Since time immemorial, gold has been a significant symbol of wealth globally. It has always been beautiful yet scarce. Ancient civilizations were known to use the precious metal for ornaments, jewelry, and even as a sign of power. Early forms of money were even crafted from gold.
The adoration of gold has barely shrunk, even in the new age. Many governments still hold gold reserves mainly to guarantee depositors and even hold the value of their national currency. Individuals buy gold to show prestige and have insurance in case of a monetary crisis.
Does the idea of investing in gold entice you? Do you feel more confused by the hordes of information out there? The process of buying gold can seem overwhelming, especially for newcomers. Well, you’ve come to the right place. These tips can ensure you have a seamless and trouble-free gold-buying process.
- Only Buy Physical Gold
This is a basic tip for any first-time gold investors. Brokers and third-party traders have taken advantage of unknowing investors by making them believe they own gold on paper. If you buy gold on paper from exchange-traded funds, you’ll notice that the terms and conditions don’t tell you whether they actually have the physical gold.
Further, you can’t ask for physical delivery. In most cases, they have cash settlement schemes where the bank pays you out in cash instead of your physical assets in case of a harsh monetary crisis. With third-parties, you run into risks such as mismanagement and fraud.
Physical gold, however, is meant to protect your wealth. It acts as insurance even during a harsh monetary crisis. Ensure that you own physical coins or bullions if you want to enjoy its benefits and save money in the long-term.
When investing in physical gold, the rule of thumb is making sure you receive your assets’ exact details. These include details such as hallmarks and bar numbers. Don’t forget to look up sites like InvestingInGold.com to get advice from a trusted source in precious metals.
- Only Buy Liquid Coins and Bars
You can buy as much gold as you want. One benefit of gold is that you can buy it from a few grams to a couple of kilos. However, you don’t want to be stuck with gold you can’t sell in case of a crisis. This why you need to make sure that the gold you buy is legal tender and highly liquid.
The most liquid gold assets help balance between costs and liquidity. For example, let’s say you decide to invest in gold in one of the mints. When buying, the price of the physical gold and the paper spot gold price should be as close as possible. This is usually the best way to calculate the value of an ounce of gold.
On top of that is the fabrication fee. This is the amount the dealer pays to the mint to get the gold physically manufactured. Then there’s a brokerage fee that facilitates all the broker’s work for the gold to be physically delivered.
Always have a 5-6% allowance to adjust the gold price when buying from a physical store or online shop. However, you should be cautious when buying from online stores. If the price indicated is way below gold’s spot price, then it’s too good to be true. If possible, try to find out whether the dealer has any certificates.
- Build Up Your Liquid Stocks
As mentioned before, gold is a remarkable means of monetary insurance. Look at this scenario; if you bought $100,000 worth of physical gold in 1970, your investment would be worth $2 million today.
With gold, you need not look at it as an investment vehicle. It’s better if you perceive it as your insurance. This means you should buy physical gold and put it aside.
It’s impossible to get your wealth out of nothing. Even while you use debts to build your wealth, you still have to repay the debt one day. Even the huge debt currently being experienced in the world will have to end one day.
This is why you should be building up your gold stocks. You’ll need it during a crisis. Some historical events have clearly demonstrated the advantages of building up gold stocks. In some inflation periods, an ounce of gold could buy you a home. If that were to happen today, your gold would place you in a much better place.
Investing in gold can be a bit overwhelming if you’re green in the area. However, a few tips can help you simplify this process. First, you need to only buy physical gold, either in coins or bullions. Secondly, make sure the gold is liquid so that you’re not stuck with kilos of gold when you want to sell them. Finally, build up your gold stocks gradually so that you can enjoy its benefits.
Disclaimer: This content does not necessarily represent the views of IWB.