Using Gold Investments To Create Secure Wealth Within An Ever Changing Global Economic Environment With Stephen Flood, CEO of GoldCore. (#104) — Transcript
Updated: Oct 26
THE PICTURE OF WEALTH · EPISODE 104
Dustin Serviss and GoldCore CEO Stephen Flood discuss gold’s role as money, the practicalities of owning precious metals and the tradeoffs investors face in an uncertain economy.
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This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
Chapters
[00:00:00] Gold as money
[00:04:24] Insurance for uncertain markets
[00:08:20] Diversification and productive capital
[00:12:42] Purchasing power across generations
[00:17:17] Systems, regulation and collateral
[00:22:09] GoldCore’s early supporters
[00:26:03] Bullion standards and quality
[00:30:07] Choosing storage locations
[00:34:12] Gold ETFs and ownership risks
[00:43:27] Expertise, integrity and the mind
Guest & resources
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Transcript
[00:00:00] Stephen Flood: Gold is money. It is the absolute ultimate form of money. It is exchangeable. It's a unit of account. It can be used in transactions. It is valuable throughout time and across all cultures and languages. And it's always been accepted in extreme circumstances.
[00:00:18] Dustin Serviss: Welcome to the Picture of Wealth or TPAW as we call it. I am your host, Dustin Service. Stephen Flood, thank you for coming on the show today. We... You are coming to us from, Dublin, Ireland. Very exciting. And we are gonna talk everything precious metals and gold. Thank you for coming on the show today.
[00:00:36] Stephen Flood: Oh, it's great to be here. Thank you so much for having me.
[00:00:39] Dustin Serviss: You're welcome. And, so for listener, I don't know if you've ever had this question, but I sure do. And I'm in the industry of finance. But gold is a bit of a mystery. Or, Steven, could you help us unpack, like, gold investing? And and clients sometimes ask, hey. Can we invest in gold? And it's a big topic. And so help us understand what what is a gold market? And when people say, I invest in gold, is that physical gold? Is it a ETF? You know, just get us going on the gold market or precious metals in general.
[00:01:14] Stephen Flood: Yeah. I mean, like, it's it's a it's a great question. It... Gold is so unusual. It's not like anything else. It doesn't fit neatly into any category. Most investments, like, you're in investment marketplace, I just trade stocks in Wall Street. Most securities and investment products, what they have is a cash flow that gets... That comes from them. And that's really what you're buying when you're buying an investment. You're buying a cash flow. A building, you get rent. Stock, you get a dividend. A bond, you get a coupon. You know, and and so on and so forth. But with gold, you get nothing but a bill.
[00:01:50] Stephen Flood: You get a pain in the in the you know what. You get storage costs. You get, you get, you know, you get a headache from the risk of it going missing. Why on earth would you want something like that? It's It's nothing but a pain. It does nothing. It's not even productive. It doesn't make stuff. But here's the deal. Gold is money. It is the absolute ultimate form of money. It is exchangeable. It's a unit of account. It is... It can be used in transactions. It is valuable throughout time and across all cultures and languages, and it... And it's always been accepted in the... In extreme circumstances.
[00:02:28] Stephen Flood: So there's a very good reason why the Canadian Central Bank, the Fed, the Bank of England, less so, the Swiss, everybody, they... All these countries have gold backing their currencies. And there's a reason why because sometimes, over time, you have black swans. These are statistical anomalies that come out of nowhere. No one saw them coming. But when they land, they are so impactful that they call into question the system that we all rely upon. And ultimately, what happens? Those central banks, they roll out their gold supply and they go, look, it's bad times right now, but we have this. And this asks no questions, tells no lies.
[00:03:12] Stephen Flood: This is exactly what it says to be. It says it is, and it doesn't require anyone to do anything for it to retain retain its value. So it's disconnected from the economic system. And as such, compared to every other asset, which has a cash flow, gold is valuable for what it is not not what it is. And it's no one else's liability, and that's the key behind it. So, you know, nuclear winter, whatever you call pandemics, it just sits there and it always is valuable. And that was... That's what makes it unique. So investors turn to it when times, are uncertain, and they're worried about the future.
[00:03:50] Stephen Flood: And they turn to it because they want financial insurance. Something that will go up and appreciate in uncertain times and will protect them and bring that diversification element to their portfolio. So there's an old Wall Street adage that says, put ten percent of your money into gold and hope to God it does not work. And the thinking is, is it that ten percent is going up? The other ninety percent is going down and vice versa. The ninety percent is going up. The ten percent is going down, and that's okay. It's like health insurance. You don't want to see those that produce premium dollars coming back. You never...
[00:04:24] Stephen Flood: You want to pay your health insurance and never see that money again and be healthy. So you'd be glad you had it in a downturn and every, you know, fifty odd years, whatever it is. The stock market statistically has, you know, a major meltdown. In fact, more often recently, it's had loads of meltdowns, and we're in a kind of a very volatile period of time, for a whole load of reasons we can talk about later. But gold is really coming into its own. It's been acquired by by com... Countries all over the world, investors all over the world, and I think with very, very good reason.
[00:04:57] Dustin Serviss: Now would... So it... Would it be safe to say that in up stock markets, then one should be buying gold because it would be low? And then as markets get more turmoil, the value of gold, in theory, goes up? And then should someone be getting out of it? Or is this something that you hold just forever, which that... I don't know what that what that return has been. Has it been... Yeah. And, I guess, there's two parts to that question.
[00:05:20] Stephen Flood: There is. Yeah. The return on gold. If I was to ask you, on an annualized basis for the last twenty odd years, let's say in US dollars, what do you think of the annualized return on gold is over twenty years?
[00:05:35] Dustin Serviss: I would say seven to seven percent.
[00:05:39] Stephen Flood: Okay. I think you cheated and you look this up. It's around nine percent. Nine point two percent, I believe, was what I... When I looked... Checked it recently. And any... And and a chunk of metal that has no real purpose. I mean, it has electronic purposes. It's jewelry, but it has no real productive economic purpose. You don't use to make stuff really. Returns nine percent over twenty years annualized is extraordinary. And it's not so much that gold is going up nine percent every year. It's the currencies are going down nine percent a year. They're getting printed.
[00:06:13] Stephen Flood: So when they talk about the stock market return, and they're saying, like, you know, properties up and stocks are up and everything's grand. It's it's a con. It's an absolute con because what they're doing is they're printing the money and they're debasing our currency. And so assets rise in value in in in in nominal terms, but not so much in real terms, when you adjust. So gold is is getting a catching a bid. More people are looking to it, but they're looking to it to protect the future. And they realize that currencies are being debased across the board. So it's done really, really well. I think it's gonna do even better in the future.
[00:06:52] Stephen Flood: There's no guarantees. This is not investment advice. And what you do is you look at gold as part of a diversified portfolio. And in traditional portfolio theory, when you have a good year, you sell your winners and you buy your losers. You reallocate. You rebalance your portfolio in favor of those things that are oversold. So I would say if the stock market's raging forward, you got great returns, take some of that profit, sell it down a little bit, buy some more gold, decide what the right allocation is for you. Is it five percent, ten percent, twenty percent? Maybe when things get really hairy, you wanna dial that up a bit.
[00:07:27] Stephen Flood: Maybe when you think things are no... Are are not so scary, then dial it back. So whatever's right for you, wherever you are in that investment life cycle, you can sell your winners, buy buy buy the losers, and rebalance accordingly.
[00:07:40] Dustin Serviss: So what would you say in a in a... When you're buying gold, you are speculating that the value goes up in the future or you're hoping? And when you buy, you know, say, a business and if you've been, you know, on Wall Street, you buy x y z stock that, you know, has good cash flow and pays a dividend. Maybe the market is in a, you know, a a down position, and that's a great business to be around for a long time. Is it not easier to buy the business that has the cash flow to make the return? Or or am I... I'm I'm comparing two different things that, you know, are irrelevant to each other?
[00:08:20] Stephen Flood: No. I mean, like, this is the thing. People sometimes, they get kinda... They get kinda, myopic about money. They think I have to choose winners. And the smart operator, you know, will spread their money around. And your productive capital should be put to work in something that you know, that you understand, that has the risk dynamics that you're comfortable with. And provides a return for you and your family. But you also have to acknowledge that you don't control all the outcomes and you should have insurance. And that's where gold comes into it. So I would say that gold is is really optimal at that ten, you
[00:08:58] Stephen Flood: know, fifteen percent of your portfolio. You leave it in there. If it falls in value, great. And as you become wealthier over time, you know, through your productive decisions that you're making and asset allocations, you put a bit more aside. And it's something for a rainy day. I have, loads of investors who have far more than ten or twenty percent of their their portfolio in gold. They might have fifty percent plus. They're old. They've got no debt. They've got no mortgage. They've got their house. They've sold their business or they don't need anything. They have a camper van and they're just living life to the max. They're drive...
[00:09:32] Stephen Flood: Driving around the place having a great time, seeing their grandkids. Their most important criteria for for putting their money is not return on capital. It's return of capital. They don't wanna get wiped out. And if they don't make any money, happy days. They have enough to spend and they're not gonna take it to their grave. They're gonna give it to their kids. And that's and that's why they have gold Because they're they're smart in that they know that the Ponzi scheme, and that's really what it is, the global debt markets, the government bond market, is based on printed money.
[00:10:04] Stephen Flood: They're just printing money and paying off the debts of yesterday with printed money today. History tells us where this goes. And and you know, you have to decide where you are on that in that argument. I think most people who are, you know, have have are canny of travel the world, know history, read books, or have a healthy degree of skepticism. Love the idea of having some a gold kilo bar sitting in their hand and it doesn't matter what anybody does. Its value is fairly secure. We call that or I call that Financial sovereignty. Your Sovereign over your money and the digital banking system today is fantastic in so many ways.
[00:10:48] Stephen Flood: You can buy and sell things really quickly, pay people really quickly, but it's being debased. Let's face facts. And I think it's a good idea to have some of that capital in the form of money that can't be debased and cannot be printed.
