Holding A Modest Amount Of Gold

A wise friend of mine, the founder of Carfax.com Ewin Barnett, recently gave me some great advice I would like to share. It is sound financial advice that is universal and one of those classic tips that most of us simply never do…

Buy some gold coins.

I am not going all doom-and-gloom here, but it really is awesome advice. I mean, how many people don’t have a written will? The numbers would surprise you – over 66% of Americans still do not have a last will and testament. Well owning some gold coins is another important thing many of us continue to overlook.

Since the primary purpose of holding gold coins is for potential barter (secondarily to preserve wealth), the difference in value between “random year” coins and “brilliant uncirculated” coins of a specific year will not matter. So why not buy the one that costs the least? It will preserve wealth just as well as any other gold bullion coin.

The issue with preserving wealth via holding gold (or silver) coins boils down to the spread between buy and sell. APMEX openly posts their “sell price” and their “buy price”. This, and the shipping/handling fee is the total “cost” of converting money into gold. You will notice that the total cost per ounce and the cost of buying 1/10 oz coins is higher than for 1/4 ounce coins, but in a barter situation, it will be harder to “make change” for a larger coin.

These folks have fees that are as low as I’ve seen elsewhere, and their delivery is prompt and consistent.

I would direct your attention to 1/4 and 1/10 oz coins, like the entry “(1/4oz) Gold American Eagle – Random Year” (and its corresponding 1/10 oz version), which I think is the best value.

Try picking up a few thousand dollars worth of small denomination coins over a period of time. Similar to investing in the stock market over any given period of time. Try to account for a few months worth of barter purchases. Then just store it in a secret place for safe-keeping and forget about it. Then congratulate yourself for getting one more of those “responsable” items off your to-do list.

Tagged as: barter, buying gold, gold, gold coins, holding gold