A Medium of Wealth vs. a Medium of Exchange - Time To Buy Precious Metals
A Medium of Wealth
A medium of wealth is an item that will hold its value no matter how good the times are or how bad the times are. That item will still maintain their value and solvency. The more the item is wanted, the more valuable and the higher that item retains its value.
If more people want said item and there just isn’t enough of the item to go around, then the value of that item goes up. Value is based on demand so items that maintain a medium of wealth will be items that will be continually in demand in one form or another.
Here is a quick example. Food is a small example of a medium of wealth.
Food is worth far more to starving people than to well fed ones.
If the starving man can save his life, there is value from both the person with the food and the person who needs the food.
Therefore a medium of wealth is established.
Other things that are mediums of wealth…
- Gold, silver, and other precious metals
- Consumable tangible assets / commodities
Just about anything that will not lose its barter and trade value is a safe medium of wealth.
If you are purchasing an item that will lose %50+ of its value the moment you take it with you, then it isn’t a good investment. This is why it is good to research any item that you may purchase to see if it will retain its value or not.
A great example of NOT retaining value is most new cars today. Now granted, once you get over the $50K mark for a car purchase, they tend to hold their value a little more. But your average car will lose close to 30% - 50% the moment you drive it off the lot.
No matter what, the average BRAND NEW car does not hold its value.
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