How To Invest In Gold (4 Ways)

we’re going to be talking about how to invest in gold as a beginner and if you’ve been following me on instagram

over the past few days you’ve seen some of the stories that i’ve been posting about gold and silver

so gold has actually recently hit an 11 year high trading at just above 1900 an ounce some people are saying that this is due to endless money printing as this shirt suggests some people are saying that it’s a sign of a weakening debasing

u.s dollar regardless of your thoughts this video is going to cover a few different things we’re going to talk about four ways to invest in gold we’re going to talk about some of the pros and cons in investing in gold and obviously at the end of the video i’m going to give my thoughts stay tuned okay so number one is probably what everyone thinks it is when they think of investing in gold this is the actual

physical bullion okay this is the actual metal

so this is going to be either in coin or bar form typically if you’re buying from a reputable source

this can be anywhere from a quarter of an ounce all the way up to 400 ounce bricks

and if you can afford a 400 ounce brick of gold more power to you if you just do some simple math and multiply the spot price of nineteen hundred dollars as it is right now

at the time of this recording multiply that by four hundred

you get seven hundred and sixty thousand dollars worth of gold

so physical bullion is actually priced about one to ten percent over spot price typically it’s one to five percent at any given time but in times like this with endless money printing a lot of people are not trusting fiat currency and there’s a lot of demand for precious metals that’s why the price is going up

so now the dealers whether it’s a coin shop or an online broker

they’re actually charging closer to 10 over spot

so if you don’t know what spot price is say gold is trading at a thousand bucks an ounce for example

if you add 10 percent premium to that you’re

probably going to be getting into that gold for about 1100 an ounce okay so you also need to buy quality what do i mean by that

the most popular types are coming from mints or they’re coming from highly reputable sources so you should only be investing in investment grade gold that’s the whole point of this so you’re looking for purity of 99.5 or higher

i personally only buy 99.9 percent or higher so the most popular ways to invest in this as i mentioned are coins because of its divisibility and its ability to be stored very easily so if you want to make a comparison to silver right now it’s trading at about 1 ounce of gold can buy you 83 ounces of silver

that’s 83 times more space if you’re comparing apples to apples if you’re comparing a gold coin to a silver coin so gold is actually highly divisible and it doesn’t take up that much room okay if you want to know where to buy this that’s the whole point of this video and how to invest

i’ve been buying all my precious metals from jmbolion.com

i’ve left a link in the description below and i actually found this receipt from about five years ago

they’re highly reputable they have fair prices and the shipping is very discreet and very quick

and it comes straight to your door so check out jmbolian.com

if you don’t trust the online sources which i don’t know why you wouldn’t i would actually check out a local coin shop or potentially a trusted broker so that’s number one physical bullion let’s go on to number two

okay so number two are gold etfs and gold

funds this sounds exactly like an etf or a mutual fund well

because they are they trade just like stocks and etfs

so this is referred to as paper gold there are three types of these etfs and funds that exist

and i’m going to go over them very briefly in this slide just because it does pertain to etfs and funds and i’m going to go into a little bit more in depth

after this slide into these so the first kind are investing in a company or a etf or mutual fund or an intermediary that actually invests in the physical bullion as we mentioned in the previous slide

so you can actually pull your money together they hold the physical bullion and they basically mimic the spot price if you will

now the second way are investing in etfs or funds that

invest specifically in gold futures contracts

so these are companies that do exactly what the first example does except they’re not holding the physical gold and they typically don’t take delivery

they’re literally just betting on the future price of gold

and then third you have gold mining companies which have become very popular over the past few weeks

and this is exactly what it sounds like you’re investing in an etf that owns a bunch of gold mining companies and it’s based that performance is based on how those gold mining companies do so very simple so if you want to look at an example of a

fund or an etf that holds the physical bullion here we have the spyder gold shares this is basically ticker symbol gld

and what they do is as mentioned is they hold the physical boolean which invests directly in gold

so that etf is typically going to mimic the spot price as mentioned so gld however you need to realize what you’re doing when you get into something like this

specifically it’s actually referred to as a collectible

meaning that the capital gains tax is going to be higher than other etfs so you need to be cognizant of that when you actually dispose of your position because you’re going to be paying a higher tax potentially up to 28 i believe number three is investing in the actual gold mining stocks aka gold miners

so gold mining stocks are literally what they sound like these are companies that actually mine

for gold duh so how do you think it gets out of the ground you have to invest these companies that mine it and bring it out of the earth

so these companies don’t necessarily correlate exactly with the spot price so that’s what i meant here by does not equal the spot price

just because these are still individual companies that need to be properly run they need to

show a profit they need to increase their revenue in order to increase the value to their shareholders aka increasing the value of the stock so they still have to manage money people resources equipment all that stuff so

just because the spot price of gold is exploding doesn’t necessarily mean that these companies will as well so if you want a couple examples two of the biggest gold miners out there are basically newmont corporation and then you have barrick gold

and then finally what i wanted to mention over the past few weeks junior gold miners

that’s a classification in and of itself it’s kind of vague so i didn’t want to get into that

however junior gold miners have actually been exploding in value there’s a lot of money flowing into them

so if you want to do further due diligence again this is at the time of this recording

but i would look into junior gold miners again this is not investment advice i’m wrong

