Lots of people are thinking about investing in gold nowadays, especially with the economy feeling a bit shaky. If you’re among these people, you need to know how to make a success of it before you head to this website to make your first purchase.
Focus on physical gold
For thousands of years, gold’s primary function has been as currency. Paper, or fiat, currency has only stopped being backed by gold since the early 1970s. This makes it easy for people to turn back to physical gold in times of uncertainty.
Some investors buy gold on paper, but while this means you don’t have the hassle of installing a safe or paying to store it in a bank vault, you can’t guarantee that you actually own it. This is because sometimes there’s not enough gold held by the dealer to honor the purchase.
It’s a good idea to buy physical gold and take photos and records of hallmarks or other identifying features on the coins or bars you buy.
You need to own the gold 100%
A useful adage among precious metals investors is “If you can’t hold it, you don’t own it,”. This is very good advice, so take heed. It doesn’t matter how much or how little you own, just make sure you own it. If you can only afford small amounts – gram or ounce bars – then buy gram and ounce bars; they’ll soon add up. You may, if you can’t use a safe on your own property, decide to store the gold with a storage company, but make sure that you own every last gram and that the company can’t pledge it.
Aim for liquid coins and bars
Make sure you buy coins that are legal tender, like the Australian Gold Nugget, for example. If there’s a crash, then relatively low-value legal tender coins are invaluable. You’ll have to pay a small fee over the coins’ spot prices, of course, but it’s usually around 5%. Very often bigger denominations have smaller fees, but you have to decide what works best for you.
Use your savings rather than credit
People use too much credit at the moment, so make sure you buy your coins and bars with actual money that you’re not borrowing. You’re investing to make a profit, so don’t do it in a way that means you have to pay interest! Furthermore, if your creditors start calling in debts or you’re struggling financially you don’t want to be selling your metals too soon.
Keep some of your metals close at hand
This could be under your rose beds or the compost heap, but you should keep a small amount of your metals somewhere where you can get hold of them in minutes. Only hide as much as you think you’ll need in an emergency and make sure the rest is somewhere very safe.
What’s a safe place?
Some countries, like Switzerland, are considered to be safe jurisdictions because they have de-centralised governments. The government can’t just seize your assets if it’s short of money itself.
Make sure you’re abiding by the law
Once you start buying more than just a few coins and bars, you’ll have to declare them and also get advice on tax. You also have to abide by the laws in the jurisdiction you’re storing your metals in.