Wealth Podcast Post

Gold IRAs with Patrick Yip

George Grombacher April 15, 2022

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Gold IRAs with Patrick Yip

LifeBlood: We talked about gold investing and gold IRAs, the problem and history of inflation, what the future could hold with the current cycle, how to own physical gold, and how to develop a plan for dealing with inflation, with Patrick Yip, Director of Business Development for APMEX. 

Listen to learn how to put together a plan for inflation!

You can learn more about Patrick at APMEX.com, OneGold.com, Twitter, Facebook and LinkedIn.

Thanks, as always for listening!  If you got some value and enjoyed the show, please leave us a review wherever you listen and subscribe as well. 

You can learn more about us at LifeBlood.Live, Twitter, LinkedIn, Instagram, YouTube and Facebook or you’d like to be a guest on the show, contact us at contact@LifeBlood.Live.

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Our Guests

George Grombacher

Patrick Yip

Episode Transcript

Unknown Speaker 0:00
Come on

george grombacher 0:11
Bob Leffler. This is George G. And the time is right to welcome today’s guest strong a powerful Patrick yet Patrick, are you ready to do this? I’m ready. Let’s do it, George. All right, let’s let’s go. Patrick is the director of online marketplaces with APMEX. They’re the leading e retailer of gold and silver. Patrick, welcome back. Tell us a little about your personal life more about your work and why you do what you do.

Patrick Yip 0:37
Great. Well, George, thanks for having me on. To start with my personal life. I have a lovely wife, I have a four year old son. For hobbies. I actually like to collect wristwatches and like to travel. In fact, I’ve been to about 50 countries so far and planning, visiting many more in the near future. One of the things that has allowed me to enjoy my hobbies as my understanding of financial markets and having my money work for me. So to transition to my job, I’m actually the director of business development over here at Amex have won gold. For those of you who don’t know who APMEX is, we are the one of the largest online retailers of precious metals. We’ve been in business for over 20 years, have done over 15 billion in retail sales to customers. We have about 2 million customers and about 25,000 Precious Metals products in stocks in our vaults downstairs.

I’ve been with the company for over 11 years now. I’ve held various roles and merchandising, sales, project management, marketplaces, and business development. And my most recent position in the company is managing the company’s fastest growing platform, which is one gold. One gold is a company that allows customers to buy sell trade and redeem vaulted positions of gold, silver and platinum. And it’s in its first three years of operation when gold has processed over 650 million in transactions.

george grombacher 1:57
Nice 2 million customers. It’s you know, it’s kind of hard to get your brain around that, Patrick. It’s a good start. That’s that’s absolutely amazing. I imagine that right now, interest has been as high if not higher than it’s ever been.

Patrick Yip 2:14
Yeah, that is definitely true. I think a lot of times people are seeing the times and the economy change. I think one of the most recent things people are seeing is inflation. Everywhere you go, things are costing more, you’re filling up your car with gas, it’s costing you more than it did a couple years ago, you’re going out to eat coffee a lot more shopping for groceries cost you more to the interesting thing about inflation, too, is is so I pulled up a couple commodity charts this morning, just to give you an idea to see like what is inflation doing in the past year. Some things that stood out so oats are actually up 87%, coffee is up 73% crude oil is up 66% net gas is up 63%. Wheat is up 51% lumbers up 31% corns up 31%, and cons up 30%. So wherever you go, you’re seeing inflation. And I think most people can relate to that, too. Everything is just getting much more expensive. But interesting thing is, is CPI actually says that inflation is only seven and a half percent, which many people, myself included think that the CPI dramatically understates inflation. So So going on from there, I think it’s important that to know that like many people don’t currently have a plan for inflation. I know I’ve talked to a lot of people and they just plan on writing it out. They see that CPI seven and a half percent. They said, Well, what really what could that do? I look back at history to look, you look at past inflationary cycles in the 1960s, it took the US Fed nine years resolve inflation. In the 1970s, it took five years it was off inflation. And it’s important to know that we’re actually in the year one of inflation just a year ago, inflation was only 1.4%. And then the other thing too on that is you said okay, well what is what is five years and what is nine years inflation look for your wealth. So assuming 7% of seven and a half percent inflation. So we’ll take the more conservative stats, instead of this 3040 50% inflation that we’ve seen in some commodities, five years of seven and a half percent inflation is going to erode 32% of your wealth and nine years of seven and a half inflation can erode half your wealth. So kind of an important time to consider inflation.

