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Golden Opportunities: How Investing in Gold Can Supercharge Your Wealth Journey

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Today, we had the privilege of hosting Kevin DeMeritt, an internationally renowned expert in business and economics, specializing in financial markets and interest rate changes. Kevin’s keen insights and strategic foresight have consistently driven value for both his clients and the companies he’s been involved with throughout his illustrious career.

Kevin began his international banking career at WFI Corporation, where he laid the foundation for his extensive knowledge and expertise. Utilizing his analysis indicating gold as a safe haven for investment, he founded Lear Capital in 1997, which has since grown to become one of the nation’s largest precious metals companies.

In this conversation, Kevin shared valuable insights into navigating financial markets, managing funds, and leveraging precious metals as a strategic investment. You will gain invaluable knowledge about economic trends and the importance of being proactive in the ever-changing financial landscape.

His perspective on economic trends and the interplay of geopolitical events provided a comprehensive understanding of the financial landscape that will give you actionable insights to optimize your wealth management endeavors.

Stay until the end of the episode for Kevin’s special announcement to kickstart your journey on precious metals investing!

In This Episode

  1. Insights on financial markets and their intricacies

  2. His personal investment thesis that proves effective in this current market trends

  3. The interplay of geopolitical events and financial cycles

  4. The importance of knowledge and information in precious metals investing

  5. The step by step process in strategically investing in Gold

Jump to Links and Resources

Welcome to today’s show on Wealth Strategy Secrets. We’ve got another great episode for you today. We’re joined by Kevin DeMeritt, an international business and economic expert with deep experience in financial markets and interest rate changes. Kevin began his international banking career at WFI Corporation. Building on this experience, he realized that gold could be a haven for investment. In 1997, he founded Lear Capital, which has since grown to become one of the nation’s largest precious metals companies.

Expanding his professional footprint in the financial management space, Kevin co-founded Wilshire Finance Partners, a real estate investment fund, in 2008. He also wrote a book in 1997 titled The Bulls, the Bears, and the Bust, which was reviewed by the Associated Press. The book predicted the market crash of 2000 and the ensuing rise of gold as a safe investment. This helped Kevin become a nationally recognized expert and a highly sought-after guest commentator on over 1,000 podcasts, radio, and TV shows. Kevin, welcome to the show.

Dave, thanks for having me. I appreciate being here.

You bet! I know this is going to be a fascinating discussion and will help the audience understand more about precious metals, gold, and your investment thesis. I’m excited for you to share why you believe now is the right time to have gold as part of your portfolio. But before we dive in, tell us how you got into the gold space and what led you to it.

It’s an interesting story. As you mentioned, I worked at WFI Corporation, which was an international banking company based in Beverly Hills. We helped establish banks across the world for larger companies, mostly for import/export businesses. These companies needed letters of credit and all sorts of tax reasons for their international transactions.

To capitalize on each of these banks, we had to use whatever currency was available in that jurisdiction. At the time, the Euro didn’t exist, so we were using French francs British sovereigns, or whatever was available. Then, someone suggested, “Why don’t we use gold to hedge all these different currencies?” It was a real pain, and gold seemed like an interesting alternative.

They put me in charge of researching gold as a potential way to capitalize on the bank and save on hedging costs. After about six or seven months of research, I realized, “You know, I think this is my career.” I decided to start an investment company in gold because I saw how governments were printing money at an alarming rate, and I believed gold would benefit in the long term. And it turned out to be right, and I still think that’s true today.

Kevin. Let’s fast forward to today. We’ve seen an unprecedented amount of money printing, especially over the last few years. I’d love to hear your perspective on the devaluation of the dollar and how it plays into this because I think a lot of people don’t necessarily see it that way. They look at things like their single-family home appreciating, but they’re not necessarily considering inflation and devaluation of currency. What’s your take on this?

I think this goes back even further than just the pandemic, Dave. If you look back to Alan Greenspan and the dot-com bubble, that was the first time we saw quantitative easing on a large scale. The government printed money to try to get us through that recession. Then, in 2008, they took that playbook and ramped it up, printing even more money to stabilize the economy.

