Are you thinking about buying gold and silver soon? Many people see the value of these precious metals increasing and they want to get in on the action. While there’s absolutely nothing wrong with this train of thought, you need to slow down for a minute.
Is walking into a jewelry shop the best way to buy gold or silver? How about a coin collectors’ storefront? Honestly, if you’re looking to buy gold and silver investments, these are two of the worst ways to get started.
Today, I’d like to tell you about the one and only way that I ever use to buy silver and gold. It’s the surefire way to maximize your investment and capitalize on tax benefits at the same time.
What am I talking about? I’m talking about opening a precious metals IRA. I’m talking about maximizing the best way to buy gold and silver. And more than anything, I want you to experience the same benefits that I do with my silver IRA.
Why is investing through a precious metals IRA the best way to buy gold and silver? I’ll tell you all about it in a moment so keep reading to find out more.
Opening a Gold IRA Provides Access to Major Tax Advantages
Most people don’t know this, but buying gold and silver in a precious metals IRA provides major tax benefits. In this account, you’ll either gain access to tax-deferred or tax-free investing depending on how you set it up.
Yes, it’s true. In their infinite wisdom, the IRS decided to help the American people save money on taxes. This rare opportunity never really comes along so it’s in your best interest to make the most of this benefit.
They decided that the American people should gain access to tax-free or tax-deferred investments. Which benefit you choose is up to you. You’ll determine this by the IRA account that you open.
Your options include:
Traditional Self-Directed IRA
If you open a traditional self-directed IRA you gain access to tax-deferred benefits. Ultimately, everything contributed to this account during a particular tax year isn’t looked at as income. It only becomes income when you take distributions starting at 59 ½ years old.
This benefit is huge because it allows you to lower your annual gross adjusted income. As an example, let’s say you earn $65,000 in taxable income during the year. But instead of depositing all of this money directly into your checking account, you deposit $6000 into your IRA.
Immediately, this $6000 is no longer considered income in the particular tax year that you happen to be in. So, you no longer made $65,000 that year. You actually made $59,000 in taxable income because the $6000 doesn’t count any longer.
Do you see how beneficial this can be to growing your retirement wealth? You can invest money typically paid to the IRS to grow your retirement wealth. All they ask is that you pay them back later on in the future when you reach distribution age.
I don’t know about you, but I think this is totally awesome. This is particularly great for people who do not earn lots of extra money. Most of this money would have went to the IRS to pay your taxes. So, it’s almost like growing your retirement account with free money that you wouldn’t have actually had anyway.
Roth Self-Directed IRA
In truth, buying gold and silver in a Roth self-directed IRA definitely has its perks as well. In this particular case, you are funding the account with money that was already taxed.
You may be thinking, “What’s the big deal then? It doesn’t sound like a major benefit?”
Oh, ye have little faith my friend. The benefit is truly incredible and it almost seems too good to be true.
Here’s the deal:
Everything earned in a Roth self-directed IRA account is yours to keep as long as you follow the rules. The rules state that you cannot take distributions in this account until you reach 59 ½ years old. If you take distributions at an earlier age you will pay taxes and you will pay a 10% penalty too.
As you can undoubtedly tell, it’s definitely in your best interest to keep your money invested in this account. Keep it here until you reach 59 ½ years old. Otherwise the tremendous advantage goes right out the window.
As an example, let’s say you deposit $100,000 into this account over the course of 20 years. During this time, your account grows tremendously because the value of gold and silver keeps increasing. The account is now worth more than $400,000, which is a tremendous windfall for many people.
Guess what? Every single penny earned in this account is yours to keep. You get to spend this money during your retirement however you see fit.
Do you want to go on vacation with your spouse or significant other 2-3 times per year? You certainly have the option now that you’re old enough to access this money without paying penalties.
Do you want to pay for your grandchild to go to state college? You can afford it. And you won’t even have to pay taxes on these distributions because of the way you set up the account.
Do yourself a favor and begin investing in silver and gold right away. Read my review of the top gold IRA companies in business right now. It will help you choose the perfect company to meet your needs.
Other Ways to Buy Gold and Silver That You Should Avoid like the Plague
Now that you understand the major tax benefits of opening a precious metals IRA, it’s time to consider other options. And when I say consider these options, I mean you should consider avoiding them at all costs.
These methods do not provide any advantages at all. And some of them are downright dangerous and hazardous to your wealth.
The biggest areas to avoid because they are far from the best way to buy gold and silver include:
Do Not Buy Gold and Silver from Online Classified Ad Sites
You’d be surprised to learn how many people get ripped off buying cheap gold and silver on classified ad sites. It happens every day and I’m personally sick and tired of seeing it happen all the time.
You have no protection from predators looking to take advantage of people on these websites. They want you to send them money through PayPal or other online payment processors before you even get the goods.
They could ship fake gold, fake silver, or nothing at all to your house after you’ve already paid them. Do you think Craigslist is going to help you? Or do you think another classified ad site will step up to protect you?
Absolutely not! These companies do not take responsibility for your actions. If you get ripped off on their website, oh well, that’s your fault. It has nothing to do with them and they shouldn’t have to pay for your mistakes.
Do Not Buy Gold and Silver from Coin Collectors
Do you know that many collectible silver and gold coins sell for a serious premium? These coins possess value, and I use that term loosely, because they’re rare or in demand.
You’ll pay a lot more to buy these collectible coins. Why? Because of outside forces beyond your control other than the value of the silver or gold.
Here’s the worst part:
You have no way to determine the true value of these coins. Just because some investor tells you that a coin is valuable because of its rarity doesn’t mean it’s actually true.
You could end up paying thousands of dollars more for a coin than it’s actually worth. When you attempt to sell it for a profit, you may not unload it for a fraction of what you paid.
Do you see how foolish this could be? Avoid buying silver and gold this way at all costs because it’s a huge mistake.
Do Not Buy Gold and Silver from Your Local Jewelry Store
Similar to collectible coins, buying actual gold and silver jewelry isn’t a good way to invest your hard-earned money. These pieces are valued by their design, the work put into creating them, and other aspects. They are not valued strictly by their gold and silver content.
What does this mean? It means that if you purchase gold and silver jewelry, you’re going to pay a premium above the actual value of the precious metals. And it means that you may not easily sell it for a higher price in the future.
So, do yourself a favor and avoid buying from local jewelry stores if you’re purchasing precious metal as an investor.
Clearly, the best way to buy gold and silver is in a precious metals IRA. We learned about the exciting tax advantages that make this investment completely worthwhile. We also learned about a few ways to never buy silver and gold. I hope you take this message to heart and begin investing in a silver IRA sooner rather than later.
To get started, please read my review of the best gold IRA companies in existence right now. This information will help you choose the ideal company to meet your investment needs for many years to come.