Lazy Man is a lazy man from California on a quest to retire early. He believes a penny saved is a penny earned, and a penny available for investing. He writes regularly on his blog, Lazy Man and Money
My fiancee (Energi Gal) and I were watching Saturday Night Live a couple of weeks ago when their signature fake commercial came on. The commercial was an advertisement to get people to invest in gold. If you missed it, it was horribly “unfunny.” The character is obsessed with gold. She has a room where everything is gold and washes her face with gold, saying “gold” over and over again. Energi Gal rarely talks much about money, so when she does, it gets my attention. She simply said, “What good is gold any more? Who wants gold?”
She was, of course, talking about gold jewelry. Maybe I have a unique social group, but no one I know has yellow gold jewelry anymore. When I asked Energi Gal to be my wife, she said that she would have preferred a $100 titanium ring to a $1,500 gold one. It seems like gold is just going out of style.
This has got me thinking. Outside of its commodity value, what is the true value of gold? What practical use does gold have? It’s a great metal conductor, but any number of metals can be used in its place. Contrast that with orange juice, a barrel of oil, and soy beans. These things will always have value to people as they are consumable.
Gold is only valuable because it’s agreed upon as a currency. Historically gold has had great value for hundreds of years. If you go back before cars and plasma TVs, jewelry was one of the most sought after commodities. Most school children are taught that Manhattan was bought for $24 of beads. Whether this is true is a matter of some debate, but it shows the historic value of jewelry.
We currently live in a time where much of the world doesn’t have the latest technology. As the world moves forward, will more people decide that they’d rather have a fancy car or a plasma television than gold? If you invest in gold, you better hope not.
Read more about personal finance and investing from the from Lazy Man’s perspective at Lazy Man and Money.
Published or updated April 2, 2007.