Who should buy gold and what percentage should you buy? Not everybody is in a financial place to buy gold. If you are living from paycheck to paycheck, then gold is not for you. If you have some discretionary money that is not earmarked for anything, then you should consider buying some gold and silver. If you are retired and you have wealth that you want to protect, you should buy gold. What percentage should you put into gold? Generally, portfolio managers for years have recommended between 10% and 20% of your total net worth into precious metals. But now, in the middle of 2010, with the economy of the United States completely collapsed, the banks melting down, and the immediate future of the country hanging by a thread, the percentages have changed. The rule now is that whatever you don’t want to lose, you should put it into gold and take possession of it.
So, if you are retired and have substantial wealth or if you want to protect the wealth you have already accumulated, don’t leave anything in financial institutions that you can’t afford to lose. Another general recommendation is that, of the precious metals that you have in your possession, 90% should be in gold, because that is your core of wealth, a very compact store of value. And 10% should be in silver for barter. They each have their purpose: gold is for wealth preservation and silver is for barter. We will cover silver later.
Gold Coins To Avoid – Bullion And Foreign Gold Coins
Here is a little lesson on how to buy gold. There are two ways to buy gold: gold bullion and semi-numismatic U.S. gold coins. When most people think of gold bullion they think about the big bars of gold in Fort Knox. The most common form of bullion today is the one-ounce gold coins, like the American Eagle, the Canadian Maple Leaf, the South African Krugerrand, the Austrian Philharmonic, the Mexican Pesos, the Chinese Panda, etc. These coins are all coins of the realm, but they have never been circulated as legal tender in any of the countries from which they came.
Also considered bullion are any foreign gold coins that have been legal tender in their respective countries, like the British Sovereign, the Swiss Franc, the French Franc, the Finish Markkaas, the German Marc, etc. These coins, regardless of their age or condition, are also considered bullion in the eyes of our government. Why? 49 countries around the world allow their citizens to hold their own countries’ numismatic gold and silver coins without fear of confiscation if they are in good enough condition to be considered collector items. It is a way to preserve the country’s history in coin form. But they do not exempt other countries’ old gold or silver coins, just their own. America is no different. In the United States, our government only exempts old U.S. gold and old and silver coins, not foreign coins.
Most of the people who buy bullion coins are speculators, people who buy it cheaply, and when gold goes up, they quickly sell it and make money. My clients are not speculators. They are interested strictly in wealth preservation. The worst part about bullion, however, is that it is confiscated. The government can take it any time they want, and it will pay you $50 an ounce in paper money for every ounce they take from you. The $50 face value is stamped right on the face of the coin, and that is why it is there.