First-time gold buyer, please offer advice!

I have posted a blog titled "On Gold and the Origin of Money" at www.dailypaul.com/node/58... which you guys may be interested in commenting on.

I challenge Ron Paul's claim that gold has intrinsic value.

Legal Tender in the case of U.S. law does not restrict the use of gold of silver coins for payment. There has never been a demonitization of the silver and gold coins here in the U.S. They can still be legally traded. In fact Legal Tender law applies only in the case of debt. For example if China owed the U.S. government a billion dollars, the U.S. government would have to allow them to pay their debt with FRN as they are considered Legal Tender. China therefore cannot require that the U.S. exchange their FRN's for goods or service unless debt is owed by the Chinese government to the U.S. government. There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.

First paycheck? I would suggest you make sure you pay off all your debt first. Once that is done. Get in the habit of tearing up credit card offers from the mail. Don't take student loans, there is no rush to get through school, take your time and work your way through. Good to set up a list of personal priorities. My personal list happens to go as such.
God (Do good with your money. I don't mean giving to institutional churches that ask for your money, volunteer your time to orphans and widows!)
Family (Pay rent to your parents rather than strangers.)
Land (Regardless of it's monetary value, you can always plant a garden and remember big houses mean more work.)
Food (Buy when low to get you through inflationary periods.)
Water (Rain is free, but caution if you live next to an industrial area)
Silver (Start buying in small units that you can barter with for local goods and services.)
Gold (This is the place to store "extra wealth", buy to invest and never trade for paper, good to have small units that can be easily traded, when you have enough you can buy the land you need.)
grant

First paycheck? I would suggest you make sure you pay off all your debt first. Once that is done. Get in the habit of tearing up credit card offers from the mail. Don't take student loans, there is no rush to get through school, take your time and work your way through. Good to set up a list of personal priorities. My personal list happens to go as such.
God (Do good with your money. I don't mean giving to institutional churches that ask for your money, volunteer your time to orphans and widows!)
Family (Pay rent to your parents rather than strangers.)
Land (Regardless of it's monetary value, you can always plant a garden and remember big houses mean more work.)
Food (Buy when low to get you through inflationary periods.)
Water (Rain is free, but caution if you live next to an industrial area)
Silver (Start buying in small units that you can barter with for local goods and services.)
Gold (This is the place to store "extra wealth", buy to invest and never trade for paper, good to have small units that can be easily traded, when you have enough you can buy the land you need.)
grant

I don't know your personal interests but if you want to get finances out of the way for the rest of your life, take a simple disciplined approach and you'll be able to do anything you want.

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You'll be the one giving advice.

If you want gold or silver it won't matter what the price is. You'll have the money to buy whatever you want whenever you want.

"Committed To The Eradication Of Poverty Among Patriots"

Premiums on American Eagles are too high, especially in the smaller denominations.

Buy "junk" silver first. Preferably Gold Sovereigns next. They are .2354 oz. content but same 22kt composition as Eagles. Another option is 90% Swiss or French 20 franc coins at .1867 oz.

If you can find them locally, great for anonymity. But you will probably find better prices at www.apmex.com Premiums on the above typically run well under 5%

Brazilian government just announced it would be purchasing more U.S. dollars to hedge against falling commodity prices. the dollar is obviously being manipulated to go higher. If it is taken off the market by central bankers around the world and then deposited at the Federal Reserve, then dollars become more attractive on the market. This has to do with the fact that exports from Brazil are still based on the price in dollars.
grant

First take care of other business.

1. If you have any debts that carry high or adjustable interest rates, pay them off.

2. Buy a supply of food, bottled water, batteries, etc., for emergencies. Keep some US cash in a coffee can, for the same reason. Yeah, it will lose value to inflation, but that can't be helped.

3. Consider buying clothes and other necessities that are cheap now. Clothes from China and so forth are getting more expensive.

When you are ready to buy gold, follow Burt Blumert's advice:

http://www.lewrockwell.co...

Whatever you decide to do wrt gold, make sure you know exactly what you are getting for your money. Not to disparage your investment acumen or anything, but I suspect the gold market is at least efficient (economically) enough that an 18 year old first time buyer is unlikely to trade with much of an edge. So, statistically, your return will depend primarily on the commission / markup you are being charged by the dealer.

Make sure you know the quoted spot price for the metal you are interested in buying, the purity you are buying and the weight you are getting. Then don’t pay more than a few percent in total commission on the sale. If the dealer has a fixed fee, try to save up to buy in quantities large enough to amortize that fee over a fair amount of metal. Or get together with other buyers and buy a larger quantity. Perhaps a DP group buy or something. If a substantial amount of your transaction is fees and markup, you are likely getting a raw deal.

