Latest / The Bullion Advantage | Wealth Protection, Politics and Finance Insights From The #1 UK Gold Dealer / Midterm Elections Spike Gold, Cryptocurrency Hacked + Gold & Property Go Toe to Toe

Transcript

Midterm Elections Spike Gold, Cryptocurrency Hacked + Gold & Property Go Toe to Toe · The Bullion Advantage | Wealth Protection, Politics and Finance Insights From The #1 UK Gold Dealer

• 0:00
  SPEAKER_00: Another blow to homeowners.
• 0:03
  SPEAKER_00: For generations, owning property has been seen as one of the safest ways to build your wealth.
• 0:08
  SPEAKER_00: Buy a house, collect the rent, watch its value grow, and eventually you'll use it to fund your retirement.
• 0:15
  SPEAKER_00: Simple, right?
• 0:16
  SPEAKER_00: But is that traditional strategy starting to fall apart?
• 0:19
  SPEAKER_00: Following the latest UK budget, there are plenty of questions being asked about the future of property ownership in the UK.
• 0:26
  SPEAKER_00: At the same time, gold continues to attract attention from individuals, major institutions, and central banks all around the world.
• 0:34
  SPEAKER_00: So how do these two very different assets compare?
• 0:37
  SPEAKER_00: And what should you consider when choosing between them?
• 0:40
  SPEAKER_00: By the end of today's episode, you'll have a clearer understanding of the true costs and risks of owning property, how physical gold compares, and what you should consider when deciding how to best protect your wealth for the future.
• 0:52
  SPEAKER_00: Also, we've got some massive breaking news on the topic of cryptocurrency, plus all the fallout from the midterm elections and how gold has reacted.
• 1:01
  SPEAKER_00: Welcome to the Bullion Advantage.
• 1:03
  SPEAKER_00: You're in the right place to gain valuable insights from specialists who talk to thousands of people just like you every year about protecting wealth.
• 1:12
  SPEAKER_00: Let's get into it.
• 1:13
  SPEAKER_00: Harry, welcome back to the podcast.
• 1:15
  SPEAKER_00: I feel like you're very, very highly qualified to talk about the topic today.
• 1:19
  SPEAKER_01: Yes, yeah.
• 1:19
  SPEAKER_01: I'm no, it's uh it's a topic I like.
• 1:22
  SPEAKER_01: So for um people who don't know, my background actually is property.
• 1:25
  SPEAKER_01: I used to own an estate agent before getting into uh the the bullion markets.
• 1:30
  SPEAKER_01: Um so yeah, there's been a lot happening in it, so it's a great thing to talk about, actually.
• 1:34
  SPEAKER_00: Well, the latest budget, as you said, has got more tax changes for property owners.
• 1:38
  SPEAKER_00: I think first just maybe outline what exactly is actually changing and who really is going to be affected by it.
• 1:44
  SPEAKER_01: Yep, headline figures is tax.
• 1:46
  SPEAKER_01: Uh no surprise there, that's what we expected.
• 1:48
  SPEAKER_01: I mean, on a whole, the budget was a little bit underwhelming.
• 1:51
  SPEAKER_01: So uh I think Kemi Badnot just summed it up perfectly.
• 1:55
  SPEAKER_01: Not bold enough, not bold enough, not bold enough, and that's the reality of it.
• 1:59
  SPEAKER_01: However, property was one area that they did attack quite uh heavily.
• 2:03
  SPEAKER_01: No surprise, Labour typically like the renters' market, they don't like people owning their properties, very similar to a European style.
• 2:10
  SPEAKER_01: Um, but the government increased property tax at rates from April 2027 are going to go to 24%, 44%, and 49%.
• 2:19
  SPEAKER_01: Uh this particularly affects individuals, landlords, especially higher rate taxpayers.
• 2:24
  SPEAKER_01: That he refers to the working class as people who sit around doing nothing, whereas for us, the working class are those who get up every day, go to work, yeah, uh, and pay their taxes, they're the ones being paid alive.
• 2:35
  SPEAKER_00: So you mentioned the the figures for the tax rises there, uh property income tax rising, 24% basic rate, 44% higher rate, and 49% additional rate.
