For the seven years I have now had the pleasure of working for Caroline Peers, the C.E.O. of Bleyer, one aspect of her work that has consistently shone through is her passion for Financial Education. This spreads across the team but also forms the backbone of Bleyer’s communication with our clients. Many of you are well versed in financial research and so we consider it a privilege to engage, inform and develop a thorough financial education of what money is, what it isn’t and how to give the greatest benefit to our clients.

A central part to this financial knowledge is knowing the basic difference between an asset and a liability. Delve even slightly below the surface of financial commentaries and one will hear these two terms. 


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Importance of Understanding

But what do they really mean? And once we fully understand what they mean, are we then – more importantly – able to identify which is which in our own lives? The importance of this understanding becomes apparent when it is understood that most people suffer financially because they simply don’t have any assets, have too many liabilities and confuse the two.


An Asset: According to Difference Between, “an asset is something that generates income for the owner on a regular basis. In a more traditional way of thinking, an asset is anything that can be turned into money when you so desire.” This seems simple enough. 

A Liability: Conversely, “is anything that causes outflow of money from your pocket” – again, in the abstract, simple enough.


Various gold bars available at Bleyer


Gold and Cash: assets or liabilities?

Gold is an asset. “If you have gold as your savings or in the form of jewellery, it can be considered an asset. [However] though, cash is considered asset in financial statements of companies, it is technically not an asset as it is not reproducing itself or generating money for you unless you have invested it in profitable schemes.”


Better yet, Gold is what is known as a “Liquid Asset”

“Gold is known as an easy liquidity asset as you can cash it very quickly and it won’t be an exaggeration to say that by any means. If you are in need of money, you can sell it instantly – this doesn’t happen for other assets like property, stock or mutual funds for that matter.” (Quora: The Economics of Investing)

Gold, Silver and any of the precious metals can be sold incredibly quickly via any online or in-person bullion dealer. Having said that, once again, I received a flyer through my door only yesterday advertising “Top London Cash Prices Paid for Gold and Silver” for one day only at Age Concern in my local town. I went along to one of these “pop-up” shops and was offered roughly 50% of what I would get from Bleyer if I sold one Gold Sovereign. That is daylight robbery. I would expect all our readers to be savy to these schemes but maybe your elderly relatives are not, so please do pass Bleyer’s details onto them because they should expect anywhere between 90% – 99% of the spot price for their Gold or Silver, dependent on condition. Not 50%!


Not all properties and cars are assests.


Do you own enough Assets?

Most people will answer, yes, of course, I have my house. But our houses are mostly liabilities, as are all our cars. If we have debt on either, it is a liability.

But what if we are mortgage free? Then my house is an asset right? No. Because it still requires insurance, structural maintenance, decorating and utilities. So, it still takes money out of our pockets, not puts income into our pockets.

The only scenario where a property we own is an asset is if we rent it and that rent covers the cost of all liabilities on that property. But the minute that property is unrented, it switches category and becomes a liability and a large one at that.

Many of our clients will have been with us long enough to remember the Rich Dad Poor Dad phenomenon of Robert Kiyosaki’s book. It’s hard to believe it has been ten years since its release. But here is a two minute video where he deftly examines the difference between assets and liabilities.




Testing the Case for Gold 

As a member of a Gold bullion company, I am not by law allowed to advise clients on whether they should actually buy Gold or not. But we are allowed to show you its strengths and weaknesses, including case history and referring to a wide variety of commentators. And of course, any company is going to approve of their own products and services!

But, is there some greater comparison and plumb line I could employ here to further deepen our understanding of the importance of Gold as a Asset which we should hold? Quite simply, yes. And that is to ask the question “What do large companies and institutions do? How do they use or hold Gold?” In many ways, we emulate those who are successful in life and if that success happens to be a financial model then we learn from their actions. 

So, after some research I found this gem of analysis. It’s a gem because it takes a fairly complex arena of financial asset investing and surmises the basic Gold principle very simply:

“Foreign reserve asset managers around the world are responsible for investing trillions of dollars in financial assets. Although the appropriate asset allocation is unique to each institution, almost every reserve manager follows the mantra of: safety, liquidity and return. Our analysis shows that gold compares extremely favourably to other traditional reserve assets with respect to these guiding principles – especially given the current unprecedented monetary policy environment.

  1. Safety: As a high-quality, liquid asset, gold helps preserve capital, diversify portfolios, mitigate risks, and serves as valuable collateral.
  2. Liquidity: Operating in large markets that rival those of major sovereign bonds, gold is one of the most highly traded financial assets, with low transactional costs and universal acceptance.
  3. Return: Since 1997, the average annual return on gold, in US dollar terms, has consistently outperformed the average returns on US Treasuries, Eurobonds, Japanese government bonds, and UK gilts over 10-year, 5-year and 1-year time horizons.” (World Gold Council)


Gold Bullion Investment Bars in a row


In Summary

Discuss whether your spread of current investments involves enough balance between assets and liabilities. Ideally, we’d all like all the former and none of the latter, but this is real life. Carefully examine whether what we thought was an asset is in fact a liability and perhaps consider adjusting some of your other investments accordingly.

Caroline Peers has many years of financial experience before her years in physical Gold investment in both the London banking sector and personal wealth management. If you would like to chat over how owning Gold or other precious metals can balance and blend with other small or large financial investments, such as pensions, property or stocks, do give her or one of the team a call on 01769 618618.


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