Testing Gold: Electronic, Acid or Touchstone?

Any time you’re serious about buying gold, even if it’s from a trusted friend or family member, it’s important to determine three things. First, is it real gold? Second, is it pure gold or gold-plated? Third, what Karat gold is it? Testing is important because it determines the value of the piece. People may misremember where they got the item, or it may have been a gift the recipient assumed was real gold but isn’t. There’s also a possibility the person doesn’t think it’s as high quality as it actually is. To be fair to both yourself and the seller, always test every gold piece before buying. Here are your options.

Electronic Gold Testing

Electronic Gold Test

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Testing gold electronically is the newest method for determining purity. You’ll need an electronic circuit, testing plate and a bottle of testing acid, which are available in all-inclusive kits. Put a small scratch in the item before testing. The reason for scratching is to determine if the piece is solid gold, not just gold-plated.

Put an entire bottle of testing acid on the plate. Dip the gold item into the solution without touching the test plate. The advantage of the electronic method is you only need a single bottle of acid to test for Karats 9k to 24k. The disadvantage is you have to use a new bottle for every item you test.

Acid Gold Testing

Gold Acid Test

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Acid testing is the most common method, but its name is misleading because all methods require acid. You’ll need a bottle of test acid for each Karat (9k, 10k, 12k, 14k, 18k, 22k and 24k), a color matching chart (which usually comes with your acid) and something to scratch the gold item with, such as a pocket knife or file.

Scratch the gold (to make sure you’re testing underneath any possible plating) and begin with the lowest Karat acid. Apply the acid and compare the color it turns to the colors on your chart until you spot a match. Normally, real gold stains brown and imitation pieces turn green or bubble. After testing, wash the acid off with water and use a pencil eraser to buff off the stain.

Touchstone Gold Testing

Touchstone Gold Test

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Touchstones are usually made of finely textured glass, fieldstone or slate. You’ll need gold testing acid and actual gold sample pieces of each Karat, to compare the test item to.

Rub the test item across the touchstone and do the same with one of the sample pieces to make side by side marks. Apply testing acid to each mark until you get a match. Touchstone testing is best reserved for cases where you’re already sure the item is gold, but aren’t sure of the exact Karat.

A Word About Magnet Testing

Magnet Gold Testing

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Many websites and amateur testers recommend testing gold pieces with a magnet before you buy. However, this is a bad business practice if you’re serious about investing in gold. Magnets are drawn to fake gold and not to real gold, so it’s fine to use a magnet before performing a touchstone test. But never depend on a magnet test alone to price gold. Because you can’t be sure of its purity, there’s no way to offer a fair price. Test Karats using electronic, acid or touchstone methods.

Making a Profit from Buying Gold Jewelry

Gold is a symbol of wealth throughout the world, but many people don’t realize how easy it is to make big profits by simply buying and selling gold jewelry. The process is easier than most people believe.

Buying Gold to Resell

Buying Gold

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When you think about buying gold, expensive jewelry stores and gold dealers are probably the first sources that come to mind. When you buy gold at these places, there’s no way to make a profit by reselling it. Even dealers that offer gold pieces at wholesale cost charge too much for the average person to make money. The trick is to buy used gold or even scrap pieces from people who need the cash more than the items they’re selling.

There are several places to look. Some of the best sources include:

  • Estate sales
  • Garage sales
  • Craigslist
  • Private auctions

Jewelry and gold sold through these places is typically well below market value, so you can make a pretty profit when it’s done correctly.

How to Resell Gold

Resell Gold

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Buying gold at a low price is the first step to making a profit from this lucrative business. Many people consider that the easy part. Reselling gold jewelry isn’t difficult either when you know what you’re doing. There are lots of places that buy gold and accept scrap metals, ranging from pawn shops to internet businesses, but these are not the locations to sell to if you want the greatest returns. In fact, most of these buyers are simply middlemen making their own profit on your jewelry. Metal refineries are the key to making a real income from buying gold.

What Is a Gold Refinery?

Gold Refinery

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Refineries work with a variety of metals, including gold, silver, palladium, and alloy mixtures. The purpose of a refinery is to transform scrap metal, impure bars of metal, and other useless objects into pure bars for reuse. These establishments pay for the metals needed to complete the process based on the current market value and weight of the metals involved. The amount of profit made depends primarily on the weight and purity of the metal you sell.

How Gold Refining Works

Refining Gold

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The refining process removes impurities from metal to increase its value. To do this, refineries melt scrap gold and unwanted jewelry pieces in a large furnace. The refinery adds borax and soda ash to the hot mixture. This combination causes the pure gold to separate from less valuable types of metal, typically resulting in gold that is 99.9% pure. Silver, copper, and any other valuable metal derived from the refining process will add to your profits.

Determining Profits from Gold

Gold Profit

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Each refinery has their own payment system, but the basic process is generally the same. In most cases, the current market value of each metal, along with the weight and purity after refining, determines the amount. Of course, the refinery is also in business to make a profit so a percentage is typically deducted to cover the refining process. Purer gold tends to bring the best profits, as well as metals like platinum and palladium.

Making a profit from buying gold jewelry is much easier and lucrative than many people imagine, especially when you know a little more about the process.

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.

How to Invest for Your Child’s Future

Yes, your child might be able to get a scholarship and work his way through college, but wouldn’t it be a whole lot easier if you could help out? Even parents with limited incomes can help their kids. It just takes some planning from the beginning and knowing how to invest. Take a look at some ways you can invest in your child’s future.

Open a Savings Account

Savings Account

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The most common way you can invest money for your child is through a standard savings account. You can set it up to automatically withdraw a certain amount of money from your personal account each month. For instance, if you contribute $50 per month to your child’s account, he will have $10,800 by the time he turns 18. The more you contribute each month, the more money your child will have when he is old enough to go to college. Every little bit helps, so this is a good way to invest even if it is only $10 per month.

Switch to a Money Market Account

Money Market Account

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Money market accounts are better than standard savings accounts because they have a higher interest rate. The catch is that you have to maintain a minimum balance in order to open one. This means you’ll have to start with a standard savings account and switch over to a money market once the balance is high enough. $5,000 is typically the amount needed to open a money market account, but the rules are different at every banking institution.

Consider Gold Investment

Gold Investment

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Just like money, gold also fluctuates in value–though it tends to rise more than money does. This means you can purchase gold as an investment and watch the value increase. Gold is one commodity that has continued to rise in value throughout history. It is still a fairly safe investment today. One great thing about gold is that you have something tangible that can’t be destroyed overnight by the stock market or a banking breach.

Open Mutual Funds or Bonds

Mutual Funds

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These are typically known as the safest investments because the likelihood of losing money is far lower than in the stock market. However, there are a lot of rules and stipulations placed on mutual funds and bonds that prevent you from withdrawing money whenever you want. The mutual funds and bonds usually have to mature before you can get to the money. Keep this in mind when investing for your child’s future because you want to make sure the money will be available when you need it. Also remember that the bonds that take longer to mature usually have better interest rates.

Play the Stock Market

Stock Market

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One of the fastest ways to make money is through trading stocks — it is also the fastest way to lose money. If you are willing to take the risk, find a stock broker to help you out, especially when you are new to this type of investment. The stock broker will be able to lead you toward smart stocks that are more likely to pay off.

Even if you only make a little extra money each month, you should invest it for your child’s future. All parents want to see their child get through school and be successful, and you can make this easier by providing money upfront to get your child started. Pick the method that fits your goals the best and get started today. Do you have any other ideas for investing in your child’s future?