How Much of Your Money to Invest in Buying Gold

If you’re looking to invest your money into something that you can see results from, try investing in gold. The value of gold continues to increase, and investing in it allows you to make profits rather than lose them. But how much should you invest in gold? This is a decision you’ll need to make when you start.

Determine Your Skill Level

Gold Skill Level

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Before deciding how much to begin investing in gold, think about your skill level. Have you made investments before? Are you familiar with keeping track of the price of commodities? Are you good with numbers? Can you invest the time into tracking daily, perhaps hourly, changes in rate? Once you’ve determined how much knowledge you have in investing, you can make a smart decision about how much money to invest in buying gold.

How Much Income do You Make?

Gold Income

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Your annual income should also be a major factor in determining how much money to invest in gold. You don’t want to use all of your profits on your investment because you don’t know how long the turn-around will be before you start earning money off it. You need to make sure you keep enough of your income to pay your bills and do other things you want in your life. Create a budget and use it to determine how much of your income you can set aside for your investment.

How Much is in Your Savings?

Gold Savings

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If you have savings set aside, you may wish to use a percentage of it to start your investment. Some investors recommend investing 25% of your savings in one area, splitting your income up into three separate investments, and keeping the remaining 25% in your savings. As your savings increase, the amount you’re investing will increase too.

How Often Should You Invest?

Investing in Gold

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Now that you’ve determined how much to invest, you need to decide how often you’re going to invest it. Will you invest your 25% every month, every other month, every six months? There’s no such thing as “investing too much,” but you do want to make sure you’re not investing more than you can handle. Create an investment strategy and budget for yourself so you know exactly how much you’re investing over time, and how often. This will help you determine how often you can invest the allotted amount of money.

Making Adjustments

Adjusting Investments

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Once you’ve begun investing a set amount of your income at certain intervals, you’ll start to see if your investment strategy and budget are working for you. If they’re not, make the necessary adjustments and continue to keep track of it. You may wish to increase or decrease the amount you’re investing and how often you’re investing depending on the amount of profit you’re making in return.

Reinvesting Your Profits

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Once you’ve begun to make profits from selling gold, you’ll want to determine whether or not to reinvest them. Reinvesting puts your profits to work for you, allowing you to invest more if you wish. But you’re also losing the extra income you may have wanted to earn from the profits. Whether you reinvest or not is a personal decision that only you can make.

You now have the tools you need to invest in gold wisely. Keep track, and make sure you’re not investing more than you can handle.

Reasons to Buy Physical Gold Instead of ETFs

Are you looking for something to invest your money in that will see great returns? Gold is a wise choice, as its value keeps increasing. One way to invest in gold is through Exchange-traded funds (ETFs). But for your best investment opportunity, investing in physical gold is better than ETFs.

What are ETFs?

Gold ETF

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Exchange-traded funds (ETFs) are investment companies that don’t sell individual shares directly to investors, but rather issue their shares in large blocks known as “creation units,” such as a unit of gold. After purchasing this creation unit, the investor splits it up and sells the individual sales on a secondary market, allowing other investors to purchase individual shares. These investors can then either sell their creation units to other sellers on the secondary market or sell the creation units back to the ETF. Depending on the amount of time it takes to make these trades, and how many units are being traded, ETF investments can fluctuate. They are not the best investment opportunity on the market today. A better option for investing in gold during such fluctuating times on the market is purchasing it directly.

Why Gold?

Why Gold

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As opposed to stocks, gold is something tangible that can be bought, sold, traded, or held onto, depending on the individual’s needs. If you have a lot of gold jewelry sitting around, for example, you can hold on to it for sentimental value, wear it, sell it, or hold on to it to sell in the future, when the rate of gold may increase. Additionally, you can have gold jewelry valued. If it pure or close to pure, it could be worth having it refined and turned into gold bars.
Unlike ETFs, holding on to your gold is not a risk. Even if you don’t sell it in the end, it’s still your jewelry to wear or pass on to others. Gold is also more likely to increase in value over time rather than decrease. Gold is also frequently in high demand, so there is little risk when investing in it.

Why Avoid Gold ETFs?

Avoid Gold ETF

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The fluctuating stock market is not the only reason to consider trading physical gold rather than gold ETFs. When investing in ETFs, there are other fees you have to pay, including taxes, management fees, sponsor fees, and marketing fees.

How to Determine the Price of Gold

Determine Gold Price

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If you’re considering selling your gold, you’ll want to know how much you can realistically sell it for. Gold may be a safe investment, but it does still fluctuate in price. To best determine how much to price your gold for before selling it, you’ll want to consult a gold price annual change chart. These charts tell you what the cost of gold was in several areas of the world over a period of several years. It will help you decide the best price to sell your gold for and the profits you can reasonably expect to receive.

Where to Sell Your Gold

Sell Gold

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Companies that advertise on TV may be a convenient way to sell your unwanted jewelry, but they may not be the best places to trade the gold you’ve been collecting for investments. Make sure you research several different companies before determining which one to sell your gold to when the time is right. Educate yourself, and do your shopping in person.

Investing in physical gold rather than ETFs can be a wise decision. Do your research, and make sure you get the most out of your investment.