As a future retiree, it’s your job to decide the best course of action when investing for your retirement future. Like most people, you intend to live comfortable and secure in your golden years. But, choosing the right investments now while you’re young is the only way to secure a bright and healthy financial future.
Will you invest in the very popular gold ETF? Or how about investing in a gold IRA? Which is the superior choice?
To help you decide, we’ll took thoroughly at both options and present our opinions. Whether you choose to invest in a gold ETF or a precious metals IRA is up to you. Just know that one investment vehicle is far superior to the other and we’ll shed some light on this topic right now.
The Gold ETF: An Investment Wrought with Hidden Dangers
Although gold ETFs are incredibly popular right now, this investment vehicle doesn’t hold a candle to the gold IRA as far as long-term retirement investment strategies are concerned.
Sure, if you happen to get lucky and time the market correctly, you could quickly buy and sell gold ETF shares and make a couple of bucks. But as far as long-term investments go, this choice is dangerous and it could seriously damage your financial future.
Plus, ETFs work differently than typical stock investments. The most popular ETF in this space is GLD. Did you know that GLD trades at three times the market value of physical gold? This means that your investment is going to move three times as fast.
So, if things are going great you’re going to make three times more on your investment. But if gold happens to slip in value, you’ll lose three times your investment because of the volatile nature of the investment. You could potentially lose a large chunk of your investment quickly if you aren’t paying attention.
And another thing, let’s say you own 1000 shares of GLD and you want to take physical delivery of the gold currently backing the shares. Guess what? You have to own 100,000 shares or more to be eligible to receive physical delivery. So ultimately, unless you have a monstrous amount of GLD shares, you basically own numbers on a computer screen, or paper stock certificates at best.
Last but certainly not least, the value of GLD slowly erodes over time. Why? It erodes to compensate the ETF managers. They charge their shareholders an annual fee of 0.4% to compensate the managers of the ETF.
Although it’s a relatively slow moving process, it still reduces the amount of available gold ounces in the fund, which makes ETF investing an inefficient vehicle. Instead, take some time to learn about investing in a gold IRA. And remember to choose your custodian wisely, because it could mean the difference between a positive or negative experience and we want you to be healthy, wealthy, and wise.
The Gold IRA: A Superior Retirement Investment Vehicle
A self-directed gold IRA is the best option for investing in precious metals. Owning physical gold means you own a tangible physical asset that you can hold in the palm of your hand. It isn’t going to disappear on you anytime soon unless you lose it, and the overall value remains stable while heading in a positive upward direction.
For starters, one of the biggest benefits of owning physical gold is that it’s an actual form of currency accepted throughout the world. So, if turmoil strikes out of nowhere and the world suddenly begins to experience major unrest and upheaval, your physical gold will take you a heck of a lot further than a useless paper investment backed by a government that may or may not exist any longer.
Next, gold is portable and liquid. If you ever need to sell any of your gold in a pinch, you can put it in your pocket and physically hand-deliver it to your buyer.
It’s also a highly liquid asset. What does this mean? Simply put, it means that gold bullion dealers all over the world will recognize your gold investment. They will have no problem buying it from you at market value.
It’s very easy to sell gold if you feel so inclined. You can go to a pawn shop, a local coin shop, or even sell it to an online dealer or maybe even a private party. You can use it to trade for goods or sell it for cash. It’s also an investment that’s easily transferable to other currencies if that’s what you desire.
Third, it’s very simple to store precious metals and the costs are minimal at best. After you discover a top-quality precious metals custodian like the one we recommend, you’ll only have to pay minimal vaulting charges and custodian fees. They will even pay for your first year’s fees for free.
A fourth reason for opening a gold IRA is you do not need specialized knowledge or expertise to buy gold. This alone makes this investment an excellent choice.
Think about other investment types like baseball cards, stamps, or buying diamonds. Each one of these areas requires specialized knowledge and skills in order to make money as a collector.
Buying gold, on the other hand, could require specialized knowledge if you approach it as a collector. But as an investor, none of this is needed or necessary.
You aren’t speculating as to whether or not a particular rare coin will rise in value. The gold itself is the valuable asset whether it was minted yesterday, today, or hundreds of years ago.
The Gold ETF vs. The Gold IRA: Final Thoughts
Future retirees like you recognize the value of investing in precious metals for their retirement. But they’ve struggled to determine the best investment vehicle for some time now.
We know that investing in a gold ETF for the long-term isn’t the best strategy. The investment erodes over time, it’s incredibly volatile and dangerous, and you need a humongous investment of 100,000 shares or more to obtain physical delivery of the precious metal.
On the other hand, we’ve learned that precious metals IRA investing is the far superior choice. When buying gold, you are literally buying a physical asset that acts as an accepted currency all around the world. It’s a highly liquid asset so it’s easy to sell, it doesn’t require any special knowledge or skills to purchase unless you’re a collector, and the storage and custodial fees are minimal at best.
Hands down, investing in a self-directed gold IRA is the clear winner. So do yourself a favor and spend some time learning about precious metals IRA investing.
Even more important, make sure you choose a gold IRA custodian that you can trust. By putting this knowledge to work, you’ll create a secure and bright retirement future for you and your loved ones.
Do you have any questions on how the gold IRA is a superior choice to the gold ETF? Ask below!
Awesome post. I couldn’t agree more with your views. I have started investing in gold lately, so far I’ve been investing only in mutual funds.
