Not knowing exactly what you're doing when investing hard-earned money can be somewhat intimidating. This means that it can pay off in both peace of mind and good financial decision-making to research investment options before jumping in head-first.
Lately, I've been interested in adding a little physical silver to my investment portfolio. But walking into a coin or pawn shop to buy physical metals as an investment feeling unsure about what to do or buy can be somewhat intimidating and leave a buyer making a poor purchase. Whether it's gold, silver or collectible coins, it's important to be informed about these metals and possible issues that could arise when purchasing them.
Here are a few of the things that I've tried to do to better information myself on how to buy physical metals.
Do Some Research First
I've found that it's critical to my making informed decisions about buying metals to be properly educated in the market. Understand things like pricing, different metal weights (e.g. ounces versus troy ounces), the best locations to buy and sell (coin shops, pawn shops, banks, online), commission rates, and similar information can keep me from making potentially costly mistakes when I'm interested in buying or selling physical metals.
Shop Around and Read Reviews
Whether looking online or at a physical location, I don't just jump at the first metal buying opportunity that comes along. I want to make sure that if I'm going to purchase something like silver coins, that the person or place that I'm buying from is reputable. With an actual location, this might include reading reviews or talking with the owner or operator in person to get to know him. Otherwise, with an online site, I might first look at ratings and reviews of the person or operation selling metals and also do an online search and investigate the history of the operation in question.
Build a Relationship
Beyond just knowing about the seller though, if I'm in an actual physical setting, I like to try to build a relationship of some sort with the seller. This way there is more than just a customer/seller relationship, and I can work toward building some trust with the seller.
For example, if a seller knows that I could be repeat business, he might be more apt to work with me on pricing and give me better deals. He also might be more open and willing to accept various buying options or deals that he might not do with those he doesn't know as well.
Having a relationship with a seller can also make me feel more comfortable asking questions. Whether it's about weight, price, resale, quantity, or quality, feeling able to ask questions can alleviate some of the stress, strain and pressure of buying metals. Being uninformed when it comes to buying physical metals can be costly and result in expensive errors.
Know how to Convert to Cash
But just because it's easy to buy metal for a certain price doesn't necessarily mean that it's easy to sell at a certain price. Having an understanding of how to re-convert coins to cash, and what it might cost to do so, can make a big difference when it comes time to sell. Whether it's taking them into a coin shop, a pawn shop, a cash for gold/silver-style shop, or reselling it online, understanding things like commission rates, tax implications, and other possible fees involved in the transaction can help me find the best deal for such conversions and keep more of my money.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.