[00:11:02] Dustin Serviss: Yeah. I think you've got some some great points. And and one, if, you know, listener who is a crypto advocate is probably putting up their hand saying, hey. Well, now there's this new thing called BTC or Bitcoin. There's There's this thing called Ethereum that's gonna be like oil and gas. And, you know, this Bitcoin is gonna be like gold. Why wouldn't the future just be digital digital rare thing called fill in the blank crypto.
[00:11:31] Stephen Flood: Yeah. I mean, like, you know, the the fiat currency system for Canadian dollars and US dollars is actually quite efficient. You can lend. You can borrow. You can leverage. You can you can you can actually create money out of collateral that's pledged to a bank. You do lots of really cool things with it. Bitcoin is a transacting medium. Yeah. That's pretty cool. I love it that it's grassroots. It came out of nowhere. It's got some really good tech behind it. Really good concepts. But here's the deal. Money is power and power is, money's power and power is political. And there's no government in the world that's gonna hand over the reins of
[00:12:08] Stephen Flood: power to a bunch of monetary theorists with Bitcoin and this walk away. And anybody who thinks that's gonna happen is diluted. They might like the idea. It's really cool. It's like a liberal fantasy. Yeah. No, it's not gonna happen. I hate to tell you. I'm I'm putting a pin in this balloon. It's not gonna happen. It's a great thought experiment. Fantastic. But that's as far as it goes and it does not have any comparison to gold in that regard because gold doesn't require a digital system. It doesn't require anything. It can be you can bury the back of your in your garden and
[00:12:42] Stephen Flood: leave a note to your grandkids, and it's gonna buy you the pretty much the same amount of value in twenty, thirty, a hundred years that it does today. You know, there's an old, story that says, you... An ounce of gold in the time of Julius Caesar would have bought a senator a new toga in the time of... In in in Rome. And today, an ounce of gold is what? Two thousand dollars? It could buy you a good suit of clothing today. That's not by accident. That's that's the that's that's its monetary credentials. I have a feeling that in two thousand years or, you know, whatever it is, Bitcoin will not be able to buy you, an equivalent amount of value.
[00:13:21] Stephen Flood: I just have a feeling about it, but I could be wrong. The other major problem I have with Bitcoin, and I study this quite a lot. So I'm not just some talking head here. Is that one of the biggest strengths that's tied to the Bitcoin is that, it's an immutable ledger, which means that it's it... You can't interfere with it all the way through. Technically, you can. But one of the stories that sells it's immutable. So, every every every coin is is encoded and securely. But if you hold on that Bitcoin today and the Feds come knocking on your door in a year's time and they turn around, they go, hey, you own that Bitcoin.
[00:13:58] Stephen Flood: Well, we have a registration of everything that was all Bitcoins that were stolen. And guess what? Yours is on it. We want it back. You're you're done. You have to hand that over because it goes back to the person who lost it in in in the theft. Whereas cash and gold to a lesser extent is in fact, is in fact, anonymous in terms of its physical characteristics. It doesn't necessarily transfer back unless it's a serial number thing. So I think Bitcoin actually has kind of proven providence risk. The Providence of the actual coin will follow you forever and you have no way of validating where it's been or what hands it's been
[00:14:37] Stephen Flood: or what dodgy activity it's been involved in. But you own it and maybe even you're part of it and maybe people will look at you and go, you knew what you were buying. You got it on the cheap. You bought something that was filthy and you're a stained. So I think it's got this unique problem that other monetary systems don't have. And a lot of people who have Bitcoin or love Bitcoin. I say that to them. They're like, oh, crap. You're right. Oh my god. So... Yeah. Hate... Well, it's it's all
[00:15:04] Dustin Serviss: it's all sort of, very... A person has to have an open mind to get their head around even gold. You know, if, you know, back in twenty twenty, things were... You know, the the economy and everything was going, you know, bad. And you know, I think, well... And I would ask you. So, if things got so bad that we went back to having to use gold, would I like take my gold bar and I would, you know, shave off with a cheese grater a bit and use those crumbs to pay the person at the grocery store for my groceries? Or how would that system actually work?
[00:15:36] Stephen Flood: Well, I hope to God we don't ever find ourselves ourselves back there because, literally, you might be living in a cave. No. I don't think any of this. I'm I'm a... I love technology and monetary systems. Systems. I think banking the concept of banking is fantastic. I love it. I just think it's been run really badly and by criminals in many respects. People are printing money are acting criminally. And, and so no, I don't think so. I think for me, gold in the future, if we do get into a real kinda scary place, I think what will happen is that all monetary systems might... Will regress back with her and die in some ways.
[00:16:14] Stephen Flood: And what you're left within today is the collateral, the actual functioning assets of our society. And off the back of those, like an elastic band, does the monetary system develop? And and you're able to say, you know what? You have no cash, but you have a house. And I have a bank and so you pledge me your house and I will generate whatever the monetary system is in credits and give it to you. You go and then buy stuff and do stuff productive bill factories and you pay that back and I give you back your house. So my balance sheet is zero. I have a house. I don't have the money. You have the money. You don't have the house.
