12 Things You Need to Know before You Order Gold and Silver from ANYONE!
Every gold dealer and pro gold newsletter writer claims to bring open answers about buying gold and silver. Unfortunately their information can be biased to persuade the reader to commit to their offer of products.
One investment guru tells you to buy no more than 5% of physical gold bullion coins . . . he even took extended measures to produce a “don’t buy $20 mint state gold coin” report . . . but what is his real game? Selling paper certificates of gold with the physical gold stored someplace overseas. Why? More money is made selling paper than physical. Folks…it is that simple.
What about a very popular gold dealer who wrote the “know all” book of buying gold and silver? If you go to his website, he’s not only selling gold, but also food, jewelry and even gold to store in a [his? Foreign?] vault. He doesn’t care about your financial survival. He only cares about selling you a product, any product. But he is a good educator on WHY you NEED gold and silver.
I once asked a popular radio-show host why he allowed a high-priced coin dealer to take advantage of his listener? His reply.. Why not? What’s wrong with folks paying “a little more” to help support the radio show? I replied that I didn’t believe a 20% overcharge was just “a little more.”
What about those dealers who promote lower prices if a single buy is made for a multitude of buyers once a month. This way he can buy a product in volume for a lower price and pass the savings on to his customers. Sounds good.
However, who knows how many customers placed such an order? No one. The dealer can claim that not enough customers placed orders and hold his customers’ money for another month or two. What does he do with his customers’ money before he makes the buy? More importantly, while he holds his customers’ money, did the market price of the product go up or down?
The point here is to be very wary of placing an order if delivery depends on other people making similar orders. Yes, if enough people place orders, you may save a few dollars. But if enough people don’t order, or if the dealer lies and claims that enough people haven’t ordered, you may wind up making an interest-free loan to your dealer for a month or more.
If you place an order, your order should be filled quickly and without regard to orders placed by others.
What about buying on the Internet? Is pricing from online sellers of gold and silver less expensive than a brick and mortar store with less overhead? Not necessarily. As a brick and mortar store, Discount Gold & Silver Trading Co. provides very competitive pricing and many times will either meet or beat the online dealers. You’ll get better service, more personalized advice from the brick and mortar store than from an Internet dealer who is typically just an “order taker.”
Also, remember Target? European hackers captured information from over 100 million credit card users. Don’t forget the NSA is spying on us all. There’s no real privacy when purchases are made by credit card over the Internet—and privacy is vital for those who purchase gold and silver. So, if you order gold and silver and pay by check or money order, your exposure to hackers or spies is absolutely minimized. People who spend thousands and thousands of dollars online for gold and silver are the hackers’ dream.
Our object at Discount Gold & Silver is to provide current information about coins and help our clients make an informed decision on what is most suitable for them—not what is most suitable for us. We want to help you make an intelligent buying decision, no matter what you buy.
What is your investment objective when it comes to buying gold and silver? It is just as bad to buy a Vicambi bar priced at $2,300 or a privately-minted silver round as it is to buy a $20 gold piece. If you buy the $20 gold pieces from the right seller at the right price, there is no reason people can’t enjoy the benefits they provide.
A common mistake people make when buying gold and silver is forgetting the fundamentals. You shouldn’t be motivated by fear OR greed. Gold is an investment that will generate the highest returns when your buying decisions are objective, intelligent and unemotional.
For example, if you believe that we are headed into difficult economic times, and you want gold and silver for barter and for a medium of exchange, you will want bullion coins like the gold and silver eagles, 90% silver and pre 1933 $5 Liberty gold coins.
On the other hand, you should own numismatic gold and silver as insurance against risk, and for privacy, performance, and as an investment for rarity and gold content free of confiscation under current law.
Holding of financially stable mining stocks is for those of SUBSTANTIAL means.
Keep your portfolio of gold and silver simple and basic. Recognizable and acceptable. It doesn’t mean you cannot diversify . . . .DO NOT—I repeat DO NOT—buy any gold and silver that is being sold other than a troy ounce. Stay away from grams, pounds, or chips. Dealers depend on the ignorance of the people to know how many grams in a troy ounce and how many troy ounces in a pound. Most people do not know that gold and silver is measured in troy ounces. Recently a gram of gold was being sold for $74.95. Multiply 31.1 grams per troy ounce by $74.95 per gram and as of this writing spot gold is $1,275. The gram-buyer paid over $2,300 for less than $1,300 in gold. He paid a $1,000/ premium on one troy ounce of grams.
