American Bullion is proud to announce the winners in our annual Scholarship Program! If you are wondering how to win a scholarship of your own, read the essays below to learn more. Winners are selected each year, and the winning students can help you learn how to get a scholarship of your own.
Three college scholarships worth $1,000 each were awarded. Over 1000 applications were received in total. Applicants were asked to write an essay answering the prompt “What are the benefits of including physical gold in an IRA/401(k) portfolio?” The students offered a wide range of viewpoints, each with its own value and approach. American Bullion is proud to award this scholarship to the deserving students below. The 2017 winners are:
- Veeraj Shah – Sophomore – University of Maryland
- Alyssa Metcalf – Junior – University of California at Santa Barbara
- Whitney Nicole Bellephant – Freshman – Southern University
We congratulate the winners and thank everyone who participated. The winners’ essays are below. For information about the 2018 scholarship opportunity at scholarship page.
Winners’ Thoughts & Essays
“Originally from Tucson, Arizona, I am a political science major and am also minoring in history. I cannot express how grateful, pleasantly surprised, and excited I am to be named a winner of the 2017 American Bullion Annual Undergraduate Essay Scholarship Contest. This award will definitely help me in furthering and strengthening both my academic and professional careers.“
In essence, a Gold IRA functions in the exact manner that a regular IRA does; however, instead of holding paper assets such as stocks or bonds, the account holds physical gold (or other precious metals, such as silver, platinum, or palladium) in the form of bars or bullion coins. Gold IRAs are self-directed and government-approved, making them an incredibly secure investment option. This method provides several advantages, including increased security, stability, and diversity in an era of economic uncertainty. Precious metals have always been considered to be a safe choice in the face of geopolitical crises and economic downturns, and the use of the Gold IRA is certainly not an exception. While the economy has been steadily (albeit somewhat sluggishly) improving since the disaster of 2008, many financial uncertainties still loom over the average American consumer. Inflation, an unstable, bubble-prone stock market, and massive national debt are just a few of the concerns that make a Gold IRA a more attractive, secure investment strategy. Physical gold is not affected by stock market swings, a depleted dollar, or international economic panics in the way that paper currency is. In fact, when paper-heavy portfolios start to shrink because of inflation and other anxieties, gold has been shown to generally keep increasing in value. Gold and other precious metals, unlike paper money, stocks, and bonds, are finite resources, meaning that the potential for growth over time is ever-increasing as time goes on. Even if an investor has confidence in the market, a Gold IRA is a fantastic way to diversify one’s portfolio without risking returns. In addition, gold’s resilience has been tried and tested before; for example, in 2001, an ounce of gold cost just two-hundred and seventy one dollars. Fast forward ten years, and that same ounce of gold cost a whopping $1,896. To do the math, that’s an increase of about 700% just in ten years alone. If the price of gold could withstand, and even flourish in, the crisis of 2008, there is no doubt that it will endure the expected turbulence of years ahead. As an added bonus, setting up a Gold IRA is simple, even if you have a preexisting individual retirement account. Converting existing retirement funds into physical gold is relatively effortless and is usually done by rolling your current account into a Self-Directed IRA, which is capable of holding physical precious metals. This process is quick and easy, usually taking ten to fifteen days to fully complete. It is important to stress that gold, and other precious metals, should be considered to be a long-term investment, so withdrawal is typically recommended in five to ten years or longer, depending on the economy’s health. In addition, there are plenty of tax benefits from using a Gold IRA, meaning that the investors can enjoy tax-free growth on their investments, something that virtually everyone can appreciate. Overall, there are seemingly endless reasons that one should consider opening a Gold IRA, including security, stability, and diversity, even in these unpredictable times we live in.
“I am deeply honored to receive this award. The recognition and associated monetary award will help me as I pursue my undergraduate degree in Bioengineering and Biological Sciences. It will also help fund my goal of becoming a physician scientist in Oncology. I thank everyone at the American Bullion Inc. for offering this generous award to undergraduates.”
While no person can predict the future, each of us can prepare for the future. This preparation begins in youth with education, followed by hard and hopefully fulfilling work, along with a plan for retirement. Retirement plans come in many forms such as the IRA, 401K, 403B, Roth IRA, SEP Ira and others. Each of these has different rules, sponsors, and tax implications. Yet, all have a common goal of setting aside money now, to be spent after retirement.
The visions of one’s retirement, be it on a beach, a mountain cabin, or simply surrounded by grandchildren, are often met by harsh realities, even after diligently investing for retirement. We see this time again, most recently during the Bernie Madoff scandal, or in the stock market crash of 2008/2009. With each shock, we are reminded of the importance of diversification, the fancy word for “don’t put all your eggs in one basket.”
Traditionally, retirement plans focus on stocks, bonds, mutual funds, and certificates of deposit (CDs). These all are paper certificates with promise of conversion to money that you will rely on after retiring. But what happens if the stock markets crash as you are about to retire? Or the institution you save with files for bankruptcy. Or even worse, the US currency loses value as inflation takes over? Clearly the US is no Venezuela, where 2016-2017 hyperinflation means the cost for a dozen eggs is hundreds of dollars. Nonetheless, the US has its own history with inflation, at 14% in 1980 and much higher earlier in the 20th century. No country and no retirement portfolio is immune to the multitude of risks that may materialize in the future.
