Sustainability of the Goldmoney business model

chocolatebarchocolatebar Posts: 8 Tin ✭
edited November 8 in About Goldmoney
Have been thinking about how sustainable Goldmoney is and whether or not it's really a place to store gold (and not transact with it)...

Is the Goldmoney business model not a transnational one, i.e., dependent on people buying/selling/making redemption in order to turn a profit? It seems so since they're not taking anything on top for storage, inspection, management, etc. But then is this really sustainable? I don't see how gold can ever be an alternative form of money and used for transactions in a world where every sales/redemption for a transaction results in a taxable event in most first world, developed countries.

I'd love to use gold to buy/sell goods, but then every time I redeem gold with a card I also redeem an headache earned from my country's tax agency.

It seems like the only way this works long-term is simply as a service to store gold, i.e., purely a service to use gold to store value and charge for that, rather than base the whole model on transactions.

Other's thoughts on this?


  • nienie Posts: 147 Bronze ✭✭✭
    edited November 8
    You also pay some small fees at Goldmoney in case that you store your Gold (Holding Account).

    Gold is money since a couple of thousand years. From my point of view, you will not get rich in case that you store gold. However, it is a very good way to save your wealth (maybe -10% because of the storage fees).

    Just look at Germany (where I live):
    - Rentenmark (1923–1924)
    - Reichsmark (1924–1948)
    - Alliierte Militärmark (1944–1948)
    - Deutsche Mark (1948–2001)
    - Euro (since 1999)

    We had five (!) German currencies in less than 100 years. And ... there is Gold.

    Regarding the tax: at least in Germany we do not have to pay taxes for precious metal which were bought over a year ago. My plan is therefore to store a part of my money in form of Gold and Silver at Goldmoney. I will maybe use it when I am >70 years old.
  • chocolatebarchocolatebar Posts: 8 Tin ✭
    Your comment doesn't really answer my question on goldmoney the company being a sustainable business model, but it is interesting & explains a lot unrelated to the question I posted in this thread. I did read that 40% of the German adult population holds some of their wealth in physical gold (not jewellery) & what you've written goes a long why in explaining why that figure is so big. In other Western countries 40% is a huge number, but they also have not had a short history of 5 currencies & no tax on precious metal sales...

    With respect to the goldmoney fees - goldmoney is not taking any extra fees on top of the vault storage fees. So what you pay them in storage fees goes directly to Brink's or Loomis or whoever. But if you just keep your gold with them and don't transact, Goldmoney earns nothing. Hence my question re: sustainability of the business model. For almost every single country a transaction of gold results in a taxable event and hence a massive headache.

  • nienie Posts: 147 Bronze ✭✭✭
    Oh, sorry. I did not know that they earn nothing from the fee. Is there a website with such a documentation?
  • fragnetfragnet Posts: 7 Tin ✭

    Investor Proposition - Return on Metal Weight

    As an innovative industry leader in a niche financial segment, Goldmoney strives to build client relationships across all countries and income segments while growing share in the $8 trillion precious metals market.

    Having invested in relationships with clients and the technology that serves them for 16 years, Goldmoney is the premier destination for online precious metal savings and banking services.

    The position we occupy offers significant value to our shareholders over the long-term in two ways. First, it creates a continuous global revenue source utilizing an asset-light internet-scalable business model. Second, it enables us to gain unique asymmetry to a rising precious metal price environment as we earn recurring transaction and storage fees derived from the total stock of client metal under custody.

    Unlike most businesses in the current global economy, our revenue isn’t earned in dollars or cents. Goldmoney revenue is earned as a weight of precious metal each time a client buys, sells, holds, pays, earns, or spends from their account.

    The Goldmoney business model provides unique exposure to a ROMW (Return on Metal Weight) financial model similar to that employed by precious metal streaming and royalty companies; however, unlike the majority of these companies, Goldmoney accumulates the precious metals it earns above its working capital requirements and its gold and silver grow with each passing day.

    If we are moderately successful, stakeholders can expect Goldmoney to significantly outperform the precious metal markets over time given the compounding nature of our growing precious metals position. Meanwhile, our shares should also provide exposure to the asymmetric tail-events inherent in the global financial system as one of the only financial institutions with a full-reserved and gold backed custodial business.
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