February 26, 2023 • 33 mins
We know it is important to invest for our futures. We wanted to release a few more investment podcasts to help aid in diverse portfolios. Now is the time to take charge of your future and this week we interview industry expert Patrick Yip.
Patrick Yip serves as the Director of Business Development at APMEX and OneGold.
APMEX is one of the largest retailers of physical gold, silver, platinum and palladium, and has sold over $15 billion in product over its 20+ year history. OneGold is a fast growing online precious metals platform that has processed over $750 million in transactions during its first three years in business.
Mr. Yip joined APMEX in 2011 and has held roles in Merchandising, Sales, Project Management and Business Development. He played a key role in the company’s 250%+ growth on marketplaces such as eBay, Amazon and Walmart.
Important Links:
- APMEX Website: www.apmex.com
- OneGold Website: www.onegold.com
- Precious Metals Credit Card with rewards on APMEX: https://thebullioncard.apmex.com/
- Precious Metals Credit Card with rewards on OneGold: https://thebullioncard.onegold.com/
- My email address: patrick.yip@apmex.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dustin Steffey (00:00):
Hello chop nation Dustin Steffey here our
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Jaden Norvell (01:12):
Welcome to your top rated business
entrepreneurship selfdevelopment and smart investment
podcast. This podcast is hostedby creator and founder Dr.
Dustin Steffey and also hostedby coach, music producer and
influencer yours truly Jadenrush Norville, we are blessed
for many accolades such as beingnominated for the People's
Choice Award for Best BusinessPodcast, as well as raising over
(01:32):
$5,000 last year for the CysticFibrosis Foundation as well as
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Without further ado, welcome tochopping wood fire ladies and
gentlemen, let's chop it up
Dustin Steffey (01:53):
Hello, everyone, and welcome to another episode
of chopping wood fire. You arejoined with your host, Dustin
Steffey I have some fun thingsin the works and in the coals
that I want to announce realquick. First and foremost, if
you guys haven't done soalready, we did just release our
first local small businessepisode. interview was with
(02:14):
speakeasy tattoo company. So ifyou haven't viewed it yet,
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pick a platform that you likeand go today to view it and send
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and the Boys and Girls Club withcystic fibrosis. Imagine having
a straw in your lungs and yourbreathing out of that straw.
It's probably not going to feelvery well. That's what it's like
to have cystic fibrosis. It's acharity that's close to me close
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If you guys have any extraresources, please head on over
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help our children to develop tohave that really one on one fun
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sports because they do sports aswell, to be able to support our
kids when we're working. They'rean awesome organization. But as
we know with this day and age,these organizations need help
because inflation is very real.
So if you do have spareresources and want to donate to
(03:47):
Boys and Girls Club, please headon over to BGBC dot o RG forward
slash donate and get yourdonations. And I think that's
everything that we have to kindof bring out right now I've been
pretty hush hush on the newthings coming in. Because I want
(04:08):
to surprise everyone as thingsare in the work works. Today
starts our investment seriesbecause again, we are an
entrepreneurship, selfdevelopment and smart investment
podcast. So we're gonna bringsome investments to you we got a
new topic coming up as far asInvesting in Precious Metals. We
(04:29):
have not discuss that yet. And Ithink that that's an important
discussion. And who better tohave than Patrick yet which he
is on right now I am going toturn the reins over to him. So
he can kind of introduce himselfand have some fun. We wanted to
change it up a little bit on youguys. So let's dive in
Patrick Yip (04:50):
it Dustin thanks again for having me on. So a lot
of times I get the question likeWhy precious metals? How do you
get involved in precious metalssince it is kind of a niche
industry? It's definitely notmainstream. So It all started
back in 2008. I'm sure many ofyou guys will remember we had
that financial crisis. So I hadyour typical portfolio of stocks
and bonds, thought the world wasgreat, everything's just was
just fine. The financial crisisoffers a hit and my portfolio
(05:12):
got chopped in half. I thencalled my financial advisor and
said, what happened? And Irecall him saying something
like, well, no one could havepredicted that crash. So this
got me into doing this deep diveinto researching a lot of a lot
of different economic systemsgot me into Austrian economics,
and then ultimately preciousmetals. So in 2008, during that
financial crisis, gold actuallyinitially corrected with a stock
(05:33):
market, but it ended up positivefor the year. So fast forward in
2011, I joined APMEX. I'm nowthe Director of Business
Development at APMEX and wongold, which is a subsidiary or
subsidiary of AmEx, Amex, forthose of you who don't know, is
one of the largest onlineprecious metals retailers in the
US. The company has been inbusiness for north of 20 years,
we have done over 15 billion inlifetime sales. I've been with
(05:57):
the company for about 12 years,I've had different roles across
the company and merchandising,sales, project management
marketplaces. And now businessdevelopment. I also most
recently began running one gold,which is online investment
platform that allows customersto purchase like a vaulted
position of gold, silver, andplatinum. And one gold just as a
data point has done over 900million in transactions in its
first four years of business.
And then I was also involved inlaunching the first ever
(06:19):
precious metals rewards creditcard, and it's called the
bullion card, and I should haveone right here.
Dustin Steffey (06:25):
That's awesome that that's a nice quick hit
right there. So a lot of lot ofdetail in that. I want to take
it a step back, and kind of diveinto precious metals. So like,
if I'm thinking about it, andI'm, I'm almost 35, right? I'm
thinking about like mygrandfather's generation,
(06:46):
because he would have gold barssilver, like actually in the
safe, right? As liquid likefunds to be able to invest or
sell if we need some money, orwhatever the case may be. You
want to dive into that a littlebit.
Patrick Yip (07:03):
Yeah, there's several different ways to own
precious metals. One is is thephysical, as you mentioned. So
this is buying physical gold,silver, platinum palladium bars,
rounds and coins, a lot of timespeople have older generations,
like you mentioned,grandfather's grandfather's who
have a coin collection, that'sone way to buy it. And that's we
do that through APMEX, where wesell you a physical precious
(07:23):
metal for delivery. That's,that's one way. The second way
is through like a vaultedplatform, such as one gold. And
we could get into one gold in abit. But this is basically where
you take a vaulted position. Soyou have gold, you have silver
stored at a Brinks vault locatedin the US, Switzerland, Canada
or the UK. A third way is anexchange traded funds, often the
the GLD and SLV. I personallywould not get into this stuff,
(07:46):
but we could get into that. Andthen a fourth way is through
mining shares. So these arethese are companies that mined
gold and silver out of theground, which could give you a
lot of upside, but it also hasrisks too as well.
Dustin Steffey (07:57):
All right, so we got a lot of a potpourri of
options here. Yeah, with thatbeing said, I'm familiar with
the vaulted option. Because wedeal a lot with cryptocurrency,
which I know that's a sore topicright now, because Kryptos still
(08:17):
down quite a bit, and peoplehave lost quite a bit of money
in it with government relationsand the economy, even and
inflation. But that's somethingthat I know is an investment. So
I've held steady, because I knowit's going to pop back up at
some point. What's your take onthat?
Patrick Yip (08:40):
Kryptos are a difficult one, I look at it too.
And in crypto is like I thinkthe oldest crypto was around in
2007 2008. I think it's Bitcoinobviously has a 15 year history.
I don't think it has enough dataat this point. Maybe it goes
200,000 Maybe it goes higher.
Maybe it also goes to zero, Idon't know. It's just there's
not a lot of data. We don't knowwhat's going to happen in a long
(09:00):
term inflationary, risinginterest rate environment. If a
major recession hits, we don'tknow how it's gonna react. I
would say you know, it doesn'thurt to get in Kryptos. But I
would say with any asset,whether it's Kryptos, whether
it's gold, make sure you havethe correct allocation. And the
correct allocation is probablynot zero, it's probably not 100
(09:20):
It depends on where you are inlife, how much risk you take,
and you look at you look at theprobability to Okay, Kryptos
let's say Bitcoins, I think alittle over 20,000 Right now,
and I haven't checked it inprobably a couple days. But
let's say it's over there, youknow, with what's what do you
think it will go to do you thinkit's gonna go 200 Okay, fine.