When the pandemic hit, they continued with that strategy, and it doesn’t look like it’s going to stop anytime soon. We’re facing trillion-dollar deficits, and it seems like this is the new normal. So you start to see the value of the currency continue to fall, which is easy to observe because each dollar they print makes the current dollar out there worth a little bit less. That’s why we have inflation, why interest rates are up, and why you’re likely to see, long-term, precious metals and other hard assets like real estate continue to appreciate. They can’t stop printing money at this point—mathematically impossible.

For sure. It’s been such a continuous process. You’re right, it started in 2008, but it goes back even further to when we came off the gold standard in 1971. This consumer-driven economy we live in is, as Robert Kiyosaki likes to say, all fake. Right? It’s all built on this fake model. So, it’s interesting to look at precious metals and think, okay, how has that evolved in your investment thesis? 

We talk a lot about wealth strategy, creating an overall strategy within private equity, and hard assets—things that are non-correlated to the markets. Certainly, precious metals have a space in that. But what do you think? Do you have a personal wealth strategy? A particular investment thesis, especially after being in this space for so long now?

My investment thesis is that the government is going to continue to print money at an accelerating pace. And if that’s your thesis, then what investments are going to benefit from that? Precious metals, real estate, art, and tangible assets are all likely to get much more expensive in the next 10 or 15 years because the value of the dollar is going to continue to fall. So if you believe the government will stop printing money, then my thesis goes out the door. However, most people are flabbergasted to learn that if you look at gold’s value in the year 2000 and compare it to the value of the stock market then, gold has outperformed the stock market.

For example, if you’d invested $100,000 in the Dow Jones in 2000, it would be worth about $325,000 today. But if you invested $80,000 in the stock market and 20% or $20,000 in precious metals, that portfolio would be worth $385,000 today—$60,000 more than the stock-only portfolio. Most people wouldn’t believe that, but you can look at the charts. That’s what money printing does—it causes hard assets like precious metals and real estate to appreciate faster than productive assets. And I believe this trend will continue for the next 7 to 10 years.

Do you think there’s a tipping point? I know a lot of people talk about this—where we just printed too much, and we start to resemble something more like Japan?

I think we’re very close to a tipping point, and that tipping point is likely to be when the US dollar is no longer the world’s reserve currency. That could be 5 years from now, maybe 7, but it’ll happen in my lifetime. The US dollar will eventually fall off a cliff and cease to be the world’s reserve currency. BRICS (Brazil, Russia, India, China, and South Africa) is doing a pretty good job of creating a tipping point. These countries represent 40% of the world’s population, and they’re working to create a currency that could compete with the US dollar. Why? Because we keep printing more of it than we should.

We’ve weaponized the dollar a couple of times, particularly with Russia and some other nations. And other countries just want to have secure trade. They want a currency they can trust, which is why they’re talking about backing it with commodities or even a little bit of gold. This could be a huge tipping point for US investors and the US public.

I know BRICS has been gaining steam recently. Do you look at gold differently in this context, given the dollar’s weakness? How do you measure gold or precious metals in these uncertain times?

One of the most predictable measurements has been US debt. If you look at US debt and compare it to the value of gold, there’s about a 95-97% correlation. As US debt increases, so does the price of gold. Over time, this relationship has been very consistent. So, if this year’s deficit is $1.5 trillion and our interest payments are around $640 billion, by 2023, those payments are expected to jump to $1.4 trillion. And that’s with interest rates not being as high as they are today.

When you consider off-balance-sheet debt like Social Security, pensions, Medicare, Medicaid—plus the retiring population—it’s clear that debt will continue to rise. And with that, the price of gold will rise as well. The value of the dollar will continue to decline. That’s my thesis, and I’m sticking with it. It’s worked since 2000, and I believe the government can’t stop printing money. They’re too dependent on it.

Kevin, what do you think is the biggest risk in investing in precious metals?

The biggest risk to me is if the government stops printing money at the pace it has been. But I don’t see that happening anytime soon. If you believe a recession is coming, then the government is just going to start printing even more money. Even if a recession doesn’t hit, we have $1.5 trillion deficits that are here to stay, and they can’t stop printing money. 

To me, the key question is: Will the government ever balance the budget? If interest rates fall and we don’t need gold as a hedge against the volatility caused by all this debt, then gold’s role would diminish. But I just don’t see that happening.

Got it. So, part of our investment thesis is always looking for tangible assets that offer tax efficiency, passive income, and some form of forced appreciation. Where does gold fit into your portfolio allocation? What role does it serve, and how much of a portfolio do you recommend putting into it?