[00:16:47] Stephen Flood: So it's it's it's... There's no creation of anything. It's just kind of an animation of collateral. That's what a monetary system does. And I think that ultimately will happen. We'll probably have a reset or a new new... A new currency coming about, whatever the world looks like. I don't know when. I do know that the... At the pace that these guys are going at and the way the regulators are owned by the industry. And we have this thing like a regulatory capture. So the the person regulating the banks today is giving them a job, you know, or is get... Gets a job with the guys who was regulating tomorrow.
[00:17:17] Stephen Flood: I mean, this has happens in all our industries right now, and it just goes on. It's a dirty little secret. So ultimately, we're not regulating. We're not operating correctly, and we're not we're not actually operating the system that was designed correctly. And, you know, I don't think it's a system. I think it's the people who run it. So ultimately, we'll see what happens. I think gold will be one of those assets of collateral that they'll roll out. And, like, the Germans will go, hey. You know what? We're gonna have a new currency system in Europe. Here's our gold supply to underpin it. You know, the Chinese will do the same thing.
[00:17:49] Stephen Flood: The Americans will. Whatever that might be. I don't know.
[00:17:53] Dustin Serviss: So you you came from the finance world, and then you, you know, you've now built up, you know, you're you're managing more than three hundred million in in gold for clients. What what was the final, I've gotta go to the goal. I've gotta go gold. I've gotta, you know, this is my passion, and I'm gonna address it. And you, you know, went over there. What was the catalyst that sent you there?
[00:18:15] Stephen Flood: Well, I I I kind of... When I worked in Wall Street, I was very much involved in technology. I love the whole trading, risk clearing system efficiency. I loved all that. And when I got back to Ireland, I wanted to get involved in a financial services company and I didn't care what it was. I just wanted to sell stuff and build really cool systems that made it better and faster and delivered value. And my old school friend, Mark, had set up Goldcorp, and then I joined just a few months later. I took a fifty percent share in it. The two of us ran it out of his apartment, and we built and built and built it up one customer at a time.
[00:18:50] Stephen Flood: We didn't raise money or anything like that. You know, we didn't pay ourselves for the first few years. And we banked a little bit and banked a little bit. And then we actually got a salary after, like, year two. And we worked together for seventeen years. And we were very early in the cycle. We started in two thousand and three when gold was, like, three hundred dollars an ounce. And then it rose all the way up to, like, you know, whatever it was, nineteen hundred back at the global financial crisis and then fell again. And we learned an awful lot on the way up and we learned even more on the way down in terms of contraction in the business.
[00:19:20] Stephen Flood: And so, I bought Mark out two and a half years ago. He he he exited the business and he left me in charge. And since then, I've changed things around a bit, hired more people, and expanded to the United States. And it's, it's been a wild, wild ride. I am insanely passionate about it as you can probably tell. You know, even though we're twenty years of business this year, I I look at every week has been a blessing. I'm delighted. I love my customers. I love our suppliers. I really love our our our team here. They're just incredible people, every one of them. And I'm really honored to to to be in a position of, trust,
[00:19:58] Stephen Flood: and I don't take it lightly. You know? It's a really, really... It's a great responsibility, and I I feel blessed.
[00:20:04] Dustin Serviss: Was there was there any sort of thing that you saw... Like, so if you started in in two thousand... Did you say three? Yeah. So it was post tech crash?
[00:20:13] Stephen Flood: Yeah.
[00:20:14] Dustin Serviss: Like, you had to have some thoughts of, like, okay. There's there's gotta be a better way. Or
[00:20:20] Stephen Flood: Yeah. No. You're
[00:20:21] Dustin Serviss: Mark. Crypto space.
[00:20:22] Stephen Flood: I'm I'm gonna I'm gonna give that to Mark, my old school friend. He was in here... In Ireland at the time, and he was looking at the property market going gangbusters. Property was going up, like, ten, fifteen, twenty percent year on year. Really, you know, very, average people were making extraordinary profits. And they were confusing their success with the market, with the market with that with... That was moving up. And and, you know, we had this thing called the Celtic Tiger. You may have held... Heard this term. And it was like Irish people who had no money before suddenly were, like,
[00:21:04] Stephen Flood: you know, loading themselves around town and, like, you know you know, it was just disgusting displays of wealth, like, helicopters everywhere. And and it was all leverage. It was all property based, and it was based on a on a... The euro currency and cheap interest rates, which we never had before. No one trusted the Irish with cheap interest rates. Where our interest rates were like six or whatever, six and seven percent, and then the Germans gave us the power of their currency combined to the euro, and we got the euro and our interest rates went right down to like two percent. And we're like, party.
[00:21:35] Stephen Flood: And, as we started buying up everything, we're going to London. They were buying up huge, you know, hotels over there and going nuts. Anyway, Mark caught this, and he was like, hey. This ain't gonna last, but where does the crowd go when it bursts and it gets ugly? And he goes, they go to a safe haven asset, and nobody was providing gold really in any real way in Ireland. So he'd... He had the notion of setting up, a gold bullion trading business. And then he called his old friend who he knew and who was involved in banking and Wall Street, me. And, and I got on board. Together, we grew the business with some, great team members here and and
[00:22:09] Stephen Flood: great clients. We have some really great clients in those early days that came in and supported us, Believed what we were doing. And they're still they're still with us today.
