I am by no means an expert in the field of buying gold and silver. Therefore, the following information is my experience and opinion, and not a recommendation to buy any specific item from any specific resource that may happen to show up within this article. The information is also geared towards middle class investors that have limited capital. Every investor has their own goal and timeframe when investing and/or trading within the asset class of their choice. A specific plan of action is for you to decide. The number one goal should be to retain your capital and purchasing power.
With my travels in the financial markets and precious metals, I have come to appreciate the ownership of gold and silver and the accessibility they offer when you may need it. Gold and silver in your possession are a form of money with no counterparty risk – everything else is truly credit. Create your own central bank.
When in the business of buying and selling any type of asset, exposure to taxes and risk must be taken into account. For instance, if you own your home free and clear or are under the debt of a mortgage, you still have to pay taxes to the local government entity every year. What are the tax implications for precious metals? A graphic and a complete rundown are available at JM Bullion. Here are a couple of partial screenshots.
A few other points worth mentioning with regard to taxes or risk with precious metals include:
- If traveling with precious metal coinage, such as passing through airport customs, it is only subject to taxes based on the sovereign dollar amount engraved upon the coin, not a value based on the content of its underlying metal. For instance, if you have a “one dollar” 1-ounce American Eagle Silver coin, the liability is one USD, not the spot price of silver that day.
- If you purchase a coin that has religious artwork engraved, it is not subject to government confiscation.
- Avoid all magazine advertisements – period.
- The counterfeiting of coins and bars has become an issue, with the most recent problems originating out of China. Go have a look inside a Chinese silver coin counterfeiting ring. FakeBullion.com is a decent resource for news on the latest counterfeiting events.
- If you do not know who you are dealing with or their reputation, do not do it. Even Uncle Tom can be a problem if you’re not a true industry bug. Stay with reputable dealers online or in person. Local coin shops can sometimes feel like a used car salesman. That is not to say there are not good folks out there with legitimate products and advice, but again, know who you are dealing with and do not buy anything out of haste in a strange place or when it sounds too good to be true.
My personal preference is coinage that is government-minted and purchased as close to the source as possible. I also prefer silver because the upside potential on a percentage basis is much higher than with gold. The dealers to utilize should have an online presence, be well-known within the industry, have no issues with the BBB, and take delivery directly from a coin’s mint for recent releases. Bars are more difficult to guarantee as genuine, so I’d stay away from those. There is one exception in the bar category, and that is in the 1-gram CombiBars.
Silver for barter or used as cash…
Pre-1965 Junk Silver.
1/10th-, ¼-, ½-ounce Silver Walking Liberty from the United States Mint.
1-ounce Canadian Silver Maple Leafs. 2013 and later have a strong new security feature to eliminate counterfeiting.
Silver for numismatic value…
1-ounce 2017 Silver Krugerrand (first ever year of issue from the South African Mint).
1-ounce Canadian Silver Maple Leaf with low mintage.
Here is a reverse-proof with the Moose Privy, 50k mintage, just one in a wildlife collection of six. The final two to complete the set of six are scheduled for release in 2018.
High Relief Silver Rounds from the Silver Shield collection. Here is the Freedom Girl.
Other High Relief Silver Rounds, NGC Certified preferred. The Tuvalu Collection (low mintage via Australian Perth Mint) is an excellent example. Here is the 2017 2-ounce Dragon, with a mintage of only 1k, as well as Aphrodite.
Gold for barter or used as cash…
1/10th-, ¼-, ½-, 1-ounce U.S.A. American Eagle coins.
Valcambi CombiBars: perforated into 1-gram squares, also available in silver.
Gold for numismatic value…
50-Cent ¼-ounce Canadian Maple Leaf (low mintage via the Royal Canadian Mint).
Don’t forget air-tight capsules from AirTites, and use a pair of cotton gloves when handling numismatic purchases to protect your investment. Online coin dealers sell the capsules, but may not have the specific style or size you are looking for. I like the squares for easy stacking.
Plan Your Trade, Trade Your Plan
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