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This week on The Millionaire Choice Podcast, Tony talks with Stephen Flood, CEO of GoldCore. Tony and Stephen discuss his life growing up with a single mother in Dublin, Ireland, the nature of Gold and Silver, and why you should invest in precious metals.
Stephen’s father died when he was only 11. Alone with two children, his mother used what money they had to purchase a guest house in Dublin’s city center where she worked all the way into her eighties.
About Stephen Flood
Stephen Flood is the CEO of Goldcore and one of the oldest gold and silver dealers in the market today. Stephen has turned over $1 billion in transactions and manages $300 million in assets for their clients. He believes in a “client first” approach and trusts that owning gold and silver helps people gain personal sovereignty in a way that few other assets can.
After Stephen received his degree at Portobello Business College in Dublin, Ireland, he began his career in finance. He held financial and trading positions in New York City, before joining Goldman Sachs as a Sales Trader in Equity Derivatives. When he returned to Ireland to put his experience in trading, risk, and financial markets at Goldman to good use, his entrepreneurial drive led him to establish his own financial services firm at GoldCore where they advise clients on gold and silver purchasing and storage.
Stephen is married with three young, lively boys, and when he’s not at work, he loves the outdoor life. He resides in the rural Dublin mountains and enjoys mountain walking, swimming and biking with the family.
Learn more about Stephen Flood, https://www.goldcore.com/
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Show Transcript
Tony (00:00):
Welcome back to The Millionaire Choice show! Today, we're gonna be talking about gold and silver and other precious metals with Stephen Flood. He's the CEO of GoldCore. He's been in the precious metals market for 18 years. I've only been in for about four years, Stephen. I started to buy my first gold and silver after I left Dave Ramsey's organization. And, Stephen's also interesting cuz he's a unique guest to us because he's been working in Wall Street Banking as a trader in the equities market in his early days. Welcome to the show, Stephen.
Stephen Flood (00:31):
It's great to be here. Thank you so much for having me on.
Tony (00:33):
Thanks for coming on. Now, you're one of my few international guests. Where are you from Steve?
Stephen Flood (00:39):
I'm based in Dublin, Ireland. And, I'm married to a lady from Buffalo, New York. And we've been, we've been back in Ireland now since 2002 and I got involved in the gulf war in 2004, so I've been working here ever since and absolutely love every day.
Tony (01:00):
I've never been to Ireland. So, I need you to give us a rundown on some of the exotic things and cool stuff over there.
Stephen Flood (01:07):
Well, you're formally invited now; just so you can come to Ireland, and we'll have a few pints of Guinness together and talk about the world and try to solve all the problems of it. It's a great place to be. It's a small, very advanced economy on this side of Europe; we have all the biggest tech firms operating from here, highly educated, and I mean, people give out about the weather, but I actually love it. Every time I look out my window, it's always changing, and I like the drama of the weather. It's a beautiful place to be and a beautiful place to visit. Really wonderful people. We absolutely love American visitors. They always have a wonderful time. I've never heard of one having a bad holiday. They always have great stories to go back home with.
Tony (01:49):
And accents too. New accents to the area.
Stephen Flood (01:51):
Well, they tried to put on the accent, but they usually absolutely bludgeon in it. My wife still uses some Irish phrases. It doesn't quite fit, but she's very cute. She makes a great effort.
Tony (02:05):
Where is she from again?
Stephen Flood (02:07):
She's from Buffalo, New York. We met in New York city when we worked there in our twenties.
Tony (02:13):
New York's got a unique accent too. So, you mentioned Guinness. I thought it was interesting; I've got a friend who wrote a book called The Search for God and Guinness. His name is Stephen Mansfield, and he's written quite a few books, but Guinness has got quite a unique history. Back in the day it was the drink of choice because you didn't have clean water back then.
Stephen Flood (02:34):
I think beer was a big part of people's diet because of water quality issues, and it was a way of getting your clean water, and also probably suppressing your problems as well. But, it's a wonderful beer; stout, as we like to call it. And, it's produced in Ireland. It's also produced in Nigeria- believe it or not. It's great. It's a little bit strong for me now. I'm not much of a drinker, but I'd have one or two. It's a great drink to have.