• 2:44
  SPEAKER_00: But I think a lot of people might not know exactly what that means for the Yeah, of course.
• 2:49
  SPEAKER_01: Let's let's break it down with a an actual um set of figures.
• 2:52
  SPEAKER_01: So if you had£20,000 of taxable income and you're higher rate taxpayer, 44% means£8,800 just in tax on a rental property.
• 3:05
  SPEAKER_01: So we do have to bear in mind that rents aren't straightforward, there's always a boiler that needs repairing, or a dishwasher that's broken, or another deep clean that's needed.
• 3:14
  SPEAKER_01: So£8,800 in tax alone.
• 3:17
  SPEAKER_01: That's crazy.
• 3:17
  SPEAKER_01: I mean, the squeeze on landlords, we've seen it for so many years, Jake.
• 3:21
  SPEAKER_01: One of the reasons I got out of the property game was because we were just losing the bread and butter landlords because it's your average Joe, your nice couple had some spare change, they bought a property, they were great landlords, they weren't trying to squeeze every penny out of tenants, they're the ones that have been penalised.
• 3:38
  SPEAKER_01: The big corporate companies, the big North London companies, they can take the battering.
• 3:43
  SPEAKER_01: It doesn't matter.
• 3:44
  SPEAKER_01: They know they've got enough reserves, they know they can play the long game.
• 3:47
  SPEAKER_01: It's your average couple that have been squeezed out of the market.
• 3:51
  SPEAKER_00: I mean, why do you think that is?
• 3:52
  SPEAKER_00: Why does government keep targeting these private landlords on their rental income rather than treating them like any other business owner?
• 4:00
  SPEAKER_01: This is this is where for us it's just the government have no direction on what they want to do.
• 4:05
  SPEAKER_01: I mean, the government wants to bring taxation of property income close to other forms of income.
• 4:09
  SPEAKER_01: But landlords argue that they're running a business, they're providing housing, they're managing tenants, they're taking financial risk, they're not simply collecting free money, but the government are treating it like it's just any other paid work.
• 4:20
  SPEAKER_00: Well, exactly that.
• 4:22
  SPEAKER_00: These changes making it increasingly difficult for regular people like you and me, our listeners, for using a property as a way of actually building wealth now.
• 4:32
  SPEAKER_01: Yeah, I mean, look, particularly for people starting out, I mean, higher borrowing costs, taxation, um regulations, reducing margins.
• 4:42
  SPEAKER_01: Property can still build wealth, but these days you have to be super savvy, switched on, and know exactly what you're talking about.
• 4:49
  SPEAKER_01: Definitely.
• 4:50
  SPEAKER_00: Do you think there's a possibility that it could maybe squeeze the gap so much that mortgage payments increase and you actually won't be able to increase the rent enough to cover the difference?
• 5:01
  SPEAKER_01: This is the biggest point, actually, because where cash flow becomes critical, if your mortgage increases by£500 a month and you can't increase the rent, you're losing six grand a year.
• 5:12
  SPEAKER_01: Yeah.
• 5:12
  SPEAKER_01: They're not unheard of.
• 5:13
  SPEAKER_01: We've seen that over the last few years already.
• 5:15
  SPEAKER_01: So you're gonna have to subsidize the property, restructure the mortgage, or sell.
• 5:20
  SPEAKER_01: That's your they're your only options.
• 5:22
  SPEAKER_01: Yeah, that is it.
• 5:22
  SPEAKER_00: And I mean, a lot of people, we've said it before, a lot of people are asset rich, but not cash rich.
• 5:28
  SPEAKER_00: Some people rent out a property that they've perhaps inherited as a as a large chunk of their income.
• 5:35
  SPEAKER_00: And if that gets taken away, then you're in real trouble, aren't you?
• 5:38
  SPEAKER_00: 100%.
• 5:38
  SPEAKER_00: If someone has most of their retirement and wealth tied up in property, then what are the risks that you would say they should be thinking about?
• 5:46
  SPEAKER_01: Biggest thing's liquidity.
• 5:47
  SPEAKER_01: So when we're speaking to a lot of clients, that's the argument of well, property actually gives me a passive income versus gold.