[00:22:18] Dustin Serviss: So I'm a client. I'm a client that wants to do business with you guys. What what does my journey look like?
[00:22:26] Stephen Flood: Yeah. All you need is about five minutes, your identity documents, proof of address, and you can become a client. It's that easy. It's on our website. We make it really, really easy. Gold core dot com. You sign up. It's a one page, and then you get a... You download an app on your phone, take a photograph. It's very, very straightforward. Then you can deposit funds with us and stays in a client assets account, so it's segregated. And then you can... Once that log... That's lodged in, you can log on to the system and then place your order, or you can phone us up. We'll have a we'll have a strategy call.
[00:22:57] Stephen Flood: So we'll we'll figure out what's right for you. And most importantly, if it's not a fit or we don't think you know what you're doing, we will actually say we don't want to do business with you, which is very rare, but we rather have a client that understands and really gets it, and, and and and understands what we do and what we don't do. Like, we're... Our clients aren't speculators. So if you're buying gold today and you're paying, like, a three, four percent premium over spot, you sell it tomorrow, you're gonna lose that. That's crazy. But if you're an investor and you want a form of gold that's tangible,
[00:23:29] Stephen Flood: that's unquestionably valuable, and it's outside the financial system, then we we are the company for you. So have a strategy call with us. We'll figure out what's right for you. We'll get you in the market and, and, and away you go. One thing I'm really, really proud of is, I think it was in twenty twelve, we started canvassing all of our clients and we said, listen, give us a a rating out of five stars. Give us a little comment. What we did was all those ratings go up on our website live. We don't get to control them at all. It's a third party puts them up there and that's it. We live and die by those.
[00:24:03] Stephen Flood: We have three thousand five star reviews from our clients. It's a four point nine out of five average. So, you know, and that's over twelve, thirteen years now, which is unbelievable. We're really, really proud of that. And, and, let's say, you know, every every month at our all hands, I read out the favorite ones, and, we talk about it as a group, and we could take great pride in it. So it's easy to become a client, and we'll we'll... We won't set you... We won't we won't set you wrong, and we'll give you good advice and, in terms of what your options are.
[00:24:33] Dustin Serviss: So again, listener, this isn't, buy or sell advice. Seek, you know, professional counsel. But, I I wanna make you unpack it further because I think it... It's it's it's fascinating. And when I meet clients who say, oh, I I own gold. And they send me their statements and they really own an ETF that tracks the price of gold or they own some... Know, they'll say, I own bullion. And I'll say, okay. Well, let's see. Well, it's a statement from an investment firm, and it has some value on it, which it really isn't what we're talking about with you today. So, you know, when someone comes to you and they say, hey.
[00:25:13] Dustin Serviss: I've got a million dollars or I've got a hundred thousand, and they give it to you, what happens next on... Like, and I'm not asking for your inner secret sauce, but what happens from a logistics standpoint with that hundred thousand that that person gave you?
[00:25:27] Stephen Flood: Yeah. So it's it's a great question. It's really important because there's the bones of it. Like, what actually is really happening? You're not just, a number on a spreadsheet. So So what happens is you're actually buying a real gold product formatted coins, bars, whatever they are. We'll talk about the options for you. But you're gonna have that on a shelf if you choose a storage. And so they comes... Those products come off what are called LBMA approved refineries and mints. That stands for London Bullion Market Association. These guys are the kind of quasi industry industry regulator.
[00:26:03] Stephen Flood: They're they're they're they're not government, but they're they're they're kind of the regulator for the industry. They set the standards for what constitutes investment grade gold. And they audit all the refiners and mints and make sure that they operate to a very high standard. And we only buy their products that come from those members, Which is really important because it's it's it's again, it's it's it's unquestionably high quality. And so, if you were to send us a million dollars and we'd say, we come up with a trading strategy for you and it might end up that you're buying kilo bars.
[00:26:33] Stephen Flood: Kilos of gold, in Zurich, and they're gonna be stored in, in a vault in in Zurich outside the financial system. So we'll buy those off a refiner. They'll move from the refiners factory in Switzerland to the vault in Switzerland, and they go on a shelf and, in a receptacle on the shelf with an account number. And those bars and the serial numbers are recorded are associated with you directly, and they're on our portal. So you can log into your portal when the trade's done, which could be done in hours. Like, it's that quick or could, you know, typically over a few days. But those assets are credited to your account at Goldcorp.
[00:27:08] Stephen Flood: The serial numbers are all stated. But then we do something, and I don't think any other dealer in the world does this. We actually give you the credentials to log in to the vaulting company's system independently of Goldcorp in in, in Switzerland and put in your, your details. And there you'll see your account number and all your bars and all your serial numbers listed by their records twenty four seven. So you know what you bought is there. And the other thing to remember is these assets are not on our balance sheet. So if Goldcorp disappears tomorrow, goes out of business, whatever happens gets shut down by the government, who knows.
[00:27:44] Stephen Flood: Your assets are not compromised. They're not on our balance sheet. Our creditors don't have access to them. They're not on the vault companies, balance sheet either. They're only on the client's balance sheet. It's like you had your car parked in our car garage. It's kept safe. We don't get to drive it. We don't get to move it or use it or lease it out or rent it. It just sits there until you say otherwise. You know, you can cover with a tarpaulin. It gathers dust until you decide you wanna go drive it. And that's that's the best way to hold gold because ultimately you're owning it for systemic hedging.
