So we're going to lay out a plan and
hopefully none of it's new but maybe
this time. it'll be a little bit more
clear the short version here is just hey
here's some gold some of this made sense
and some of it didn't but unfortunately
the way mistakes work is sometimes you
have to make them before you can spot
them so repeat topic done differently
you might be just starting out buying
gold maybe you're just searching the
idea maybe you've been doing it for
years but regardless of how far in you
are this is still the most important
part of the whole topic there are a few
things you should be thinking about
before you buy in the first place and
some of the most important ideas aren't
going to affect you until you go to sell
so that kind of thing is easy to
overlook in the front end because you're
not thinking about selling you're
thinking about buying well that can be
an easy mistake to make just ask me how
I know now what I found is there might
be 99 plans for buying gold some of them
even good but if you take bits and
pieces from each of those plans it's no
longer a plan so I'm not going to tell
you that my way is the only way to go
about this but I will tell you that I
found a right way to do it and I've also
found a wrong one so before we get back
to it a quick thanks to my channel
sponsor STD bullion if you're looking to
buy online they're great if you're new
you can even get gold or silver for spot
sdbullion.com
Slash new so the first thing that I'm
going to say about buying gold is that I
don't see it as an investment to me this
stuff is savings and the reason that I
would start there is that the trigger
for a lot of us to look into gold in the
first place is sometimes some kind of
planning scenario a scenario that ranges
from a stock market crash to an allout
Mad Max world you're going to see that
you're going to hear that so it's easy
to come in hot thinking that if you
don't have a pile of gold and silver
well you run the risk of losing
everything so let's put all the fire and
brimstone out of our minds there are
strange people online telling strange
stories let's just look past it the way
that I think we should approach this is
pretty simple personally I buy gold a
little bit at a time with money that I
freed up from suspicious needs so extra
streaming services nights out on the
town fancier cars anything I don't
really need I try to pull that back into
my budget for gold now this article is
about buying it so it makes sense to
look at where the money is coming from
in the first place so for me I budgeted
a monthly purchase if you just want to
get in buy some gold and get back out
well I would say just think of that more
as savings than as some kind of big
investment so let's get specific for a
minute the price of gold can be split
into two factors the spot price and the
premium the spot price is the value of
the gold itself determined by trading
levels it doesn't matter where you are
in the world more or less that price is
consistent and gold gold is dollar
denominated so there's going to be
fluctuation between currencies but the
gold content of these coins should be
worth the same amount anywhere in the
world now the second part of price is
premium and that's the amount that you
pay above spot so you think of that as a
retail markup now the premium is
important because most people are going
to buy and sell from the same place when
you buy from an online dealer or a local
shop you might pay a premium of anywhere
between 3 and say 20% now if you sell to
shop you're going to find that the
buyback is significantly less so what's
significantly less well it depends on
what you buy and that's probably why
most of you are here what most of you
are probably interested in anyway so
let's get into it we're going to talk
about four things the metal the form the
mint and the size so for metal that's
probably the first thing we want to
decide we're talking about silver gold
Platinum mainly this article focuses on
gold now there are a few big reasons
that I prefer gold to other precious
metals but to stay on topic I'll just
say gold has lower premiums for form
that's going to be coins or bars and you
could say scrap or jewelry or something
else but we're starting out here we need
to stay focused I think you should keep
it simple you should choose between
coins or bars coins and bars I like
coins personally because they're easier
to authenticate they're also a little
bit easier to sell and then for mints I
think you should always start with your
Regional mint so whoever is closest here
in the United States it's the US Mint
and I'm going to include Royal Canadian
Mint as a close second they're just over
the border and then throw in the Royal
Mint and Perth Mint as honorable
