Quote:
Originally Posted by ElDiabloJoe
I got a cousin with a beachfront SoCal house and sold his business for $50M, so you'd hope he'd know a bit about money.
He was always encouraging me to buy gold and stash it in the Ol' Gun Safe. Of course, let's say gold is $1000/ounce (hypothetical), and I go to the local "Gold R Us" store in Newport Beach. I want 5 Krugerrands at $1000 each.
Wellllll, you'd think that's $5000, but add in the average fee of 4% and I'm at $5200. Then when I go to sell back my $5000 in gold that really cost me $5200, I have to pay a commission fee of 5%.
So I'm selling $5200 of "investment" and only getting back $4,750. So, unless gold went up substantially, I'm eating $450 of lost cost associated with my $5K in gold coins.
No thanks.
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There are ways to minimize the spread on buy/sell/spot. It can be done for a lot less than 9%. There are also pesky storage fees if you don't have a gun safe or don't want to risk home storage. I find that the easiest way to avoid all of these detractors is to use a gold ETF. GDLM has an expense ratio of 0.10% and is very liquid. Yes, I am aware of the drawbacks of paper gold vs tangible, but I am of the opinion that if it ever gets that bad, it won't matter.