The role of gold is twofold. First, you mentioned forced appreciation. If the government keeps printing money, the value of gold will increase. Take 1971, when we came off the gold standard. You had a choice: paper dollars or gold. Everyone wishes they’d taken gold when it was $50 an ounce—it’s nearly $2,000 today. So, gold has had a tremendous run since we left the gold standard.

If they keep printing money, gold, along with other tangible assets like real estate or art, will likely continue appreciating. I have 30% of my portfolio in precious metals, but I’m in the business, so it’s easier for me. For someone else, the percentage might be lower, depending on their situation. 

Gold doesn’t provide income, so if you’re looking for income, you might allocate a smaller portion of your portfolio to it. Gold would serve more as protection against a downturn in the stock market or a potential economic recession. That said, we’d need to sit down with someone to understand their goals and give them a specific percentage that fits their needs.

“Gold is protection against economic downturns.”

Fair enough. And what’s the best way for people to acquire gold? What’s your model at Leer for gold purchases? Do you have physical vaults? Where are they located? What’s the security and access like?

Great question. Most of the time, Dave, we physically deliver the metal if it’s a home delivery situation. About 80% of the time, people want to hold the metal themselves—they don’t want it in an exchange-traded fund. So we deliver it directly to them. We also use a company called the Delaware Depository Corporation, one of the largest depositories in the country. 

Many IRA companies, as well as the government, use them. It’s also where COMEX stores its physical metals. It’s very accessible, and you can take physical possession of your gold anytime you want from that depository. We work with a lot of IRAs and pension plans, too. People looking to move a portion of their IRA or pension to a self-directed IRA come to us often. If you want to take physical possession, that option is available. We generally don’t store outside of the U.S. because I’m wary of third-party risks too far away. It’s like owning real estate—I prefer it to be as close as possible. I feel the same way about depositories.

I’ve read that in the past year, there’s been a big movement of sovereign wealth funds and countries bringing back their gold into their own physical possession, right in their own countries. Even the Vatican has done it—I’m not sure of the exact amount, but they’ve brought it back under their physical security. It seems like this has been a significant trend over the past 12 months. Do you have any statistics on that?

I don’t have statistics on it because it’s very hard to follow what these countries are doing. But yes, in the news, England wanted their gold back. Germany wanted their gold back from the Federal Reserve and Fort Knox. So I think people are coming to the same conclusion: they want to hold their wealth in their own hands.

But on top of that, Dave, just recently—at the end of last year and throughout this year—central banks have accumulated more gold than they have in the past 50 years. Central banks aren’t hedge funds or day traders. They’re not here to buy and sell. They’re here to accumulate and hold for 10, 15, or even 20 years at a time. And they are accumulating at the fastest pace since the 1970s.

If I were an investor, I’d be looking at that. Because if you look back in history, when central banks are sellers, the price drops. For instance, in 1999-2000, they were selling, and the price of gold dropped to $275 an ounce. Now, they’re buying again.

So if I had to guess, the price is going to go much higher. Central banks have more money than any institution—they can print money and buy gold. That’s a pretty good way to accumulate wealth. So long-term, not only are countries looking for their gold back, but they’re also accumulating more.

I think it’s extremely telling. Countries all over the world are making these moves, and as you said, central banks are actively involved. Investors should be aware of these moves and incorporate them into their strategy to make sense of it.

I’m not smart enough to be a stockbroker, so I couldn’t give too much of a recommendation on stocks. But gold is driven by supply and demand. If there’s more demand than supply, the price goes up. That’s why, when the government is printing money, you’re creating increased demand for a fixed supply. The price is going to rise. That’s my thesis, and I believe it will continue to happen. Central banks are now piling onto that same thesis, with everyone creating money. I think over the next 7 to 10 years, it’s going to be a great period for investors in precious metals and other tangible assets.

Let’s talk about the supply of gold. Where is it primarily being mined? Have there been any technological advancements in mining extraction to make it more efficient, or are we still dealing with scarcity and limited supply?