• 5:53
  SPEAKER_01: Obviously, you just sit on it until you sell it.
• 5:55
  SPEAKER_01: The reality is there is no passive income anymore.
• 5:57
  SPEAKER_01: I don't know anyone in in the property markets that are going, yeah, I'm I'm happily clearing my mortgage, payments, management fees, uh, utility costs, whatever it may be, and still building up a float.
• 6:09
  SPEAKER_01: It's it's non-existent.
• 6:10
  SPEAKER_01: So liquidity is super, super saturated.
• 6:15
  SPEAKER_01: This is my biggest argument for people looking at gold over property right now.
• 6:19
  SPEAKER_01: I'm never ever ever going to call you and say your vaulted gold needs a new boiler.
• 6:24
  SPEAKER_01: I'm never going to tell you that we have to change over the gold provider because they want to move on.
• 6:29
  SPEAKER_01: It doesn't happen.
• 6:30
  SPEAKER_01: And and you are just offering so much risk to property, and where people were making fantastic yields, they were making 20, sometimes 30% in HMO situations a year.
• 6:41
  SPEAKER_01: I fully understood it.
• 6:42
  SPEAKER_01: Now you're taking all the risk and bearing none no reward for it.
• 6:47
  SPEAKER_01: What's the point?
• 6:48
  SPEAKER_00: Yeah, and at the same time, property owners are facing all of these pressures, gold's been attracting attention from bigger institutions like central banks.
• 6:56
  SPEAKER_00: So, what do you think's driving that demand as well?
• 6:59
  SPEAKER_01: Yeah, I think we're gonna come on onto it later, but the midterms have been a huge ripple in the market.
• 7:04
  SPEAKER_01: There's a lot happening right now that every time there's a knee jerk reaction in the markets, there's a sell-off of gold, and then there's a lot of people flooding to gold.
• 7:12
  SPEAKER_01: And it's the exact same as I've explained in the podcast before.
• 7:15
  SPEAKER_01: In the Middle East, the only asset they had to sell was gold, yeah, and they used it as their reserve currency, they resume, they used it there in a times when they needed it.
• 7:24
  SPEAKER_01: Same for the domestic buyer right now, it's the exact same.
• 7:27
  SPEAKER_01: So, right now, people are going, don't know what way to turn, everything seems a risk.
• 7:33
  SPEAKER_01: Actually, let's just go back to basics, let's go to what we know's done well for so many years.
• 7:37
  SPEAKER_00: Yeah, you touched on it briefly there with a few examples.
• 7:41
  SPEAKER_00: But what would you say fundamentally makes gold different from owning property?
• 7:47
  SPEAKER_01: Um, I think property is a productive asset that can generate income.
• 7:51
  SPEAKER_01: Gold is more of a monetary asset, yeah.
• 7:53
  SPEAKER_01: Uh, so used for diversification for wealth and maybe an extra tool in your portfolio.
• 7:59
  SPEAKER_01: I I think for me though, I really and from a property background, Jake, I just don't see the benefit unless you're a Sparky, a plumber, uh a developer that has your own building team.
• 8:11
  SPEAKER_01: I really cannot see the justification or argument for property.
• 8:15
  SPEAKER_01: There was this whole flood up north because the northern prices had to catch up with the southern prices.
• 8:20
  SPEAKER_01: But even five years ago, mate, I knew people who were getting 25% yields.
• 8:23
  SPEAKER_01: Now people are going, well, is it over 5%?
• 8:26
  SPEAKER_01: I'm thinking, what?
• 8:26
  SPEAKER_01: Why are you doing all this work for a 5% yield?
• 8:29
  SPEAKER_00: Yeah, it's not it's not good enough, is it?
• 8:31
  SPEAKER_00: But I think one sticking point, and you also mentioned it briefly there as well, is that gold gold doesn't generate passive income.
• 8:38
  SPEAKER_00: That is one thing.
• 8:39
  SPEAKER_00: So why do people consider it really an effective way of wealth preservation?
• 8:44
  SPEAKER_01: Yeah, I think this is important.
• 8:45
  SPEAKER_01: Income and wealth preservation are two very different objectives.
• 8:49
  SPEAKER_01: Gold doesn't pay rent or interest, but some investors hold it to diversify their portfolios.
