With the current economic uncertainty many people have been looking for alternative investments. One of the investments that has come up a lot is gold. Gold is one of the oldest currencies in the world. When stocks and paper money are at their worst, gold tends to be at its best. The question comes down to how do you invest in gold though? Here are five ways of investing in gold.
A lot of people think of gold jewelry when they think about investing in gold. Gold jewelry includes a lot of different items, from necklaces to rings, and more. These items are very prevalent in society and tend to be easy to come by. You can also buy smaller amounts of gold jewelry without spending large amounts of money.
There are a few major problems with gold jewelry. The main problem is that it is hard to prove the quality of gold in jewelry without being an expert. Gold jewelry isn’t stamped with the quality of the gold. Some jewelry will come with certificates of the quality but these are sometimes faked and altered. Gold jewelry’s quality can be further altered by adding gems and other metals.
The truth about gold jewelry is that it is a good option for people who can’t invest in a lot of gold upfront. However, you should be careful to verify the quality and value of any gold that you purchase. As time goes on if you can sell your gold jewelry in order to buy gold coins or bullion that would be the best option.
Gold Coins and Bullion
- Gold coins and bullion are what most people think of when they think of gold. Bullion resembles small bars of gold. They are stamped with the logo of the company that pored them or the companies name. Also stamped on the gold is the purity level. The purity of gold bullion is between .999 and .9999 in most cases. .9999 purity gold requires special storage conditions due to the lack of extra metals to increase the durability.
- There are a wide variety of gold coins that you can find from all parts of the world. When you go to purchase gold coins it is important that you pick the right gold coins for your investment. Gold coins issued by a mint or treasury from around the world will be the most reliable. That country’s stamp is its mark of approval. While some people do try to make fake gold coins, it is a lot harder to master the exact print of a country’s gold coins.
- Gold coins and bullion are both great if you want to buy large amounts of precious metals that are of the same quality. Both coins and bullion are small and portable. They can be sold individually and easily. It isn’t too hard to find a buyer for gold that is in the bullion or coin formats.
- The problem with gold coins, bullions, and jewelry is that they are easy to steal. If someone breaks into your house, all they have to do is load it into a bag and leave with it. They will have just as easy of a time selling the gold as you would. Most home owners and renters insurance agencies will not insure gold that is store at home. They view it as having too high of a risk. You can store gold in your safety deposit box but many banks will not insure it with that storage either. Safety deposit boxes are not meant to keep gold in the best condition possible.
- The best storage option for gold is storing it in certified gold storage vaults. These vaults are maintained around the world by different companies. These vaults are insured and set up to keep the gold in top condition. Typically these vaults are not cheap though, they will charge annual storage fees and potentially other fees.
- Gold coins and bullion are a great option for people with a lot of money who want to secure a portion of that money with a good chance of being able to sell it easily. Make sure that you arrange for proper storage of the gold for the safety of your financial resources.
- Some people like investing in gold scraps because they can get them relatively cheaply. Gold scraps come from a wide variety of sources. Mines that find pieces they deem unworthy of using, extras from melting gold down, items that contained small parts of gold, or damaged gold pieces. These scraps have low value by themselves but when added together, they can be worth a fair amount of money.
- Gold scraps can be harvested from technology and jewelry pieces. This means that serious collectors can find broken and unwanted electronics and get the gold out of them. The process of finding and removing this gold can be long and tedious. If you do it a lot and have a good buyer though you can make relatively good money.
- One of the biggest problems with buying gold scraps as an investment is that they can be hard to sell. Unless you can find a metal buyer that buys scraps you might have trouble selling them. Scraps aren’t certified or marked as pure, which means that the buyer would be taking a risk. Melting scraps down and increasing their purity is a good step to take before selling gold but the process can be complicated for those that have not gone through it before.
- Most likely if you invest in gold scraps you will have to store it at home. Most gold storage facilities will not store scraps because they have no easy to determine value. Insuring scraps will be even harder than insuring other forms of gold that you store at your house.
- Gold scraps are best left to those who have experience working with metals. Those who don’t have that experience may still be able to find a metal company that is willing to buy the gold. You will also need a lot of time on your hands in order to get gold.
- Gold Individual Retirement Accounts are one of the best ways to invest in gold. Gold IRAs are funded by actual gold and will be tax free until it comes time to start taking your withdrawals. The one downside about that it is an investment that you can not touch until you get near to retirement age. If you are investing in gold for retirement though, that is not a problem.
