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Categories: Debt Advice

By: Mario Schwartz

The Beginners Guide to Buying Gold as an Investment

Buying gold as an investment can seem like an attractive proposition to many, and for the most part, it can be very rewarding if carried out in a right way. However, you shouldn’t spend all your money on jewelry just yet, as there is more to consider than just the aesthetic quality. Despite what you may think, gold is popular for many reasons, and knowing the true value of gold can ensure that you’re making well-informed decisions when it comes to your investment.

The Value of Gold

While there is money to be made in the manufacturing of jewelry, we shouldn’t assume that this is the only value that gold offers. While there can be a lot of money to be made in the jewelry industry, those who invest in gold do so for many different reasons.

For example, there are those who make investments in gold based on their melt value, and this can be a deciding factor in many cases. The melt value is what most dealers will pay when it comes to your gold, as it can be used in many different industries. Whether it’s dentistry tools or satellites, the use of gold is as solid as ever, but because it’s rare, it will hold its value when other assets fail.

To summarize, there is no need to purchase decorative pieces if you’re merely looking to invest for financial security. Of course, those looking for something tangible may opt for decorative gold, but this is purely a personal preference.

Buying Gold Safely

Regardless of how you want to invest in gold, you need to ensure that you’re only dealing with reputable gold dealers. Due to how many unsavory dealers there can be in a competitive industry, we need to have our wits about us when it comes to making a purchase.

Those buying gold as an investment may be better suited to a Gold Individual Retirement Account. This allows you to invest in gold, without having to store the gold at your home. Evidently, this can be worrying for some, but the gold you purchase will be housed safely, as per IRS regulations.

What’s more, a custodian has to be appointed. A custodian will have insurance in place that will ensure that even if something does happen to the gold, it’s not coming out of your pocket.

Of course, this may not be the option for you if you’re looking to physically own gold, but it can be a worthwhile consideration for those looking to diversify their portfolio.

Check Your Options

It’s easy to get caught up in the world of gold investing, and it’s easy to dismiss some of the smaller details, but the truth is that these smaller details make up the bigger picture when it comes to deciding as to whether gold is a smart investment. Buying gold as an investment can come with a series of pros and cons, which is why it’s important to ensure that we’re fully aware of the options available to us.

Of course, not everyone can be an expert when investing money in gold, so it’s important that we’re able to connect with professionals. For example, if you have a current retirement plan that needs converting, you may need to check the rules of your current IRA with your employer. While many 401(k) IRAs can be transferred, many have their own set of rules. Therefore, knowing what options are available to us from the outset can put in a much better position when it comes to investing in gold.

You should also be aware that the IRS only allows for one tax-free rollover of funds each year, so it’s important that we choose the right custodian if we decide to opt for a Gold IRA.

Finding The Right Gold Dealer

Just as we need to find the right custodian, we also need to find the right kind of dealer. Just like any industry, there can be those who don’t operate in the right way. As such, we need to ensure that we’re carrying out thorough background check when it comes to making a gold purchase.

There are many gold custodians that will allow for the account holder to choose a precious metal dealer. It can be advisable to opt for dealers that have a buyback scheme in place.

Restrictions on Gold Bullion Bars and Coins

If you choose to invest in gold as part of a IRA account, then it can be worthwhile knowing the restrictions that are in place. The IRS has laid out some stringent rules when it comes to the gold you invest in. Generally, there has to be a 99.9% purity level for it to be an approved investment. However, finding the right custodian and the right gold dealer will mean that this won’t be too much of an issue.

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