You know, if it goes 200 Maybeyou have 80,000 and upside
(09:41):
20,000 On the downside, youknow, what are the
probabilities? You look at itand you make the correct
allocation?
Dustin Steffey (09:48):
Yeah, something that we preach here is do your
research first, right with withany investment, it's still a
gamble. It's still putting moneyinto something where it could go
up or or it could go down andcrypto I think is very volatile.
Whereas precious metals havebeen pretty steady for the most
(10:08):
part, I would say right, whereare we at for precious metals
right now?
Patrick Yip (10:12):
You're about $23.
For silver about 1900. For gold.
Dustin Steffey (10:15):
Yeah. So I remember when gold was 1000. So
1900. Now, that's a net 900increase. So,
Patrick Yip (10:22):
yeah, I think I think too, that that's important
to talk about, too, is is whypeople even get into precious
metals too. And we could talkabout that too. With with
inflation if you want.
Dustin Steffey (10:31):
Yeah, let's dive into it. This is, this is good
for people that want to investright now.
Patrick Yip (10:36):
Okay. Yeah. So a lot of times when people hear
gold, they just immediatelyclose the doors. And I'm not
interested, right. But let's,let's see what what history
tells us with gold. So right nowthat one of the topics in the
news is inflation, no matterwhere you go, you're hearing
inflation, you go to therestaurants, you go into Target,
you go to Costco, everything'shigher, right? So we're about
two years into the currentinflationary cycle. So just back
(10:57):
in January of 2021, inflationwas only 1.4%. I'm sure many of
you guys remember that. The Fedsaying, hey, it's transitory.
It's transitory what's beentrend. It's hasn't fixed itself
in two years already. So manypeople are feeling pinched. So
the last time we had inflationat these levels was built way
back into the 1970s in the1960s. So let's see what
happened back then, in the1960s, we had an inflationary
(11:19):
cycle, and it took the Fed nineyears to resolve that cycle. And
then fast forward to the 1970s,we had another inflationary
cycle, it took the Fed fiveyears to resolve this
inflationary cycle. Okay, great.
So what does that mean? So let'slook at how various asset
classes performed during thatinflationary cycle. So let's say
one option is to hold cash,you're not going to do anything,
I only recommend holding cashfor liquidity for buying
(11:40):
opportunities, I don't recommendthat you have most of the
majority of your assets in cash.
And the reason is, becauseinflation is going to erode away
your savings. So five years ofsix and a half percent inflation
compounded at six and a halfpercent is a current number
given by the BLS. I think it'sdramatically understated, but
let's just use it right fiveyears of six and a half percent
(12:01):
inflation is going to erodeabout 30% of your purchasing
power. So not the greatestoutcome. If inflation lasts five
years, let's say at less thannine years, like it did in the
1960s, nine years, compounded atsix and a half percent, it's
going to be about 45% of yourwealth eroded away. So obviously
not great there either. Okay,let's say, Okay, you agree, you
don't want to hold cash, let'ssay you want to hold stocks,
(12:24):
you're invested in s&p, and whoknows if history is going to
repeat, right? So in the 1960s,you had the s&p lose about 20%,
over that nine year inflationaryperiod. And in the 1960s,
inflation was running at 12%. Sonot only did you lose nominal
purchasing power, you lostinflation. And then in the
1970s, stocks did a little bitbetter, they were up about 4%,
(12:45):
over that five years, butinflation hit almost 15%. So you
may look like you're makingmoney, but in fact, you're
losing purchasing power. Andthen lastly, let's look at gold
in the 1960s. From actually from71, up to 74. Gold was pegged
before 71. It went up from 35 to200. And so you know, as 5x
(13:05):
Move, there was a brief periodaround 74 and 75, where the Fed
actually raised their interestrates above the inflation rate,
which caused gold to crash from200 to 100. And then obviously,
they lost control of inflationagain, in the 1970s. Gold
rallied from 100 850. So an 8xmove. So that's just what data
says. Who knows if history willrepeat, but if it does, it's
(13:27):
likely to be very bullish forgold.
Dustin Steffey (13:30):
What about silver, what's the highest
you've seen silver, silver has
Patrick Yip (13:33):
hit $50 in the 1980s, and it hit $50. Back in
2020. Right now, it's currentlyabout 23 and change. It's also
in modern times, and also hit alow of 12. Back in 2020, as well
during that initial COVID crashin March. One thing I like to do
and I mentioned it briefly onthe bitcoin is is is you look at
(13:54):
your risk and your reward. SoSilver's at 23 Maybe it goes
down to 12. Again, I mean, it'spossible. So let's say you have
$11 and the downside, it's alsobeen at $50, twice in history.
So maybe you got like almost,you know, almost $30 and upside
so you got 11 On the downside,actually 27 and upside, you
know, do you buy it? You know,hey, couldn't hurt to get in
(14:14):
right now.
Dustin Steffey (14:15):
I'm one for diversifying investments, right.
So if I'm investing in metals,I'm investing in a couple of
different ones just to kind ofsee where it goes right?
Patrick Yip (14:25):
Yeah. And normally what happens in previous cycles
too is you had gold initiallystart running up and then silver
followed after gold maybe acouple months later and it often
rallies to a bigger and fasterextent than then gold so like it
I think that might beinteresting is maybe you get
into gold when you start seeinggold rally, maybe sell some of
(14:46):
your gold get into silver andthen hope silver rallies like it
does in the past and exceedsgold on a percentage basis.
Dustin Steffey (14:53):
And is it similar for Investing in
Precious Metals as it is incrypto where you don't have to
buy the whole night? 100 You canbuy a percentage of it. Yeah, so
Patrick Yip (15:03):
that's where we came up with one gold. Because I
guess the old way is, is youwanted to buy a gold coin a
silver coin. Okay, silver coins,23 bucks gold coins $1,900.
Well, let's say you wanted toput $1,000 in, you're like,
Well, I want to save $1,000every month. But you know,
$1,900, I could get a gold coinevery other month. So we created
back in 2018, we've created onegold. So APMEX, our company
(15:24):
partner with Sprott a largealternative asset manager at a
Canada with about 22 billionunder management, basically a
large investment management firmto come up with one gold. And
one gold is it's a onlineinvestment platform that allows
customers to buy sell and tradevaulted positions of precious
metal. So a lot of people callit like the Robin Hood or
Coinbase of precious metals.
It's basically one of these newonline investment platforms.
(15:44):
That is super easy if you getstarted in a couple of minutes,
and own gold. And what one golddoes is we first start by having
agreements with various vaultingcompanies around the world. So
we have an agreement withBrinks. With Loomis with the
Royal Canadian Mint and a lot ofother partners around the world.
We then source wholesale bars,so 400 ounce gold bars, 1000
ounce silver bars, these are thebars that you often see in like
(16:06):
movie scenes that the bigindustrial bars, we then put
place in in these breaks andLouis falls and then we make it
available for customers to sell.
And then you could buy as littleas a point 001 ounce of gold
point 001 ounce of silver. So ifyou had a couple of bucks, you
could own gold. And prices aresuper attractive to since you
(16:27):
typically own part of a largerbar. So instead of you actually
having a gold eagle or goldMaple Leaf, you may have
fractional ownership and a large400 ounce gold bar. Gold is sold
for as little as point 4% overspot or 40 basis points and
silver is sold for as low as 1%over spot. All the metals
regularly audited by a top fiveaccounting firm, it's insured by
(16:48):
Lloyds of London. And let's sayyou said hey, I want to take
possession of my metal, let'ssay you want to put $500,000
into gold every single month.
And when you have enough forthat ounce of gold, you want to
actually take your gold Eagle,you could swap your position at
one gold and redeem it for anyof the 25,000 product products
available@apmex.com. And we'llship it next day directly to
your house.
