What's "Invest in Gold"?
“What does ‘investing in Gold’ even mean?” asked Mira.
“It means buying gold in one way or another. You buy it because you think you can sell it later for more money than you bought it for.” replied Grandma Tara.
“Like buy REAL GOLD?!” exclaimed Teyus.
“Yes” said Grandma with a smile. She went on, “Well, there are many ways to buy gold. You can buy actual bars and coins of gold like the kind they have in treasure chests. You can buy a small part of companies that drill down in the earth looking for gold. You can even buy parts of companies that have a business in gold on a stock market (that's just a fancy word for a market where you can buy and sell virtual ownership of companies).”
“But wouldn’t it be more fun to buy gold and wear it?” asked Mira, already imagining a gold crown on her head.
Teyus rolled his eyes and asked, “But why would you even want to invest in gold?”
Grandma continued, “People buy and sell all kinds of things to make more money or to keep their money safe. Gold is just one such thing. Since gold is precious, it’s called a ‘precious metal’. But it’s not the only kind of ‘precious metal’, there is also Silver and Platinum and Palladium and Rhodium.”
“So why is gold so special?” asked Mira.
“Well, let’s look at the other precious metals" said Grandma, and then continued. "Silver tarnishes so it looks blotchy after a while and the other three are hard to extract from the Earth. On top of that, they need high temperatures to melt so they are not very practical to use. And of course, gold is the only one which is actually ‘golden’, the other three look silver-grey. All of these factors led to gold being used more.”
“If it’s that good, why do we use cash?” asked Teyus.
Grandma smiled, “Cash is easier to carry because it has different values. Imagine buying a chocolate bar with a gold coin!”
She went on to explain how almost every ancient civilization from the Greeks to the Romans to the Egyptians used gold coins as a currency. In fact she even told them about the Gold Standard.