george grombacher 4:27
It’s amazing, right? And that’s kind of hard to get our brain around. And with so many inputs coming our way. I think a lot of the time, it just becomes part of that noise, but to your point, it’s not going away. Or maybe it is we just don’t know. But why not start to put a plan together for how to actually handle that. Should this extend. Historically nine years you mentioned five years. I see very little reason to think that it’s going to just go away and anytime soon.

Patrick Yip 5:02
Yeah, it’s a lot of times it goes away. I guess there’s two ways I can see it going away. One is, is if the Fed increases its interest rates, so that you have real interest rates where basically, there’s a positive yield on like a 10 year treasury, currently that the Fed Funds rates about 25 basis points. So the 10 year yield probably want to change, you’re having inflation run 7%. Not unless the Fed does something and increases rates dramatically. Let’s say they increase it. So 789 percent, is that’s one way to resolve inflation. Another ways is currently, we’re in a unique situation with all these COVID restrictions. It’s also possible that the Fed could or not the Fed more so like the economy could ease up on some of these COVID restrictions, get some of the supply chains going and inflation could fix itself that way. But I’m just looking at history and past inflation cycles. And history says this is not just one year gross.

george grombacher 5:54
Right? So in terms of putting a plan together, what does that look like?

Patrick Yip 6:00
I personally think that right now is is an optimal time to buy precious metals. And the reason for it is, if I just look back at history to two reasons, one is precious metals tend to do well in inflationary and in rising interest rate cycles. So if I go back to the 1960s 1965 to 1974, gold went up five times from $35 to $200, during inflationary cycle, and then looking at the 1970s 1976 to 1980, gold actually went up. What is it? Eight times from about $100 to $850. So that’s one of the reasons I’m bullish on precious metals, it just performs well on inflationary and rising interest rate cycles. The next is I think, everything’s cyclical, nothing goes up forever, nothing goes down forever. I think everything grounds and waves here and there, I think we may be ending the stock bullish cycle. And the reason for this is, first of all, stocks tend to struggle in inflationary times. And then the next is just looking back and a little more modern time. So you look at 2000 to 2011. We’ve had basically this this stock last decade is what a lot of people call it for in the early part of the century. So stocks started at 1415 2011 years later, and then at 1250. So down 14%, over 11 years, if you look at Gold, gold actually increased from $250 to $1,900. So seven next game. So that’s from 2000, to 2011. The cycle verse from 2011, to now, more stock started at 1250, and went up to 4800 on the s&p, and then gold started at 1900 retraced all the way down to 1050. And now it’s back in 1900. So it’s basically made a big U shape bottom. And it’s been flat for 11 years. As I mentioned, stocks tend to tend to struggle in inflationary time. So I think that the cycle may be reversing, it may be time that stocks now go a couple years, maybe flat, maybe down and now gold is going to start rallying. And a couple of interesting things do so gold made its most recent low in 2015 of 2050. I would honestly not be surprised to see multiples of this level. Obviously, no one knows the future. And I was listening to Rick Rule a couple of weeks ago, for those of you who don’t know who he is, he’s basically one of these legendary resource investors. But he commented that he would not be surprised to see four or five or $6,000 Gold.

george grombacher 8:28
Got it? So certainly, where is it at today?

Patrick Yip 8:32
And it’s about 1900 Little over 1900. Got it.

george grombacher 8:37
And so with that, that certainly makes sense. opportunity to potentially go higher in how how best to actually invest in it. How best to own gold.

