The Basics
We all begin somewhere. With gold and silver, we start with 10 Commandments. We’ll explain them as we go.
1. Always take delivery
You purchase physical precious metals as financial insurance. If you need them in a pinch, they will do you no good stored in a vault across the country. While IRAs limit us to such storage, personal investment need not.
2. Never buy premium if you can avoid it
The premium is the mark-up you pay for any coin or bar over the price of gold or silver. The lower the premium, the more ounces you get for the dollars you spend. Follow this rule closely. The lower the premium, the more money you actually invest in metals.
3. Buy bullion for business, numismatics for fun
Maybe this rule should read “…and numismatics not at all.” Unless you’re a coin collector buying solely as a hobby, avoid numismatics and every sales tactic enticing you into them. They are a trap.
4. Buy silver first, then gold
Since 1872 gold and silver have had many long-term ups and downs. In every up-cycle, silver has always outperformed gold. It is not just cheaper and more divisible. Silver is much more undervalued than gold every day of the week!
5. Buy small gold first, then large
If you’re buying less than $5,000, actually buy silver first. Next buy small gold coins because they’re more divisible. Typically the smaller the coin, the higher the price per ounce, but there are small coins out there that buck that rule.
6. Never buy exotic coins or modern rarities or anything you don't understand
This should probably be number one – Never, ever buy anything you don’t understand.
7. Know your dealer
Only buy from someone you know. How do you get to know them over the phone? Ask for references. Check with the BBB.
8. What governments can't find, they can't steal
Don’t store your metals in a bank.
9. Never swap bullion coins for U.S. $20 gold pieces
This is a sure way to pick your own pocket because you’ll sell coins with a low premium (bullion) and buy coins with a high premium ($20 gold coins). This will take ounces out of your hands and put dollars into the hands of whatever unscrupulous salesman convinced you to do this.
10. Never break the law
For normal folks this is actually getting harder every day. Regardless, we do our best to keep current with all new relevant regulations from Money Laundering laws to Sales Tax requirements.