hundred percent of the time okay so number four is investing in gold futures or options uh so the reason i have an asterisk up here next to this is because this is for advanced traders only this is for people that either do this as a living

or have been doing it for many many many years and they know exactly what they’re doing

the reason i included this in a how to invest in gold for beginners video is because this is one of the strategies that gold etfs and funds use so i thought that it would provide value to the audience to be able to explain this to you that way you understand what you’re getting yourself into

if you choose to invest in that kind of an etf or gold fund

so as mentioned these are basically the options on futures or

etfs so if you don’t know what an option is it’s basically the right not the obligation to buy or sell an asset

at a certain price at a certain time so if you don’t know how options trading works you can actually check out some other videos there’s a million videos on it

that’s not the scope of this video but just know that it’s the right not the obligation to strike on a certain price and execute on that price in the future

so if you think the price of gold is going up or down

you can effectively place a bet on that with put or call

options which you can do your own research and figure out what that means so with all that being explained let’s go into some pros and cons of investing in gold

okay so very quickly let’s run through the pros of investing gold there’s obviously more than these three but these are the typical

main points so number one it’s obviously a hedge against inflation

okay so when you see the money printer going bur and printing trillions and trillions of dollars

people lose their confidence in fiat currency

so they go back to something that is a historical store of value

so there’s a finite amount of it it’s considered hard money

and this is to battle decreased purchasing power okay ever since the united states went off the gold standard in 1971

you can do your own research okay and again it’s just a store of value number two portfolio diversification so most

mostly everything you’re invested in whether it’s etfs 401ks

you know bonds all this stuff it’s all linked to the financial markets okay so they’re tied to the markets in some way this

actually is a non-correlated asset which actually provides diversification outside of just equities or stocks so when you see your favorite youtubers say you know buy stocks they only go up yes that’s fun but that’s not necessarily a good way to diversify i actually had someone on twitter ask me do you recommend a certain portion of etfs and stocks and this and that

but he didn’t realize that he was talking all about stocks so if stocks go down

it’s going to go down period doesn’t matter how well diversified you are you need to provide true diversification and introduce that to your portfolio you can do that through precious metals such as gold and then finally it’s easy to get started okay so

all you need to do is literally go online if you go on jmbullion.com you can literally get started today it takes five minutes not even so etfs and funds

are just as easy as buying a stock so those gold etfs and funds that we mentioned

if you already have an open brokerage account you can literally get started in investing in gold and

a click of a button just by buying shares of those etfs or funds so it’s very easy to get started okay so finally the cons of investing in gold is pretty simple it doesn’t earn anything it is literally a pet rock

so if you invest in the physical bullion you’re gonna throw it somewhere in a safe or at a bank or you know safety deposit box

and it’s literally just gonna sit there there are no dividends no compound interest and no passive income coming from that investment okay it’s a double-edged sword because that’s why people invest in gold in the first place because it’s not correlated and it can’t do those things

number two is storage so where can you put it are you going to keep this in a safe in your house

what if someone knows it’s there you’re going to get robbed dude

so you may want to keep it at a bank and even then you know what if there’s a run on the bank what if that bank you know burns down

yes there’s insurance not the point of the video my point is is that if you invest in physical gold

storage could become an issue and if you are you know like scrooge mcduck and you’re just swimming in it

the actual physical amount of gold that you own can actually start to outpace the size of the safe that you keep it in so keeping it off site has trust issues keeping it on site has safety issues so the storage is kind of a pain in the butt and it’s definitely a con and then finally i alluded to this earlier in the video you’re paying a premium over

spot and then you also have taxes as a collectible when you go to dispose of your

position okay so basically the premium we mentioned is anywhere typically from one to five percent

right now in this environment it’s right around 10 percent and then this is also taxed as a collectible up to 28 percent of the value

so now that we’ve mentioned the four different ways the pros and cons i’m going to go into my thoughts at the end of the video

okay so my thoughts my that’s a brain okay it looks like a walnut it looks like a

hairball it’s my brain okay that’s your brain on drugs

just kidding not on drugs unless you consider a coffee a drug well coffee is a drug never mind

so anyway my point is is that this is a great way to diversify your portfolio i believe that everyone should have at least five to ten percent of either gold or precious metals to make up their portfolio

silver is actually very underpriced right now it’s not the point of this video

but gold has typically been a better store of value

they’re both running right now at the time of this video so i would keep a small percentage of my portfolio in physical

yes you can’t go to costco and give them a silver bar and expect to get groceries for it

but that’s not really the point the point is is to preserve wealth if you’re younger watching this you probably think you know i’m an idiot or a psychopath for wanting to do this as you get older and you start to build more value you want to be able to preserve your wealth and have something tangible so a well-diversified portfolio in my opinion is going to be a little bit of precious metals a little bit of real estate assets and then you have your typical

usual suspects stocks bonds things like that

and then also 2020 going to crypto now the video is going to get down voted because people don’t do the research and here we are so i hope this video was valuable

at the end of the day the money printer can only go burr

interest rates will not go up in any time in the near future

that’s why gold is actually such a valuable asset at this point in time hope you got value out of the video please like and subscribe and share the video with a friend

check me out on instagram if you haven’t already and check out jm bullion down below

thank you so much and have a prosperous day

oh baby

yes fur

baby yes

we’re rich we’re rich

we’re rich lately we’re rich yes you

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