If you go back to South Africa, which was once the world’s largest supplier of gold, technology has only allowed the industry to increase supply by about 2% per year. They have to dig deeper and deeper into the ground. So more technology just helps keep supply roughly the same, year after year. There haven’t been any major discoveries. Most countries, like China and Russia, have a hard time mining gold because it’s of very low grade. So we’re not seeing a big surge in supply, despite advancements in technology and large equipment compared to what we had 30-40 years ago. The supply is about the same.

It’s interesting because you’d think there’d be advancements in that area. That we’d drive up efficiency and be able to extract more. But like you said, if the increase is only 2%, the chances of it surpassing that in the next decade are probably minimal.

Yes, it’s mainly deeper digging and a lot more government regulation worldwide. Those two factors make it hard to push past that 2% range unless they find gold at the bottom of the ocean or on another planet. So I think we’re stuck at about a 2% increase in supply, at most.

I know you’re not an economist, Kevin, but you follow this closely. If you had your crystal ball, where do you see the price of gold in the next 5 to 10 years? We’re hovering around $1950 an ounce right now. What are your projections telling you?

It may sound crazy, but I’ll give you a projection I made all the way back in the year 2000. Silver was trading around $3.75 an ounce, and I predicted it would reach $12 an ounce. People thought I was crazy at the time. Once it hit $8, people started to think I might be onto something, and then it surpassed that. I think the price of gold could reach $3,500 an ounce in the next five years. If you consider the global debt, money printing, supply issues, and central bank purchases, gold has a very good chance of hitting $3,500 or more per ounce.

Interesting. And from a gold purchasing perspective, are there any fees involved? For instance, if I were to buy 10 ounces of gold, how does the pricing and structure work? Do you have fees for housing or transaction fees?

That’s a great question. Different types of gold—such as coins and bars—have different fees depending on their rarity and other factors. When we conduct a transaction, we provide full transparency on the associated fees. These are outlined on the invoice, a recorded confirmation line, and the contract. For instance, if you’re buying rare coins, the fees will be higher, while more common ones like American Eagles might have fees ranging from 1% to 3%, depending on the purchase amount.

We also offered something unique last year—a 24-hour risk repurchase guarantee. Once you purchase gold, we send you the invoice, and you have 24 hours to cancel the transaction, as long as you haven’t finalized the payment yet. We want to ensure people fully understand the cost and encourage them to compare our prices with other providers.

Got it. Let’s talk about security for a second. If I were to buy 20 gold bars, how would delivery handled? If it’s physically shipped to someone’s home, how does that process work?

That’s a common question. To deliver large sums of gold, we use Federal Express. This allows you to track the process from when the box leaves our facility to when it arrives at your door. You need to sign for the delivery, so the gold is securely in your hands.

Is that delivery insured?

Yes, the package is fully insured for its entire value. And when you need to return gold, we send you a prepaid Federal Express label, and it’s insured under our blanket coverage. This makes the return process as simple as possible, typically within 2 to 3 days.

Once the gold is in my possession, how do you recommend securing it? Should I set up a safe, or is there another system you suggest?

Most people use either a safety deposit box, where you can store a significant amount of gold, or a secure home safe. If you opt for a home safe, I strongly recommend bolting it to the ground. We’ve seen many instances over the years where thieves, sometimes even neighbors or their children, steal safes. So, securing it properly is essential.

Interesting. There are also facilities across the country where people store their gold in central vaults, right? Do you offer that service as well?

Yes, we do. We use the Delaware Depository and Brink’s for storage. Brink’s has locations in Los Angeles, Utah, and on the East Coast, so you can choose one based on your location. Delaware Depository, based in Delaware, is one of the most secure and largest depositories in the world. These facilities are widely used by IRA custodians as well.

You mentioned you have about 30% of your portfolio in gold and silver. You also run a real estate investment firm. What does your real estate firm focus on?

It’s a lending company, and we’re in between hard money lending and traditional bank lending. Our rates typically range from 6.5% to 9%, and we mostly lend on commercial properties like industrial spaces and long-term memory care facilities. We’ve been around since 2008 and have never lost an investor’s money.

Our loan-to-values are typically around 65%, and we’re very strict with that. Lending gives us a unique advantage—we get a close look at many properties, which helps us identify potentially good investments. We like the income-generating aspect of lending, where we receive monthly payments with a margin of safety.

Where is the remainder of your portfolio allocated? What other key asset classes are you focused on?

