Buying bullion can be a true pleasure, because not only are you gaining something of great intrinsic worth, you’re often purchasing fine art as well. Since you don’t want to bungle your “art” purchase (just kidding), here are a few tips to help you keep things on an even keel.
Tip #1: Choose your dealer wisely.
These days, it seems that every Tom, Dick, and Bubba is offering to sell you bullion. So where should you buy it?
We recommend that you investigate any purported dealer very thoroughly. In this Internet Age, where information on just about everything is at your fingertips, there’s no excuse for not checking someone’s bona fides.
In the beginning, you may want to purchase bullion exclusively from someone who lets you see and handle it first, so you can be absolutely sure it’s genuine and up to the proper weight. A highly regarded precious metals exchange or a top-quality coin dealer is usually a good choice.
Once you’ve become comfortable with the bullion buying process, you can start purchasing from reputable dealers on the Internet. Just be sure that you investigate them as thoroughly as you would any brick-and-mortar dealer.
Tip #2: Avoid vendors with official-sounding names.
Some bullion brokers deliberately invent official-sounding names for their companies, in the hope that people will believe they’re associated with the government. A lot of buyers fall for it, too.
We’ve all seen coin stores or other private organizations with “mint” in their names. That’s a bit misleading, since a mint is a facility that manufactures coin for currency. Other “official” names, however, are blatant attempts to deceive.
I won’t mention any actual examples here, but suppose you wanted to buy iridium bullion (you can, you know). What might you think if you found dealers named the “United States Iridium Bureau” and the “Federal Iridium Reserve”? They sound official, don’t they?
Well, they’re not.
If you can’t trust an organization to represent itself honestly in something as basic as its name, then you can’t trust it at all.
Tip #3: Ignore the gold confiscation hype.
The U.S. government confiscated gold from its citizens just once, back in 1933. However, I (and many other experts) believe it will probably never happen again. The Feds want you to purchase gold. They don’t want to take it away. We’re no longer on a gold standard, and they have plenty of their own anyway.
And even if they do decide to call gold in, by law they have to pay fair market value for it, just like in ’33. Back then, the FMV was about $21. Today, it’s hovering over $1,200.
Do you really think the Feds can afford to pay for millions of ounces of gold right now?
Tip #4: Don’t worry about reporting your purchase to the Feds.
Some vendors will urge you to pay premium prices for their gold and platinum bullion, because you don’t have to report bullion purchases to any federal agency, not even the dreaded IRS. And they’re right, you don’t.
But they’re leaving something important out: you don’t have to report any precious metal purchase to the government. The government is happy that you’re spending money on bullion.
One thing, though: if you spend over $10,000 in cash or use a cashier’s check, you do have to report that to the IRS. Of course, you have to do that for any other large cash purchase as well.
But if you’re buying bullion for lesser cash amounts — or for any amount paid for by wire transfer, electronic funds transfers, or personal check — then no worries!
Of course, there’s more to buying bullion than I could fit in this article. Find out exactly what you need to know by subscribing to my free Mini-Course and newsletter, the Gold Minute.
So what do you think? Comment below…