It is important to understand the pros, cons, risks and rewards whenever you decide to invest in anything. Gold is not risk free and these are the three main cons and risks you need to grasp before you commit into buying gold.

Remember the golden rule: You will not get rich in one day, but one day.

Gold doesn’t earn passive income. Other investments such as stocks and bonds may derive a portion of their value from passive income in the form of interest and dividends. However, the only return you can make on gold is when the value increases and you decide to sell.

Need physical storage and insurance. If you choose to buy actual, physical gold, you will not only need to store it, but you will need to insure it as well. Otherwise, you won’t be able to replace it if it becomes damaged or stolen.

Gold can create a bubble. In turbulent economies, many people start investing in gold, but when investors start to panic, gold can become overpriced. This, in turn, means that your investment could lose value once the price corrects itself.