Gold equates to real money. Unlike other assets like traditional stocks and bonds, even legal tender, which really just represent the value of money, gold can retain its intrinsic value even when an economic downturn occurs. This is the reason why smart and practical investors tend to invest in gold. “Buy gold coins and watch them grow.” People say that buying physical gold often rewards good investors with promising returns.
From a financial perspective, owning physical gold is similar to owning real estate except that you usually don’t have to worry about mortgages. Compared to traditional stocks and bonds, the value of gold remains consistently high despite major setbacks in the economy, and it’s all about keeping your savings intact from the liabilities caused by the economic crisis. Nothing does this better than investing. Buy gold coins and save them for a rainy day.
Now that you know the real impact of gold on a steady income stream, you’ll probably want to know how to use gold to build the foundation of your wealth. When you retire, you can invest using a gold IRA. With this IRA, you can invest in tangible gold such as gold coins and bullion. Gold in an IRA can definitely give you more security than other forms of investment, especially if you’re facing financial setbacks, which are often associated with accumulating medical bills, debt, and expenses. If you are no longer able to work for yourself, gold in an IRA will serve as your life jacket.
If you want to invest in gold, buy gold coins only after you determine the purity and weight of the gold. This is the amount of real gold contained in one coin. Keep in mind that gold coins are also made from other metal alloys, so there is no such thing as pure gold coins. Metal alloys are usually mixed with gold to make the coins more durable. Gold coins for potential investment usually contain at least 22 karat gold.
If you also want to diversify your gold coin investment, buy gold coins from other countries as well. Some alternatives to the American Eagle gold coin are the Canadian Maple Leaf, Chinese Panda, and Austrian Philharmonic coins. You also need to study the specifications of these coins to make them suitable for investment.
You have to be smart if you want to invest in gold. Buy gold coins when they are the cheapest and hold them until you can sell them at the highest price. Time is on your side, as the value of the coin increases every year.
Compared to other investment options, gold is not subject to the capital gains rate. If someone owns physical gold, such as bullion and coins or gold certificates backed by physical gold, the IRS recognizes it as a collectible rather than a source of investment.
However, when someone buys bullion and coins, it is likely that the person who bought it will eventually sell it. Then you have to think about what will happen when you sell your coins. If the coins are sold in less than a year, the money you earn is treated as ordinary income and taxed accordingly. But if you sell the gold after owning it for about a year, the income is taxed at a maximum of 28%.