Tony (03:12):
So, you got into finance; you're into gold and silver now- spent some time in wall street with Goldman Sachs and equities markets, but did you grow up in finance or what did life look like growing up?
Stephen Flood (03:24):
Growing up, my family were publicans. So, going back about three or four generations, we would've been publicans in Dublin, so we ran pubs. We sold our last pub in the 1980s. My father sold it. It was a very, very hard life. You worked a lot of hours. You'd probably have a lot of people robbing from you, and different things like that. The bar was all cash, so sometimes they'd have an extra till installed in the bar, and the staff would be running that till, and it was tough to keep an eye on everything. Also, back then in the eighties, you got taxed to death in Ireland. Like it was crazy taxes, inflation was rampant, interest rates were high. It was really tough to make money. My family originally were publicans, and ran quite a well known pub in that part of Dublin.
Tony (04:22):
So, in the states we have the Republican party, so you're in the publicans, which are too totally different things.
Stephen Flood (04:28):
I dunno if they're maybe the publicans; the people's house, or some of that was probably where they cross over. I don't think all the Republicans are borrowers. I like the idea of it though.
Tony (04:45):
That's funny maybe we'd get some better laws coming outta DC if that was the case.
Stephen Flood (04:49):
I think so. Absolutely.
Tony (04:51):
So, you didn't grow up with wealth or money, but when did you make a shift from being- I guess you made it sound like you were financially struggling as a family at times?
Stephen Flood (05:01):
Well, we were quite a wealthy family; especially by Irish standards. We had a big business and we lived in a nice area with a nice house. My mother and father had plenty of money, but we lost a lot of it; unfortunately due to those difficult times. And, my father died when I was 11 years old. So, I would've been very, very young. And, my mother had had a bit of money, but she had never really worked. She found herself back in the labor market in her forties. And, she was looking for a business to get into that generated cash. So, she decided on the guest house business.
Stephen Flood (05:45):
So, she bought a guest house in the city center of Dublin; one of the roughest areas, and she was quite a wealthy lady and had a great up bringing, so it was a bit of an adjustment for her. And, she worked every day until she died in her eighties; just about two years ago in the guest house. And, as we were growing up, we had huge interest rate payments on the mortgage on the guest house. My sister and I would be changing the rooms for the guests. And, sometimes if we got really busy, we would give up our own beds, for guests who are staying, so we could make a little bit extra money for the guest house and pay our mortgage payments.
Stephen Flood (06:30):
We'd sleep on the floor of the kitchen with mattresses, with my mom and my sister, in order to make extra bit of money. So, we went from having a lot of money to having no money to then building up a business again. And, my mother taught me an awful lot about capital and the importance of hard work. She was an absolutely amazing lady. She reinvented herself in her forties and on-wards, and always had a smile on her face. Woman of great faith as well, and she went to mass every day, as well. And, she used to love the guest house cause she used to use it as an opportunity to convert people to a more Christian way of life. And, she really saw herself as someone in that vein. And so, she was a wonderful, wonderful lady, and I've always taken a lot from her. She helped me then, and she helps me now.
Tony (07:20):
So, you were kind of like Airbnb before Airbnb existed?
Stephen Flood (07:24):
A little bit. Well, guest houses are wonderful. They're all over Ireland, B&Bs, we call 'em as well. So, you get a great welcome, great stay. Usually in someone's home, and you get a really good breakfast as well. They give you the insights in terms of where to go and what not to do. It's a great way of seeing Ireland as opposed to some of those generic hotels you might go to. If you're coming to Ireland, definitely go to those B&Bs and support the local economy.
Tony (07:51):
I really hadn't thought about doing that before. I've gotten more into that concept. We had some short term vacation rentals down in Florida for a while, but we sold those off. We've actually got a couple homes up here in Franklin; one in Franklin, one in Columbia, and we're playing with the idea of turning one of those into a bed and breakfast deal. The one in Columbia has 10 acres of land. It's a nice little place. It's got some development that needs to be done on it. We've been working on it for a few months now. The one in Franklin; obviously Franklin's one of the hot-spots of Tennessee; especially in the Nashville area. It's 4,800 square foot home with, five to six bedrooms.
Tony (08:28):
And, it's sitting on about two acre, close to two acres of land, 1.8, not quite two, which is a lot for this area, but learning about what I love about that concept. I tried to do something like that when I was young, I tried to talk my best friend into going out, buying a house, and letting me buy the house and him become a renter in my house. He's like, "no, I'll go in half and half with you and buy the house." And, I wish I had gone ahead and bought it without him and just moved somebody else in instead of him. But, instead I just stayed home and, lived with my mom and dad paying them 200 bucks a month in rent for a while. I had a great deal, and I was able to save a lot of money that way. How old were you when you moved into Wall Street and started working with Goldman Sachs?
Stephen Flood (09:13):
Well, I loved the idea of making money and applying myself, but not so much the idea of becoming rich or wealthy or something like that. It was more the idea of applying myself and becoming financially independent, and just throw myself into the world and seeing what would come of it. I was quite fearless. Cause I grew up with quite a lot of challenges in terms of the guest houses. I described it to you; financial challenges; we didn't have a lot of money. So, I was quite prepared to go out into the world and just roll the dice. So, I went there after college, I got my college degree, and I got on the plane and went off to New York. My very first job was as a painter with a friend of mine who was part of that Irish network, we looked after each other and he was a wonderful guy.
Stephen Flood (10:07):
Kyle was his name. And, I remember he was quite gruff. I'd be on site painting away with a bucket, and talking away about something and he'd say, "Hey, Stephen, listen, just shut up. I'm paying you from the neck down to do the work." And it was more like, I don't care about your opinion, so shut your mouth and get on with the painting. So, I always thought that was very funny. And, then I got a job in banker's trust, which was amazing, which it's gone now. They were bought by the Deutsche bank, but it was one of these early entrepreneurial banks in Wall Street. And, they would've developed the first options contracts ever used. The actual concept behind option contracts; the pricing mechanism.
Stephen Flood (10:55):
So, they actually built those markets out. They had a lot of innovations as a company. And, I met a lot of really great people there, and they taught me an awful lot about financial technology and I absolutely loved it. And, then I went, I kept in financial technology and then trading, and moved on to Goldman Sachs. I got involved in program trading, which is like the top layer of technology and trading, where you're trading hundreds of millions of dollars worth of trades using computers. So, I would've learned an awful lot there and really enjoyed those amazing people. And, it was great, but I got married and myself and the wife decided to do a trip around the world, and then moved back to Ireland.
Stephen Flood (11:35):
And, I was looking for an opportunity when I got to Ireland after having a wonderful trip and seeing the world. I joined my old school friend, Mark, in a company he had just set up a few months before called GoldCore. And, we were probably the first proper business providing precious metals to Irish and UK investors looking to buy gold. Now, gold back in 2003 was, about $250-350 an ounce. It was well out of favor; nobody would go near it. It'd been going sideways for a long time. But, we saw the writing on the wall. We saw this huge credit bubble building up. We saw asset markets going mad and houses being flipped for 10-15% within a month of being bought, and we knew this couldn't end well, history told us, Mark in particular was very, very prescient about this.
Stephen Flood (12:31):
He was a student of history and he saw the opportunity there. So, we joined forces and built the business up from there. It's been a great success. We have been in the business now 18 years, and we have about 300 million in assets under management, and about 9,500 Customers all around the world. So, it's been exciting, but what we did was really focused on how you store gold really safely. And, that was our key thing differentiator from us and everyone else out there. So, it's been great.
Tony (13:09):
So, you have got a big safe in the ground somewhere; big hole or something?
Stephen Flood (13:13):
Yes, right behind me here. We have about 11 volts around the world for our clients' metals, and our standard storage product is segregated and allocated. So, it means you have a particular bar, it has a serial number on it. It goes on a shelf, and they separate it from everybody else's bars, and our entire system is based on this segregation. We then allow you to go to the GoldCore website and you can see all your assets stored. You can buy and sell and do what you do. Look up P&L if you wish, but you can also then log into the vaulting company's system independently of GoldCore. And, they'll show you the records of what they have stored in that vault in real time. You'll see your account number and your serial bars and your assets all listed there. So, what you bought off gold core is actually stored in that vault. And, we have vaults now in New York. We have it Utah, the Cayman islands, and also in Zurich, Switzerland, London, Dublin, and in Asia. So, 11 vaults to choose from, and it's the proper way to store gold and silver. It's very, very effective. People love it.
Tony (14:32):
Now, you mentioned Utah; I know Utah was moving through with their own depository. Did they get that finished up?
Stephen Flood (14:40):
Sorry?
Tony (14:42):
They've got their own. I knew that they did that in Texas and Tennessee. So, they finished that all the legal requirements and all that, but it's in action these days?
Stephen Flood (14:52):
I heard about that. I mean, very progressive people definitely. For quite some time now people have been looking at protecting their personal wealth from the banking and financial system. And, not without cause. I mean, there's an awful lot of the questions to be answered there. But, the idea of having precious metals, either in your physical possession, and that's not always practical if you're investing significant sums; a hundred thousand to half a million; whatever it is, the number for you. You can't store those things safely on your person or in your home. You might be putting your family at risk. So, most people will look for a storage solution and a lot of them out there don't do storage correctly. They have it all mixed up together. It's all pooled and you're just a name on a spreadsheet somewhere.
Stephen Flood (15:37):
You have to have it segregated and allocated to be correct. To have that be what we call "legal proximity." So, the idea is that you hold that gold in storage, and what you're gaining personally by doing that is you're getting financial sovereignty from the system, so you have a financial type asset, i.e. Money that can be used and transacted free of the system. And, that is actually very, very powerful and it calms the mind. If should we go through a turmoil in the markets and your other stocks and assets are losing value; your gold and silver are really, really safe.
Tony (16:13):
I love the idea of that. I didn't grow up with gold and silver and thinking that way. And, some of the teaching I've received has poo-pooed on gold and silver. So, I had to start unlearning some things and relearning new things. And, I love what you said about gold and silver being one of those- you didn't use the word hedge, but really when you talk about things going upside down- let's say the stock market drops by 50%, which would not surprise me any day. Going forward, especially with the inflation hitting like it is. So, gold and silver really does fit in somebody's financial plan. It's interesting U.S. wise; I'm interested to see what you have to say, but in the U.S., but during the great depression, when the whole stock market went upside down, there was so much turmoil then; they actually made it illegal.
Tony (17:07):
FDR made it illegal to own gold. And so, U.S. citizens turned in their gold. And, what was interesting about that if I remember everything at least reasonably correct is that they paid the average person $28 on the ounce. And, then once they were able to collect a lot of the gold at $28 an ounce, they reset the price to like $35 an ounce. So, everybody that had sold their gold missed out on some of that accrual. It was to reset the United States financial system. But, to think about an entity; we're seeing this stuff in Canadal which you and were talking about the pre-show. Canada is seizing people's bank accounts and their funds.You're talking, "Hey, this is a free democratic country.
Tony (17:56):
How are you doing that?" That's what communist do. They go in and possess massive amounts of people's funding out of their bank accounts. But, the U.S. did that too in a way. They said that you couldn't own a specific product or a specific piece of precious metals. What's interesting about that is gold really has been the backbone of almost every economy for like 3000 years. And, to take that asset and say, "Hey, this is no longer something that the public is allowed to have." That's a really mind boggling thing to me.
Stephen Flood (18:31):
I think it's absolutely reprehensible what they did. I think it's unforgivable. They have probably flagged to an awful lot of people who would never ever look or even think on these terms that these risks do exist. Most people think that their money is at risk and that the bank might go bust, but they don't see the government as being an entity who would actually go in and confiscate assets; because, most times you have constitutional protection over the ownership of assets in most countries. The only time that these can be compromised; maybe if you're a criminal. So, I think what they've done is they've criminalized people who are protesting, and whether you agree or disagree with them is really not the point.
Stephen Flood (19:19):
The fact is that the government has overstepped their authority and they've used legislation, in the case of Canada, to criminalize protestors, and try to compromise their ability to live their lives and pay their bills. And, it's just shocking. If you need your bank account to pay for food for your family and by virtue of being at a protest, suddenly you have that taken away from you. What does that say about who the government serves? I think that particular cohort of politicians in Canada have massively overstep their authority. I think that they have signaled to an awful lot of people around the world that these risks, do exist. They are there, and there are people who are, suffering as a result of them.
Stephen Flood (20:04):
And so, you need to think about this and your family. You need to have precious metals as part of your diversified portfolio. You need to have some at home, and you need to have some properly stored as well. I don't think you should put all your money into gold. I think you need to invest in companies and productive assets. Gold is not a productive asset. It's not an investment; even in the traditional sense. It doesn't have a yield. It doesn't do anything except sit on a shelf and gather dust. But, gold is valuable more for what it is not, than what it is. This is really important. The idea is that it's actually detached from the financial system. That's why central banks own gold. That's why they buy it to underpin their currency.
Stephen Flood (20:47):
So, when the chips are down and those risk, coming from unknown quarters- you can't get ahead of it- you won't see it in time, but they will affect you. You'll be glad you have something like gold on the shelf, because it becomes more valuable when these times become more uncertain. So, there's no Wall Street adage that says, "put 10% of your money into gold and hope it does not work." I think that's really important. Cause, if that 10% is going up, the other 90% of your assets are going down by virtue of the same factors. So, the idea is actually you buy- this is how I qualify investors, cause we don't sell gold on the fact that the price is gonna go to $5,000, which, it could well do.
Stephen Flood (21:32):
We settle on the basis of diversification. And we hope those investors actually lose money. Have you ever heard anybody selling something to somebody so that they might lose money? But, that actually is the best case scenario for gold. Cause, if it goes outta fashion; bankers are telling truth; politicians are to be trusted, and the chances of them doing things like taking people's bank accounts off for protesting are a lot less, and the world is a good place. So, I think the case for having gold is so important now.
Tony (22:01):
And, I did buy some, and I've counseled some of my guys that they should look into that, which is good. Some of the people I work with. Now, ETFs; let's talk about that for a minute. A lot of times people ask me, "should I buy paper gold ETFs? Or, should I buy real gold; hard gold and silver?" What do you think about that?
Stephen Flood (22:21):
Well, ETFs are fantastic in that they're a great way of speculating gold and a speculator as opposed to an investor, which is a big difference. It's very much short term; speculators. They need to buy it cheaply. They need to hold it cheaply and they need to sell it cheaply. Okay. So, those margins, the costs of those commission costs are really important. And the ETF is great for that. You can buy like a lot of proxy gold for about $10, whatever it is your share trading service charges you. So, it's a good way of getting exposure, but only when things are normal. So, when things are normal and the market's ploting along doing its normal thing; there's no major issues in the world. ETF is a great way to go, but if things get a bit hairy, you don't wanna be sitting on a piece of paper gold or proxy gold because suddenly the rights that you need to be in place won't be there.
Stephen Flood (23:11):
So, your ability to take delivery is almost never available. And if you look at the ETF and look at the prospectus, all of the component companies that bring that to you are indemnified should something go wrong. So, if something gets stolen or there's a terrorist attack or whatever might happen; say the vault gets robbed by somebody, or things get stolen. Nobody is held accountable except the person who owns ETF. They're left holding the bag or empty bag in that case. So, the reason for physical gold is that you're outside of the financial system. And, that's the purpose of gold. It is to hedge against the financial system. Why on earth would you buy an ETF, which is very much part of the financial system in order to hedge the financial system? It doesn't make any sense. So, speculators go for it. Definitely look at the ETF, and be prepared that maybe you don't get the rights you need, but if you want to, if you're looking as a foundational asset for portfolio long term five years, plus physical goal all day long.
Tony (24:09):
I'm a believer in that too. I believe it's better to have hard assets in your hand than paper assets, because you're buying against the future in a lot of cases and the Gold's not even out of the ground yet.
Stephen Flood (24:22):
I will say though; it's very important; because, in the United States in particular, there's a lot of companies out there that are not reputable, and do sell gold in what I would say is not the best way. They'll pitch very, very low priced gold, and then you call up, and they might be advertising on TV or something like that, but they say, "well, that particular product is all sold out. I only had two of those bars, but I do have this really amazing collectors item over here, which is all certified, and it's a great way to buy gold. If you buy this, and gold goes up 10%, it'll go up 20%," and they miss sell gold completely. And, they overprice it with huge premiums, and people get sucked in on these scams.
