Is investment in 1 gram gold coins a good one?
Ans: Understanding What 1 Gram Gold Coin Investment Means
You buy physical gold in the form of 1 gram coins.
These coins are available at banks, jewellers, and gold shops.
You may buy for tradition, saving or gifting reasons.
It feels emotionally satisfying for many Indian families.
But real wealth creation from it is very limited.
Real Cost of Buying 1 Gram Gold Coins
Gold coins have making charges built into the price.
Usually, banks and jewellers charge 5% to 10% extra.
You lose money the moment you buy due to extra pricing.
Then you don’t earn any monthly income from this gold.
It just stays idle in your cupboard or locker.
No Use in Emergency
Gold coins are not liquid in urgent times.
You can't sell them at full price quickly.
Buyers deduct melting or resale charges again.
You may get 90% or even less of the value.
This makes them a weak emergency asset.
Not Suitable for Long-Term Growth
Over long periods, gold gives average returns.
It protects against inflation but doesn’t multiply wealth.
For 10 to 15 years, mutual funds create more wealth.
Gold just holds its value, not increases it big.
Gold is passive. Equity-based options are more active.
Storage and Risk Problems
Coins need physical storage and safety.
There's always fear of theft or misplacement.
Bank locker costs extra every year.
If lost, there is no replacement like FD or insurance.
It becomes a burden instead of peace.
Small Amount, Small Impact
Buying 1 gram at a time builds slow quantity.
Even after 5 years, the amount may stay small.
It won’t support your child’s education or retirement.
It may just buy a few grams of jewellery.
For wealth, growth is more important than safety.
What Most People Don’t Notice
Coins from banks cannot be sold back to banks.
Jewellers may reject coins not bought from them.
Resale value is not guaranteed or fixed.
Purity check is needed at resale.
These problems reduce final returns a lot.
Emotional Satisfaction Is Not Financial Wisdom
Buying gold feels good culturally.
But finance works with numbers, not feelings.
Feelings should guide festivals, not investments.
Emotions lead to weak decisions in money matters.
Money must be handled with logic and planning.
Better Alternatives Than Gold Coins
Mutual funds via regular plans give compounding returns.
SIPs grow steadily and suit small investors.
You get expert management and guidance from CFP-MFD.
This is not possible with gold coins.
Active fund managers adjust to markets, gold can't.
Disadvantages of Direct Funds
Many think buying mutual funds directly saves cost.
But without MFD + CFP support, mistakes increase.
Most investors redeem at wrong time emotionally.
Regular plan gives advisor support and investor discipline.
For a long journey, guidance matters more than cost.
Problems With Index Funds
Index funds just follow the market.
They don’t protect during market fall.
They cannot beat the index ever.
Actively managed funds have stronger potential.
Skilled managers aim for better returns than index.
Gold for Gifting, Not Investing
For gifting on weddings or festivals, coins are fine.
But don’t confuse gift item with investment asset.
Gift gold with love. Invest money with purpose.
Keep both actions separate.
That brings clarity in wealth planning.
Don’t Buy Gold Every Month as SIP
Some do monthly gold coin buying like SIP.
This builds low-return portfolio.
Monthly SIP in mutual fund is smarter.
That builds wealth, not just collection.
Coins don’t give power in long run.
If Already Holding Gold Coins
If you already bought coins, keep as is.
Don’t increase your exposure further.
Focus new money on wealth-building assets.
Limit gold to max 5% to 10% of total.
That protects balance and gives growth too.
What You Can Do Instead
Create emergency fund using liquid mutual funds.
Invest monthly in actively managed mutual funds.
Track goals like retirement, child education, car, and home.
Review portfolio every year with a Certified Financial Planner.
Keep insurance separate from investments.
Don’t Depend on Gold for Retirement
Gold doesn’t give monthly income in old age.
No interest, no pension, no regular flow.
You may sell gold, but it may not be enough.
Invest early to avoid such worry in future.
Retirement must be supported with growing assets.
Avoid ULIP and Traditional LIC Plans
If you have ULIP or LIC policy with return goal, rethink.
These offer low returns with high lock-in.
If surrender value is available, consider mutual fund reinvestment.
Discuss with a CFP before final action.
Don’t hold weak products lifelong out of fear.
Gold Is a Tradition, Not a Strategy
It holds value, but not wealth.
Gold is for culture, not compounding.
It is for sentiment, not security.
Wealth strategy needs disciplined investing, not gold buying.
Respect gold, but invest with purpose.
Finally
One gram gold coins are not a smart investment.
They are emotional buys, not wealth creators.
You pay more while buying and lose more while selling.
They stay idle and carry safety risks.
Don’t build your future on shiny metal.
Use mutual funds with certified guidance.
Let your money work harder, not sit idle in gold.
Every rupee you invest wisely builds a better tomorrow.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment