Today marks my fourth Gold Question in the last four weeks. I'm so
excited to be answering the amazing questions that you are sending in. Just last week, I wrote all about the
Value of Tarnished Silver Coins. Today,
I'm thrilled to answer a very special question. One Gold Why reader is ready to buy his very first gold coin, and he
faces a dilemma. It's a classical question, one that all of us gold investors face at one time or another (I know I
face this one all the time). Let's jump into the question...
©iStockphoto.com – IVV79
Question: Hey, thanks for getting to my question, i know you are busy and get tons of (fan?) mail. Anyway,
my question to you is this. i am 15 and just had a part time summer job babysitting and i have a little over 700$. well,
my original plan was to just have 500 in a secret spot in my room and keep 200 as spending money, but after some looking
around i've found that i might as well invest the 500. i've always been interested in gold, i used to play a trading card
game that brought me to the local coin store quite often (they sold cards as well) and one day the store owner started
talking to me about gold bullion. this was about 2-3 years ago, in 2008. back then i had enough money to get a quarter
of an oz, and im still kicking myself for not investing back then. My question is, do you think that buying anything other
than a 1 oz isn't good for my first gold investment? with 500$, i can BARELY afford 1/4 an ounce. i mean i might put 50 more
into it if i really have to. So, buy a 1/4 ounce, maybe some silver or copper instead? my worry is that if i wait until i have
enough saved up for a 1 oz coin, the price will have risen even more! it is about 1800 something per troy ounce today, at
least that's what i've seen looking around. i'm not an expert. Thanks for the reply, it really means a lot!
Answer: Thanks so much for the question, I really like this one and feel like I have a lot of valuable
perspective to share on it. Recently, I wrote an article about
Buying Your First Gold Coin. You'll definitely
want to check that article out as background. However, today's question is slightly different so I'm going to offer some unique
perspectives. First, two cool side notes. 1) I can totally relate to your urge to stash your money in a secret hiding spot.
I personally Hoard One and Five Dollar Bills. The difference:
I have no more than 1-3 percent of my net worth hoarded in my home, on my person, and in my car. I would not recommend hoarding
your entire net worth in a hiding spot. Rather, I'd consider placing at least some of it in the bank. 2) I really like your
story about the trading cards. Do those happen to be Magic The Gathering cards? That's a really cool game that I used to play
way back in the day, but still really respect the game. That said, definitely feel that gold coins are a better investment.
Anyways, I digress, and let's get back to your question!
Perspective 1: The Time To Buy Is Now
Gold is an amazing metal. When you own your first gold coin, you will be amazed at how it looks and feels in your hand. It's magical.
Also, Gold Coins Bring Good Luck. Prices over time are
generally trending up. However, they may also come down. You never know with the market. If you're buying your first (or even first
few coins), the time to buy is now. I would not worry about the market too much. I would also not wait to have more money saved to
buy a bigger gold coin. Even if you can only afford a tenth (or twentieth) ounce coin, I'd buy now. The fact that you can afford a
quarter ounce gold coin (such as the Quarter Ounce Maple Leaf)
means your time to buy is most definitely now. This first perspective really revolves around my belief that investing (in stocks or gold)
is a journey. It's one that involves multiple touch points. You'll buy more and more over the years. You'll buy bigger and bigger coins
over the years. However, you have to start at some point. That time, when it comes to gold, should be as soon as possible (in my opinion).
Perspective 2: 1/4 Ounce Gold Coins Are Really Respectable Coins
My second perspective today is that the 1/4 ounce gold coin is no joke. It's a really respectable coin for your first gold coin. With
a 1/4 oz gold coin, you'll definitely be able to feel its magic in your hand. I would not hesitate to make a 1/4 oz gold coin my
first gold coin. A well diversified gold coin collection contains all different sizes and mints of coins. The point: You're going to want
to have 1/4 oz gold coins in your collection at some point. Why not make that coin your first and then fill in the other sizes later?
Perspective 3: Markups on Fractional Gold Coins Go Both Ways
I love Fractional Gold Coins. I'll buy fractional gold coins all day,
any day. (These are not to be confused with Mini Gold Coins. Don't get me wrong,
I still like mini gold coins, but won't buy them all day, any day.) Despite my passion for fractional gold coins, I can't deny the markup. The
smaller the gold coin, the more the markup. Dealing with quarter ounce gold coins, the markup isn't as bad as tenth (or twentieth) ounce gold
coins, so that should provide some comfort. That said, the markup will be more than a half ounce or full ounce gold bullion coin. Here's the cool
part, that markup exists for a reason. Fractional gold coins are more attainable for the average investor (like you and me). These days, with
the price of gold where it is, I can't even afford those 1 oz coins I used to buy (when the price of gold was between $500 and $700). Now, I'm
opting for tenth ounce gold coins a lot of the time. Others are the same way. The markup exists because fractional gold coins are sought after.
Now, when you sell your fractional gold coins (which I never recommend), you will recoup that same markup. Maybe not if you sell to a dealer,
but definitely if you sell on eBay! That's something to consider - I don't really think you can go wrong with a 1/4 oz gold coin.
Thanks so much for the amazing question. I hope these perspectives help. I wish you all the best in buying your very first gold coin,
a beautiful quarter ounce gold coin. My final word of advice: Since it's your very first purchase, make sure to buy from a really reputable
seller. I'm talking about major stores like Blanchard and Company
or your local coin shop (please verify they've been in business for a long time). You're spending your hard earned money on a hard asset. Make
sure you're dealing with the best of the best. I wouldn't hesitate to overpay on my first gold coin to make sure I'm dealing with a super
reputable seller. Thanks again and keep the amazing questions coming!
Buy Quarter Ounce Gold Maple Leaf Coins on eBay
Related Quarter Ounce and Fractional Gold Coin Articles
Fractional Gold Bullion Coins
Quarter Ounce Gold Maple Leaf
Video - Introduction To Different Gold Bullion Coins