First, decide whether you want to buy online or locally. Chances are high, even if you are in a major metropolitan city, your best prices will be found online. Why is that? Sheer volume and overhead costs.
An online dealer doesn’t have all the brick and mortar costs associated and they have the market of their respective country (some deliver worldwide).
Having a local coin shop is great if you are in need of quick fiat cash. As for the bulk majority of your buying, there is an argument for privacy being stronger in a local coin shop but I beg to differ on that point. If you are buying in bulk ($10,000 or more) you’ll still get a paper trail from a check or bank wire transfer. The employees at the coin shop at the time of delivery will have seen your face, and potentially any others who are hanging at the time when you take possession.
Buying it first hand or taking delivery, they all have risks associated. I’d like to think in the next section of this guide (TAKING DELIVERY) I have some safer alternatives to propose.
Thanks to the downward price action of silver and gold over the last four years, most of the Johnny Come Lately’s have been weeded out via business volumes and profitability.
That doesn’t mean there are not active online “Bait & Switchers” out there advertising in magazines and on television.
When it comes to the bullion dealer you choose, make sure they have been in business for some time.
That said, there have recently been high volume ($300+ million a year revenue) online bullion dealers with 20+ year track records of fine service, who have imploded into bankruptcy over a smattering of months.
Every time you move to buy online, always check the most recent reviews of any bullion dealer you are thinking about doing business with via hard-to-fake review websites like http://GoldDealerReviews.com. I don’t care how many times you have successfully bought from that firm before, d0 your due diligence every single time you risk your hard earned savings. Precious metals are so expensive; even one failed order can cost you year’s of hard earned savings!
As often happens, bad customer reviews in mass were being posted on the recently bankrupt Tulving Company in the fall of 2013.
Most of Tulving’s regular and even newbie clients didn’t do the proper pre-order due-diligence before ordering. Understandably so, many had ordered successfully from the company for over a decade of time.
As of now, many of the poor souls who tried to buy from Tulving in the past year or more, they are now stuck in a settlement suit, begging for dimes on their dollars.
You may be thinking to yourself, “O.K., then I’ll just buy locally”. Now you see if you are buying a decent amount of bullion, most local coin shops are simply middlemen, you’ll have to give them the cash, they’ll order the goods, and you’ll be forced to wait. For example, it wasn’t just online buyers who got bit by Tulving’s bankruptcy; it was also street level retail bullion buyers who are flailing in the wind without their savings.
Do what you can to never be in those folks’ shoes. If you buy locally, get it in your hand same day. If you buy online, investigate each and every time before you buy… make sure of recent company delivery times and continued solvency prior to placing your orders.
Let’s tackle this one at a time.
Price… well what can I say? Price is important. It is important to be competitively shopping with bullion prices always. BUT what is of utter, more crazy importance is that the price claimed is not a “Bait and Switch”, or some loss leader product to get you on some sleazy phone call list, or worse yet…. a place that collects your currency but delays or worse yet never delivers the goods you expended for!
Value… are the people you are buying from, do they offer you excellent customer service? Do they try and educate you and keep you up to date (social media) on the real market going-on’s day to day?
Product Selection… do you have more than a dozen items to choose from? I mean more than great-grandaddy’s graded hoarded coins.
Speed of Delivery… baring upheaval in the bullion buying market, after you pay do you not get tracking and delivery to follow in a matter of days? If not, you may be financing a losing venture.
Shipping Fees… in the USA to ship bullion fully insured high volume should come out to no more that $5 – 50 per 5 to 500 ounces of silver or 1 – 10 ounces of gold.
I’ve heard the argument countless times before…
¿Why would I keep my savings in a place the Feds could come in and nationalize?
Well that is a loaded question to begin with. Let’s say the Feds never in our lifetimes nationalize the private retirement fund of the U.S. citizenry. Then bullion investors are left with a current maximum capital gains tax on profitable bullion sales of 28%.
Imagine if you go Roth IRA and somehow the Feds raise the bullion capital gains tax, and there is no private retirement fund nationalization. You’d be cashing in scot-free.
The point I am trying to impart is that no one knows the future. Now if all your retirement funds are caught up in IRAs then yes, I theoretically would take some penalties and take some of my savings out of the system. But if I only had a portion of my funds in IRAs, I’d roll the dice on the option of limited tax risks on my gains versus the penalties one might undergo bowing out.
Either way, you can get bullion in your hand or outright within your IRA, it is your call completely. I’m not a professional investment or tax advisor, I only want to see you keep what you have worked so hard to save.
The next article in our Beginners’ Guide to Buying Physical Bullion will discuss the process of buying, payment and taking delivery.