Gold vs my appartment

Some people believe that gold is the only money that this planet have. So let's count how much my appartment in Budapest worth currently in gold.

Purchase price: 2000 November: 5.500.000 HUF
Current value: 2007 Jan: 7.200.000 HUF (about).

First, I use to convert the value to USD. The reason for USD that USD is still the most important currency of the world, so it is easier to count with it.

2000 November: 5.5 M HUF = 17.710 USD.
2007 January: 7.2 M HUF = 38.050 USD

In USD, the appartment increased over double (114% increase). Sounds good isn't it?

Let see gold prices using the same currency converstion tool. (1 oz. = 28.349 gram).

In 2000 November, 5.5 M HUF buys 66.64287 oz. Gold
In 2007 January, 7.2 M HUF buys 59.4911 oz. Gold

In Gold, the appartment lost 11% of its value. That is not so good after all.

What if I would have invested in Gold?

If in 2000, November, I would have buy gold on the 5.5 M HUF, I would have now 8.1 M HUF worth of gold and no appartment to stay in Budapest.

So in this case, financally buying gold might seem to be a better choice. For me, buying the appartment seem to be the better choice after all. Not because it is a great invesment but simply one needs a place above his/her head when staying in Budapest.

No comments: