Comments

  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    Another innovative step for the platform. I keep telling my grandkids to build their savings in gold but if they need to do some short term borrowing, now they can without having to resort to credit card rates.

    As a shareholder I like that the company is fully secured by the gold backing the loans.
  • GoldmattersGoldmatters Posts: 3,961 Admin
    @GrandpaBrian another nice revenue stream for Goldmoney shareholders while providing additional utility for users. Cant wait until this is also avaiable in the States!
  • GoldIsCurrencyGoldIsCurrency Posts: 1,784 Gold ✭✭✭✭✭
    I would have like to have seen this Lending feature rolled out after a Prepaid Card in CAD actually existed. At this point a Prepaid Card in CAD is a priority.
  • RocketDogRocketDog Posts: 713 Silver ✭✭✭✭
    Well, surely that feature is not Shariah Compliant? (Not that I care...but...just sayin' .) I think that is a good feature for the company, it should increase profits considerably and that should be good for the stock price. I don't know if that is a victory for customers or not. Seems fraught with temptation to do something financially unwise (for the gold-owner). If you can't borrow against your gold you could sell your gold or find another way to get the needed cash.
  • UvasUvas Posts: 678 Silver ✭✭✭✭
    I can't understand the advantage of this. My thinking before the announcement was that you could borrow against your gold balance, then pay it off without incurring a capital gains event. But you must pay off the loan with your gold anyway, and seeing that it is FIFO, you will still be incurring a tax event...

    Or am I looking at this wrong?
  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    For investor types, @RocketDog , it's really no different in concept than buying on margin at a traditional stockbroker. But your point about temptation and risk is valid. It's up to the individual to decide what level of risk is appropriate.

    This is another example of Goldmoney digging a deeper moat around its business. The more useful features provided by the platform, the harder it becomes for competitors to enter the market.
  • BigMouseBigMouse Posts: 119 Bronze ✭✭✭
    i just took out $200 CAD load. I see it automatically bought about 4g of gold. On the screen, it says 0% for 30 days then 1% after. I thought the announcement is 12% interest after 30 days?
  • BigMouseBigMouse Posts: 119 Bronze ✭✭✭
    now, how do i pay the loan back? I do not want to use my gold. I want to pay it with credit card. Just tried to click 'Pay full amount', it asks me enter pin number. I am afraid it will take my gold out of my vault to pay for this loan. it will make no sense then.
    On another note, 12% (i think it is even though it shows 1% on screen) interest seems high. There is no risk to the company right? it is backed by gold. I would like to see it much lower. I do like this feature. When money is tight, i will take out the load to buy gold and pay it back when pay cheque comes. I need to make sure I an pay it with credit card or at least debit.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,784 Gold ✭✭✭✭✭
    @BigMouse The interest is 12% per year. If you saw a message that said 1% I would presume that is giving you the monthly interest rate. I thought it seemed high as well but it is lower than most credit cards on a comparison basis.

    When it comes to paying the loan off if your concern is being able to pay it off on a credit card or debit. Today's announcement said "Standard deposit and redemption fees of .50% apply upon receipt and repayment of Maximizer Loans." So I would presume you can either pay off the loan with gold you already own on the platform or just buy more gold (on your credit card or debit) to pay the loan off. Kind of the same thing in a round about way.
  • RocketDogRocketDog Posts: 713 Silver ✭✭✭✭
    @BigMouse I think the 12% is an APR (it says annually) so 1% per month = 12% APR ??? Not sure.
    Thanks for doing the experiment for the rest of us. Let us know how that turns out.
  • MelanieMelanie Posts: 1,045 Gold ✭✭✭✭✭
    @BigMouse You can click here for all information you will need regarding the Maximizer loans. And yes, you will repay the loan using gold from your Toronto vault. If you have 2FA set up (the "PIN" you mention) you will need to enter your 2FA code to proceed. Please ensure that you fully understand the implications of a loan, the same way you would if receiving a loan from your bank.
  • GoldmattersGoldmatters Posts: 3,961 Admin
    edited December 2016
    Note the link TLM has provided confirms @GoldIsCurrency is correct about the monthly interest rate. @RocketDog @BigMouse
  • BigMouseBigMouse Posts: 119 Bronze ✭✭✭
    ok, I just hit the 'pay full amount' button. Now it took away the 4g gold I got earlier plus fee. No option to pay with credit/debit. I feel I am a fool now. This service does not make sense to me then.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,784 Gold ✭✭✭✭✭
    @BigMouse Just buy more gold to pay off the loan. There is no real difference. The press release stated "Standard deposit and redemption fees of .50% apply upon receipt and repayment of Maximizer Loans."
  • BigMouseBigMouse Posts: 119 Bronze ✭✭✭
    @GoldIsCurrency I am really puzzling who will be using this service (take out load to buy gold) for what purpose? the only thing i can think of is people think gold will go lower, so they take out load to buy gold. then price do go lower, they buy more gold with the same amount of paper money and pay the load back. they end up with more gold in the account. maybe. Anyway, this is a big disappointment for me. I like to pay back the load with paper money not gold.
  • RocketDogRocketDog Posts: 713 Silver ✭✭✭✭
    @BigMouse You are not a fool! You are an explorer of a new financial terrain. And what doesn't kill us makes us stronger. Thanks again for trying it out and sharing.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,784 Gold ✭✭✭✭✭
    edited December 2016
    @BigMouse Some people may take advantage of a loan as leverage to buy more gold as you pointed out. Another purpose is if someone is in a tight situation, requires some money but does not really want to sell their gold. They could use the loan in the meantime without having to sell their gold. Having their cake and eating it too as the sang goes. I can see some advantages of this loan function for Account Holders but I can also see some disadvantages depending on how gold performs going forward.

