Recent reports in the media indicate a significant rise in the number of young adults investing in gold and precious metals. With the development of digital platforms that allow investors to purchase gold easily online, the number of people taking a stake in these resources has increased almost fivefold. Real Business sat down with Michael Lillelund and Shaun Houghton from My Gold Platform, the bespoke gold company that trades physical gold internationally, offering customers reliable investing advice and secure delivery or storage.
Michael has over thirty years experience as an independent consultant in the financial services industry, specialising in gold investments, and twelve years consulting with private individuals and companies regarding the process of investing in physical gold. He has partnered with Shaun, a highly qualified IT expert with over thirty years of experience in the industry, to launch an easily accessible online platform for people to purchase physical gold.
Gold is regarded as a safe investment and is popular for investors globally in times of economic uncertainty. This was very evident during the COVID-19 pandemic but also during times when there has been financial or political instability. My Gold Platform believe that gold is one of the safest and most reliable investments available in our current erratic and unstable world.
You recently started accepting cryptocurrency as payment. What changes did this bring to your business, especially as you trade in a very physical product? What were your reasons for accepting digital currency?
This is a very exciting addition to our capability, and we are the only online gold business in the UK that is currently accepting cryptocurrency as payment. Cryptocurrency is a good medium of exchange for buying and selling goods worldwide, which is why we’ve chosen to accept cryptocurrency as a payment method. This is alongside our traditional payment methods such as credit and debit cards and bank transfers. We don’t necessarily view cryptocurrency as a form of long term investment due to its volatility. We know more and more people are holding money in cryptocurrency and this means that people who would like to move their investment from cryptocurrency to gold can do so directly with us. Our system makes it very simple to use the cryptocurrency payment option at checkout to pay for your physical gold. We also offer a very comprehensive spread of the various cryptocurrencies.
You state that you view gold or precious metals as the ‘true store of value’. Could you expand on what you mean by that?
The oldest pieces of gold ever found at an archaeological dig were roughly five thousand years old. Those little pieces of gold were perfect, they were intact, and they have obviously held their value. If you think of the currencies we have today, none of them were in place during the Roman period, for example. Gold is the universal currency that has continued to survive as world currencies rise and fall in value. Gold has maintained its worth through economic downturns, through times of inflation and even during disastrous world events. That is what we mean when we say it is the one true store of value.
You specify on your website that you only deal with physical gold and not what is known as ‘paper gold’. Could you explain the difference and why you chose to exclusively sell physical products?
In our very online world today, people may think they have purchased and therefore own actual gold. They will go online to various investment sites or banks, and they will purchase an ounce of gold. What they often receive in return for that investment is a piece of paper that says they own one ounce of gold. Various reliable sources estimate that in London each physical ounce of gold is already owned by about two hundred people. If each person were to request delivery of their ounce of gold at the same time, the bullion banks would have two options. Either they would have to default because they don’t actually hold the gold or they would be forced to try and buy the physical shortfall. Given that actual gold is in very short supply this unexpected demand would significantly raise the price of gold. For this reason, we only deal in physical gold. If a client purchases an ounce of gold from My Gold Platform we will actually send them that ounce of bullion. In our opinion, purchasing so-called ‘paper gold’ constitutes a massive risk because all you truly have is a piece of paper promising you gold. The secret to physical gold, apart from its rarity, is that it holds no counter-party risk.
What are the logistics of storing or delivering physical gold to your customers?
It is quite simple. If you buy, for example, a one ounce gold coin from us, we package it and we deliver it to you. The gold is fully insured until you sign for it. If the delivery is within travelling distance for us, we will deliver the gold personally. We enjoy being able to meet and chat with our customers. There are several gold companies in the UK, but many only deliver locally to the UK. Our ability to deliver internationally is quite unique. We have an arrangement with a third party security company that handle our international gold deliveries.
Likewise with storage. Jurisdiction is an important consideration when storing gold or silver. We offer clients highly secure storage in various locations around the world. We are also able to assist those clients who wish to open their own private safe custody facilities in various cities and venues throughout the United Kingdom and Europe.
Are there certain taxes or rules clients should be aware of before they invest in gold?
There are not a lot of taxation issues around gold, but you do have to be aware of two. VAT is not applicable when purchasing gold in the UK but is an important factor when purchasing silver. Capital Gains Tax (CGT) needs to be discussed with clients. Gold is technically classed as an asset so if you were to make a profit when you sold it on, a tax would likely be levied against the money you made on that sale. However, British Sovereign coins and Britannia coins are CGT free because they are legal tender in the UK. There are ways to buy gold or gold products that are exempt from CGT that we can advise our clients on. Whilst we do not claim to be tax experts, we can certainly have discussions with our customers at the correct level regarding the tax implications of buying gold or silver.
Did you have any challenges launching My Gold Platform?
Our business model was always to consult with people directly. When someone was interested in gold, I (Michael) would sit down with them, and we would discuss what their investment objectives were and how the process would work. Once we agreed an approach, I would issue an invoice and the transaction process would begin. We launched here in the UK in March 2020 and once the pandemic hit, we couldn’t follow that business model anymore. While we still consult with people face-to-face, Shaun and I made a strategic decision to take My Gold Platform online. We rebuilt and modified our website which has massively improved our international trade. We are still able to hold virtual consultations and our online purchasing system has made it very easy for clients to buy from us. Our website updates its prices every five minutes, according to the global market. Once you are ready to make your purchase, our system locks that price for you, so you know exactly how much you are paying for your product.
If you had any advice for young entrepreneurs or investors who may be starting out in business, what would it be?
A top piece of advice from us would be to never give up and to persevere. Surround yourself with people that know the things you don’t. For example, Michael has the history and experience in the gold and financial sector, and I (Shaun) have the years of experience in Information Technology, so we make a perfect match for the type of business we are running. Technology is a key enabler. Looking at lockdown and the past year alone, we would not have been able to achieve or go on as we have without investing in technology.
Be careful regarding debt. Our younger generation has not experienced the impact of high interest rates. There is a perception amongst people that zero interest rates are with us forever. That is simply not true. When rates rise, those with high debt levels will be devastated financially.
A final bit of advice would be to preserve your wealth. Gold is a smart investment. It remains largely unaffected by economic collapses and doesn’t lose value in the same way stocks or property can.