These risks are precisely the reason for including alternatives in your retirement portfolio that are far more stable. These risks are also precisely the reason that Congress created, in the Taxpayer Relief Act of 1997, the opportunity to diversify retirement savings to include physical gold.
Mankind’s investment in physical gold dates back millennia. Through the turmoil of history, from the Egyptians, Greeks, Romans, to modern day America, physical gold holds value. Physical gold cannot be ‘printed’ and devalued like currency. Physical gold is immune to stock market fluctuations. Its value is bolstered as geopolitical or economic crises unfold. Moreover, physical gold can be easily converted to any currency around the world and can easily be handed down to relatives.
The smart strategy for every retirement nest egg, whether 401K, IRA or the like, is diversification through the purchase of gold bullion, which is gold in the form of coins or bars. This can be achieved by transferring a portion of assets from an existing IRA to a new Gold IRA, or rolling over funds from other retirement plans to a Gold IRA.
Retirement investors recognize physical gold as the key to counter risks associated with paper investments such as stocks or bonds. Now, they also see gold as a smart way to grow their retirement nest egg. Indeed, since year 2000, gold has significantly outperformed the Dow Jones Industrial average and the S&P 500. For example, $10K invested in year 2000 is now worth $17.7K if invested in the S&P 500, $22.7K if invest in the Dow Jones, and $41.2K if invested in gold, based on October 2017 data.
Investment in physical gold through one’s IRA, 401K or other retirement plan is the way to counter the risk of political, economic, and inflationary meltdowns. It is also the way to grow long-term retirement portfolio value so that one may indeed realize the dream of retiring to a condo on the beach, a cabin in the mountains, or whatever is your vision of a life enjoyed.
Whitney Nicole Bellephant
“I graduated from Beachwood High School as a part of the class of 2017. Ever since my high school graduation, I’ve been eager to start my future as a nursing major. My interest in the medical field stems from the numerous nurses I’ve come to know over the years. My other interests include reading, writing, and watching sports with my friends. I’m extremely grateful for this scholarship and its contribution to my future.”
My grandmother is the kind of person who likes to see her physical money – she keeps cash around the house. I asked my grandmother why she needs to have large amounts of cash around. She told me that she remembers Y2k and the blackout of 2003 when access to banks and ATM machines were not always available. She remembers the Great Depression and the S&L crisis as well. My grandmother went on to explain that she is not very fond of paper money because it can burn up or lose its value over time or get lost or stolen. She wanted to purchase gold coins but was afraid of the volatility of the commodity. So for my grandmother, keeping paper money in her home is the best that she could do to feel financially secure.
Before writing this essay, I didn’t even know what a 401(k) was. My mother, a CPA, explained it to me. My mom also explained that she advised my grandmother not to buy gold in the early 2000s when the price was $300/oz. As you can imagine, she will never live that advice down. A $10,000 investment in gold in the early 2000s would be worth over $50,000 today. But it’s easy to look backwards. Why should someone invest in gold now, going forward?
My mother says that a 401k account should be diversified in general. That means that you shouldn’t put all your eggs in one basket. You should have some cash/low risk savings accounts, stocks, bonds and commodities. You need all of it. You need to diversify because all of your investments don’t perform well all of the time. You need to have a back-up plan. Gold is a good back up plan. If interest rates rise or when prices go up, your cash may be worth less, but the price of gold goes up too. My mother calls that a hedge against inflation.
Traditional investments like the stock market thrive when there is predictability, calm, status quo. Unfortunately, the world changes quickly and sudden events can destroy investment returns. A terrorist attack, a major corporate bankruptcy, a war – all of these things can cause the stock market to decline quickly and recover slowly. That’s when unlike other commodities, gold increases in value. When something unexpected happens in the world, and it always does, the stock market reacts negatively and gold is the strong and steady performer. Gold is slow and steady growth for the long term without the pesky volatility of other investments or commodities.
Gold will always be worth something, like land. What else can you say that about? My grandmother said that people used to say “what’s good for General Motors is good for the country”. GM was a dominant company in the car market. Who would have thought it would fail? What would have happened if GM had not been bailed out. What other organizations – suppliers, banks, communities – would have experienced a domino effect and failed right along with GM. Gold will never fail.
Planning for retirement is a marathon not a sprint. I’m sure everyone has heard that before, but it’s definitely my first time having to say it. People need their 401k to be diverse to smooth out volatility and something that holds and increases in value over time. Gold should be a part of any portfolio to offset risk and provide retirement security.
The views and opinions expressed in the above essays are those of the authors and do not necessarily reflect the views of American Bullion, Inc., its affiliates, or its employees. American Bullion does not guarantee the information’s accuracy or completeness, and does not recommend that the information serve as the basis of any investment decision.