How many ounces of gold would a Mega Moolah jackpot buy?
It is kind of interesting to stop and think about what you might do if you ever won the Mega Moolah jackpot. One of the big reasons people love Mega Moolah so much is the size of its huge progressive jackpot.
The Mega Moolah has paid out millions over the years. In one particular case from a couple of years ago, a British player won more than £13 million, a win that was officially recognised as a world record by Guinness World Records.
So what would you do with that kind of money? You can bet that winning would result in plenty of financial advisors contacting you to offer their services. I'm sure they wouldn't recommend that you buy gold with it. Why? Because financial advisors aren't taught that gold as a viable investment. They just know it is a commodity and sits atop the investment pyramid at the highest risk level while the U.S. dollar sits at the safest and bottom level.
Financial advisors are taught to bash gold as if was the enemy to the paper fiat system. Fiat money is a currency without intrinsic value. It is just a promise and that's why paper currencies always eventually fail.
For those in the know, gold is seen as a relatively safe investment and one that protects against inflation. In the event of a financial meltdown, gold would have loads of value merely because it is a tangible asset. Gold has been money for more than 5000 years. It has seen hundreds of currencies backed by various empires and governments come and go during that time.
How much gold would the current Mega Moolah jackpot buy you?
Just for the sake of argument, let us talk about how many ounces of gold a Mega Moolah jackpot could buy. We will base our numbers on the size of the jackpot and the value of gold at the time this article was written. The Mega Moolah jackpot currently stands at £10.6 million; the price of gold is currently at around £930 ($1,220) per ounce.
Based on those numbers, spending the entire Mega Moolah jackpot would allow you to purchase just under 11,400 ounces of gold. That is a lot of gold. But, of course no one should spend their entire jackpot on it. It is better to invest perhaps 10 percent of the winnings in gold, which would buy you just over 1,000 ounces of the yellow metal.
The advantages of buying gold
Gold is a trendy investment is certain circles. In fact, it has been pretty popular among small-scale investors for more than a decade. Much of its popularity is wrapped up in its perceived value. That value may be its greatest strength.
Here are some of the advantages of buying Gold:
- It is Tangible - Unlike stocks and bonds, gold is a tangible asset that you can actually hold in your hand. Because it is tangible, it will always have an intrinsic value. That value may go up or down depending on the markets, but value will always be there. Stocks and bonds can be completely worthless during a financial crisis because their value only exists on paper.
- It Beats Inflation - With very rare exceptions, gold almost always beats inflation during economic downturns. Even when inflation is at its worst, the value of gold tends to rise faster. It is exceedingly rare for inflation to outpace gold.
- Gold Is Stable - Other kinds of investments suffer from a certain level of instability that gold is not exposed to. Yes, gold is subject to price fluctuations based on market demand, but not nearly to the same extent as other securities. Stocks, shares, bonds, and cryptocurrencies are all subject to enormous fluctuations that can take you from a London mansion to Poverty Row in mere hours.
- Multiple Formats - You can purchase gold in multiple formats. You can buy gold bullion, gold coins, and even certificates. A gold certificate is a legal document representing the fact that you own a share of physical gold stored in some other location. Serious gold investors shy away from certificates and always buy physical gold.
The disadvantages of buying gold
As wonderful an investment as gold is, it does have its disadvantages. At the top of the list is cost. At £930 ($1,220) an ounce, it is one of the more expensive investments on the market. You do not get a lot for your money in terms of actual, tangible product.
Here are a few more disadvantages:
- Portability - Unless you elect gold certificates, an investment in gold is not very portable. Gold bullion is definitely too large and heavy to carry in your pocket. As for gold coins, carrying them around is unwise, albeit physically possible.
- 'Spending' Gold - You cannot walk into a store and pay for your groceries with gold coins. In order to spend whatever value is tied up in your gold, you would have to convert it to cash. So gold is really not something for every day use, it is a long-term investment - something to have for the monsoon type rainy day.
- Inverse Relationships - The strength of gold (its perceived value) is also its greatest weakness. Because it is tangible and backed up only by the laws of supply and demand, gold tends to have an inverse relationship with general economic conditions. As the economy improves, the value of gold declines and vice versa.
If you are not quite sure why inverse relationships can be bad, consider how national economies work. With the exception of rare events like the US market crash in 1929, national economies do not change dramatically overnight. They are cyclical. You have a period of sustained growth followed by a period of decline. If you get in on the gold market at the wrong time, you could be in for years of lost value until markets turn around.
Inverse relationships do not have to be an investment killer if you know how to work them. When you see gold at the start of a sustained decline, you sell and transfer your wealth into other investments. You then reinvest in gold when it starts to go back up. The alternative is that you invest for long-term and not worry about the ups and downs. Consider it a back-up that you don't touch but keep adding to when favourable to do so.
If you were to buy gold
Let's say you were to win a Mega Moolah jackpot of £10.6 million. Knowing what you now know about gold, you would have to make a decision about buying it. There are some things to think about first. For example, how much money are you willing to invest?
A standard rule of thumb is to never put all of your investment eggs in a single basket. Diversification is the key. In other words, spread out your money among multiple investments in order to reduce risk. Bitcoin, property, and other valuables such as art and collectables. In the event of a loss, it is not likely all of your investments will lose simultaneously. Some will lose while others gain.
Investing 5 to 10 percent in gold bullion would be reasonable. Using a 10 percent benchmark, a £10.6 million jackpot would give you £1,060,000 to buy bullion.
The next thing to consider is the form of gold you want. A lot of dealers recommend certificates simply because they are easier to deal with. However, it is not advisable because the attraction of gold is that it is tangible. Assuming you choose bullion or coins, you are going to need a safe place to store the gold.
You could install a safe in your house. You could also buy (and store) the gold from a vault in Switzerland, Singapore or Hong Kong.
Investing in gold is certainly an attractive proposition for spending some of your winnings from the jackpot.
Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.
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