Posted 12th December 2023

Micro-Investing in Gold: Strategies for Small Budgets

One of the major factors that makes gold such a precious metal, is its malleability. It can be melted down and reshaped into whatever is the most convenient form: a ring, a coin, or even a whole bar of bullion.

The days of having to safely store physical gold in your home or an expensive, insured vault are gone, thanks to the advent of blockchain technology. 

It is now possible to invest in gold whatever your budget, whoever you are, wherever you are in the world. In this article, we’ll discuss how digitalising gold on the blockchain opens up gold investment to a wider range of people than ever before.

What is Micro-Investing?

Micro-investing is a concept centred on investing any amount of money as a long-term strategy to build wealth over time. The availability of the internet, and more recently blockchain technology, has made this much easier for individuals without much time and disposable income, through:

Rounding-up spends – numerous apps and features within online banking enable would-be investors to round up the cost of purchases to, for instance, a round number, and use the difference to invest in either a savings account or in stocks, shares, commodities or cryptocurrencies.

Automated transfers & dollar cost averaging – a way of “set it and forget it” passive investing, investors can set a predetermined amount of money to be invested each week or month. This removes the risk and effort of trying to “time the market”, and can be a very effective way to grow wealth over time.

Fractional investing – this is the idea that you don’t have to own a complete asset, you can own parts of it. Blockchain technology and the tokenisation of real-world assets have meant anything – such as a gram of gold – can become divisible. Even 0.00000001 of an item can be owned by investors who can, over time, work towards owning 1 tokenised asset.

There are multiple benefits to investing in this way, mostly around the ease of use of these functionalities. Anyone with an internet connection and some money can invest today, and this was not always the case. 

Digital Platforms: Your Gateway to Gold Ownership

Owning gold was once a complex and complicated process an investor would have to go through, that would have involved purchasing and storing physical gold themselves. Often, investors would then have to pay for both storage fees and expensive insurance, both of which would eat away at their profits. 

Today, this is no longer the case. Digital, online platforms like Kinesis enable democratised access to gold ownership for everyone in the world who is willing to sign up, verify their identity and get started. 

Flexible deposit options and the ability to withdraw in either fiat currency or physical bullion mean that investors have total control over how they invest their money and can enjoy their assets’ appreciation in value over time. 

Some digital platforms – like Kinesis – go even further than this, offering free storage of gold in secure global vaults, and an innovative revenue-sharing model through unique yields that reward an investor’s platform activity, however they intend to interact with the system.

Kinesis customers could earn gold and silver for:

  • Simply holding their metals in the system
  • Trading their metals on the Kinesis Exchange
  • Spending their metals via card 
  • Referring friends to the system
  • Minting new metals
  • Investing in a Kinesis Velocity Token

These yields are paid out monthly in more gold and silver, helping investors to protect and grow their wealth in precious metals instead of deflating dollars. Even with small budgets, this will all add up over time.

Smart Strategies for Small Budgets

The following ideas are not intended to constitute financial advice, they’re strategies that can  be used to increase your chances of successful investment.

In no particular order, here’s a non-exhaustive list of smart strategies for smaller budgets:

Dollar-Cost Averaging Made Simple

Also known as DCAing or DCA, to dollar-cost average is to take an amount of money (doesn’t have to be dollars) each week or month and invest it in a certain asset at a certain time. For example, someone in the United Kingdom might decide that each Monday morning as the market opens, they want to invest £30 into gold, whatever it costs at the time. 

Setting Goals and Building Wealth

Once an investor has learned about exchanging and opening trades, it is possible to start Ratio Trading, and building a stack of gold and silver without having to invest any further funds than your initial amount by swapping between currencies as they fluctuate in price. This is also known as arbitrage trading. 

An investor could easily set a goal to earn more silver than they started with by swapping to gold and back at different times, and leveraging yields.

Other goals might include saving up enough for a house deposit or other expensive life events. Some savings and investment apps offer “vaults” which might offer interest on your savings, and this can help you build wealth and reach your goals more quickly. 

Staying Informed: Your Key to Micro-Investing Success

Some investors look at technical analysis charts to attempt to forecast where prices might go in the short and long-term future of an asset, but it is important to understand two other factors:

Fundamentals – seemingly simple but useful indicators nonetheless include an understanding of an asset’s supply and demand dynamics, its industrial use cases and the strength of the technology supporting it at the time of investment.

Macroeconomics – the market conditions are always affected by geopolitical events and news media hype narratives, and it is important to stay abreast of developments as they are “priced into” the market.

Furthermore, you can dive into the history of an asset to better understand its possible future. For newer assets such as cryptocurrencies like Bitcoin, this can be very useful. 

Fractional Gold Ownership

Using a digital platform like Kinesis, investors can own tiny amounts of gold as well as vast quantities of the precious metal. Through Kinesis, it is possible to do anything with gold (and silver) from saving for a house to buying a cup of coffee, or paying your friends back for dinner.

Because you own the gold you invest in with Kinesis (always check you hold the legal title to the underlying physical bullion that you’ve invested in, whether it is digitised on the blockchain or not!), it’s yours to do what you want with whether that’s spending, saving or investing. 
You can sign up for a free Kinesis account and get started in minutes today.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.