How to Buy Gold (Without Getting Ripped Off)

There are two reasons to own gold.
The first is as a safety play when it all goes to hell. For this you need physical gold stored somewhere in your possession, and it is way better for this than large amounts of cash, since it performs way better than cash stored “under the mattress”.
Taxes are not an issue in this situation.
The second is as part of your retirement portfolio, in that case I would go with a gold fund such as GLD or PHYS. In your IRA it would be a means to diversify without any additional tax consequences. As to how much, it depends.

If buying gold or silver is something you've chosen to do, it might be worth your time to check if your state charges sales taxes on in-state and/or online purchases. Many states have no taxes at all when purchasing precious metals from local coin shops

Edit: Owning physical metal isn't without fees, though. It is common for significant mark ups from actual spot/market price depending on purity, weight, year, etc.

OneGold?

I'm surprised mining companies weren't mentioned. Are there ETFs of mining companies?

I have around 5% of my portfolio in physical gold just for peace of mind. I've had good experiences online with Provident Metals. Today, a 1 oz US Gold Eagle costs $2017. Spot price is $1929. That's about a 4.5% markup. I'm in California and have never paid any sales tax. Definitely going into smaller sizes will increase the markup percentage.

My view on gold is that it would serve as a means of bartering and holding a physical asset of known value in a doomsday scenario (or more likely, some kind of disaster where we wouldn't have access to other assets for a period of time...)

I would have zero interest in owning "paper" gold (Gold ETF or otherwise).
With that, the IRA route isn't possible as you aren't allowed to physically hold the gold yourself.

Owning physical gold also means that nobody knows how much you own nor would they know when you sell or transact it (and by "they" I mean Uncle Sam and/or the IRS and/or other people)... Having it in an IRA or owning paper gold doesn't have this advantage.

I don't own any gold but have considered it ... what I have also considered is that owning ammunition and shelf stable food might prove to be much better "investments" than gold or silver in the doomsday scenario ...

Just some thoughts... not financial advice!

GDE

Like Levi Strauss found out, selling to the gold miners was more profitable than mining it. Similarly, gold dealers make money (and you lose) when you buy and when you sell…..

Monument Metals and Hero Bullion are some of the best prices and services for physical AU & AG.

I don’t know Rob, you are talking yourself into some niche fringe cases. First you say “track dividends” which reasoning was a huge stretch. Now it’s “gold has a place in some portfolios”. I’m in a parallel universe 😂

APMEX is a good and very reliable company. However, some on line sellers do have better prices.

Physical gold is very profitable. It makes very good returns for people that collect the premium when buying it and selling it. They do pretty good.

For those who have an emotional response to whether gold should be in a portfolio:
1. Be sure to distinguish between whether one is in the accumulation or the decumulation phase. Gold does not affect each of those two very different goals/stages the same way.
2. For a bit of data, plug the following two portfolios into Portfolio Visualizer's "Backtest Portfolio Asset Class Allocation" tool:
a. Portfolio 1--60% US Stock Market, 40% Intermediate Term Treasuries (basically a Bill Bengen type of portfolio that determined the 4% rule)
b. Portfolio 2--43% US Stock Market, 37% Intermediate Term Treasuries, 20% Gold
Notice that the data for both goes all the way back to 1972; both CAGR's are basically the same (allocations above intentionally chosen to make this happen), but then check the standard deviations, maximum drawdowns, sharpe ratios and, more importantly for drawdown/decumulation portfolios, the safe withdrawal rates (SWRs can be found under the metrics tab above the pie charts). Pretty substantial difference in terms of how much one could spend in retirement.
Play with different dates if you like, but I think you may come away with a different view of gold.

Physical is a pain in the arse.

In my, granted limited experience, so far regarding gold/silver I would agree if looking at it as an investment use the spot price tracking/mining stocks & ETFs. Whether in an IRA or regular brokerage depends upon you and your situation/goals. Honestly though these are some of the worst performing investments for me so far. At this point typically as soon as I'm back in the green on them I sell them ;) If looking at it as wealth preservation, remember "if you can't hold it, you don't own it". Personally, I would avoid those places where you can purchase it and they say they will hold it for you. I would also recommend sticking to the generic rounds and bars for "stacking" purposes. Those traditionally give you the best price/lowest mark ups and should be the easiest to sell off again. If looking at it for the collectable aspect, then you'll want hands on it anyway. If going the physical route remember to think through how/where you are going to store it. Before getting started, come up w/ an idea of how much you want to deal w/ and where you are going to keep it.

Another problem with owning physical gold is when you go to sell it the buyer will take a 5% to 10% discount of its value. Way to much friction in buying and selling physical gold.

Have some GLD (5%) I in my 457 , first time hearing about GLDM

Rob, do you have an updated link to the 1994 Bengen 4% Rule paper? The link in your Video #3 doesn't work, nor can I find an active link on the internet. Thx!

Rob - off topic but would be great if you could do a video on a treasury bond nvestment strategy for retirement folks given the current high yields. Value your prespective. Thanks.

People with physical gold never talk about the experience of selling it. I could imagine its difficult because everyone wants to get it cheap and argue about its purity.