• 8:55
  SPEAKER_01: This is about long-term wealth, this is about long-term growth.
• 8:58
  SPEAKER_01: The same way we've said we know a lot of people who are asset rich, the reason they become asset rich is because they sit on what they have.
• 9:04
  SPEAKER_01: Yeah, it's about protecting what you have.
• 9:06
  SPEAKER_01: And right now, I cannot think of a time in our history where it's more important to protect what you have.
• 9:12
  SPEAKER_00: So, again, you mentioned earlier liquidity is a really important part of this conversation.
• 9:18
  SPEAKER_00: How does physical gold compare with property when it comes to liquidity and accessing your money when you need it?
• 9:23
  SPEAKER_01: And cheese.
• 9:25
  SPEAKER_01: Property, I think the average sale time now is about 10 months.
• 9:28
  SPEAKER_01: Now, there's going to be people going, well, that's ridiculous.
• 9:30
  SPEAKER_01: I sold in three months.
• 9:31
  SPEAKER_01: How about liquidating in 24 hours?
• 9:33
  SPEAKER_01: Yeah.
• 9:33
  SPEAKER_01: That's that's the the counter-argument, right?
• 9:35
  SPEAKER_01: The bottom line is HMRC, land registry, estate agents, solicitors, buyers, sellers, chains.
• 9:43
  SPEAKER_01: There are so many variables when you come to sell a property that until that deal is done, that's why they say it's the most stressful experience of your life.
• 9:51
  SPEAKER_01: Because until that is done, it is not finished.
• 9:54
  SPEAKER_01: And even the rate of people pulling out after exchange, that was never heard of.
• 9:58
  SPEAKER_01: Once you exchange, you're liable for the deposits, you're liable to complete on that property.
• 10:02
  SPEAKER_01: People are still doing it because the market's moving so drastically.
• 10:06
  SPEAKER_01: So, in terms of that, I mean, for example, our pensions, 24-hour liquidity.
• 10:10
  SPEAKER_01: When you want to sell, you pull the trigger.
• 10:12
  SPEAKER_01: It is that simple.
• 10:13
  SPEAKER_01: The gold market continues to move.
• 10:15
  SPEAKER_01: So if liquidity is something you're after, they're not even in the same conversation.
• 10:19
  SPEAKER_00: No, I totally agree.
• 10:20
  SPEAKER_00: Keeping the topic on gold, is there any specific type of gold that people are buying at the moment, especially when it comes to protecting their wealth, keeping the most of what they have?
• 10:29
  SPEAKER_01: Yeah, I don't want to be uh too repetitive because we go over this many a time.
• 10:33
  SPEAKER_01: It is still British gold coins.
• 10:34
  SPEAKER_01: We have to stick with British gold coins, they are VAT and capital gains tax exempt.
• 10:39
  SPEAKER_01: I think the highlight really for us is the amount of people this year purchasing is down.
• 10:46
  SPEAKER_01: The total value purchased is up, which actually shows us it's these savvy guys who are going, Well, there's a dip right now, this is when you buy.
• 10:54
  SPEAKER_01: You don't buy when it's sky high, you buy when it's low, right?
• 10:56
  SPEAKER_01: So um I think we're about 33% away from where we were, so about£1,100 an ounce.
• 11:02
  SPEAKER_01: Yeah, that's a lot of money.
• 11:03
  SPEAKER_01: 1100 pounds an ounce from where we were at March of this year.
• 11:07
  SPEAKER_01: So if you can't see this as a good opportunity to buy, in all honesty, you're never gonna buy.
• 11:12
  SPEAKER_01: That's that's the facts of it.
• 11:14
  SPEAKER_01: And we are having them conversations with people, but it is the truth.
• 11:17
  SPEAKER_01: If you're waiting for the absolute bottom, you're gonna miss it.
• 11:21
  SPEAKER_01: Yeah, you're gonna miss it.
• 11:22
  SPEAKER_00: 100%.
• 11:23
  SPEAKER_00: So, what do you think would need to happen for property for it to become more attractive and private landlords could actually benefit again?
• 11:31
  SPEAKER_01: Yeah, as a homeowner and a landlord myself, Jay, this is really, really, really simple.
