Should I Buy Gold and Silver?
Should I Buy Gold and Silver?
Should I buy gold and silver coins or should I invest in gold and silver ETF funds? That’s a question we often hear. In fact, in this last year, it has become more and more prominent.
I spoke with one of our gold and silver experts in July and he was saying that more silver went into ETF funds in the previous three months than at any time in history. So the topic of gold and silver has been hot!
Should I Buy Gold and Silver Now?
The question though, on whether you should buy gold and silver and/or how really depends on a few things.
First, let’s break out the advantages of buying physical coins or buying funds and when it makes sense. But before we think about either of these scenarios there’s something I want you to know. There is no “one-size-fits-all” answer. You can’t just say, “Yes, everyone needs gold and silver.” It’s really how gold and silver fit into your overall plan. You need to make sure all other pieces of your plan are in place first before you consider investing in ETF funds or physical coins.
In our Four Steps to Dream Retirement, we talk about going through your plan and identifying “What do you want?”
This can refer to retirement income, what you plan to do during retirement, what your goals are, what your investment tolerance is, all of those things that you need to consider we would want to be planned out before we figure out what we need.
Too often we do the reverse. We see a fancy product and think, “I want to get that” and make it fit into my current plan. It is like trying to fit a round peg into a square hole or vice versa and that is not the way it works.
We want to determine what we need and then figure out how to fill it.
Are Gold and Silver A Good Investment?
Recently I visited the chiropractor because my hip was out. Now, if I ask you if biking or running is good exercise you would probably say, “Of course,” right? Now some of you might not like one of those exercises but would generally agree that it is a good form of exercise. However, sometimes what we do can have a negative effect on another area.
For example, running might be considered a good exercise but it works against my body. It is hard on my knees, my hip, and my back, all of which I have issues with. So, is running a good exercise? Yes. Is running good exercise for me? No.
The same can be said for gold and silver. Are gold and silver good Investments? Yes. Are they good for you? It depends on your overall plan.
What Should I Consider When Buying Gold and Silver?
Keep this in mind as we explore gold and silver today. You want to consider your current retirement plan and if there may be room to add this type of investment.
Let’s take a look at buying physical gold and silver coins. There are a few advantages to buying the physical coins. First, the purchase of these coins is non-reportable. So when you buy physical coins it is not reportable on your asset sheet and the IRS doesn’t need to know either.
This has become an attractive feature and a big reason as to why people are buying gold and silver coins. When people choose to buy the coins, they are usually purchased with money that has been set aside for the future, excess money that they don’t need, etc. I would not recommend buying a lot of gold and silver coins with money that you may or may not need in the future. Only consider buying the coins if there is money that you know you have an excess of.
While our gold and silver expert purchased his car with these coins, I would say that this scenario is not appropriate for most of us. We don’t want to put money into physical coins that we’re going to need in the next few years.
Yes, we could access the money if we needed it, yes it is relatively liquid when we sell it, but probably not the place that we want to put that money.
I’ve had some clients that accumulate a massive amount of coins, they’re not reportable, and they end up hiding the coins and it is a great way to hedge against everything and leave some inheritance to their family.
The other way to invest in gold and silver is via ETF funds. Whether this investment scenario makes sense for you or not really depends on your overall picture. You don’t want to just invest because it seems like the new hot thing. You want to make sure that it works well and is integrated with the rest of your portfolio.
Our management team will often invest in some precious metal ETF funds as a hedge inside the portfolios and they’re doing it strategically. So, it can be a great investment for you, but it needs to be done strategically and as a part of your plan. You should also probably have someone watching this investment for you, knowing that all areas of your plan are coordinated before investing in this way. That’s their expertise and why we pay them.
In general, make sure that your entire plan is taken care of before you start investing in other areas like gold and silver. If you have questions or if you’re unsure if you have a solid plan in place, watch The Four Steps to Dream Retirement to walk through your plan.
If you have any more questions about how gold and silver might fit into your plan, let us know. Be informed and aware of any “advice” that comes your way, advising you to buy coins. Again, it has to fit in your overall plan, and just like running might be good exercise, it might not be the best form of exercise for you.
Gold and silver can be a great investment, but it doesn’t mean that it is right for you. What you don’t want to do is work against your goals. As always, if you have any questions at all I’d be happy to talk to you.
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