The Gold Ratio - are you surprised?

Have you ever wondered if things change the way you are told?

When we look for new investment properties, we can often read online that 

“the price for houses has gone up a lot – current median home price in USA is almost $400K!”

Is that more or less than in the past?

The true question is: What is the value of a house now versus in the past?

Here is an interesting comparison that might surprise you:

A 1kg Gold Bar is 32.15 ounces of Gold. The current price of one ounce of gold is about $2300. To buy that median house we would need approximately 170 ounces. That’s about 5 ½ of these bars.

In the 1930’s a median home cost about $9000 and the gold price was $35/ounce.

That means you needed about 260 ounces or a little more than 8 of these bars of gold.

On top of that the houses at that time were much smaller than the average house now.

So, are you surprised that the value you receive when you buy a median home these days costs you less in gold than the same value almost 100 years ago?

The little green pieces of paper with the numbers on them have lost purchasing power, but when you look at something that has always had value, like gold, these ratios can provide surprising results.

I am tempted to say: 

“Get your next investment property now, it’s cheaper than it was 100 years ago”.

Axel M.

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