Dustin Steffey (17:09):
So then it would be like my grandfather, I could
have that actual physical assetin my safe. That's correct. And
I think that's that's where alot of people are these days is
the ones that invest in cryptounderstand how crypto is but
it's not a tangible asset. LikeI don't have Bitcoin, like in my
(17:31):
safe right now. It's it'sdigital. Yeah,
Patrick Yip (17:34):
and that's a that's a good point too. With with
physical metals, there are prosand cons. Obviously, the thing
that you mentioned, it'stangible, it's physical, it's
off the grid, you can't hack,there's no way to hack your gold
coin, if it's in the safe,unlike some of this new
technology if you have, I mean,you hear a lot of these crypto
exchanges too. And people arequestioning whether they want to
hold their Kryptos on theexchange because it's possible
(17:56):
that it could get hacked, younever have to worry about that
with physical gold. No one'sever gonna hack it, they can't
hack a physical item. Taxes areself reported to I do recommend
that you report your taxes. Butsome people choose to do what
they don't want to do, isaesthetically pleasing to own
too. So a lot of times peoplecollect these things. If you
ever held real gold, it'sactually a very interesting
(18:18):
feeling too. So gold is about 19times heavier than water. So
like you hold something thatsmall, and you're like this is
pretty heavy, like it's a lotdenser than any other thing that
most people hold. The biggestcon about owning physical gold
is a small stack quickly turnsout large stacks. So everyone
I've tell who get who wants toget into precious metals, they
start with maybe a couple $1,000Then it comes 10s of 1000s. And
(18:39):
then maybe if you're fortunateenough, it becomes a six or
seven figure some unfortunately,that's problem some it's not the
greatest idea to have a milliondollars in gold held in your
house. I mean, we have peoplewhose purchase I mean north of
50 million from us at APMEX. Imean that's up to them to decide
where to store it. But all ittakes is one guy breaking into
your house with a gun and itdoesn't matter what kind of
(19:00):
security what kind of safe youhave. It's gone right? And
that's why we have otherdifferent ways to one gold is a
great example. I do recommendand you alluded to it earlier, I
recommend that you you spreadaround your risk diversify a
little don't have all your eggsin one basket. And even if you
decide to go in gold, don't haveit all in physical don't have it
all in one build spread it out alittle bit.
Dustin Steffey (19:20):
Where's platinum not in pricing because you did
bring up platinum as well.
Patrick Yip (19:25):
So platinum is around $1,000 an ounce, it is
actually a low compared to goldwoodware has been trading
historically. I mean in let'ssay in the past, in the past, I
would say maybe five or so yearsit has been a little bit
misaligned from gold becausetypically platinum has always
traded at a premium to gold. Nowit's prepaid or trading at a
(19:45):
deep discount. So gold's at1900. Platinum is about 1000. So
you do have people who arespeculating that this ratio is
essentially going to return backto normal where platinum is
going to trade at a premium togold and whether that that is
gold going down to platinumgoing up or a combination of the
both Have people are saying,Hey, maybe I get into platinum
and see where this thing goes.
But it relative to gold, it doeslook a little cheap.
Dustin Steffey (20:08):
See that interests me, that's probably
where I would start myinvestment. And given where it
was in history before now.
Patrick Yip (20:15):
Yeah, and there's people who have a lot of times,
there's another thing called theGold Silver ratio where people
look at the price of golddivided by the price of silver.
And this ratio has been as lowas let's say about like 16, and
has been as high as 120 in thelast couple of years. And the
thought there is when the ratiois high, it's you're getting
more each ounce of gold is isworth more ounces of silver. So
(20:39):
basically, silver is undervaluedcompared to gold when the ratio
is high. And then when the ratiois low, gold's overvalued
compared to silver. So a lot oftimes people trade this ratio,
like I said, if it's high, it'scurrently about 80. To one
people are saying thishistorically has been high,
they're selling some of theirgold buying silver, and then
when the ratio goes lower,they'll swap it into gold.
Dustin Steffey (20:59):
Now they exchange that virtual, is that
encrypted? Do you own the keysto that? Like, can you explain
that a little bit? Because formy crypto and individuals, we
have teas and safety nets andstuff for our investments? How
does it work for the preciousmetal side?
Patrick Yip (21:20):
Yeah, so it's on all online through one gold, we
did actually have basically aledger, a blockchain ledger way
back when we first launched, butthen the person who is actually
managing the ledger willactually charge us fees. So we
ask a lot of our customers tosay, Hey, do you like this
ledger? Do you value it? Do younot value it? And then a lot of
times, people said, Hey, I wouldrather pay a cheaper price and
(21:42):
not have this ledger. And thisis just related to one gold in
our space, too. So a lot oftimes people trust, they trust
that Max, who as I mentioned, isone of the largest online
precious metals retailers in theworld. They trust Sprott, who
was one of the original foundingpartners, and they just said,
You know what, that's that'ssufficient. It's and my thought
is like, if you have a bankaccount with Bank of America, Do
You Trust Bank of America enoughthat your your, your checking
(22:04):
account is going to be safe? OrAre you skeptical? And I know
everyone has their debit? I seeyou smiling there I do. I think
the banking system is a wholedifferent discussion. But you
know, maybe for that amount thatyou have in there, you trust it,
and you trust the backing. Andmy thought too, is like, if you
really don't trust it, we offerfiscal redemption to or we offer
at max, you could always holdyour gold in your house or in a
(22:26):
safety deposit box, or whereveryou should. So we like to have
the solutions for all types ofcustomers.
Dustin Steffey (22:31):
Yeah, it's funny, you bring out the banking
question, because we addressedthat earlier last year. And I
don't believe in any of thebanks because the banks take our
money, and invest it to makemoney for themselves. And so I'm
not I'm not a fan of thatcentralized model, per se.
Patrick Yip (22:53):
Yeah. To me, it's like, yeah, I'm not a fan of it,
either. But But I, you have tokeep your money somewhere. And I
do have a checking account. Imean, that's the only thing I
really have with a Bank ofAmerica. Everything else is
spread out and other places, butI mean, it's, I'm skeptical
about it, too, as well. Yeah, it
Dustin Steffey (23:09):
only takes one bad thing to happen. And then
all of a sudden, oh, yeah. Wedon't know where your money is.
Patrick Yip (23:14):
Yeah, well, actually, it's the I think that
and how it appears in the bankis technically not your money.
It's the bank's money as soon asyou deposit it, and and
basically, they, they could dowhatever you want, like they
could loan it out, do whatever,it's no longer your money, you
just have a claim at that point.
Dustin Steffey (23:29):
And that's a scary thing. And that's
something that I really want toeducate my listeners on, which
is diversifying where your moneyis going, because you never know
if it's gonna be there or not.
Patrick Yip (23:41):
Yeah, and I think it brings up a good point back
to gold. If you look atcurrencies, for example, the US
dollar since the pandemic, Ithink there's different stats
out there, depending on whatmetric you're using, but about
half the money in existence hasbeen printed in the last couple
of years since 2020. And to me,that's scary. Because if you're
working, you're earning dollars,or euros or wherever you are in
(24:04):
the world. And these centralbanks are now just printing it
up. So you put hours into thatyour whatever you do, you make
money and they just evaluate itbecause they just doubled the
currency supply. Well, that'skind of scary. So like you want
you want something that theycannot just print away, whether
that's precious metals, realestate, something that cannot
just be made out of nothing witha couple clicks.
Dustin Steffey (24:27):
So for you personally, I know you're
diversified and invested inprecious metals. Have you made a
profit with this where you'recomfortable or like how long?
How long is the typicalturnaround people would see on
starting to see profitability?
Patrick Yip (24:45):
Yeah, I'm profitable. I started buying
precious metals probably since2008. After that financial
crisis. Were as I mentioned, Ilost quite a bit of my net worth
and back in 2008 Gold was was alot lower $800 an ounce. So I'm
in I Personally, I'm staying ingold right now until the Fed
gets inflation under control.
