deposits in Serbian dinars are exempt from tax on earned interest income, unlike foreign currency deposits where tax is paid.