- While the title has gold in it gold IRA is just the term commonly used to refer to precious metal IRAs. An IRA can be funded by gold, silver, palladium, and platinum. The IRA controls what kind of gold that you can have in your gold IRA. There is a list of approved gold coins. You can also invest it in gold bullion. These options are pure and easier to tell.
- Many gold dealers will offer buy back programs. This means that when it comes time to sell they will buy the gold back from you. Having someone that will guarantee you that they will buy back the gold is a good insurance. It means that you won’t have to hunt for a buyer if you don’t want to. Make sure that you pay attention to the terms of the buyback and that the company will pay you full price for the gold. Some gold dealers will only perform buybacks on gold that is going into IRAs, others will perform it on any gold transactions.
- After you have opened a precious metal IRA account you will need to work with your account manager to purchase the gold. In almost all cases you will have to invest in gold from a gold dealer. The financial institutions and the government want to make sure that you are investing in non-counterfeit gold. It is highly recommended that you start the financial account then ask your custodian what gold IRA company they use regularly or recommend to their customers.
- Gold IRAs are self-directed. That means that they aren’t controlled by an employer. You make the decisions about the investing and you fund it yourself. You take the lead role, which may scare some people while other people may find it a good solution because it allows for more flexibility.
- Do you already have a retirement account? Gold IRAs can be funded via a rollover from an existing retirement account such as a 401K, traditional IRA, and more. There are a lot of different accounts that can be rolled over and your financial advisor can help you determine if yours is eligible for rollover.
- Unlike the other methods for storing gold, a gold IRA is more limited. In most cases you cannot store the gold at home. Because the gold is being used for a government retirement plan you will need to keep it with a custodian or trust. Custodians may cost you a little bit of money but in the long run your retirement funds will make you happy. There are methods for storing IRA gold at home but they take a lot of time to set up and are far more scrutinized by the IRS.
- A big benefit with gold IRAs is that they do not require too much maintenance. While it is always wise to check your account sometimes you don’t need to do it constantly. There isn’t much maintenance required in these accounts. You will also have a financial institution that will help you with your account.
- Since the rescission there have been a spike in the number of people looking to get gold IRAs. During troubled times when stocks or paper money are at their lowest value gold IRAs tend to help solidify investments. People want to protector their investments and still have the money they need to live retirement the way they want. Gold IRAs are a comfortable option for them.
- If you are looking for a good way to support your retirement with tax benefits a gold IRA is the way to go. Gold IRAs also have limited insurances from the federal government. They are a safer way to invest for retirement than stocks. You actually have the metal that you can sell.
There are a variety of options that allow you to invest in gold companies and funds without investing in actual gold. When you invest in these options you often take on significantly more risk. Options for non-physical gold include Exchange-Traded Funds, Stocks, options, and mutual funds.
Most of the non-physical investment options involve investing in a gold mining or production company. If you invest in an established company or a company that shows a lot of promise your risks are low. However, some of these funds are far more risky as some involve in investing in companies that are new or extremely risky.
Non-physical gold options require more work from investors. You have to monitor your accounts regularly in order to ensure that the stocks or options aren’t going down. If they are at the top of their game you have to decide whether you want to sell or hold on.
Gold options like this are risky so they are better left to those who enjoy risk, have money to spare, or prefer to not have to deal with storing gold. Before investing in any non-physical gold options you should do your research on the fund and make sure that it is reliable. Many people find that they would prefer direct ownership of gold because it is always there and you won’t lose it if a company goes out of business.
No matter which option you chose, whenever considering financial investments you should make sure to do your research. You want to know all the steps and the ins and outs before it comes time to invest. This will keep you from making a mistake and will also help you make the most with your money.
Along the same line of thinking, no matter what gold option you go for you need to shop around. Do not buy from the first gold source that you see. There are a lot of gold dealers out there and some will charge more fees than others. Some gold companies also have worse reputations than others. You want to make sure that the gold company doesn’t have a history of giving their customers bad orders or anything else.
Now that you know more about investing in gold it is time to do more research and make your decision. The most recommended gold investment option is gold IRAs because of their reliability and tax benefits. We highly recommend you to fill out the form below to request your free gold investment kit from Regal Assets which is a time limited offer that will provide you all the information you’ll ever need before making any investment in gold. Ultimately though, the decision is yours. Good luck with your investments and may they serve you well.