Howard Marks says: “It’s not so much What you Buy- It’s What you Pay”
Bought Gold in 2008 at $835. Now close to $2000. A 6% return per year tax deferred.
How about a The Return Bonds have made since 2008?
Would I Buy Gold now?
Not with Bonds NOW yielding 5% and portfolio is already 10% Gold.

Why bother? Gold is an asset that produces nothing. Your only hope is someone is dumb enough to pay more than you paid.

Rob ur videos are normally such well put together. This is a rare miss. So many issues with the information provided. First u dont mention a single advantage to owning physical gold which imo is the best pro for gold. Next ur biggest problem with gold are mainly tax reasons which couldnt be further from the truth with physical. If u buy in cash in majority of states u pay 0 tax. When u sell in cash u pay 0 in tax. Ive been buying and selling gold and never paid a dime in tax, its one of the pros of physical gold, and its ur biggest con. Huge problem with that. Lastly u say dont buy in person at coin shops when that is literally the cheapest place to buy precious metals. No idea how ur other experiences would have shown different.

I would strongly recommend revisiting this topic and video.

SD Bullion is a great dealer that sells and buyback.

I used them over the last few years without any issues…

Gold is the currency of fear. There are great businesses out there that are worth a lot more than gold!

Now could you please advise the best way to sell physical gold, like jewelry, teeth, gold scraps, etc.

My question is why does portfolio visualizer show a 60% US stock and 40% gold from January 2001 to today with $10,000 invested give me a return of $69,000? Is something wrong with the software? What am I missing?

Keep in mind that when buying small amounts of gold and silver bullion online you are usually paying shipping charges which negates any low premiums and/or special sales they may be offering and depending on your state and method of payment you may also have to pay tax. So unless you are buying enough quantity to get a bulk discount and/or free shipping it may be better to buy from a local dealer where you'll usually only pay their premium over spot. Some dealers won't charge tax if paying with cash as long as the transaction is under 10K.

Hi Rob, I just wanted to correct you. Both GLDM and IAUM hold physical gold in vaults. That's what their docs say.
They do not operate with futures.

Could you tell me for stability in a Roth IRA, would a high yield bond or gold be a better option? Thank you. Oh, I also live in a state tax free state, that is why I am not looking at TIPS. Thank you so much for all your teaching!

I would rather buy an ounce of gold and take possession that treasuries which is not money

Does anyone know if it is worth it to invest gold in an IRA? If so. Is it nessesary to have a custodian /broker? I have read a lot info on the Internet . However, I'm just confused about how to obtain gold and wisely use the money in my 401K. Some companies like American Hartford Gold and others charge maintenance fees and I have read that are mostly scams.

What do you think about investing in gold from the US Money Reserve? I'm considering it.

Would you please do a similar video for dummies as in me 😅 I had a hard time keeping up 😢

There are no fundamentals in today's economy that make sense investing in America's future. We're going over the cliff. Some amount of gold makes sense.

Even if you keep gold in an IRA, eventually the tax man will come and get his 28%, right?

Dude SO needs to buy and hold a one ounce physical gold coin. 😂

The info on this video is so full of dangerous assumptions and bad advice.

Im thinking of buying gold coins aince they look cool as fuck

Physical gold is worth more than paper gold

A few things:
- I view precious metals not as an investment, but as an insurance policy against economic policies that are entirely debt driven and will crash our economic system.
- If you don't hold it, you do not own it. I am specifically addressing paper gold (GLD) and gold that you trust that others are holding for you.
- Tax reporting guidelines are different depending on what you are selling. If I go down to my local shop and sell them a one ounce American Gold Eagle, that sale does not generate tax paperwork. Foreign gold and gold bars have less favorable reporting requirements.
- APMEX and most online dealers have high premiums. I have a private bullion dealer that will sell one-ounce American Gold Eagles with only a 3% premium, plus shipping.

Do you get a certificate of ownership when you purchase gold in the US? I just bought gold at a coin shop near me but did not get a certificate.

You took the gold out of the wrong place. It's there to provide stability by providing a non-correlated asset, so it should be replacing at least some bonds. If you do a 45/27/18/10 split, that is, taking 10% off everything for 10% gold, you end up with much closer results, significantly more stability, and higher Sharpe and Sortino ratios.

I swear I’d rather own some % of gold in my portfolio compared to owning government bonds.

Good video, thank you. However, from.what I hear that you will still get a K1 if you own a Gold Futures ETF and a BDM (buisness development) shares EVEN ON AN IRA? kindly clarify. Thank you.

I guess your subscriber was right one year later $ 2600+ /oz

All this is insane! Aren't we free and allowed to buy and keep goods (regardless of their composition) wherever and whenever we want? Can't I keep a pound of gold or silver at my place? this is st*pid

We have to pay tax on precious metals in my state thats a turn off for me.

Any comments on IAUM? It's an ETF that doesn't own physical gold but has a tiny fee. I have some in an IRA as part of a test portfolio for a retirement Bucket 2. It's part of a Golden Butterfly portfolio, lower returns than equities, but the lowest back tested ulcer index... Exactly how a bucket 2 should perform.