Need advice on precious metals IRA vs. physical gold vs. GLD/SLV

10 posts / 0 new
Last post
radardeb's picture
radardeb
Status: Member (Offline)
Joined: Sep 11 2008
Posts: 19
Need advice on precious metals IRA vs. physical gold vs. GLD/SLV

I'm about a year away from being able to withdraw $ from my IRAs without penalty, but I'm nervous about letting all that sit in cash for the next year and possibly be destroyed/greatly diminished by inflation.  I don't have a lot of free cash to invest in physical gold, not in the amounts that I think I'll want/need in the next few years.  So I'm thinking about transferring the $ in my IRAs to a  Precious Metals IRA.  Any thoughts on how secure these accounts are? 

My only other recourse is to withdraw from IRA, pay taxes and penalty, and buy physical gold/silver.  That or invest in GLD or SLV within current IRA.  I know Chris favors physical PMs in your possession, but taxes and penalties seem a high price to pay to get the money a year early.  Any advice or opinions greatly appreciated!

 

 

Brainless's picture
Brainless
Status: Silver Member (Offline)
Joined: Dec 9 2008
Posts: 150
Re: Need advice on precious metals IRA vs. physical gold ...

I have the advantage of having the possibility to buy gold in Thailand which is very easy and no big markups either.

I thought about buying gold of the paper kind where it is stored in some far away country, but for when things get out of control i have the feeling this paper gold is also worth nothing.

My feeling would be that a gold IRA would be better than a dollar IRA, because of inflation which will be high even maybe hyper. IMHO of course. 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Self Directed IRA?

I am not sure if you are suggesting a self directed IRA but that's what I would reccomend. Then you can buy prescious metals, real estate, and many other things.

I use EntrustCAMA and have been very happy with their service and online seminars. There are others, I think the choice comes down to where you want to buy your prescious metals as most of these companies only approve one or two sources. For example, GoldMoney works withEntrusCAMA.

While I have had a good experience with this arrangement, I don't really have any alternatives to measure them against. I'm sure some others are also very good.

Like Chris Martensen, I own a higher percentage of presious metals than would typically be suggested. Maybe gold and silver are good investments but over the last several months I have lost a slight amount of value. Still, I sleep better at night owning an asset that is not another parties liability (I only buy allocated metals). And I think the math of flooding our markets with liquidity will eventually spur inflation - who knows when, most seem to think we are months away from that.

I'm not convinced that inflation will ever hit as I think our economy could "sieze up." If this happens, gold will be one of the few safe places.

 

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: Need advice on precious metals IRA vs. physical gold ...

There's an option that may be somewhere in between taking possession of physical and a pure paper trade: James Turk's "goldmoney.com".

Turk is a well respected advocate of owning physical gold.  I read his book "The Collapse of the Dollar" and he is definitely not pushing paper gold.  This is what the goldmoney website has to say:

When you purchase precious metals through your GoldMoney account, you actually hold and own the metal in your name. GoldMoney is not a "paper gold" product,
which means that your gold ownership is not dependent upon the ETF's,
certificate issuer's or pool account operator's ability to obtain and
redeem metal for you when you want to sell it.

Nearly all
of these types of "paper metal" programs work on a fractional reserve
basis, so if the majority of the program's customer wanted to redeem
their metal for cash, the program operator would not be able to meet
all of its obligations. In other words, "paper metal" products
represent merely a promise to pay metal; they are not products that
give you direct ownership of metal, and therefore expose you to
counterparty risk since you are dependent upon the program issuer's
ability to meet all of its obligations.

Contrary to the
fractional reserve nature of "paper metal" programs, the quantity of
customer metals recorded in GoldMoney's database is always equal to the
quantity of metals in the vaults. GoldMoney guarantees it.

While I personally own actual physical metals, I think this might be a "second-best" option for those that can't get their hands on what they need or don't want to deal with storing large amounts.

What do you guys think?

Brainless's picture
Brainless
Status: Silver Member (Offline)
Joined: Dec 9 2008
Posts: 150
Re: Need advice on precious metals IRA vs. physical gold ...

Switters,

I looked at goldmoney.com and what they offer.

In the end it is that they own your money AND your gold.

Delivery will be close to impossible when things turn nasty.

IMHO nothing beats physical gold in your hands, even with the problem of storing it safely.