[00:28:17] Stephen Flood: You think if the system was to go to pot with the banks failed, some a war broke out, pandemic happened. I don't know. Choose your choose your disaster. You know that that gold is sitting there. It's unquestionably accessible. And if you wanna sell it, you can sell it to us or someone else. If you wanna ship it to you, you can do that too. You have total domain and control over that. It's fully insured. We get auditors to go in, and they look at all the the holdings, and they give us a report. We send that to you. We send you the certificate of insurance from a broker at Lloyd's of London.
[00:28:50] Stephen Flood: And you can go visit your gold in those vaults as well. Some of them. Some of them you can't. But I don't think you could possibly make it any safer. The other great thing is we have eyes on it at all times. So we know that if we sold you that kilo bar, it never moved out out of the vault. And we know if you say, you know, I wanna sell it to you, Steven, and we go, great. There's our price, and you go, done. We can give you the money very, very quickly, and we can sell it to another customer knowing it's been in the chain of integrity. It hasn't been interfered with, and it is pure.
[00:29:21] Dustin Serviss: Is is there, is there more of an insurance premium at different facilities? Like, are different facilities higher security, or is it all basically like a standard that's like they all have to be
[00:29:34] Stephen Flood: Well, we charge the same storage rate everywhere. We don't we don't... But I'm sure that at the vault level, there there will be some places that will have better credentials, but they all have... There's a lot of standards around security. Switzerland is one of the lowest risk environments in the world because where do you go if you rob it? Like, you're surrounded by the Alps on one side and, you know, and and, it's hard to get anywhere. So they... I don't think they've ever had, any major robberies there. I could be wrong on this one, but I don't think so. So it's one of the lowest risk. But we offer...
[00:30:07] Stephen Flood: We actually tell the customers, listen, you choose where you wanna have it. And if you're really worried about the situation in the world, like, you know, like, there's a lot to be worried about. Let's face it. So you take your asset. You have a million dollars. You say, you know what? I'm gonna put some in Singapore. I'm gonna put some in Zurich. I'm gonna have some in in London, Dublin. I'm gonna have some in in North America, maybe Toronto. You spread it around. It's it's the same charge. We don't charge you, any more or less. It's the same fee based on the total value. And, and what what you can do is you can decide, you know what?
[00:30:38] Stephen Flood: I think I'm gonna move that out of Toronto, and I'm gonna move it to New York, and we'll move it for you. It's your asset. You know? And and and the main thing is what we do is we make a market. We keep it safe. We have it insured, but we're the... We're vigilant. This is the most important thing. We're like a clearing house for risks. You know, we've got thousands of customers all over the world. They're all feeding us information when they see things. We take that information and we spread it out again. And we tell people, like, listen. Hey. You know what? We're not happy about Hong Kong right now. A lot of protests there.
[00:31:11] Stephen Flood: Chinese troops on the border. What happens if, like, if that vault gets compromised? You know, does your insurance pay out? Well, hell, it doesn't pay out because of, you know, you know, it becomes one of these uninsurable risks, you know, civil unrest. So what... Do you wanna move your gold to Singapore? We got a plane going in two days. We did this. This actually happened. And we got, like, ninety seven percent of our customers out of Hong Kong. We moved in Singapore. Three percent were on holidays. They couldn't take our call. They stayed in Hong Kong because everything is segregated. They're not...
[00:31:43] Stephen Flood: They they weren't available to make a call on it. They stayed there. And that's because we're not... You're not like commingled. Like a lot of guy... A lot of a lot of companies will sell you a a big four hundred ounce bar of gold and have ten thousand people own little bits of it. And they have to get all those people to, you know, permission to move it. Not in our case. Everything's segregated out. It's ready to go.
[00:32:04] Dustin Serviss: So is there, oh, I got so many things to ask you. So is there a diff... Like, is there a difference between gold and silver? Like, obviously, there is. But is there a difference in, like, the storage? Because you need a... Do you need a lot more silver to make up the same... Is gold and silver different weights? Do they not?
[00:32:25] Stephen Flood: No. Well, weight weight is relative. So they have... They can have the same weight for the same weight, but they have a different atomic mass. And so per per mass... Per per, you know, the volume, they could be different weights. But they're quite different. You know, as an investor, our rule of thumb is seventy five percent gold allocation, twenty five percent silver. And with silver, you know, if you think we're gonna get into a period of uncertainty, and things are gonna get a bit hairy, and gold's gonna go up a percentage, whatever it is. Silver will probably go up twice as fast, twice as far.
[00:33:01] Stephen Flood: And conversely, it'll fall twice as fast, twice as far. So you're gonna get a little bit more volatility. And over the long term, it... I don't think it does any better than gold. But if you think you're smart enough and you wanna be a little bit of a speculator, yeah, put a bit of silver in there. I have silver in my portfolio. I've gold and silver. And I think it's... I think silver's got some, some some... It's got some great potential. But if you're older, you know, maybe you wanna be a bit more conservative and maybe have more gold than than silver.