And what's happened in the inthe 1970s and 74, to 75. And in
(25:06):
1980, is when the Fed funds ratewas higher than the inflation
rate. And Paul Volcker was wasthe Fed chair back in the 1980s.
And what he did was inflationwas running at 14.8%, in the
late 1970s. And he said, I'mgoing to tackle inflation, I'm
going to raise the Fed fundsrate to 20%. So he raised that
5% 500 basis points above theinflation rate. And then sure
(25:29):
enough, what that caused, thatcaused a lot of assets to crash,
everyone ran to the dollar,because they said, now if you
get this massive yield, on thedollar, everything basically
crashed, and the dollar wasessentially saved back then. So
where are we right now, we're atinflation, as at 6.5% is the
latest number, the Fed fundsrate is at 4.5%. I think they're
going to increase interestinterest rates today, probably
(25:52):
25 basis points. So let's sayit, raise it to 4.75. I mean,
inflation is not under controluntil, you know, maybe inflation
goes down, which typicallyinflation gets sticky. And then
the latest job reports wasstrong, which is not what the
Fed wants to see, obviously,strong jobs report means people
are employed people have moneypeople are spending that's
inflationary. So, you know, jobsreport is is is strong,
(26:15):
inflation is unlikely to godown. The second way that they
could solve it is maybe the Fedfunds rate gets increased to
something near or above 6.5%?
Well, there's still a long wayfrom that. Or the third way is
maybe a combination of both. ButI mean, time will tell time will
tell, time will tell. But if youjust look at the past, inflation
typically gets stickier. So likeit's easy to reduce it from the
(26:38):
nine to eight to seven. But thenwhen you get from six to five to
four, it's a lot harder toreduce that down.
Dustin Steffey (26:43):
So you judge based on current, so current is
lower than back in the 70s and80s. But it doesn't seem like it
seems like we're worse off rightnow. In my opinion.
Patrick Yip (26:56):
Yeah, I think the Fed inflation rate or the BLS
inflation rates are dramaticallyunderstated. Like, if you told
someone Hey, inflation, sixpoints at 6.5%, you're like,
that's, that's not accurate. Imean, everywhere you go to
target, you get gas, go toCostco, you do anything? And
you're like, that's not six, sixand a half percent. That's like,
that's like 30%. That's 40%. Imean, depending on what you you
(27:17):
get. But I mean, there's a wholebunch of data looking back that
that says that the the numbersare kind of fudged these days.
But, you know, basically, thehigh level takeaway is, is
inflation is here, it's likelynot going to be something that's
easily resolved. In the next,let's say, couple months or a
year or two.
Dustin Steffey (27:36):
I think my barometer is taken a look at the
price of eggs. I know everybodylaughs about that, but I'm
paying 899 for a dozen eggs. Andthat was 399. A few years ago.
Patrick Yip (27:49):
Yeah. I mean, that's, that's a great example,
too. So so in that case,inflation's over 100%. I mean,
that's it's double. So so if Itold you six and a half percent,
you're like, yeah, that's that'snot right.
Dustin Steffey (28:00):
That's where I have an issue. Right. And that's
where a normal normal personwould have an issue when we're
looking at gas, eggs, milk, foodin general. It's it's above that
six and a half percent by alongshot.
Patrick Yip (28:14):
Yeah. So I think that brings it back to says like
inflation is here. I mean, whatwhat do you want to do? As we
mentioned, stocks were down lastyear bonds were down last year.
You know, what, where do youwant to go? And we could get
into the historical goldallocation too, if you want.
what history tells us?
Dustin Steffey (28:31):
Yeah, I mean, more information, the better.
This is research at this point.
Patrick Yip (28:36):
Sure. Yeah. So normally, if you ask your
financial advisor, you know howyou should allocate your
portfolio, they'll say, Hey, youshould probably have a
combination of stocks and bonds.
And the thought is, if you wantto have higher risk, higher
return, you do heavier stocks,if you want your lower risk,
lower volatility, you do bonds,and then you know, it all works
out. But like we mentioned,stocks and bonds were down, both
down last year, so thatportfolio didn't do much for
(28:59):
you. So we looked at last 50years of data. So I'm gonna look
from about 71 went when gold wasnot pegged when gold was trading
freely with the market up tilllet's say the last couple of
years, and then looking at 10year average returns to look at
the proper or the rightallocation or the best
allocation that you could havewith precious metals. Everyone's
allocation should be differentdepending on your place in life.
(29:20):
But this is just data this,obviously do your own research.
But if you had a stockportfolio, you made an average
of a 7% real return and a 5%standard deviation over a 10
year investment period. So I'mnot penalizing stocks in 2008
bonds basically had a 5% return.
So 200 basis points lower thanyour stock return, three 3%
(29:43):
standard deviation, so also 200basis points lower and your
standard deviation. If you went80% s&p 20% gold, so you got rid
of the whole bond equation toyou had a return of real return
of 6.7% annually. So 30 basispoints lower than your stock
return, but you know Almost 200basis points higher than your
bond return, and a 2.7% standarddeviation, so much lower,
(30:05):
actually 30 basis points lowerthan your bond standard
deviation. So you get all theupsides of stocks, and all the
low volatility of bonds by doing80% s&p 20% gold, but obviously,
I'm gonna say everyone'sallocation should be different.
Obviously, if you're more riskadverse, maybe you go heavier
gold or more, if you're morerisky, maybe you go heavier
gold, if you if you're in your80s. And you may, you may need
(30:27):
the cash, maybe you you don't dothis and you hold cash.
Dustin Steffey (30:30):
Yeah, that's a really good call out in my
opinion. So I want to make astatement real quick. I am not a
financial advisor. So thisinformation is purely for doing
your own research before youinvest in anything. I don't know
if Patrick is a financialadvisor. So I'm just making the
disclaimer, I am not a financialadvisor.
Patrick Yip (30:53):
Yeah, I have not either. And that's something I
can 100% agree with. A lot oftimes people ask me, like, how
much gold should I get? Well, itdepends. I don't know your
situation. If you need thismoney to pay your bills, then
you have more important thingsto do than buy gold. If you have
millions in the bank and you'resitting in cash, maybe maybe you
should buy some gold. It reallydepends.
Dustin Steffey (31:15):
Yeah, so remember, smart investments are
doing the research, reallymaking sure you have the money
your bills are paid first beforeyou invest in anything because
any investment is at risk. 100%agree. So Patrick, if one were
to want to get a hold of you,what would be the best course of
(31:36):
action to get a hold of you?
Yeah, I would say
Patrick Yip (31:39):
first of all, definitely check out precious
metals if you want the physicalprecious metals. So you want to
basically buy gold, buy silver,have it delivered to your house,
you could check out@mex.comThat's a P M e x.com. If you
want that vaulted solution,which is that new and modern way
to purchase precious metals,check out one gold.com That's o
n e gol d.com. And if you haveany questions, feel free to
(32:00):
reach out to me directly oremail me. My email is Patrick a
pa t er IC k dot yep, that's whyIP at APMEX APM x.com.
Dustin Steffey (32:10):
And for my listeners, I will have the links
in the description so that way,it's easy to click and go to the
sites all tried to have ATTREXinformation in there, too, on
the guest profile page onchopping wood fires website, so
that way you guys have mediansto get a hold of Patrick.
(32:31):
Patrick last thing as aninvestor, what is one key piece
of information you want to leavethe listeners with today?
Patrick Yip (32:40):
I would say find what you love and do that. Like
I personally love preciousmetals. I mean, I was talking to
my wife and you know, when Ihave enough money, it's
debatable whether or not I'llleave here or not because I
personally love doing what Iwhat I do. And you know you find
what you love, you do it you endup making more money than you
probably ever thought becauseyou're doing it in your spare
(33:01):
time you're doing it in theevenings you're doing it in the
weekends, you're gonna have thatcompetitive advantage over
others who are just doing it asa job. So find what you love and
do that and you'll likelysucceed.
