So you are ready to buy gold and silver! He’s seen a ton of TV commercials highlighting the importance of physically owning your precious metals, and he’s heard the myriad of reasons why you should own them. You’ve made your decision… you’re ready to start shopping! Now what?
Do you know how to guarantee a safe and confident purchase? I am going to make this really easy and simple for you. There are three things you really need to know to buy your gold and silver the right way and with confidence. You want to buy with confidence, right? Well, here are three essential things you need to know.
- authentication: You need to know how to authenticate yourself, so you know it’s real. It would really be a shame if you finally went out and bought some bullion, only to find out later that it wasn’t even real. To avoid this pitfall, you need to know how to authenticate your purchases before you buy. The topic can go into depth and it’s not realistic to go into the pros and cons of the various authentication methods here, but I want to briefly share what those methods are so you’re aware of your options. There are three ways to prove the authenticity of your bullion…those methods are chemical testing, electronic testing, and physical testing. The testing methods you choose will be based on the types of purchases you make, the volume of your purchases, and your testing budget (particularly some of the electronic fitting rooms can be expensive). Chemical and electronic testers are pretty much what you’d expect them to be. Physical testing includes testing the weight, size, and sound (yes, sound) of the bullion you are testing.
- Classification: You need to know how to determine the value, so you don’t overpay. To determine value, you need to know the weight, purity, and trading price (known as the spot price). Weight is simple and is a measure of the weight of a given piece of bullion. But weight is only part of the equation… we also need to know what part of the part is pure. For example, if a piece of silver bullion is 50% pure, then the silver content would be 50% by weight. Once you know how much silver (by weight) is in the piece, you can easily calculate the value using the spot price. Please note that trade prices vary slightly depending on the premiums charged by dealers. I just can’t overemphasize the importance of your ability to determine value so you can make smart buying (and selling) decisions.
- Strategy: You need to understand your own strategy, essentially the real reason you’re buying these precious metals in the first place. This is more important than you may initially think because it will help you choose the right bullion. Bullion comes in many different sizes, shapes, and values, and you’ll need to make purchasing decisions based on your goals. Your options may differ if you are buying to protect your wealth, or if you are buying to hedge against currency fluctuation, or if you are buying to prepare for an economic collapse. Whatever your reasons are, you need to know why so you can make the right decisions. And here’s a bonus tip: You’ll also need a strategy for storage.
Buying gold and silver is simpler than you think, but one mistake can cost you a lot. After all, precious metals are valuable and your purchases can (and should) really add up. I hope you have found this article useful on your journey.