Also, as I have mentioned before, if you are buying to hedge against a nasty downturn, buy bullion, not collectible or numismatic stuff. Unless you think buying a stamp collection to protect yourself against an economic collapse is a good idea. Again, never pay more than a few percent over quoted spot, and make sure what you buy is either pure, or is properly discounted for actual gold content. If you’re going to buy gold as an investment, make sure you are paying for gold, not cheaper alloyed metals, ‘historic value’ or dealer commissions.

To the goldbugs who spend to much time on www.thebulliondesk.com, goldinfo.com or other similar sites.

Well, I don't know how to explain to you but the guys on those sites are SELLING GOLD or SILVER...so don't expect to get to much negative news from them regarding the future of metals, ok ?
Sites like prisonplanet.com are making money from advertising, they have interest to put out there bombastic stories about gold going up and dollar down so you will click the sponsors and some of you even buying...
Now everything indicates that metals will go up...but eventually they will go down and most of you will lose...hopefully you will learn a lesson from this.

Second, 20 years ago you could get a home for $25.000 (65 ounces of gold)and sell it today for $400.000. So please help me out and explain me how those 65 ounces of gold of 1985 will get me the same a house today , since the goldbugs are saying that gold keeps intact the buying power.

The point is , even over a long period of time, there are better investements then gold. Two months ago a swiss bank (I don't remember the name) sold alot of it's gold reserve (the price was around $880 an ounce)... with this being said my advice is to sell the metals and buy them back later cause the price will go down big time.

To the young guys...this goldfever maybe is new news for you, but ask some older (smart) guys about it and they will tell you that investing in gold is gambling, be sure you can afford to lose because it can happen very quick. Gold lost over 100 bucks an ounce in the last 10 days but the goldbugs are still optimistic...ha, speaking about being stupid ! They are living in denial, even if it goes down to 300 an ounce they will keep saying "it will go up, gold has the same value". Yeah, sure...see how much value gold has after you buy it and it goes down 20% in one week.

Great Post!

I've been wondering the same things.... with all this new information and possible risks ahead I've been wondering the same thing... I'm only 19 years old, so I've been wondering if I should try and invest in gold/silver, etc.

Although, after reading the advice on here, I think I'm leaning towards those who say "don't worry about it."

I don't know about you, but I'm in college... and with tuition nowadays (or maybe it's just my school), I'm already nearly $55,000 in debt for this year, plus another $45,000 from last year from student loans... and the loans I got for this year, well, let's just say I didn't budget extra loan funds in order to buy gold and silver... I got enough to pay for living expenses and tuition....

So, considering that, and the fact that I'm basically in debt and really have nothing to protect at the moment (which is all gold is really good for, just protecting/backing up what you already have.... not necessarily building wealth, at least not from what I understand), I think I may just risk it... at least until we see if things get worse....

I guess I'm just going to stick with the original plan of investing in myself with a college education, rather than investing with gold... because without the education it'll be harder to have anything else in the future (besides, it might offer some protection if the draft is reinstated).

yes. I can. as an 18 year old your number one asset is you. not gold, not your money, not some girl, not a fancy car with shiny rims, or looking cool.

invest in you.

you need to spend your money on making sure your ass(et) becomes smarter, healthier, more useful, faster, quicker, better.

if you aren't going to college, then you better start reading books. lots of them. also better start learning a trade. by the time you are 25, you better know how to do things. be good at several things.

don't drink, don't smoke, don't party your money away, don't eat fast food. read a-lot. drink water. exercise.

there are countless things that as a young person you should be doing.

if you aren't doing those things, then it doesn't what small quantity of gold you can cobble together won't matter because there are far more important things you have to do before you get to the storing of wealth stage.

when you're young and strong, use that to make yourself better.

later, when you're not as young and not as strong, you can work smarter, and you'll know things, and be able to earn far more.

you still be educating yourself in the middle years, and you'll be able to save some decent income, and then will be a good time to look at tangible assets.

when you're old and frail, then all you have left is your mind, and your ability to see thing coming far in advance.

p.s. if you really want some gold, don't deprive yourself...buy a few small pieces, just know that it'll mostly be symbolic. All the real investment early on, is in yourself.

pss your better off with silver. google for the 10 commandments of gold and silver buying. silver first. then gold.

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You'll know for yourself.

"PunJab! Bring me my checkbook!"

silver coins? Junk silver coins? Gold?

the value of a ron paul $20 silver coin?

Buy Silver if you want to use it for everyday exchanges. Buy Gold/Diamonds as a store of wealth and for major purchases. I know a Cuban family that smuggled their wealth out using diamonds in their shoes. This latest pull back in Gold/Silver is a gift sent from God. We've got the opportunity to exchange depreciating currency for real money. I just hope it keeps going down so that I can buy more at lower prices before it starts up again. It may follow the 70's and pull back another 30 percent from here, but time will tell. The only thing for sure is that paper currency always goes to zero while precious metals maintain value.