• 11:36
  SPEAKER_01: Predictable taxation, affordable mortgage finance, and clear regulation, we have nothing, no clarity, no idea where it's going to turn, way too many variables.
• 11:47
  SPEAKER_01: It needs to be simplified.
• 11:49
  SPEAKER_01: Simple as that.
• 11:49
  SPEAKER_01: There you go.
• 11:50
  SPEAKER_00: So I guess the big question is if you had£100,000 lying around today and your priority was protecting your wealth over the next 10-20 years or so, would you choose property?
• 12:03
  SPEAKER_00: Would you choose physical gold, or would you choose both, mate?
• 12:06
  SPEAKER_01: I'm really hoping people have listened to the last 15 minutes of this.
• 12:09
  SPEAKER_01: I think hands down, right now, for me, it's uh gold, obviously.
• 12:14
  SPEAKER_01: That that is the only answer to it.
• 12:17
  SPEAKER_01: The reason the only reason I'm holding on to the properties I have is purely on the basis that I'm gonna make such a hemorrhaging loss that I can't I can't face it right now.
• 12:27
  SPEAKER_01: If I was at a point of break-even, I'll be cashing out and getting it out.
• 12:30
  SPEAKER_01: Wow.
• 12:31
  SPEAKER_01: Would I put all of that into gold?
• 12:32
  SPEAKER_01: No, and it's what I've said to you before.
• 12:34
  SPEAKER_01: We never say if someone calls up and says I've got a hundred thousand, we have to find out is that the full amount you're looking at, or is that a portion of your portfolio?
• 12:42
  SPEAKER_01: You never want to be in one asset completely.
• 12:45
  SPEAKER_01: But do I think now more than ever we're going from single figure allocations to double-digit allocations for sure?
• 12:52
  SPEAKER_00: Yeah, yeah.
• 12:53
  SPEAKER_00: So let's I think just segue into the big news stories that we definitely need to talk about today.
• 12:59
  SPEAKER_00: I think the first one there was a massive cryptocurrency hack, and Binance had to cover, I think it was what six six billion dollars.
• 13:07
  SPEAKER_01: That is a huge figure, and it sent shockwaves through the market.
• 13:12
  SPEAKER_01: Gold itself went down three percent.
• 13:14
  SPEAKER_01: There was an instant sell-off, people were trying to liquidate money, they had cash it in.
• 13:18
  SPEAKER_01: It's rec returned that loss already, yeah, and it's come back on it because people are going, ah yeah, let's get out of this crypto game, let's let's get into hard assets.
• 13:27
  SPEAKER_01: It is always been the pessimists of crypto, they've just been they're they're being a bit smug at the moment and and rubbing their hands because it has just proved them completely correct.
• 13:38
  SPEAKER_00: What actually happened?
• 13:39
  SPEAKER_00: I all I've read are the headlines massive cryptocurrency hack, six billion.
• 13:44
  SPEAKER_00: But I what actually happened, I don't know.
• 13:46
  SPEAKER_01: In all honesty, to our listeners, that is all they need to know.
• 13:49
  SPEAKER_01: 6.3 billion was wiped out of the biggest market for crypto on Binance.
• 13:55
  SPEAKER_01: Everyone's heard of Binance, and 6.3 billion is a lot of money to just vanish.
• 14:01
  SPEAKER_01: Ludicrous if you're putting large portions in it.
• 14:04
  SPEAKER_01: Stop being greedy, stop looking for the 40% win overnight, yeah.
• 14:08
  SPEAKER_01: Protect what you have.
• 14:09
  SPEAKER_01: I've said it a million times before on this gold is not gonna make you a millionaire overnight, it is 100% gonna stop you living on the street.
• 14:16
  SPEAKER_01: Yeah, and if you're putting everything into crypto and the next thing you know it's just been sucked, what are you gonna do?
• 14:21
  SPEAKER_01: What are you gonna do genuinely?
• 14:22
  SPEAKER_00: Well, you have nothing, don't you?
• 14:24
  SPEAKER_00: You have nothing.
• 14:24
  SPEAKER_00: You have absolutely nothing.
• 14:25
  SPEAKER_01: Nothing at all.
