How do you buy gold?

[txtxyeha]

Bless their heart but my dad and his wife are retired and pretty much watch The Weather Channel and MSNBC all day. They would sleep better at night if they had $20K of gold in a safe in their closet. I've tried to talk them into buying T-bills (or Treausry MMMFs) but they want something more...tangible.

How does one own gold? Dad says he's gotten quotes from three local coin dealers and all are quoting a 6 - 7% commission. I am assuming they would have to pay another 8% sales tax. While it pains me that they are paying 15% of the asset value to satisfy an emotional need, hey, if that's how they want to find happiness with their money then sobeit.

Any ideas on how to more efficiently own gold? Any ideas on another asset type they could purchase that would give them peace-of-mind? I've already suggested ammunition, an on-site gasoline storage tank, and a bigger generator. He didn't think that was as funny as I did. I also suggested watching less TV and he's taking that under advisement.

Thanks in advance for your replys and have a great weekend.

 

[OldHippie]

I believe that it is tax free if you buy more than a certain dollar amount of gold. This link says that amount is $1000. Link At over $1000 per ounce, you would buy fewer than 20 one ounce gold coins to make a $20,000 investment. Maybe they can get a break on the commission if they buy that much. The cheapest coins that have no coin collector value are probably what they want.

Vanguard has a Precious Metals mutual fund which allows you to invest in the value of precious metals companies without actually owning the metal itself but that doesn't sound like what they are looking for.

 

[baboso]

In my experience, if you are buying "used" gold coins, be they Eagles, Maple Leafs, Krugerrands, or whatever, you will pay close to the spot price for an ounce of gold and if you pay with cash, many coin dealers will "overlook" sales tax. This is face to face and not over the internet.

With that said, you may want to point out to your folks that when a commodity is trading at historical highs, it really isn't the time to buy.

 

[pulque]

You buy with greenbacks...

 

[l00p]

Better than Diamondbacks (or Mamba's).

 

[Longhorny630]

The Link

All they have to do is take a vacation to Abu Dhabi and stay in the Emirates Palace hotel. They have a brand new gold dispensing ATM.

 

[TexasEd]

ETF

I buy just like a stock.

 

[valencia]

Please explain more about ETF

 

[HornsInTheHouse]

ETF stands for Exchange Traded Fund. It's like a mutual fund in that it's a collection of individual stocks and usually passively managed or indexed. But it's traded like a single stock, so you can own 10 shares of ETF 1, sell 2 shares that day, buy another 8 shares the next day, so forth.

iShares and PowerShares are two of the largest ETF providers in the US.

For gold, there are ETF for gold companies and for the commodity. IAU is the iShares ETF for Gold. For your folks, this may not satisfy their urge to own tangible wealth since like any stock or T-Bills, ETF are just a piece of paper in their safe, unlike gold coins.

 

[TexasEd]

Thanks,

I used the wrong term for what I do. I actually buy the Spyder GLD. I do not have the gold in hand, I have a certificate held by my online broker. I don't have to get a lock box, safe, or pay for shipping.

This is a very liquid way to own gold. I think I buy increments of 1/10 oz since the price per unit is roughly 1/10th the price of a full ounce.