Dustin Steffey (33:10):
I like it. Thank you, by the way for coming on.
Thank you for discussingprecious metals. We have not
discussed that yet. So I thinkthis is good all the way around.
Patrick Yip (33:21):
Great. Well, thanks again for having me on. Thank
you
Hello chop nation Dustin Steffey here our
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Jaden Norvell (01:12):
Welcome to your top rated business
entrepreneurship selfdevelopment and smart investment
podcast. This podcast is hostedby creator and founder Dr.
Dustin Steffey and also hostedby coach, music producer and
influencer yours truly Jadenrush Norville, we are blessed
for many accolades such as beingnominated for the People's
Choice Award for Best BusinessPodcast, as well as raising over
(01:32):
$5,000 last year for the CysticFibrosis Foundation as well as
for the Boys and Girls Club,spending a global reach or
podcasts in the top fourdownloads in four countries.
Without further ado, welcome tochopping wood fire ladies and
gentlemen, let's chop it up
Dustin Steffey (01:53):
Hello, everyone, and welcome to another episode
of chopping wood fire. You arejoined with your host, Dustin
Steffey I have some fun thingsin the works and in the coals
that I want to announce realquick. First and foremost, if
you guys haven't done soalready, we did just release our
first local small businessepisode. interview was with
(02:14):
speakeasy tattoo company. So ifyou haven't viewed it yet,
please take a look at it. Makesure to hit the little bell if
you're on YouTube, and Comment,like and subscribe. Obviously,
we're also on your favoritepodcast platforms. So please
pick a platform that you likeand go today to view it and send
(02:35):
us some comments. Also, ourcharities are cystic fibrosis
and the Boys and Girls Club withcystic fibrosis. Imagine having
a straw in your lungs and yourbreathing out of that straw.
It's probably not going to feelvery well. That's what it's like
to have cystic fibrosis. It's acharity that's close to me close
(02:59):
to Jaden close to this podcast.
If you guys have any extraresources, please head on over
to C F F dot o RG forward slashdonate today. Also the Boys and
Girls Club most of you areprobably already aware of they
help our children to develop tohave that really one on one fun
environment to be able to makefriends to be able to play
(03:25):
sports because they do sports aswell, to be able to support our
kids when we're working. They'rean awesome organization. But as
we know with this day and age,these organizations need help
because inflation is very real.
So if you do have spareresources and want to donate to
(03:47):
Boys and Girls Club, please headon over to BGBC dot o RG forward
slash donate and get yourdonations. And I think that's
everything that we have to kindof bring out right now I've been
pretty hush hush on the newthings coming in. Because I want
(04:08):
to surprise everyone as thingsare in the work works. Today
starts our investment seriesbecause again, we are an
entrepreneurship, selfdevelopment and smart investment
podcast. So we're gonna bringsome investments to you we got a
new topic coming up as far asInvesting in Precious Metals. We
(04:29):
have not discuss that yet. And Ithink that that's an important
discussion. And who better tohave than Patrick yet which he
is on right now I am going toturn the reins over to him. So
he can kind of introduce himselfand have some fun. We wanted to
change it up a little bit on youguys. So let's dive in
Patrick Yip (04:50):
it Dustin thanks again for having me on. So a lot
of times I get the question likeWhy precious metals? How do you
get involved in precious metalssince it is kind of a niche
industry? It's definitely notmainstream. So It all started
back in 2008. I'm sure many ofyou guys will remember we had
that financial crisis. So I hadyour typical portfolio of stocks
and bonds, thought the world wasgreat, everything's just was
just fine. The financial crisisoffers a hit and my portfolio
(05:12):
got chopped in half. I thencalled my financial advisor and
said, what happened? And Irecall him saying something
like, well, no one could havepredicted that crash. So this
got me into doing this deep diveinto researching a lot of a lot
of different economic systemsgot me into Austrian economics,
and then ultimately preciousmetals. So in 2008, during that
financial crisis, gold actuallyinitially corrected with a stock
(05:33):
market, but it ended up positivefor the year. So fast forward in
2011, I joined APMEX. I'm nowthe Director of Business
Development at APMEX and wongold, which is a subsidiary or
subsidiary of AmEx, Amex, forthose of you who don't know, is
one of the largest onlineprecious metals retailers in the
US. The company has been inbusiness for north of 20 years,
we have done over 15 billion inlifetime sales. I've been with
(05:57):
the company for about 12 years,I've had different roles across
the company and merchandising,sales, project management
marketplaces. And now businessdevelopment. I also most
recently began running one gold,which is online investment
platform that allows customersto purchase like a vaulted
position of gold, silver, andplatinum. And one gold just as a
data point has done over 900million in transactions in its
first four years of business.
And then I was also involved inlaunching the first ever
(06:19):
precious metals rewards creditcard, and it's called the
bullion card, and I should haveone right here.
Dustin Steffey (06:25):
That's awesome that that's a nice quick hit
right there. So a lot of lot ofdetail in that. I want to take
it a step back, and kind of diveinto precious metals. So like,
if I'm thinking about it, andI'm, I'm almost 35, right? I'm
thinking about like mygrandfather's generation,
(06:46):
because he would have gold barssilver, like actually in the
safe, right? As liquid likefunds to be able to invest or
sell if we need some money, orwhatever the case may be. You
want to dive into that a littlebit.
Patrick Yip (07:03):
Yeah, there's several different ways to own
precious metals. One is is thephysical, as you mentioned. So
this is buying physical gold,silver, platinum palladium bars,
rounds and coins, a lot of timespeople have older generations,
like you mentioned,grandfather's grandfather's who
have a coin collection, that'sone way to buy it. And that's we
do that through APMEX, where wesell you a physical precious
(07:23):
metal for delivery. That's,that's one way. The second way
is through like a vaultedplatform, such as one gold. And
we could get into one gold in abit. But this is basically where
you take a vaulted position. Soyou have gold, you have silver
stored at a Brinks vault locatedin the US, Switzerland, Canada
or the UK. A third way is anexchange traded funds, often the
the GLD and SLV. I personallywould not get into this stuff,
(07:46):
but we could get into that. Andthen a fourth way is through
mining shares. So these arethese are companies that mined
gold and silver out of theground, which could give you a
lot of upside, but it also hasrisks too as well.
Dustin Steffey (07:57):
All right, so we got a lot of a potpourri of
options here. Yeah, with thatbeing said, I'm familiar with
the vaulted option. Because wedeal a lot with cryptocurrency,
which I know that's a sore topicright now, because Kryptos still
(08:17):
down quite a bit, and peoplehave lost quite a bit of money
in it with government relationsand the economy, even and
inflation. But that's somethingthat I know is an investment. So
I've held steady, because I knowit's going to pop back up at
some point. What's your take onthat?
Patrick Yip (08:40):
Kryptos are a difficult one, I look at it too.
And in crypto is like I thinkthe oldest crypto was around in
2007 2008. I think it's Bitcoinobviously has a 15 year history.
I don't think it has enough dataat this point. Maybe it goes
200,000 Maybe it goes higher.
Maybe it also goes to zero, Idon't know. It's just there's
not a lot of data. We don't knowwhat's going to happen in a long
(09:00):
term inflationary, risinginterest rate environment. If a
major recession hits, we don'tknow how it's gonna react. I
would say you know, it doesn'thurt to get in Kryptos. But I
would say with any asset,whether it's Kryptos, whether
it's gold, make sure you havethe correct allocation. And the
correct allocation is probablynot zero, it's probably not 100
(09:20):
It depends on where you are inlife, how much risk you take,
and you look at you look at theprobability to Okay, Kryptos
let's say Bitcoins, I think alittle over 20,000 Right now,
and I haven't checked it inprobably a couple days. But
let's say it's over there, youknow, with what's what do you
think it will go to do you thinkit's gonna go 200 Okay, fine.
You know, if it goes 200 Maybeyou have 80,000 and upside
(09:41):
20,000 On the downside, youknow, what are the
probabilities? You look at itand you make the correct
allocation?