• 14:26
  SPEAKER_00: Yeah, and I think the other big news story that we want to talk about, obviously, last night, Democrats absolutely swarmed the midterm elections, won the House and the Senate.
• 14:36
  SPEAKER_00: And this actually did have quite a decent effect on the gold market and the price.
• 14:40
  SPEAKER_00: Yeah, fantastic.
• 14:42
  SPEAKER_00: What's the correlation there?
• 14:43
  SPEAKER_01: Yeah, it's been really good.
• 14:44
  SPEAKER_01: I I think um for those who are political listeners on the podcast, obviously the Republicans had both the House of Representatives and the Senate.
• 14:51
  SPEAKER_01: That meant it was very easy for uh Donald Trump to get anything he wanted passed through.
• 14:56
  SPEAKER_01: Uh in the midterms, the House of Representatives has gone back to the Democrats, which don't get me wrong, in America, the the president has the final say on most matters.
• 15:04
  SPEAKER_01: However, it's gonna make it a little bit more arduous, it's not gonna be a tweet and a snap of the fingers, and suddenly Trump can do what he wants.
• 15:10
  SPEAKER_00: So I think they called the Senate for the Democrats as well.
• 15:14
  SPEAKER_01: Did they?
• 15:14
  SPEAKER_01: They got both, yeah.
• 15:15
  SPEAKER_01: So that that that's the reality of it is that he's not getting anything.
• 15:20
  SPEAKER_01: He's not getting anything done, yeah.
• 15:21
  SPEAKER_01: I mean, it's just gonna encompass him with a lot of legislation and a lot of work, so it's good for us, and that's why the market's reacted so positively, because where he's just been controlling and calling the shots with the markets, there's a little bit more time.
• 15:34
  SPEAKER_00: He won't be able to do that, and they're gonna try and impeach him and everything like that.
• 15:37
  SPEAKER_01: So he's gonna be a bit more maybe two huge bits, but I mean both are opportunities for people looking at this market, yeah, for sure.
• 15:45
  SPEAKER_01: For sure.
• 15:46
  SPEAKER_00: So has the traditional British love affair with property started to change?
• 15:50
  SPEAKER_00: With rising taxes, increasing regulation, higher mortgage costs, and more pressure on private landlords, it's becoming increasingly important to question whether property is still the best place to hold your wealth.
• 16:03
  SPEAKER_00: Gold certainly has its own risks, and it definitely isn't a replacement for every asset out there, but it does offer a very different way of holding and protecting wealth.
• 16:14
  SPEAKER_00: Without the tenants, without the mortgages and ongoing responsibilities that come with property ownership, it's something to consider looking at if you're looking for wealth protection.
• 16:24
  SPEAKER_00: Ultimately, there's no one size fits all answer.
• 16:27
  SPEAKER_00: What's important is understanding your options, knowing the risks, and making sure you're not putting all your eggs in one basket.
• 16:35
  SPEAKER_00: We'd love to know what you think though, and if you did have£100,000, or£10,000, or£1,000, would you still be looking to save for a property?
• 16:45
  SPEAKER_00: Would you look at physical gold, or perhaps a combination of both?
• 16:49
  SPEAKER_00: Please do let us know in the comments below, or you can email us at podcast at directbullion.com.
• 16:56
  SPEAKER_00: If today's discussion has got you thinking, and you're interested in how gold could play a role alongside your existing assets, we've got a free guide to tax-free gold.
• 17:07
  SPEAKER_00: It explains which UK gold coins qualify for capital gains tax exemption, what to look for when buying, and how to get started.
• 17:15
  SPEAKER_00: You can get your free copy at guide.directbullion.com.
• 17:19
  SPEAKER_00: Next week, we're talking about all the digital uncertainty that's going on at the moment, and how physical assets are becoming even more crucial for wealth protection.
• 17:28
  SPEAKER_00: So definitely stay tuned for that one.
• 17:31
  SPEAKER_00: Thank you so much for listening to the Bullion Advantage today, though.
• 17:34
  SPEAKER_00: Stay informed, stay prepared, and most importantly, stay golden.
• 17:39
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• 17:46
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• 17:52
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• 17:56
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• 18:02
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