Problem i have now is that physical gold are in relative large 'chunks'. At the moment i am investigating to manufacture small blocks/coins of around 4-5 grams. These would be much handier when you need it to trade for other goods. I do this now for family and friends, but who knows it might be a product. :)

At the current price it would be around 100 US$ for the smallest size. Even smaller blocks/coins would not be easy to make and probably silver would be a better candidate.

radardeb's picture
radardeb
Status: Member (Offline)
Joined: Sep 11 2008
Posts: 19
Re: Need advice on precious metals IRA vs. physical gold ...

I have seen those sites where you own actual precious metals stored in their vaults.  I was just wondering how secure they are.  Under normal circumstances, I'd say extremely so.  But if the sXXt really hits the fan, what are the odds that the business goes under or something else happens and your account just disappears?  I don't see this as a very likely possibility, but just wondered.

Ruhh's picture
Ruhh
Status: Gold Member (Offline)
Joined: Nov 12 2008
Posts: 259
Re: Need advice on precious metals IRA vs. physical gold ...

I've also been looking closely at those precious metal sites too. Particularily BMG (yes where Chris held the webinar today which was great).

I'm personally not worried as much about things up here in Canada especially since I have a secure job in fed gov. and a camp far away on a river but I am worried about my parents as they approach early retirement (read: unemployment).

An alternative to these I was thinking of was to approach pawn shops and jewelry stores regarding purchasing their scrap metals. Buy a scale, buy a safe and start stockpiling.

Some might think this is totally ridiculous (I think it's kinda funny but true) but another good investment besides precious metals is good ol' contraband! If you've got room in a cellar start stockpiling your favorite spirits. As Chris sais in the Crash Course, societal complexity might be simplified drastically. If your carrer is now obsolete you can always become a bootlegger. In times of dispair a nice stiff drink might make the world at least seem a warmer place (G.W. pun intended).Worse comes to worst you can always throw a party with it in celebration that the collapse didn't happen or you can age it and sell it on e-bay! Either way it's as good as gold, baby!

Another fun read...  100 Items to Disappear First

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Need advice on precious metals IRA vs. physical gold ...

There are compromises and benefits from many different approaches. I think that diversification is important and store my metals at more than one source. I mostly use GoldMoney and think that having allocated gold stored in a foreign country is a good option (more time to avoid confiscation). With GoldMoney, my precious metals are regularly accounted for by VIA MAT and insured by Lloyd's of London. But let's face it, Lloyd's could go bankrupt or something bizarre might occur. 

If you take possession of your gold, you might need to have it melted down to verify the purety and weight. If you place it in a bank safety deposit box, you are not insured and might encounter the IRS or a Federal agency to witness the retrieval. If you store your gold in a bank vault, it becomes someone else's liability. Again, diversification might be the key.

 

jpost's picture
jpost
Status: Member (Offline)
Joined: Mar 1 2016
Posts: 1
Gold money

Hi radardeb

Many people do not understand the differences between buying physical gold, silver or other precious metals and buying paper metals products, such as a gold or silver-based ETF.

Firstly, by purchasing shares of GLD, one could potentially profit from a rising gold price and one could potentially lose money from a falling gold price. This is because shares of GLD are designed to try and closely mimic the price of gold minus the fund’s fees and expenses and if someone buys shares of SLV then one may potentially profit from a rising silver price, while one may stand to lose money if silver prices fall. 

GLD/SLV Pros
Provides easy access to gold or silver markets
Easy to monitor day-to-day activity
Small minimum investment.
GLD/SLV fees may be lower than costs associated with storage and protection of physical bullion.
 
 
GLD/SLV Cons
Ownership in GLD/SLV does not equate to owning physical gold or physical silver
GLD/SLV have certain potential counterparty risks
Taking delivery of physical gold or silver bullion is out of reach for most investors
Potential for liquidity issues
In an economic or geopolitical crises, shares may not be exchangeable like physical metals
 
So these are the main points which you should keep in mind while making a wise decision.
I have some useful links which can be beneficial for you.
Links:
 
 
 

 

Andy54's picture
Andy54
Status: Member (Offline)
Joined: Feb 27 2017
Posts: 1
Gold IRA Storage

These accounts are definitely secure. According to this custodian comparison some companies are even offering offshore storage. 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments