A couple days ago, I had a conversation with one of my friends. He had received the wrong information about how to invest in the pricious metal known as Gold. His stock broker advised him that it was a very good time to invest in Gold Mine because of the rise in gold price. I want to give information to everyone who visited this blog the truth that I learned from the banker, a friend of mine.
When one person comes to see the bank and asking for a loan to open up a gold mine, he needs to have the proof that there is a potential site which is the geological map or the satellite photograph. The bank will have to verify this proof and then gives this person the loan with the collateral that how many gold bullion needed to pay for the interest and covers up the first investment. Then this person will take this loan and goes to the commodity market to ask for the permission to sell forward the gold that he will dig them up in the future to raise cash. The gold miner has to open up the site and set up the refinery which costs him a fortune. As you can see that the gold mine will have a huge debt before it starts the operation.
The stock broker advised my friend to buy the gold mine stock because he wants his commission. If my friend decides to buy the bullion instead, he will definitely make money and will not subject to any risk. Thank you everyone for reading this.
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