Did you know the simplest way to transfer wealth from one generation to the next is with transferring property in the form of art and jewelry? Search for any royalty in history and you can find a long list of notable baubles on them or in their vault – likely with fancy names.
Jewelry can simply be bequeathed. According to the IRS,
Most relatively simple estates do not require the filing of a federal estate tax return. A filing is required if the gross estate of the decedent, is valued at more than the filing threshold for the year of the decedent’s death.
In 2024, that number is $13,610,000. That’s a sparkly and shiny number. Some states, however, may require an estate tax, though many do not. Always check with your trusted accountant and financial advisors.
The premise to investing in jewelry is the intrinsic value of the materials the jewelry is made of. Gold, for instance, has outperformed both the S&P 500 and the Dow Jones over the last two decades, and it is especially strong in times of recession such as the current FY2024 (Figure 1; JM Bullion). The same holds for silver but not platinum. I follow the logic of Carrie Bradshaw, "I like my money where I can see it . . .hanging in my closet," or rather in my case, hanging around my neck.
The earth only has made so much gold and silver to date. It is likely there is a dwindling natural supply of both, and, like many other resources, humans are mining gold and silver faster than the earth can produce it. Gold and silver formation take millions to billions of years of geological activity. The same follows suit for diamonds and gemstones. As natural supplies of these precious materials dwindle and demand increases, it is simple economics that their value and worth increase. Time will tell if these economics hold true while lab-grown gemstones flood the market. But, as far as this chemist knows, no one has mastered the art of alchemy (yet). So, it’s safe to say that gold will hold, and silver won’t wither.
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