Sam Zell is a 77-year-old real estate titan whose net worth is estimated at $5.5 billion. He told Bloomberg last year that he bought gold for the first time in his life as a “good hedge.” Zell didn’t cite the type of hedge, gold is widely known as a hedge against inflation, currency depreciation, and the weak performance of various other asset types.
He got started with real estate in Chicago in the 1960s. And over the last five decades, he’s built an American real estate empire.
By 2017, Zell started selling his companies before taking over a Chicago real estate investment trust called Equity Commonwealth. As a result, the company is sitting on a stockpile of $2.7 billion in cash.
It is obvious Sam Zell is a visionary. Something he has in common with other billionaires. He sees the future of investment before it even becomes conceivable to anyone.
In 2018, Zell realized that the investment in mining has been virtually non-existent but the demand for gold is going up. He started buying gold as a hedge but soon realized it’s turning into an actual profitable long-term investment. He’s unloading properties at a record pace and buying gold.
“Investment on gold mining is basically non-existent. Go back to the very basic of supply and demand. When there is a rise in demand but limited supply, it equals increase in value.”.
He points out that investment in new mines is nonexistent. Less investment means that new gold reserves are not being discovered. In fact, gold reserves around the world have shrunk by 40% from the peak – due to less exploration activity by gold companies. He predicted that the slow pace of gold production will result to prices surging. His prediction is happening now. The coronavirus pandemic is only a bonus in this regard.
Sam Zell clearly wanted a safe haven investment in the beginning but is now realizing gold is more than that. Gold is an actual profitable investment that is completely detached from other factors like the S&P and printed currency.
You can do the same. You don’t need millions to start investing in gold.
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