Here’s the question – if someone offers you some gold coins and claims that it’s a sound investment choice, what would you do? Is buying gold a good idea for growing personal wealth?
This article aims to discuss the topic in a simple way without crunching numbers or cracking your head. By the end of this, you should be able to decide what’s best for your money and time.
First, Why Do People Buy Gold?
Over many centuries, all over the world, people have been buying gold for a number of different reasons. The main one being that gold has a tendency to hold its value when other forms of currency begin to lose their value, gold is a material people often fall back on to regain their wealth.
Gold has been around for centuries, with the first gold-containing coin appearing in 800.B.C, however, the first all gold coin came during the reign of King Croesus in 1100 B.C.
Economies and societies all over the world use gold as a way of combating uncertainty and instability of other forms of currency, and in a way in which to grow and maintain their wealth no matter what the economical outcome.
Types of Gold Investment
One thing that most people won’t be aware of, is the many different forms in which gold can be invested. So if you are considering to invest in gold, here are some of the best ways to do so:
(1) Physical Gold
This is the type of gold investment that most people will be familiar with; physical gold comes in the form of gold jewelry, coins or bullion. The main advantage of this kind of investment is that the investor had physical control over the gold along with direct ownership. This way the investor could store the gold in vaults or personal safes as they wish.
(2) Gold-Backed Securities
Gold-backed securities are a way in which an investor can indirectly purchase gold, through stock exchanges like ETF (Exchange Traded Fund) or alike. The downside to this is that redeeming your gold will come at a price, depending on which company you use, you will also never have physical ownership of your gold until you redeem it.
(3) Gold Mining Stocks
Another lesser-known way in which a person can invest in gold is via gold mining stocks. Using this approach a person doesn’t necessarily invest in gold but in gold mining companies. As you are dealing with a company here, there is the potential of loss alongside the potential to double or triple or more, your investment.
(4) Gold Mutual Funds
Gold mutual funds are a way in which an investor can invest in gold and gain exposure to the metal. The downside to this is there are often very high annual charges.
Where Can You Buy Gold?
The obvious answer here for most of us would be to say “at the jewelers”, but there are many more ways in which gold can be obtained. Many jewelry shops only stock lower-value goods, so if you are looking for higher returns, jewelry from a physical shop may not be the best way to go for you and your investment.
Many larger banks offer investors the opportunity to purchase gold bars or bullions in exchange for cash, these can often be stored in the bank’s vault or the secured area, for you to gain access to during bank opening times.
This is a great option if you are not looking to store or wear the gold yourself, and you are purely purchasing it as an investment, however, there may be charges involved for storing the gold at the bank and also you will only have access to it during the bank opening times.
In this day and age, you can purchase just about anything online, and gold is no exception to that. Anything from gold jewelry to bars and bullions can be found, sometimes at a fraction of the cost of legitimate gold vendors.
When purchasing online you need to be sure that the person you are buying from, is who they say they are, and also that the gold is, in fact, gold, and to the carat, you were expecting. Never purchase anything without seeing all the proper documentation.
This is why one of the best ways to purchase gold is through a legitimate vendor or through stocks, both of these options come with peace of mind when purchasing. When investing in the stock market it is important to do your research and expect levels to rise and fall throughout the duration of your investment.
Gold Buyers Beware
Gold is a high-value item and because of this, there are people out there coming up with more elaborate scams to rid you of your own money. New telemarketer scams are offering people a safe gold investment, however, when looked into the investment is actually extremely high risk.
This is also the case for MLM schemes, offering you the ability to increase your investment by selling the investment to others. Put it another way, it’s a pyramid scheme, whereby the only people that benefit are those at the top and everyone else is left out of their pocket.
Online sellers and unverified sellers are also becoming an increasing problem, selling gold without proper documentation, with false information and quality information.
It is important when purchasing gold in any form, that you do your research and ensure that you are going to get exactly what it is you are paying for and that you are in fact making a wise investment.
So, Is Buying Gold a Good Idea?
The main reason for purchasing gold is for the purpose of investment. So you should be asking if gold is a good vehicle for that. Buying gold can be a great idea, it is something that people have been doing for centuries in a bid to maintain and improve their wealth accumulation.
And because precious metals tend to retain their values during times of economic crisis, some investors may consider it a good hedge for inflation. If you share this point of view, then adding gold investment into your portfolio might be a wise move.
Not only that, but you can also share your investment strategies with others and generate additional income by referring to new investors to reliable tools and gold buying platforms.
It is called affiliate marketing and this monetizing method allows you to promote gold investment companies and earn from lucrative referral commissions. Here are 3 platforms that are quite well-known within this industry.
(1) Gold Broker
Goldbroker, an investment platform founded in 2011, lets customers own physical gold and silver under a store name which gives them direct access to a secured vault, outside of the banking system. They have multiple offices around the world and garner an impressive customer rating of 4.5/5 on Trustpilot.
Goldbroker offers its affiliates 20% of the net margin realized on purchases and storage services during the customer’s lifetime. A minimum fund of $100 is required and payouts are done via bank or PayPal transfer. You can sign up for the program directly on its main website.
(2) Silver Gold Bull
Silver Gold Bull is one of the largest coin and bullion marketplaces, trading a wide selection of bars, coins, collectibles, and jewelry in gold, silver, and platinum. Their prices are known to be competitive and customers can purchase securely online. This site is highly rated on Trustpilot as one of the fastest, most reliable online precious metals suppliers in the US.
SGB offers its affiliates 0.8% to 1.7% per sale with a cookie duration of 45 to 120 days. You can sign up for the program via CJ Affiliate.
(3) Regal Assets
Regal Assets is a company set up to become an investor’s dream, their mission is to make gold investment simple for any investor. They have even transferred many stocks and cryptos into precious metals.
Regal Assets offers its affiliates a 3% commission on all gross sales transactions. You will also be paid $30 to $100 for each qualified lead.
> Learn from this free training on how to make money with affiliate programs.
However, not all that bling will make you money – at least not that soon. Some economic experts feel that buying gold is a poor investment choice based on a few fundamental facts.
- In the long run, the returns tend to be poorer than other forms of investments like stocks or even bonds.
- A pile of gold actually doesn’t produce anything, unlike real estates of trust funds, which are considered productive economies that can generate actual wealth.
- The value of gold is only worth as much as the buyer perceives it to be and doesn’t reflect the reality of the local or global economy.
- It’s easy to get sucked into gold investment schemes or scams if you’re a total beginner in wealth planning.
If you’re someone who’s aiming for a faster return in investments and dare to take up risks, then you should probably look into stock trading, forex exchange or start an online business. For the same amount of money you put into gold, these alternatives can be significantly more rewarding over a shorter period of time.
I belong to the latter group of investors and I think it has served my portfolio well so far. What about you? Do you think buying gold is a good idea? We would love to hear your thoughts in the comment down below.