Gold bars can become a valuable asset to your finances. You just need to know how to invest in gold properly. Many times the reason why some investments do not work out is because they did not invest the right way. In order to set you on the right track, I have several pitfalls to avoid. These are very common amongst first-time buyers.
Do Not Pay Too Much for Your Gold Bars
The day you buy, check out the prices on average. No buyer should be paying a high price. Look at the spot price. Do not buy over 8% of the spot price. You should be between 5-8% for the markups. You are getting ripped off with any rate higher. This is according to U.S. Mint.
Buying for Historical Value is a No-No
This is part of the bait and switch program. They offer gold bars based on their “history”. The only value these bars have is for their “melt value”. Any other value is only there to sucker people into buying. This works especially with first-time buyers.
They think they are buying a piece of history and they are not. Do not be a sucker. Know what the true value of the bar is before you invest.
Some Other Tips to Think Over
You should never be paying a premium for the “proof bars”. This is another rookie mistake. Those of you who are collectors and investors, you need to stick with the regular bars.
Never buy over the phone. There are many cold callers out there trying to scam on people buying gold bars. According to the Federal Trade Commission, these boiler rooms deals are on the rise. These people use high-pressure sales techniques to make their deals. Do not get involved with this. Many of these calls come from the Do Not Call List Registry. Your number may be on the list and they will call anyway.
You should buy gold bars from an actual person sitting in front of you. Deals like this need to be as transparent as possible.
Do not buy into the “confiscation scare tactics” either. Some will claim your gold is very rare and not available anymore. Others will use the FDR scare tactic approach. You can look up the FDR scare tactic approach here to get more information. The person is trying to intimidate you into buying or selling. Do not fall for it. It is a scam.
Do buy using any kind of leverage. Some like to use leverage to control the outcome of what their gold bars are worth. Gold is volatile to start with. Margins like this do not work out. Many rookies make this mistake and lose their shirts. Leverage affects the outcome of the sales commission too. It is better to stay clear of this cat and mouse game.