Patrick Yip 8:49
Yeah, so we like to offer a variety of ways. So, Amex and one gold. Basically, we sell physical, we sell vaulted. If you want to buy physical x, we’ll gladly sell to you. There’s a lot of nice things about physical, it’s in your hand, it can’t be hacked is aesthetically pleasing. Sometimes people even collect different coins. They’re easily passed from generation to generation. Your taxes are self reported, I recommend that you do report your taxes, but some people choose not to. That’s up to you and I’m not going to get between you and the IRS. If if you do decide to buy physical, what I recommend you do is find a reputable dealer. Find a Dealer who has been in business for years, who will back its product who has processes in place to authenticate the product to make sure that it’s guaranteed to be real. If you do buy physical, there are a couple of downsides though. The biggest downside is worrying about theft and loss. Everyone I know who started buying physical they start out with a couple $1,000 Maybe it becomes 10s of 1000s, maybe even a six or seven figure sum. The problem about that is initially you plan to protect your assets from inflation, and then you start worrying about every single time you leave In the house every single time you travel, okay as my as my six figure some of gold safes in my house that are given by my safe at home. So what we did is is a couple years ago back in 2018 APMEX partner with Sprott, which is one of the leading alternative investment managers and came up with a company called one golden, I’d be happy to talk to you about one gold if you’re interested. Yeah,

george grombacher 10:23
I think that’s fascinating. I never thought about it. I’m definitely interested in hearing about that. I wanted to circle back on something. I’ve never thought about the risk tolerance of owning actual physical gold, that maybe if I’d never thought about it before, what’s the big deal? I’ll just have it at my house. But I could find myself in a position where I actually start to worry about that. And oh, my gosh, what’s going to happen? And I can see people really having a hard time with that. So that’s something you need to be honest with yourself about for sure.

Patrick Yip 10:57
Yeah, exactly. I had an interesting story where I was talking to a buddy, and he lived in downtown Chicago in a high rise building. And one time they were testing as fire alarm, and he couldn’t get into his unit. And he was started worrying is saying, Well, maybe storing that much gold in my unit is not the best idea. You never know. If you live in an apartment, you live in a building with people or you stored in some type of area with that. There’s nothing preventing your neighbor from setting his kitchen on fire, and then restricting your access.

george grombacher 11:29
Yes, certainly a million different scenarios running through our minds. And in terms of making sure that you’re actually getting what it is that you’re buying. How How common is for lack of a better term fraud.

Patrick Yip 11:46
Are you talking about like replicating fake products? Yeah. So at APMEX, we buy from like the directly from the men’s so the US Mint, the Royal Canadian Mint, and so on like that we also buy from a large part of a large network of wholesalers. So these are some of the most well respected people in the market, we do a couple things to test authenticity of our product. So we have a spec for what is it a sigma scope, so it actually evaluates the conductivity of the metal. And then we have an x RF gun, which actually looks into the metal content. So like, if if I have a 99.9% coin, it’s gonna say 999, if it’s alloyed, with something, and you might say, Hey, it’s 90% 90%, gold and 10% Copper, so we would know if, if it if it is authentic, but a large part of it is we also have a numismatic team too. And they’ve handled, you know, 10s of 1000s of coins, maybe even more, that you almost get a feel for it, you get to see it, you touch it, you look at it, and you just know that it’s real.

george grombacher 12:49
Yeah, I don’t doubt that for a second, but that y’all have lots of systems and processes in place to check it. That’s just sort of a buyer beware, if you are buying it just from XYZ company down the street, that you’re getting what you expect, I hadn’t really thought about that either. But with all the I buy gold and silver companies that you drive by, you just you just never know.

Patrick Yip 13:15
So yeah, exactly. And that’s why I said you should buy from a reputable dealer. Especially if you’ve not gone into this before. You’d hate to buy a $1,900 coin. Think that it’s real. Maybe your way you measure the diameter, you say it’s all right. But some of these counterfeits are getting so good there people are using like tungsten to which tungsten has a similar density of gold. He hate to spend $1,900 Put it away for years only to try to sell it years later and said hey, it’s it’s it’s fake. So I would say definitely find a reputable dealer if

george grombacher 13:48
you are going to buy purchase balls. Yeah. Well, that’s really make sense. All right, and also curious bringing together a precious metal with a tax preferred vehicle like an IRA. Tell me a little bit about that.