mentions now there are others and of the
seven or eight top coins to consider
those Four Mints that I just mentioned
that'll get you five of them for size
you have a lot of options but because
we're early in this this is early advice
we're going to focus on 1 oce and then
1/2 1/4 and one10 oun fractional sizes
and that gives us a pool of options so
we can start talking about premiums
premiums again that's how much we're
going to have to pay over the spot price
of gold every time we buy so what have
we been looking at here well American
Gold Eagles gold buffalos Canadian gold
Maple Leaves the Eagles 1 oz and/ qu
ounce the maples and the buffalos 1 o
coins now if I was starting out today
what you see on the desk here would be
my option but that's just me there are
strong cases to be made for branas or
Krug grants kangaroos Phil harmonics
there also cases to be made for gold
bars cases for series coins from Big
mints even cases for us pre-33 gold or
old European gold but all of that really
depends on your specific situation so
let's take a quick look at premium the
premium on 1o Gold Eagles and Buffalos
it's around 5 1/2% for gold Maple it's
32% give take about 1% I'm just going to
show you the size difference here the
premium on a quarter ounce gold eagle
right now is about 12 12% quarter ounce
coins from other mints you can find them
for lower we'll use 9% as a typical
premium for quarter ounce branas or kwrs
10th ounce coins they're going to range
from about 16% to 28% so things are
getting pretty serious when you're
buying at that size the smaller the coin
the higher the premium the half ounce
size for whatever reason is kind of Hit
or Miss usually though they're about the
same as the quarter ounce premiums so
let's get a 7th inning stretch here
what's different from the last time that
I ran through a plan like this well
premiums on fractional Eagles have
definitely come down and last year I
think the community probably got a
little bit of a flash of what can happen
in a buyer Market we saw smaller dealers
heavy on inventory they weren't all
buying and I even had the largest online
dealer on on the planet I believe
declined to buy a series coin that I had
bought from them the year prior so a lot
of the rationale that I put into the
plan that I put out in 2020 on why you
might limit your choices to the most
popular options well we got some new
evidence on why now that said there are
still a lot of good choices with gold
you have a lot of people making good
cases for whatever it is that they
prefer but the cases aren't as strong if
you start to mix them together so your
plan shouldn't be a mix of 12 different
plans and I don't think that there is a
good case to be made for buying whatever
comes along or something different every
time regardless of what seems hot here
on YouTube or Reddit or wherever unless
you're just doing this for fun and in
that case just I guess grab whatever
catches your eye if you want what's
efficient though what's easy and what
gives you an exit plan I would say come
up with a short list and that's what I'm
showing on the table here so I've got a
mess here let me clean this up and let
me get really specific if I was going to
come up with a simple plan say I wanted
12 oz of gold I would want 10 1 oz gold
buffalo Eagles or Maple Leafs and then
eight quar ounce gold Eagles and the
most important part of that plan is just
that I wouldn't have a lot of options it
wouldn't have 12 different coins or 50
different coins 50 different forms of
gold different mints different sizes
different Purity did somehow add up to
around 12 ounces because if I went to
sell that pile the math and the simple
Logistics of selling it just goes out
the window it gets way more complicated
so let me just give you a few more
things to think about before we close
this down maybe you caught that I
ignored Purity the first time around
these Eagles on the desk they're 22
karat the Buffalo and the maples are 24
carot and most buyers simply do not care
if you go strictly from sales figures
the American Gold Eagles are the most
popular gold coin sold worldwide
Canadian gold Maple Leaf here that's the
second so we can't say that 24 karat
gold coins are more popular than 22 it
just isn't true the eagle is 91.67% pure
but it still has 1 o of pure gold so
it's simple that remaining silver and
copper in the alloy that just makes the
Eagles harder and slightly heavier so
I'd say don't get caught up in that but
if you don't want 22 karat gold for
whatever reason you have plenty of
options you have Buffalo's Maple Leaf
branas kangaroos Phil harmonics you're
covered okay so the last point is about
price let's start off with which size to
buy you caught that 1 oz is the cheapest
in terms of Premium percentage 1 oz bars