Stephen Flood (25:16):
You have to be really careful who you deal with. And, we've been in the business 18 years, and my job is to actually make sure my client gets the most gold for the least amount of premium. I want them to get the best possible price. None of the people who work in GoldCore are actually- none of them are paid sales commission. So, if someone pulls up and they transact with us, or don't transact, the salesperson doesn't get paid any different. The job is to actually get the right information to the right client, and make sure the client is buying for the right reasons. That they get a great service, and as a result, we have like a 4.8 out of 5 rating over the last 10 years, which is unbelievable. We're really, really highly rated by our clients. Because, we really believe in gold as part of the portfolio, but we want people to own it the right way and for the right reasons.
Tony (26:12):
I love it. Now, if you're talking to a first time gold buyer, let's say, somebody comes into your office and sits down; what are you gonna talk to them about? How are you gonna explain things to them? And, they don't know anything about gold and silver. They just heard us talking and wanted to learn a little bit.
Stephen Flood (26:28):
What we can do is; we have a "strategy session," as we call it. We sit down, and we ask them questions about their motivations. Like, what is it about gold? Why have you come here? What was it that you read or saw that got you interested in it? We try to understand what their motivations are, and then we kind of figure out what product might be best for them, in terms of the format, like big bars or coins, so if they're looking for something to keep at home, we're gonna suggest coins. If they're looking for something to store in a long term basis, we're gonna, probably suggest large bars, where you get a lower premium. You get more gold for your money, and they just sit there. They're perfect for trading.
Stephen Flood (27:08):
So, we go through those and then we ask them about where they wanna store it. Like, if they're worried about confiscation, then we might suggest they store it in Zurich, or London or Dublin, and they have it segregated there. So, they can do that. No problem at all. Or, maybe they're looking at it, from a pensions perspective and we'll let them set up an IRA account with a provider that we work with. So, we go through a strategy session, we ask a lot of questions and we prescribe a solution that we think will fit, or we say, "listen, you know what? We don't think it's for you. We don't think you should be selling your house, to be going into gold for three months, and then looking to sell to buy your home." We'll say, "listen, keep your money and buy that home because, gold could go up and go down. We don't know where it's gonna go short term. So, therefore we wouldn't want you to take a loss for the sake of a premium to us."
Tony (27:59):
I love what you said earlier. You don't really invest in gold or buy gold as an investment to go up. You buy it more as a hedge, against, economic problems,
Stephen Flood (28:08):
That's insurance.
Tony (28:09):
I think that's the big thing over here; people say cash is king. The reality is we're seeing that cash isn't king right now. And, you've got like 7%, 10%, some people think 15-30% inflation right now; depending on what you're trying to buy. Two years ago I was buying 2x4s for construction projects at $2.95. Now they're like $7. So, you're looking at some outrages prices.
Stephen Flood (28:35):
A lot of companies are gouging customers. They actually see an inflation rate, and then they add on an extra margin to try and make more money because they know people are out of their price senses. They're just trying take advantage of it. So, you have a lot of companies- you watch the stories now out there; A lot of big meat producers in the U.S. have been found out for gouging customers in supermarket. It really just shows the lack of competition that's out there.
Stephen Flood (29:08):
I will say; we have a guide, our website is goldcore.com. But, we do have a special guide for the U.S. Market. We love Bruce Springsteen. We think Bruce Springsteen is one of the best exports America's ever produced in terms of music. But, what his song Born in the USA gave us the idea to have a website called goldintheusa.com. And, if you go there; there's a guide you can download. And, it's got five pointers that any new prospective gold buyer would need to read. And, you can learn from that and take it to any dealer you want. You don't have to come to GoldCore. It's just a really good way to start the conversation and start thinking about things. And, that's based on 18 years of experience that we have; you, gold investors, should look at it. So, it's goldintheusa.com.
Tony (30:03):
So, let me run through all that for the listeners, the future millionaires listening to the show; you owe it to yourself to learn about gold. I know a lot of you out there probably don't have gold in your financial plans or anything like that, but it's a great time to learn about it. Find a gold dealer, check out these resources. That's goldcore.com with Stephen Flood, our guest today, he's the CEO of GoldCore. And, he knows his way around the financial markets and specifically for that five pointers, for new gold buyers, that is goldintheusa.com. Stephen, thanks for being on the show today.
Stephen Flood (30:36):
It was absolutely brilliant. Thank you so much for allowing me to be here.
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