Patrick Yip 14:04
Yeah, so as I mentioned, it kind of hinted on on before. So back in 2018, we partner with Sprott create one gold and one gold is it’s a platform that allows users to buy sell and redeem faulted positions of precious metal. So instead of taking physical gold, and storing in your house, it’s similar to a brokerage platform where you can do whatever you want, you can fund your account you can buy you could sell if you do want physical, we do offer a redemption option. But basically, it’s a platform that that allows you to transact and own metals without actually taking possession of them. It’s important to note that you do still have title to it. It doesn’t appear at home, one gold’s balance sheet metals are insured and so on like that. But the neat thing about one gold is it makes doing a self directed precious metals IRA easier. So traditionally, if you wanted a precious metals IRA, you had a couple different parties. You had a dealer who’s going to sell you the metal. You had a deposit for We’re going to store the metal. And then you have a custodian which manages your IRA account. What with one gold, what we’ve done is we’ve streamlined the process. So your dealer and your depository are now one. So it’s with one goal, you still do have a custodian, I would recommend that you do your own research on that we do have lists a couple custodians on the one gold side too, as well. But we cannot unfortunately guide you which custodian to use. But the nice part about that is you simply fund your account with your stone custodian, the funds get put into one gold, and then you could buy, sell and trade and do whatever. And the nice thing about it too is, is if you do a Roth IRA, since you’ve already paid taxes on it, you could essentially fund your account, you could trade in and out. So let’s say you said hey, I think gold is gonna go up, or I think silver is gonna go faster, or whatever it is, some people trade what they call the Gold Silver ratio, which is the price of gold divided by the price of silver. So typically, what that is, is when the ratio was high, was currently about 80. Right now, people say that silver has more potential for upside, and when the ratio is low, they said gold’s more potential for upside. So with a Roth, you could you can try to trade this stuff for the Gold Silver ratio in and out, you could hold cash, and basically just do it in within minutes. So it’s a great solution for people who want to open a precious metals IRA.

george grombacher 16:19
Nice. Gold Silver ratio. Sounds like there’s another episode in there, Patrick. Like it. Well, Patrick, to people ready for difference making tip? What do you have for them? Yes, I

Patrick Yip 16:32
would say in this current environment, make sure you have a plan for inflation. Many of the younger investors who are who are investors who have may not have studied inflation, are likely not prepared for this situation. We’ve essentially never had an investing climate like this for the last 40 years. You here you look at various stats who said inflation is at 40 year high. In the past, as I mentioned, inflationary cycles lasted years, time will tell if this one’s going to last one years, two years, or five or nine. It’s like the previous cycles. I personally think precious metals are a great hedge. I think they have a tremendous amount of upside. If you do want to buy fiscal check us out@mx.com That’s apx.com If you want to buy vaulted you don’t necessarily want to take possession of your goal but you do want exposure to gold. Check out one gold calm that’s a win@aol.com Both companies have mobile apps on the Apple App Store Google Play Store, and if you have any questions feel free to reach out to me directly. I’m at Patrick patrick.us@mx.com That’s pa t ri CK dot white IP at max APN yet calm.

george grombacher 17:37
What that is great stuff that definitely gets come. Patrick, thank you so much for coming back on. Give us the websites one more time.

Patrick Yip 17:46
That’s APMEX comm AP me x.com And one gold calm o m e t o ld.com.

george grombacher 17:53
Excellent. If you enjoyed this much as I did show Patrick your appreciation and share today’s show with a friend who also appreciate good ideas. Dig into it, explore it, find out if physical precious metals are a good fit for you at app Max calm or if you’re intrigued but don’t actually want to hold on to the gold or the silver or the other precious metals themselves. You can go to one gold calm and explore the vaulted option as well as where do people learn about the IRAs. Patrick? Is that one gold? Yeah, you can email us

Patrick Yip 18:27
at support at one gold calm and one of my associates would be happy to help you out.

george grombacher 18:31
Okay, beautiful. Thanks. Good, Patrick.

Patrick Yip 18:34
Great. Thanks for watching.

george grombacher 18:36
And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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