Money and Wealth (Part 12) – Investing (Part C) – Gold, Real Estate

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Money and Wealth (Part 12) – Investing (Part C) – Gold, Real Estate

Here’s what Peter Schiff, owner of Euro Pacific Asset Management and Schiff Gold, recommends.

1. Schiff recommends, and has for a long time, to invest outside of the US in good, foreign, dividend paying stocks.
2. He recommends investing in gold and silver (more on this below) and other commodities which tend to do well in inflationary times.
3. He also recommends investing in gold and silver mining companies.
   • When the price of the precious metals goes up, the mining companies’ profit goes up, and therefore their stock prices go up.
   • Typically, the price of the mining companies will go up multiples of the price of the metals.
   • As of 4-17-2025:
     1. Gold is up 75% from its old record high in 2011 ($1,900 to $3,330).
     2. Gold mining stocks as a group are down 21% from their old record high in 2011.
     3. Gold is up 215% from when it bottomed out in the end of 2015 ($1056 to $3,330).
     4. Gold mining stocks as a group are up 291% from when they bottomed out in end of 2015.
     5. In the previous bull market (2008-2011), gold was up 150% while gold mining stocks were up 265%.
   • This divergence will probably not last for much longer before gold mining stocks begin to outperform gold.
   • Gold mining stocks are up 51% since the beginning of this year (as of 4-17-2025).
   • I think there is a large potential gain to be had at this time by investing in gold mining stocks as a whole, which one can do by buying the VanEck Gold Miners ETF (symbol: GDX).
   • However, investing in gold and silver mining stocks is risky and the market is very volatile, so be cautious.
4. Peter Schiff predicted the housing and financial crisis of 2008 years before it happened.
5. He has also predicted that the US economy and stock market will crash and will be outperformed by foreign and emerging markets.
6. He is bearish on the US stock market.
7. Time will tell if he is right.
8. He may have just been years early, but being years early means missing out on a lot of gains during that time.
9. You have to make up your own mind when it comes to whose investment advice to follow.

Investing in precious metals

1. Gold and silver should be a part of every portfolio, in my opinion.
2. Gold and silver have been valued by people for thousands of years, and that is not likely to change (Psa 19:10; Pro 3:13-14).
3. The word “gold” and its cognates are found 489 times in the Bible.
4. The word “silver” is used 320 times in the Bible.
5. Gold (and usually silver) will generally maintain their purchasing power over time and increase in value in terms of currency at the true inflation rate.
6. But they are not an investment per se, like stocks, because they do not normally grow exponentially over time, except in times of high inflation.
   1. For instance, if one would have invested $100 in the S&P 500 in 1928, it would have been worth $982,817.82 in 2024. If one bought $100 worth of gold in 1928, it would have been worth only $12,649.47 in 2024. (Historical Returns on Stocks, Bonds and Bills: 1928-2024, https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html)
   2. However, the price of gold has increased much more than the S&P 500 so far in the 21^st
      • Since January, 2000, the price of gold went from $284/oz to $3,324/oz (4-24-2025), which is a 1,070.42% increase.
      • Since January, 2000, the S&P 500 went from $1,469 to $5,444 (4-24-2025), which is a 270.2% increase.
7. How much precious metal should one own?
   1. I do not recommend putting all, or the majority, of one’s net worth in gold and silver because they will not grow your wealth like good quality stocks will, at least in normal times.
   2. However, during times of high inflation, as we saw above, they have outperformed the stock market.
   3. Some people recommend putting 5-10% of one’s net worth in gold, while others recommend more in times of high inflation.
   4. It is each man’s choice of how much to own.
   5. In an environment like today’s where the dollar could lose its global reserve currency status and inflation could soar, it might make sense to have more than 5-10% of one’s net worth in gold, possibly even much more.

Real estate

1. Real estate investing is another option to build wealth.
2. Purchasing real estate is a Biblical practice (Jer 32:44).
3. Investing in real estate for the future is also Biblical (Jer 32:6-15).
4. There are different ways to make money in real estate.
   1. Land can be purchased and sold later after it appreciates.
   2. Rental properties (houses, duplexes, apartments, etc.) can be purchased and rented out.
5. Real estate investing has various tax advantages.
   1. “One of real estate investment’s most compelling tax benefits is the ability to defer capital gains taxes through a 1031 exchange. This strategy allows you to sell a rental or commercial property and reinvest the proceeds into a like-kind property without triggering an immediate tax liability. By deferring capital gains taxes, you can preserve more capital for reinvestment, compounding your wealth over time. For instance, if you sell a property with significant appreciation and reinvest in a higher-value property, you continue to grow your portfolio without losing capital to taxes. The IRS has guidelines for this process, including identifying a replacement property within 45 days and completing the transaction within 180 days.” (The Top Tax Benefits of Real Estate Investments In 2024, Forbes.com, 1-20-2025)
   2. “Depreciation is another tax benefit that sets real estate apart. Even as your property appreciates in value, the IRS allows you to deduct the depreciation of the building over time, typically 27.5 years for residential properties and 39 years for commercial properties. This non-cash expense reduces your taxable income, saving you thousands of dollars annually.” (Ibid)
   3. “Certain types of real estate investments come with valuable tax credits. For example, projects that involve historic building restoration or low-income housing development may qualify for federal and state tax credits. These credits directly reduce your tax liability, offering dollar-for-dollar savings.” (Ibid)
6. Real estate investing also comes with headaches such as dealing with tenants who might not pay or might trash your property.
7. It’s also a lot of work, such as taking care of maintenance, leases, collecting rent, evictions, dealing with tenants, etc.
8. One rule to remember when investing in real estate is: never borrow money to do so! Always pay cash for investment properties.