Your analysis is well detailed and complete in all sense. I’ve noticed that banks are offering good deal of gold. Can you suggest to buy gold from banks? Let me know your views.
Thanks a lot for sharing this useful post.
Hello Akshay! The gold that you buy from the banks is most likely stocks. I don’t know of banks that actually sell physical gold. That is why we have a gold IRA in the first place. It acts almost like a bank because you can convert your gold bullion into cash at any time (at least with a good gold IRA custodian). As written in the article, I don’t recommend investing in gold in any other form than in an IRA. Paper assets are too risky and so is holding gold yourself physically. It’s best to leave it to the experts. Thank you for the dropping by with the question and feedback, Akshay!
There is no doubt that the best choice among the two is Gold IRA. Now Indon’t know anything about gold investments. I’m just lucky that you taught me through this article the difference and the better choice among the two.
My folks were saying just recently that gold jewelries are better investments than forex exchange and dollar stocks because it’s value is always increasing. It may not have something to do with your post but what I’m saying is that I understood better the value of gold at hand.
Thank you for this advice. I pray to God that I may be able to do this wise investment in the future. Have a nice day!
Hello MissusB! Indeed, your parents are correct that investing in gold jewelry or any type of physical gold is better than stocks because of the volatility of the stock market and the uncertainty of any fiat currency, especially the U.S. dollar. I will also pray for you that you are able to do this wise investment in the future! Thank you for dropping by!
Really enjoyed this article, it certainly makes a lot of common sense, boiled down it is liquidity, or a physical holding over a piece of paper. To me if you have something that is tangible it can be sold at the current market price, where as a paper holding as you righty say is very volatile.
Was only thinking the other day that some forty years ago I was offered a number of Kugerands but could not afford the asking price, at today’s prices I would now have quite nice investment.
A most interesting and well thought out article. Many thanks.
Stuart
Hello Stuart and thank you for sharing your experience with us! Unfortunately the Kugerand is not an IRA-approved coin so you wouldn’t be able to hold it for your retirement but if you hold gold personally then perhaps that’s another story. We are not the biggest proponents of holding gold yourself, but rather with an IRA – it’s much safer and convenient. Thank you for dropping by and sharing your feedback, Stuart!
Hi, Davis.
Thanks for explaining the difference between the Gold ETF and Gold IRA.
I have many shares of Gold ETF as suggested by the Financial Advisor of my company, where I work, but I need to rethink on my strategy after going through your article.
You correctly said, Gold in physical form is always having instant liquidity, but to keep it safe is a challenge. Being in another country, what arrangement you make to provide custodian services in this regard?
Warm Regards,
Gaurav Gaur
Hi Gaurav! The gold IRA companies we recommend are for US residents, but I highly suggest you work with the one we recommend most – Regal Assets. You can call them and see if they are willing to work with you to hold your physical gold for retirement. They will store your physical gold at a depository location of your choosing with Brinks depository. I hope everything works out!
I plan to retire soon and the thought that I might have invested in the wrong option freaks me out. I don’t live in the US so in my country retirement isn’t that scary, since you also receive some fees from the government, depending on where you’ve been working. But still, investments are necessary because the fees we receive aren’t high enough to live as you used to.
I’m pretty sorry I never thought about investing in gold IRA. I actually heard about this option some years ago, but I didn’t know too much about it, so I just forgot about it soon enough. Now that I look back, it would have been a good decision. But I still have some money left so I plan to invest them in physical gold. What about silver, do you think it’s a good investment right now?
Hello Heather! Silver is also a very good investment. Our #1 recommended IRA company has a free PDF guide for precious metals investors particularly interested in silver. You can read the pdf here! I’m glad you dropped by with your question!
I always tried to avoid investing in shares and things that you can’t actually see. I know they are a golden mine for some people, but as long as I’m not familiar with them, I think it’s better to stay away. On the other hand, investing in physical products seems a better investment to me, especially when it comes to gold. I personally wouldn’t invest in gold shares, but it’s each person’s own choice.
I checked out your suggestions on investing in gold IRA and the best companies to choose. Regal Assets was the one that caught my eye, since it has no complaints in the last years. But do you think it’s a good choice for someone who doesn’t want to invest a lot of money? Let’s say a beginner, as I am.
Hi Ashley! Thank you for your feedback on my article and for sharing your own investing experience with us. Regal Assets is the best company for anybody. If you want to transfer or rollover your retirement plan, you only need to invest a minimum of $10,000 and the minimum for direct cash deposit is $5,000. The customer service representatives will take care of everything else for you! I hope you do make a good decision to diversify your portfolio. Thank you for dropping by!
What has always attracted me more to gold is its ability to hold value over investments that are backed with trust that the paper currency will hold up, but inflation will naturally devalue paper money, or so that’s what I was told before. Something else I love about gold is what you mentioned as well, is that it can be accepted anywhere, anytime, whereas the dollar may or may not be accepted in time. I’m only 28, so my entire ordeal, thinking a few decades ahead, is whether the US dollar as we know it today will still be around in any decent form.
Hello Todd and I am glad we agree on all the points you just mentioned. It only rises in value as time goes by and it will be accepted anywhere in the world, whereas a currency will only last the duration of the country’s lifetime. Nobody knows what will happen to the dollar eventually, but gold has lasted longer and is foreseen to last longer than the dollar as well. Thank you again for dropping by with your feedback, Todd!