I have 30% in precious metals, 40% in real estate, and the remaining 30% in cash and stocks. I’m very selective with stocks, focusing on companies I understand. So, stocks make up a very small portion of my portfolio—about 5%. The cash portion is relatively high right now because I expect a recession and want to be in a position to buy undervalued assets when that happens.

Can you walk us through the process for someone who wants to purchase gold or silver from Lear? What steps should they take?

Certainly. If someone wants to purchase gold or silver, they can start by contacting us to discuss their needs. We’ll explain the types of metals available, the fees associated with each, and provide a clear breakdown of costs. Once they choose their purchase, we’ll lock in the price and send them an invoice. If they decide to proceed, they’ll send payment, and we’ll handle the secure delivery and storage options. It’s a straightforward process designed to provide transparency and security.

Secure your gold in a safety deposit box or a bolted home safe.

The first thing I would say is to get the package of information. A lot of people are investing in precious metals for the first time, and I would really love for everyone to get educated on it first. That way, you’ll ask the right questions and feel much more confident about the investment you’ve made.

Once you have that information, you’ll be able to answer questions like, “Why do I want precious metals?” and “What do I expect from this investment?” Take your time with the package of information—spend about a week or two with it—and then get back to us. We can have a conversation about your goals. Once we understand what your goals are, we can put together some recommendations, and then you choose.

For example, one option might focus more on appreciation, which could lean toward the silver market, as I believe that’s a great place for appreciation. Or, if you’re looking for more security, we can focus more on gold. And then, we need to discuss your time frame: Is it 10 years, 15 years, or just a couple of years?

A lot of people it’s their first time investing in precious metals and I really would love everyone to get the education on it first, then you’re going to ask the right questions.

If it’s just a couple of years, then we’ll focus on bullion, something with extremely high liquidity value. We’ll cover all that with you. If you’re interested in setting up an IRA and moving funds over, we can send out the paperwork for that. Once that’s all done, you get to choose.

We’ll lock in the prices over the phone before we even take your checks. We’ll send you an invoice, you review it to make sure everything is correct, and then you send your money. After that, we’ll help you track your investment through newsletters, updates, and bulletins. Plus, you’ll have your representative who you’ll talk to whenever you call in.

If you could give just one piece of advice to listeners about how they could accelerate their wealth trajectory, what would it be?

Always be learning. Every day, I’m studying and learning more about my market. I’ve been doing this for 30 years, and I learn something new every single day. But don’t try to be a jack of all trades. Focus on a couple of investments you love, ones you’re passionate about, and that you can spend time learning. Understand those investments. People often make decisions and then think, “Why did I do that?” And it’s usually because they didn’t have all the information.

If you understand everything better, you’ll make better decisions. You’ll know when to buy at the right time and hopefully sell at the right time, or somewhere near it. It’ll work out much better in the long run. I’d say: focus, focus, focus.

I love that. A couple of key points you made there: never invest in something you don’t understand, so getting smarter on this is really key, and continuing to learn. That’s part of the fascination with investing, especially when considering asset classes like precious metals.

The investment thesis around precious metals, gold, and silver is really strong. It aligns with our thesis of having tangible assets and allocating some of your portfolio to hedge against all the money printing going on in the world.

Kevin, it’s been a pleasure speaking with you. This has been super informative for the listeners. I know you’ve talked about setting up a special link for first-time clients. If people would like to learn more about you or Leer, what’s the best way for them to connect?

Never invest in something you don’t understand, getting smarter is key and continue to learn.

They can go to the link you mentioned, lear.bizback/gold, to request information. They can also give us a call at 803-140-7230. I wanted to offer something special for the program, to encourage people to look at this investment and learn more. For anyone who requests information, we’re offering a $500 credit immediately. You can use that credit to start an IRA, cover IRA fees, or for the delivery and insurance of the precious metals to your home. It should cover almost all of those expenses.

Folks, you heard that. Kevin is offering a $500 credit to get started with a very reputable precious metals supplier. Something worth considering for your portfolio. We’ll include all the links in the show notes, so feel free to reach out to Kevin and his company if you have any questions. Thanks again for joining us, Kevin. It’s been a real pleasure and honor to speak with you.

Thank you, Dave. It’s been a pleasure for me as well.

Thanks, and we’ll see you next week.

Thank you.

Important Links

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