[00:33:35] Dustin Serviss: And and is... Okay. So... And and just to finish my initial thought on the the funds. So if if, let's say, you buy an ETF, a gold ETF, and it just literally tracks the price of gold. And I'm talking about, yeah, ETF. So for listener, it would be like a, you know, mutual fund or a fund where a bunch of people put money in, and then, you know, the price of gold goes up. Now if the price of gold goes up five percent in a day, will the ETF go up exactly five percent as well?
[00:34:12] Stephen Flood: I I would say no. Not exactly, but close to. It should do. But what you will find in the future is is that... So I I kinda call ETFs. I think they're they're great for speculators. It's a really cheap way of getting access to gold and getting exposure to gold, but you're not owning it in a way that's conducive to systemic risk. So you do have, like, lots of companies that have a book value of x, but trade at a far less multiplier of y. And the reason is because they have these risks associated with them, and they have costs embedded in them. And so investors don't really accept what the book value is.
[00:34:57] Stephen Flood: So I believe, and I could be wrong, but I believe that if you're a a speculator, yep, go with ETFs all day. Hello. Look at the futures market. You can even get more leverage. You know? You could lose your shirt too, but, hey. You know what? That never stopped anyone. So... But if you're if you're worried about systemic risk, which is like, you know, you ring up the phone and you get, like, you know, a a do do do tone, like, there's no one there. You know, the institutions disappeared. No one's answering. Then you'd probably don't want an ETF. You want physical gold sitting in a vault in a really safe jurisdiction, and
[00:35:30] Stephen Flood: it's a whole different proposition. So ETFs great for speculating and holding low costs hard, you know, very, very low cost. Although, at larger sums, our our storage costs are much lower than ETFs. Believe it or not, there's a lot less paperwork, a lot less middle men to pay, papers... Paper shufflers. So, I think I think, an ETF has a has a purpose, and I think it's... That it's done a great... They've done a great service for the gold market because they've raised awareness. It's made it easy for people to invest in gold. But... No. I think astute people who would look at systemic risk probably want the real
[00:36:06] Stephen Flood: thing, sitting in a vault with this... With the with the the narrowest proximity. The ones... They wanna be as close legally to their gold as possible.
[00:36:15] Dustin Serviss: Yeah. No. That totally makes sense. I I think... And maybe we're not gonna solve this problem today. But I think if if you've got an ETF that is tracking that, when you have a fund and a bunch of people, you could have a situation where a bunch of people are selling the ETF on one day, and the price is actually coming down based on sales of just the fund. And the price of gold could actually go up. Yeah. Because that that could happen. Right?
[00:36:44] Stephen Flood: Yeah. Yeah. There was there was a case in, in Canada. I think there was this fund that was really... It was interesting. It had... It was fully backed by metals, and it was an unusual structure. And it used to trade at a discount to the gold held in it because it had a kind of a unique set of risks in terms of redemption that made it difficult, I think, to access. Now this is going back years, so I'm kinda pushed now to remember. I think it was bought by a much bigger well known Canadian, commodity specialist, but, I'd have to go back and think about it. But, yes, sometimes all all investment funds can can have
[00:37:21] Stephen Flood: a, a disconnect between their underlying. It absolutely can happen.
[00:37:27] Dustin Serviss: So, and again, I'm I'm pivoting. But listener is always wondering where the market's going in the future. What do you see on the horizon? I know you don't have a crystal ball. But what do you see as sort of decision levers that you being in the market, watching the economy, watching the world, what levers are you watching?
[00:37:48] Stephen Flood: So, geopolitically, let's go up to thirty thousand feet. What we're seeing is right now is the, you know, the the... We're in the late stages of a currency war, where the dollar, which has been held supreme for, you know, got some... You know, gone on a hundred years, is now being shunned by some big players. And the reason is, they weaponized the dollar. They used it to, freeze central bank assets in the case of Russia. And, you know, it's not a case of being right or wrong on that, but it's the signal that it sends every other country in the world that this is now... They... They've kind of...
[00:38:32] Stephen Flood: They've broken through a Rubicon that is a point of no return. Once you do that, you can't take it back. And so those countries are now saying, hey, you know what? We need to diversify our reserves. We don't need... We shouldn't have all dollars. We shouldn't have dollar debt. Let's go... Even it might cost differently, you know, it might be a different proposition. Let's have other currencies. And now, what we have is China which has aspirations to become a global superpower. It is a global superpower, but to become the global superpower and usurp the United States. And there's a battle between these two titans.
[00:39:05] Stephen Flood: They're going to be looking for the world to turn to their currency to pay for their energy, to transact. And they've just won over and make it huge news just happened in the last few weeks. They just won over Saudi Arabia. One of the biggest energy exporters in the world. And they are now going to be exporting energy and get paid Chinese renminbi and yuan and trade accordingly. And if you and you hear... If you look at the press release, the the Saudi said, well, you know what? We only really care about our own interests. Let's be honest about this, which is refreshing because most countries never talk like this.