    I would urge Goldmoney to sort whatever needs to be sorted out to get a CAD Prepaid Card issued. Paying FX fee's on top of interest and 0.5% fee's to fund the loan and pay it off. Gets a little excessive. I sure hope I see some news ASAP about a CAD Prepaid Card.

    The other news I was hoping to see before the Xmas Season was more physical redemption options added to the platform. Some new redemption options could have made some nice xmas gifts.

    I hope my post doesn't sound rude. Just keeping my expectations of Goldmoney real. Cheers.
  • BigMouseBigMouse Posts: 119 Bronze ✭✭✭
    @RocketDog THANK YOU FOR YOUR SUPPORT!
    @GoldIsCurrency Thanks for your reply. I will try to be patient.
  • powslayerpowslayer Posts: 116 Bronze ✭✭✭
    I think this i a great idea. If there was a Canadian card I would use it.
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    edited December 2016
    My 2¢ (US) … I have not read ( https://support.goldmoney.com/customer/en/portal/articles/2599505 ) since this does not apply to US account holders*, however …

    Based on ( http://support.goldmoney.com/customer/portal/articles/2600520 ) it appears that this is essentially a margin account using the collateral of gold on deposit to buy more gold or access the funds for any other purpose. One can either pay off the loan by depositing funds - thereby avoiding the need to sell one's gold (and avoiding tax consequences) or by selling one's gold. Just like a margin account with a stock broker.

    This would not appear on the surface to be a Shari'ah compliant service, but who is to say other services from other vaults (Singapore or Dubai) could not be Shari'ah compliant.

    With regard to a similar US service I would assume that it would be restricted to the New York vault and also would require state-by-state approval.

    This is yet another revenue source for Goldmoney and can provide access to funds without the need to sell one's gold. All in all not a bad deal.

    @Melanie @JacHumphrey @Josh Crumb is my assessment correct?


    * I lied - I just had to go read it to make sure my 2¢ was at least worth 2¢

    ERROR ERROR ERROR

    On the web page ( http://support.goldmoney.com/customer/portal/articles/2600520 ) , the link here ( see below ) is invalid.


  • UvasUvas Posts: 678 Silver ✭✭✭✭
    edited December 2016
    @Melanie

    My concern is the possible tax consequences. Are the funds you use to make a payment against your loan deposited into your account? If so, then the first in first out rule would apply and you are stuck with the same tax consequence as if you simply sold your gold instead of borrowing against it. Or do payments somehow circumnavigate being deposited to your account and are applied directly towards your loan balance?
  • MelanieMelanie Posts: 1,045 Gold ✭✭✭✭✭
    @79Au197 Have no fear, the links have been fixed. Do note in your assessment that you say that user may deposit funds to payoff the loan instead of selling one's gold - since you never carry a fiat balance on your Goldmoney account, when you deposit funds, you are purchasing gold. You would then be selling this gold to pay off your loan.

    @Uvas I believe that answers your question as well.
  • TheRaveneerTheRaveneer Posts: 105 Bronze ✭✭✭
    At our option, we may demand payment in full of the Outstanding Balance even if your loan to value has not fallen below 90%.

    Typo, I believe you mean:

    At our option, we may demand payment in full of the Outstanding Balance even if your loan to value has not risen above 90%.
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    Rats - I was in the process of a much more detailed response when I got distracted and lost most of it :'(

    @Melanie @Uvas

    Although this may not be a new concept, it is novel in the modern world. The concern @Uvas has is with US first in - first out accounting.

    As an example, say that one has 100g of gold purchased when gold was USD 34/g. The price of gold is now USD 50/g (hypothetical). The 100g is used to borrow fiat (some amount).

    Again hypothetically the loan is paid back while gold is near USD 50/g. The question is whether the gold is repaid at the USD 50/g rate or if the gold purchased at USD 34/g is first sold to pay repay the loan.

    Can this be clarified further?
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    @GoldMatters FYI @TheRaveneer has actually been here since August. o:)
  • GoldmattersGoldmatters Posts: 3,961 Admin
    @79Au197 But he only became a part of TGMPBT today!
  • TheRaveneerTheRaveneer Posts: 105 Bronze ✭✭✭
    As you buy Gold you have an ACB that gets computed. When you sell gold, you sell it at your ACB. Who says Gold is FIFO? I say it's like any other security.
  • SpontaneousOrderSpontaneousOrder Posts: 297 Bronze ✭✭✭
    I agree with @TheRaveneer: you can select lots as you like for calculating capital gains. It doesn't have to be FIFO. Could be LIFO, HIFO, or any arbitrary lot selection for each individual redemption.
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