First Financial Consulting was featured in an Ask an Advisor article examining some of the more unusual retirement strategies financial advisors have encountered with clients.
In the piece, Greg Welborn, principal of First Financial Consulting, shares the story of clients who had accumulated several carloads of physical gold and buried it in their backyard. When a wildfire destroyed their home and the Army Corps of Engineers prepared to clear the property, the clients suddenly needed to recover and secure the gold.
Greg Welborn on the Risks of Holding Physical Gold
Greg explains that burying physical gold introduces risks that go well beyond investment performance. Physical precious metals can create storage, security, insurance, liquidity, and recordkeeping challenges, particularly when large amounts are held outside of traditional financial institutions.
After helping the clients retrieve their gold, Greg developed both immediate and longer-term solutions. The initial priority was securing the assets in a fireproof, high-security safe, while the longer-term plan included considering a private bullion depository and addressing the tax and reporting considerations involved if the gold was eventually sold.
Greg also encouraged the clients to reconsider how much physical gold they wanted to maintain. For investors who want exposure to precious metals, he noted that precious-metal ETFs can offer easier liquidity without many of the storage and insurance complications associated with holding physical bullion.
Key Takeaways from the Article
- Physical gold can create significant storage, security, insurance, and liquidity considerations
- Unconventional assets should still be evaluated as part of an overall retirement and investment strategy
- Investors should consider how easily an asset can be accessed or converted when needed
- Selling substantial physical holdings can introduce tax and financial-reporting considerations
- Investment decisions should account for practical risks in addition to potential returns
Overall, the story illustrates an unusual but important retirement-planning lesson: how you own and store an asset can matter almost as much as the asset itself. A retirement strategy should consider accessibility, security, diversification, taxes, and long-term financial goals – not simply whether an investment might increase in value.