Dustin Steffey (09:48):
Yeah, something that we preach here is do your
research first, right with withany investment, it's still a
gamble. It's still putting moneyinto something where it could go
up or or it could go down andcrypto I think is very volatile.
Whereas precious metals havebeen pretty steady for the most
(10:08):
part, I would say right, whereare we at for precious metals
right now?
Patrick Yip (10:12):
You're about $23.
For silver about 1900. For gold.
Dustin Steffey (10:15):
Yeah. So I remember when gold was 1000. So
1900. Now, that's a net 900increase. So,
Patrick Yip (10:22):
yeah, I think I think too, that that's important
to talk about, too, is is whypeople even get into precious
metals too. And we could talkabout that too. With with
inflation if you want.
Dustin Steffey (10:31):
Yeah, let's dive into it. This is, this is good
for people that want to investright now.
Patrick Yip (10:36):
Okay. Yeah. So a lot of times when people hear
gold, they just immediatelyclose the doors. And I'm not
interested, right. But let's,let's see what what history
tells us with gold. So right nowthat one of the topics in the
news is inflation, no matterwhere you go, you're hearing
inflation, you go to therestaurants, you go into Target,
you go to Costco, everything'shigher, right? So we're about
two years into the currentinflationary cycle. So just back
(10:57):
in January of 2021, inflationwas only 1.4%. I'm sure many of
you guys remember that. The Fedsaying, hey, it's transitory.
It's transitory what's beentrend. It's hasn't fixed itself
in two years already. So manypeople are feeling pinched. So
the last time we had inflationat these levels was built way
back into the 1970s in the1960s. So let's see what
happened back then, in the1960s, we had an inflationary
(11:19):
cycle, and it took the Fed nineyears to resolve that cycle. And
then fast forward to the 1970s,we had another inflationary
cycle, it took the Fed fiveyears to resolve this
inflationary cycle. Okay, great.
So what does that mean? So let'slook at how various asset
classes performed during thatinflationary cycle. So let's say
one option is to hold cash,you're not going to do anything,
I only recommend holding cashfor liquidity for buying
(11:40):
opportunities, I don't recommendthat you have most of the
majority of your assets in cash.
And the reason is, becauseinflation is going to erode away
your savings. So five years ofsix and a half percent inflation
compounded at six and a halfpercent is a current number
given by the BLS. I think it'sdramatically understated, but
let's just use it right fiveyears of six and a half percent
(12:01):
inflation is going to erodeabout 30% of your purchasing
power. So not the greatestoutcome. If inflation lasts five
years, let's say at less thannine years, like it did in the
1960s, nine years, compounded atsix and a half percent, it's
going to be about 45% of yourwealth eroded away. So obviously
not great there either. Okay,let's say, Okay, you agree, you
don't want to hold cash, let'ssay you want to hold stocks,
(12:24):
you're invested in s&p, and whoknows if history is going to
repeat, right? So in the 1960s,you had the s&p lose about 20%,
over that nine year inflationaryperiod. And in the 1960s,
inflation was running at 12%. Sonot only did you lose nominal
purchasing power, you lostinflation. And then in the
1970s, stocks did a little bitbetter, they were up about 4%,
(12:45):
over that five years, butinflation hit almost 15%. So you
may look like you're makingmoney, but in fact, you're
losing purchasing power. Andthen lastly, let's look at gold
in the 1960s. From actually from71, up to 74. Gold was pegged
before 71. It went up from 35 to200. And so you know, as 5x
(13:05):
Move, there was a brief periodaround 74 and 75, where the Fed
actually raised their interestrates above the inflation rate,
which caused gold to crash from200 to 100. And then obviously,
they lost control of inflationagain, in the 1970s. Gold
rallied from 100 850. So an 8xmove. So that's just what data
says. Who knows if history willrepeat, but if it does, it's
(13:27):
likely to be very bullish forgold.
Dustin Steffey (13:30):
What about silver, what's the highest
you've seen silver, silver has
Patrick Yip (13:33):
hit $50 in the 1980s, and it hit $50. Back in
2020. Right now, it's currentlyabout 23 and change. It's also
in modern times, and also hit alow of 12. Back in 2020, as well
during that initial COVID crashin March. One thing I like to do
and I mentioned it briefly onthe bitcoin is is is you look at
(13:54):
your risk and your reward. SoSilver's at 23 Maybe it goes
down to 12. Again, I mean, it'spossible. So let's say you have
$11 and the downside, it's alsobeen at $50, twice in history.
So maybe you got like almost,you know, almost $30 and upside
so you got 11 On the downside,actually 27 and upside, you
know, do you buy it? You know,hey, couldn't hurt to get in
(14:14):
right now.
Dustin Steffey (14:15):
I'm one for diversifying investments, right.
So if I'm investing in metals,I'm investing in a couple of
different ones just to kind ofsee where it goes right?
Patrick Yip (14:25):
Yeah. And normally what happens in previous cycles
too is you had gold initiallystart running up and then silver
followed after gold maybe acouple months later and it often
rallies to a bigger and fasterextent than then gold so like it
I think that might beinteresting is maybe you get
into gold when you start seeinggold rally, maybe sell some of
(14:46):
your gold get into silver andthen hope silver rallies like it
does in the past and exceedsgold on a percentage basis.
Dustin Steffey (14:53):
And is it similar for Investing in
Precious Metals as it is incrypto where you don't have to
buy the whole night? 100 You canbuy a percentage of it. Yeah, so
Patrick Yip (15:03):
that's where we came up with one gold. Because I
guess the old way is, is youwanted to buy a gold coin a
silver coin. Okay, silver coins,23 bucks gold coins $1,900.
Well, let's say you wanted toput $1,000 in, you're like,
Well, I want to save $1,000every month. But you know,
$1,900, I could get a gold coinevery other month. So we created
back in 2018, we've created onegold. So APMEX, our company
(15:24):
partner with Sprott a largealternative asset manager at a
Canada with about 22 billionunder management, basically a
large investment management firmto come up with one gold. And
one gold is it's a onlineinvestment platform that allows
customers to buy sell and tradevaulted positions of precious
metal. So a lot of people callit like the Robin Hood or
Coinbase of precious metals.
It's basically one of these newonline investment platforms.
(15:44):
That is super easy if you getstarted in a couple of minutes,
and own gold. And what one golddoes is we first start by having
agreements with various vaultingcompanies around the world. So
we have an agreement withBrinks. With Loomis with the
Royal Canadian Mint and a lot ofother partners around the world.
We then source wholesale bars,so 400 ounce gold bars, 1000
ounce silver bars, these are thebars that you often see in like
(16:06):
movie scenes that the bigindustrial bars, we then put
place in in these breaks andLouis falls and then we make it
available for customers to sell.
And then you could buy as littleas a point 001 ounce of gold
point 001 ounce of silver. So ifyou had a couple of bucks, you
could own gold. And prices aresuper attractive to since you
(16:27):
typically own part of a largerbar. So instead of you actually
having a gold eagle or goldMaple Leaf, you may have
fractional ownership and a large400 ounce gold bar. Gold is sold
for as little as point 4% overspot or 40 basis points and
silver is sold for as low as 1%over spot. All the metals
regularly audited by a top fiveaccounting firm, it's insured by
(16:48):
Lloyds of London. And let's sayyou said hey, I want to take
possession of my metal, let'ssay you want to put $500,000
into gold every single month.
And when you have enough forthat ounce of gold, you want to
actually take your gold Eagle,you could swap your position at
one gold and redeem it for anyof the 25,000 product products
available@apmex.com. And we'llship it next day directly to
your house.