He would be better off to buy a MS-61 or MS-62 numismatic gold coin and pay only a $200 to $300 “premium” over the bullion price of gold. More, he could resell his numismatic coin almost immediately and receive virtually the same price he’d paid. Once he bought those grams, the bullion price of gold might have to move almost $1,100 for him to break even. Nevertheless, some dealers will talk to you with a smile on their face and the people who buy grams will argue that grams will be good for bartering instead being outraged at the person who ripped them off.
As for using grams of gold for bartering, if I show you a small bit of shiny metal and claim that it’s a gram of gold, will you believe me? How can you tell that a gram of metal that purports to be gold, isn’t really brass? On the other hand, if I show you a gold coin minted by the U.S. Mint, complete with words, images and fluted edge that’s easily recognizable, will you believe that I am offering an 1/10th, 1/4th, one half or a full ounce of gold? Probably, Yes.
What about the dealer who says if you buy the product from them, they won’t charge you commission when you sell. REALLY! How do you know what they are charging?? Nice statement…sounds good…but if you are paying a little more on the front end, do you really think these “nice” people will do something for nothing when you are ready to sell?
What about shipping charges? I saw shipping charges on a $250,000 gold order of about $500. I can’t believe someone would pay any shipping charges for an order like this…At Discount Gold & Silver, our shipping range is $20 - $40. Most of the $40 shipping cost is applied to silver due to the weight. Always ask if the shipping charges are included in price quoted. Shipping charges can significantly change the price of the item you are buying. Shipping charges continue to increase and can be adjusted as they rise…our shipping charge 20 years ago was $5.
What about quality? This should be the number one important factor when buying gold and silver…there are many complaints and disclaimers on website sellers to the condition of gold and silver coins. Of course these dealers can offer a lower price when the coin you purchased is damaged or scratched. RETURN anything in this condition. One that comes to mind….”We guarantee the condition to be Fine to Brilliant Uncirculated”. Well, I will guarantee if you purchase 20 coins - 17 will be Fine Condition and three BU which lowers the value significantly…you are paying for BU but receiving majority of Fine and there is a BIG difference of quality.
What about…. Circulated $20 gold pieces are fine if the spread between the circulated and a Mint State coin is significant. I call the Extra Fine $20 Gold Pieces “Opinion Coins”
When you go to sell, it’ll be the buyer’s “opinion” that determines the grade of the coins. Thus “opinion” grades allow dealer to mix damaged $20 Gold pieces in with the Extra Fine and no one knows until you sell. This is a far more damaging to a buyer than purchasing Mint State 61 $20 Gold Piece for a difference of about 50 bucks. I’ve purchased many of these $20 gold pieces from clients who originally purchased them from a dealer in Minneapolis and people have lost thousands of dollars.
Coins often look all nice and shiny because they’ve been cleaned and polished. We call them “Shavers”. That means the coin was polished to a mirror-like finish you could use to shave. But despite the brilliant mirror-like finish, such coins can still be damaged and of less value.
Modern issue certified Gold and Silver Eagles. Unless you’re purchasing this type of coin for a special occasion…. do not buy gold or silver eagles (no matter the size) in Mint State 69 or Mint State 70. Having a bullion coin certified means nothing. Many times we crack these coins out of the case just to fill other orders. Dealers will charge larger premiums when they sell, but when you sell, you’ll only get a few dollars over regular price for bullion. Perhaps in 100 years it might mean something but not today. All coins directly from the mint would be considered Brilliant Uncirculated. Modern coins are massed produced and have little collector value.
Proof coins. Proof coins are beautiful. It doesn’t mean I want them in my IRA. Why pay hundreds of dollars for dealer commissions.
With all this said . . . there are no bad coins to own. Each coin has a purpose and a place in a person’s portfolio as long as it is SUITABLE for them. It is our job at Discount Gold & Silver Trading to help people make an informed decision on which product should be purchased based on what is suitable for them.