In this post I’m going to address precious metals investing at it’s most basic but funnest form…buying physical gold and silver.
There are various forms of owning gold and silver such as allocated/unallocated accounts or digital ownership through companies like GoldMoney.com and OWNx.com, which all have their benefits. (Check out my post The 5 Best Ways to Invest in Gold and Silver for more details). But today I’m talking about real physical ownership, meaning actually having the assets in your possession.
Every investor should hold between 10-15% of their assets in physical gold and silver as a safe haven, inflation hedge, portfolio diversification, and of course liquidity in times of crisis. To build up your rainy day stash, here are the top 5 ways to buy physical gold and silver…
1. Bullion Coins
For new gold and silver investors, bullion coins are the easiest way to get started. Bullion coins are typically 92-99.9% gold and %99.9 silver, are directly valued to the metal content with small premiums, portable, easy to store, buy and sell.
Here is a list of the most liquid, recognizable, and best gold and silver coins to start stacking…
Quick Tip: Pay attention to the metal content, some are fine gold, 99.99%, and some are just 22 Karat. Although all are good investments, my favorite for gold coins is the American Gold Buffalo because it is 99.99% gold and typically a little cheaper than the others. For silver, you can’t go wrong with the American Silver Eagle.
I know these coins are beautiful and you’re probably pumped to start buying some now, but before you do, you need to check out my article How To Buy Gold And Silver Coins Without Getting Scammed first.
2. Bars and Ingots
Coins are pretty and fun to collect, but if you want to get the most bang for your buck you need to switch to gold and silver bars and ingots. Bars and ingots are popular choices for investors because they have much lower premiums than minted coins.
Gold bars and ingots come in various sizes and represent the most concentrated source of stored value. The average investor may not anything over 1 oz ingots practical to buy, as the larger bars are very expensive, but available sizes are…
- 10 oz. bars
- 500 grams
- Kilo bars (32.15 oz)
- 100 oz. bars
- 400 oz. bars
If you’re fortunate enough to buy one of these, you might want to think about keeping it in a very safe place. Could you imagine having a $130,000 gold bar stored at your house? Yikes!
Silver bars on the other hand are much more assessable to the average investor and below are few popular choices…
100 Oz Johnson Matthey Silver Bar
10 Oz Scottsdale Silver “Stacker”
This is probably my favorite silver bar to collect. These are gorgeous bars with interlocking edges making it easy to create neat rows that fit perfectly in a deposit box or safe.
3. Junk Silver (90% Old Silver Coins)
The term “junk” in this context is misleading and may not sound like a very sound silver investment. But don’t let the name fool you, junk silver bags contain $1,000 of face-value silver coins issued in 1964 and is actually an inexpensive way to buy physical silver.
The reason they call it “junk silver” is because the coins are in pretty bad shape and won’t find any coins that are rare or has numismatic value but who cares…each 55 pound bag contains 715 troy ounces of pure silver!
These old coins are pretty easy to buy and sell but keep in mind that you’re required by law to report a sale of $1,000 face value bags to the IRS. However smaller bags, like the $100 and $500 face value are not reportable.
These may not be as pretty as a American Silver Eagle or Canadian Maple Leaf, but silver is valuable no matter what it looks like.
4. Gold Jewelry
Here’s kinda an out-of-the-box way of owning physical gold, and even silver for that matter. The people of India have been practicing this investment strategy for centuries and is why that country is the biggest consumer of gold.
Its a practice I don’t see many Western investors embracing but perhaps they should as it has it’s numerous advantages like…
- Exempt from IRS 1099B Sales Reporting
- A Discreet Means of Transporting Wealth – If you wanted to, you can drape yourself with over $100k in gold jewelry and fly out of the country without having to declare it or having it confiscated. Personally, I think this is the best reason to start buying a lot more 22 Karat gold jewelry.
- Investment Grade Jewelry – Typically 22 Karat (92%). Make sure you buy this kind. Regular jewelry is considered scrap gold when trying to re-sell. Scrap gold has a horrible re-sell value and you’d be lucky to get 80% of the actual metal content.
- No Historical Precedent of Confiscation – go ahead and try, right.
- A Great Gift Idea for Your Loved One – knowing that it also serves as an investment, this makes it a lot easier reaching deep into your wallet for anniversaries, birthdays, weddings, holiday gifts, etc. But be sure to get the 22 Karat investment grade though.
5. Numismatic Coins
This is my least favorite way to buy physical gold and silver. It’s actually one of my “don’t buy” guidelines in the article How To Buy Gold And Silver Coins Without Getting Scammed.
I never buy them myself and I don’t really recommend it but if you’re a collector and would like to loose yourself in a hobby that may actually pay off some day, numismatic coins are for you.
My problem with numismatic coins is that they are not really investments but collectibles that are valued for their rarity and not their precious metals content.
If your’e interested in collecting coins as an investment, I would only buy popular, recognizable coins with a high precious metals content.
And be aware of scam artist companies out there, like Goldline.com, who are always trying to trick new investors into paying 2 or 3 times more than the metal content for so-called rare coins that don’t re-sell easily and are not worth near as much as advertised.
If serious about numismatic coin collecting, check out these informative resources first…
Don’t feel like reading today? Check out my video below summarizing the above information.
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PS: To get my list of the best online dealers to buy gold and silver bullion fast, cheap, and without getting scammed… CLICK HERE