Dustin Steffey (17:09):
So then it would be like my grandfather, I could
have that actual physical assetin my safe. That's correct. And
I think that's that's where alot of people are these days is
the ones that invest in cryptounderstand how crypto is but
it's not a tangible asset. LikeI don't have Bitcoin, like in my
(17:31):
safe right now. It's it'sdigital. Yeah,
Patrick Yip (17:34):
and that's a that's a good point too. With with
physical metals, there are prosand cons. Obviously, the thing
that you mentioned, it'stangible, it's physical, it's
off the grid, you can't hack,there's no way to hack your gold
coin, if it's in the safe,unlike some of this new
technology if you have, I mean,you hear a lot of these crypto
exchanges too. And people arequestioning whether they want to
hold their Kryptos on theexchange because it's possible
(17:56):
that it could get hacked, younever have to worry about that
with physical gold. No one'sever gonna hack it, they can't
hack a physical item. Taxes areself reported to I do recommend
that you report your taxes. Butsome people choose to do what
they don't want to do, isaesthetically pleasing to own
too. So a lot of times peoplecollect these things. If you
ever held real gold, it'sactually a very interesting
(18:18):
feeling too. So gold is about 19times heavier than water. So
like you hold something thatsmall, and you're like this is
pretty heavy, like it's a lotdenser than any other thing that
most people hold. The biggestcon about owning physical gold
is a small stack quickly turnsout large stacks. So everyone
I've tell who get who wants toget into precious metals, they
start with maybe a couple $1,000Then it comes 10s of 1000s. And
(18:39):
then maybe if you're fortunateenough, it becomes a six or
seven figure some unfortunately,that's problem some it's not the
greatest idea to have a milliondollars in gold held in your
house. I mean, we have peoplewhose purchase I mean north of
50 million from us at APMEX. Imean that's up to them to decide
where to store it. But all ittakes is one guy breaking into
your house with a gun and itdoesn't matter what kind of
(19:00):
security what kind of safe youhave. It's gone right? And
that's why we have otherdifferent ways to one gold is a
great example. I do recommendand you alluded to it earlier, I
recommend that you you spreadaround your risk diversify a
little don't have all your eggsin one basket. And even if you
decide to go in gold, don't haveit all in physical don't have it
all in one build spread it out alittle bit.
Dustin Steffey (19:20):
Where's platinum not in pricing because you did
bring up platinum as well.
Patrick Yip (19:25):
So platinum is around $1,000 an ounce, it is
actually a low compared to goldwoodware has been trading
historically. I mean in let'ssay in the past, in the past, I
would say maybe five or so yearsit has been a little bit
misaligned from gold becausetypically platinum has always
traded at a premium to gold. Nowit's prepaid or trading at a
(19:45):
deep discount. So gold's at1900. Platinum is about 1000. So
you do have people who arespeculating that this ratio is
essentially going to return backto normal where platinum is
going to trade at a premium togold and whether that that is
gold going down to platinumgoing up or a combination of the
both Have people are saying,Hey, maybe I get into platinum
and see where this thing goes.
But it relative to gold, it doeslook a little cheap.
Dustin Steffey (20:08):
See that interests me, that's probably
where I would start myinvestment. And given where it
was in history before now.
Patrick Yip (20:15):
Yeah, and there's people who have a lot of times,
there's another thing called theGold Silver ratio where people
look at the price of golddivided by the price of silver.
And this ratio has been as lowas let's say about like 16, and
has been as high as 120 in thelast couple of years. And the
thought there is when the ratiois high, it's you're getting
more each ounce of gold is isworth more ounces of silver. So
(20:39):
basically, silver is undervaluedcompared to gold when the ratio
is high. And then when the ratiois low, gold's overvalued
compared to silver. So a lot oftimes people trade this ratio,
like I said, if it's high, it'scurrently about 80. To one
people are saying thishistorically has been high,
they're selling some of theirgold buying silver, and then
when the ratio goes lower,they'll swap it into gold.
Dustin Steffey (20:59):
Now they exchange that virtual, is that
encrypted? Do you own the keysto that? Like, can you explain
that a little bit? Because formy crypto and individuals, we
have teas and safety nets andstuff for our investments? How
does it work for the preciousmetal side?
Patrick Yip (21:20):
Yeah, so it's on all online through one gold, we
did actually have basically aledger, a blockchain ledger way
back when we first launched, butthen the person who is actually
managing the ledger willactually charge us fees. So we
ask a lot of our customers tosay, Hey, do you like this
ledger? Do you value it? Do younot value it? And then a lot of
times, people said, Hey, I wouldrather pay a cheaper price and
(21:42):
not have this ledger. And thisis just related to one gold in
our space, too. So a lot oftimes people trust, they trust
that Max, who as I mentioned, isone of the largest online
precious metals retailers in theworld. They trust Sprott, who
was one of the original foundingpartners, and they just said,
You know what, that's that'ssufficient. It's and my thought
is like, if you have a bankaccount with Bank of America, Do
You Trust Bank of America enoughthat your your, your checking
(22:04):
account is going to be safe? OrAre you skeptical? And I know
everyone has their debit? I seeyou smiling there I do. I think
the banking system is a wholedifferent discussion. But you
know, maybe for that amount thatyou have in there, you trust it,
and you trust the backing. Andmy thought too, is like, if you
really don't trust it, we offerfiscal redemption to or we offer
at max, you could always holdyour gold in your house or in a
(22:26):
safety deposit box, or whereveryou should. So we like to have
the solutions for all types ofcustomers.
Dustin Steffey (22:31):
Yeah, it's funny, you bring out the banking
question, because we addressedthat earlier last year. And I
don't believe in any of thebanks because the banks take our
money, and invest it to makemoney for themselves. And so I'm
not I'm not a fan of thatcentralized model, per se.
Patrick Yip (22:53):
Yeah. To me, it's like, yeah, I'm not a fan of it,
either. But But I, you have tokeep your money somewhere. And I
do have a checking account. Imean, that's the only thing I
really have with a Bank ofAmerica. Everything else is
spread out and other places, butI mean, it's, I'm skeptical
about it, too, as well. Yeah, it
Dustin Steffey (23:09):
only takes one bad thing to happen. And then
all of a sudden, oh, yeah. Wedon't know where your money is.
Patrick Yip (23:14):
Yeah, well, actually, it's the I think that
and how it appears in the bankis technically not your money.
It's the bank's money as soon asyou deposit it, and and
basically, they, they could dowhatever you want, like they
could loan it out, do whatever,it's no longer your money, you
just have a claim at that point.
Dustin Steffey (23:29):
And that's a scary thing. And that's
something that I really want toeducate my listeners on, which
is diversifying where your moneyis going, because you never know
if it's gonna be there or not.
Patrick Yip (23:41):
Yeah, and I think it brings up a good point back
to gold. If you look atcurrencies, for example, the US
dollar since the pandemic, Ithink there's different stats
out there, depending on whatmetric you're using, but about
half the money in existence hasbeen printed in the last couple
of years since 2020. And to me,that's scary. Because if you're
working, you're earning dollars,or euros or wherever you are in
(24:04):
the world. And these centralbanks are now just printing it
up. So you put hours into thatyour whatever you do, you make
money and they just evaluate itbecause they just doubled the
currency supply. Well, that'skind of scary. So like you want
you want something that theycannot just print away, whether
that's precious metals, realestate, something that cannot
just be made out of nothing witha couple clicks.
Dustin Steffey (24:27):
So for you personally, I know you're
diversified and invested inprecious metals. Have you made a
profit with this where you'recomfortable or like how long?
How long is the typicalturnaround people would see on
starting to see profitability?
Patrick Yip (24:45):
Yeah, I'm profitable. I started buying
precious metals probably since2008. After that financial
crisis. Were as I mentioned, Ilost quite a bit of my net worth
and back in 2008 Gold was was alot lower $800 an ounce. So I'm
in I Personally, I'm staying ingold right now until the Fed
gets inflation under control.
And what's happened in the inthe 1970s and 74, to 75. And in
(25:06):
1980, is when the Fed funds ratewas higher than the inflation
rate. And Paul Volcker was wasthe Fed chair back in the 1980s.