[00:39:45] Stephen Flood: And and we trade more with China than anyone else. So, yeah, it makes sense. And it does. But years ago, if you had suggested that you were going to, you know, trade out of dollars into other currencies, you would have been invaded. You would have troops on your door for humanitarian purposes. You know, you'll be disposed because you're like, you know, and I'm not saying some of the people that were deposed, disposed, deposed, and disposed weren't nasty types of people, but, you know, it was... I think it was more a question of the dollar than it was about nasty people. And call me a skeptic, but... Hey. So... Yeah.
[00:40:20] Stephen Flood: So right now, the world is changing. These these, rules are being broken and rewritten. And, and the world is changing. So, yeah, in that scenario, I see the the the need for gold as a form of money that can't be suddenly withdrawn or, you know, taken away from you because you hold it, as being very very important in the world.
[00:40:43] Dustin Serviss: Have you ever read, Ray Dalio's book, Changing in the World Order? Read that one?
[00:40:48] Stephen Flood: No. I I love Ray Dalio and I haven't read that one. I think he had an essay, up on LinkedIn, and I've tipped dipped in and out of it. But... Yeah. No. He... He's he's a... I think he's just an absolute genius. I think his work is amazing principles. I love that book. And, yeah. Yeah. Absolute genius.
[00:41:05] Dustin Serviss: He unpacks he unpacks what you're sort of talking about. A little bit scary sometimes, but at the same time, I think it's, awareness and just stretching your brain to know all the different levers that are happening. Final question for, for you would be... You you are probably not dealing with a bunch of clients who buy five thousand dollars gold positions, which I know you can do that. You're dealing with some wealthy people right down to someone who wants to do five thousand. But in dealing with wealthy clients and dealing with their wealth, you kinda mentioned the allocation.
[00:41:39] Dustin Serviss: What are some of the traits that you see when you're working with these, you know, wealthy clients? What are some of the behaviors around money, around wealth? What is wealth? Where does your mind go when I ask you sort of, what are some of these, you know, unique traits of of dealing with the wealthy and and their gold?
[00:41:59] Stephen Flood: I think our market is a little different than the traditional market. Our clients tend to be worldly, traveled, inquisitive, refreshingly honest, highest integrity. They really, really are. And they have a healthy degree of skepticism. They don't... They understand their own biases. They have biases, and they also examine the other side of arguments. You know, they like to debate, and they don't. They they would be they're kinda scratching their heads of late because in the last ten, twenty years, the way the world has gone in terms of information flow is astonishing. You know you know, in terms of way people who are
[00:42:48] Stephen Flood: canceled, removed from the equation, not even invited to the table anymore. History tells us where this goes. So our our clients would be concerned about what's happening there, you know. They they... You you you you... They would understand the value of real honest debate and learning. So, the other thing about them is most of them didn't set out to become wealthy. They became domain experts. They had a really good work ethic. They always never stopped learning and developing. And money came from being great at something. But it was an afterthought. It was it was a... It came after the fact. They wanted to become expert and honest
[00:43:27] Stephen Flood: in the delivery of some service or some expertise, and then money follows that. So for anyone who's out there looking to build a fortune, don't chase the money. Become a domain expert. Become, invaluable to people, always remember integrity matters more than anything. And if I could add my own piece in there and to bring it back to Ray Dalio, one of the most important things you could do is to to learn how to meditate, to to actually... It starts with you. It starts with your mind, and you have to look after that. And, if you read up on Ray Dalio and his principles book, he talks about meditation.
[00:44:05] Stephen Flood: I learned to meditate because of what he said in that book, and it changed my life completely.
[00:44:11] Dustin Serviss: Very cool. Well, that, that was a great bookend, Steven. Thanks. Where can people find more information about you and, your studies, your company?
[00:44:22] Stephen Flood: So, yeah. If you go to our website, it's gold core dot com. And and we have a a team of people there ready to help you, and answer your questions. There's no hard sell. Nobody gets paid a commission, to sell anything. We're all about the long, the long view on client service at all at all costs. And, and, yeah. So get on get on the phone or send up... Set up an account. And you'll you'll... You can set up a strategy call and learn all about us. And I'm always available to take a call even if it's a five thousand dollar trade. I have no problem taking the call. I love talking to clients. And it's, yeah.
[00:44:59] Stephen Flood: You can ask for me or anyone in the team.
[00:45:01] Dustin Serviss: Thanks a lot. Stephen Flood, listener. I know that, I enjoyed and learned a ton today. I hope you did too. Thanks a lot for being on the show. It was
[00:45:08] Stephen Flood: great to be here. Thank you so much.
[00:45:11] Dustin Serviss: Thank you for tuning in to this episode. If you enjoyed the show, please like and rate the show, share with a friend, or use your new knowledge in your next conversation. Pang of inspiration, motivation, or sense of uncertainty, act on it now. Get the clarity you're looking for. Find the permission you seek. Go to service wealth dot com to discover how others are learning how to take Fridays off or buying a recreation property or spending more money. If you're an organizer of an event where you believe my philosophy on finance lifestyle design would be applicable, go to service wealth dot com and book me as a speaker at your next event.
[00:45:44] Dustin Serviss: If you want a copy of our new book coming out soon, send me a message on Instagram or Facebook, and we will be sure to get you a first copy.