they're even cheaper than coins so there
are two things to think about here you
have the overall cost at the time of the
purchase and then you have the buy to
sell spread so the first part of that is
just a simple case of what you're
comfortable buying each time maybe you
don't want to spend $2,100 on one of
these 1 o coins every time 550 for one
of these quarter ounce coins that might
be a better option for you but as a note
you're going to be spending spending
$2,200 for the same gold content if you
go the route of buying these quarter
ounce coins it could be$ 2500 if you're
buying 10th ounce coins so if you're
patient you'll save a lot of money
buying larger coins less often okay so
that's premium on the front end the
second part is the buy to sell spread I
can sell a buffalo to a dealer for 1 to
2% over spot so if I'm buying it at
5.5% selling it at 1.5% that's a spread
of 4% this gold Maple Leaf will sell for
spot so if I buy one of these at 3.5%
premium it seems like a better deal at
the time I can only sell it for spot
that's a
3.5% spread so slightly better but again
only slightly and that 3 to 4% buy to
sell spread that's pretty common for
what I buy a 1o gold bar it might cost
two or 2 and a half% in premium so again
you can save on the front end but I
would get one or 2% back of spot in a
sale so again similar case 4% buy to
sell spread okay so here's the tough
truth on fractional most local shops
that I know give the same buyback price
for a coin regardless of size so if they
were to give 2% overs spot for a 1 o
Gold Eagle most of them don't do much
better for fractional so the buy to sell
spread gets really wide on fractional
coins I found that to sell them for what
they're worth I typically have to find a
private buyer and that really slows
things down that or I just have to be
okay with the lower buyback price now
hypothetically I could sell any coin I
have to a private buyer for more than I
could sell it to a dealer but it's way
more work I don't want that I want an
easy sale not a hard one I definitely
don't want lots of Hard sales okay so
let's put all this together the advice
that I would give to myself my 17-year
younger self would be to choose from a
small list of options I would focus on 1
oun in quarter ounce coins quarter ounce
both for the flexibility and just to get
comfortable with the idea and 1 oun to
save on premium if my wife runs across
to gold bar when she's out at Cost Co
well great I'll take it if I run into a
dragon coin I just have to have yep I
want that too but for my primary stack I
want everything as uniform as possible
okay so look Plain Talk I told you
earlier that the tips I have the advice
I'd give my younger self came from
mistakes that I've made you saw my side
quest coins in the intro everything in
that Pelican case I can still justify by
some of them the lunar are going to
appreciate the Marcus Aurelius Roman
orius in there that's something I've
wanted for decades but most of what's in
there was just fun at the time gold I
paid too much for or I didn't really
think through and it falls outside of my
plan so does that matter well for me I
plan to roll a portion of my gold
Holdings into a property when I retire
property is not cheap so I'm going to
have to sell a lot so if I wanted to
sell say 40 ounces of gold I just made
that up I could sell 40 Eagles in a
single trip I cannot sell 40 ounces of
gold for my random Pile in that single
trip I would have to sell a few at a
time and they'd be considerably more
complicated to sell and I spend more on
those coins at the time so that's the
important part the part that most of us
don't talk about definitely the part
that most of us don't think about when
we're buying we don't think about what
it's going to take to sell now maybe
you're thinking well it's not my problem
I'm going to hand them down to my kids
well that problem doesn't go away
they're going to have a lot more trouble
than you would so whatever I choose
personally before I buy a single coin
I'm going to call up a local shop if I
have access to one and I'm going to ask
them what they would pay to buy back
whatever it is I choose that's an easy
call and an important call now you can
sell to online dealers as well but I
think that it's important to know where
the exit doors are in the event of an
emergency and that's going to be a local
buyer again if you have access to it
that felt like a really long talk I have
a headache hopefully that final Point
wasn't buried in there thinking about
the sale really is the most important
part it's a good place to call it good
so let us know what you're up to if you
have any advice for new buyers drop them
in the comments.
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