And what he did was inflationwas running at 14.8%, in the
late 1970s. And he said, I'mgoing to tackle inflation, I'm
going to raise the Fed fundsrate to 20%. So he raised that
5% 500 basis points above theinflation rate. And then sure
(25:29):
enough, what that caused, thatcaused a lot of assets to crash,
everyone ran to the dollar,because they said, now if you
get this massive yield, on thedollar, everything basically
crashed, and the dollar wasessentially saved back then. So
where are we right now, we're atinflation, as at 6.5% is the
latest number, the Fed fundsrate is at 4.5%. I think they're
going to increase interestinterest rates today, probably
(25:52):
25 basis points. So let's sayit, raise it to 4.75. I mean,
inflation is not under controluntil, you know, maybe inflation
goes down, which typicallyinflation gets sticky. And then
the latest job reports wasstrong, which is not what the
Fed wants to see, obviously,strong jobs report means people
are employed people have moneypeople are spending that's
inflationary. So, you know, jobsreport is is is strong,
(26:15):
inflation is unlikely to godown. The second way that they
could solve it is maybe the Fedfunds rate gets increased to
something near or above 6.5%?
Well, there's still a long wayfrom that. Or the third way is
maybe a combination of both. ButI mean, time will tell time will
tell, time will tell. But if youjust look at the past, inflation
typically gets stickier. So likeit's easy to reduce it from the
(26:38):
nine to eight to seven. But thenwhen you get from six to five to
four, it's a lot harder toreduce that down.
Dustin Steffey (26:43):
So you judge based on current, so current is
lower than back in the 70s and80s. But it doesn't seem like it
seems like we're worse off rightnow. In my opinion.
Patrick Yip (26:56):
Yeah, I think the Fed inflation rate or the BLS
inflation rates are dramaticallyunderstated. Like, if you told
someone Hey, inflation, sixpoints at 6.5%, you're like,
that's, that's not accurate. Imean, everywhere you go to
target, you get gas, go toCostco, you do anything? And
you're like, that's not six, sixand a half percent. That's like,
that's like 30%. That's 40%. Imean, depending on what you you
(27:17):
get. But I mean, there's a wholebunch of data looking back that
that says that the the numbersare kind of fudged these days.
But, you know, basically, thehigh level takeaway is, is
inflation is here, it's likelynot going to be something that's
easily resolved. In the next,let's say, couple months or a
year or two.
Dustin Steffey (27:36):
I think my barometer is taken a look at the
price of eggs. I know everybodylaughs about that, but I'm
paying 899 for a dozen eggs. Andthat was 399. A few years ago.
Patrick Yip (27:49):
Yeah. I mean, that's, that's a great example,
too. So so in that case,inflation's over 100%. I mean,
that's it's double. So so if Itold you six and a half percent,
you're like, yeah, that's that'snot right.
Dustin Steffey (28:00):
That's where I have an issue. Right. And that's
where a normal normal personwould have an issue when we're
looking at gas, eggs, milk, foodin general. It's it's above that
six and a half percent by alongshot.
Patrick Yip (28:14):
Yeah. So I think that brings it back to says like
inflation is here. I mean, whatwhat do you want to do? As we
mentioned, stocks were down lastyear bonds were down last year.
You know, what, where do youwant to go? And we could get
into the historical goldallocation too, if you want.
what history tells us?
Dustin Steffey (28:31):
Yeah, I mean, more information, the better.
This is research at this point.
Patrick Yip (28:36):
Sure. Yeah. So normally, if you ask your
financial advisor, you know howyou should allocate your
portfolio, they'll say, Hey, youshould probably have a
combination of stocks and bonds.
And the thought is, if you wantto have higher risk, higher
return, you do heavier stocks,if you want your lower risk,
lower volatility, you do bonds,and then you know, it all works
out. But like we mentioned,stocks and bonds were down, both
down last year, so thatportfolio didn't do much for
(28:59):
you. So we looked at last 50years of data. So I'm gonna look
from about 71 went when gold wasnot pegged when gold was trading
freely with the market up tilllet's say the last couple of
years, and then looking at 10year average returns to look at
the proper or the rightallocation or the best
allocation that you could havewith precious metals. Everyone's
allocation should be differentdepending on your place in life.
(29:20):
But this is just data this,obviously do your own research.
But if you had a stockportfolio, you made an average
of a 7% real return and a 5%standard deviation over a 10
year investment period. So I'mnot penalizing stocks in 2008
bonds basically had a 5% return.
So 200 basis points lower thanyour stock return, three 3%
(29:43):
standard deviation, so also 200basis points lower and your
standard deviation. If you went80% s&p 20% gold, so you got rid
of the whole bond equation toyou had a return of real return
of 6.7% annually. So 30 basispoints lower than your stock
return, but you know Almost 200basis points higher than your
bond return, and a 2.7% standarddeviation, so much lower,
(30:05):
actually 30 basis points lowerthan your bond standard
deviation. So you get all theupsides of stocks, and all the
low volatility of bonds by doing80% s&p 20% gold, but obviously,
I'm gonna say everyone'sallocation should be different.
Obviously, if you're more riskadverse, maybe you go heavier
gold or more, if you're morerisky, maybe you go heavier
gold, if you if you're in your80s. And you may, you may need
(30:27):
the cash, maybe you you don't dothis and you hold cash.
Dustin Steffey (30:30):
Yeah, that's a really good call out in my
opinion. So I want to make astatement real quick. I am not a
financial advisor. So thisinformation is purely for doing
your own research before youinvest in anything. I don't know
if Patrick is a financialadvisor. So I'm just making the
disclaimer, I am not a financialadvisor.
Patrick Yip (30:53):
Yeah, I have not either. And that's something I
can 100% agree with. A lot oftimes people ask me, like, how
much gold should I get? Well, itdepends. I don't know your
situation. If you need thismoney to pay your bills, then
you have more important thingsto do than buy gold. If you have
millions in the bank and you'resitting in cash, maybe maybe you
should buy some gold. It reallydepends.
Dustin Steffey (31:15):
Yeah, so remember, smart investments are
doing the research, reallymaking sure you have the money
your bills are paid first beforeyou invest in anything because
any investment is at risk. 100%agree. So Patrick, if one were
to want to get a hold of you,what would be the best course of
(31:36):
action to get a hold of you?
Yeah, I would say
Patrick Yip (31:39):
first of all, definitely check out precious
metals if you want the physicalprecious metals. So you want to
basically buy gold, buy silver,have it delivered to your house,
you could check out@mex.comThat's a P M e x.com. If you
want that vaulted solution,which is that new and modern way
to purchase precious metals,check out one gold.com That's o
n e gol d.com. And if you haveany questions, feel free to
(32:00):
reach out to me directly oremail me. My email is Patrick a
pa t er IC k dot yep, that's whyIP at APMEX APM x.com.
Dustin Steffey (32:10):
And for my listeners, I will have the links
in the description so that way,it's easy to click and go to the
sites all tried to have ATTREXinformation in there, too, on
the guest profile page onchopping wood fires website, so
that way you guys have mediansto get a hold of Patrick.
(32:31):
Patrick last thing as aninvestor, what is one key piece
of information you want to leavethe listeners with today?
Patrick Yip (32:40):
I would say find what you love and do that. Like
I personally love preciousmetals. I mean, I was talking to
my wife and you know, when Ihave enough money, it's
debatable whether or not I'llleave here or not because I
personally love doing what Iwhat I do. And you know you find
what you love, you do it you endup making more money than you
probably ever thought becauseyou're doing it in your spare
(33:01):
time you're doing it in theevenings you're doing it in the
weekends, you're gonna have thatcompetitive advantage over
others who are just doing it asa job. So find what you love and
do that and you'll likelysucceed.
Dustin Steffey (33:10):
I like it. Thank you, by the way for coming on.
Thank you for discussingprecious metals. We have not
discussed that yet. So I thinkthis is good all the way around.
Patrick Yip (33:21):
Great. Well, thanks again for having me on. Thank
you
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