So you've decided to buy some gold bullion. Great move. The price of gold has surged to $890 this week with no signs of looking back. If the price of gold does correct, it will be a great opportunity for savvy investors to accumulate more. Gold is on the move to much higher levels in this environment of continued low interest rates and inflation. Today I'm going to talk all about safely storing your gold bullion investment.
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Store Gold In Your Safe Deposit Box
For most investors, the safe deposit box is the best place to store gold coins and bullion. If you are an average person with a gold collection that's worth $25,000 or less, the safe deposit box is you best option. There are four main reasons I like safe deposit boxes as a repository of gold storage:
- Safe deposit boxes are relatively inexpensive. You can rent a safe deposit box for around $75-$125 per year depending on the size. This is a good value considering you can also store other valuables in addition to your gold such as stock certificates, important documents, and gold jewelry.
- Safe deposit boxes are easily accessible. You can visit your safe deposit box six days a week at most banks. Pick a bank close to your house so you can always retrieve your gold quickly and easily.
- Safe deposit boxes are secure. Storing your gold at home or in a home safe is risky. Most home safes (if they are under 500 pounds in weight and not bolted into the ground) can be stolen by thieves and then broken open once they are in another location. Gold hidden around the house can be easily detected with a metal detector. If you are wealthy and have greater than $25,000 in gold assets, the safe deposit box may be below your required level of security. In that case, it probably makes sense to talk to your gold bullion dealer about an underground vault which will cost more but worth it if you have a sizeable gold position.
- Safe deposit boxes give you peace of mind. We all have a lot to worry about. The last thing we need is another reason to worry. If gold is safely stored in a safe deposit box, there's no need to worry about the security of your gold. Not having to worry is probably the greatest gift of the safe deposit box.
Don't Declare Your Safe Deposit Box - Keep Your Gold Safe
Here's a piece of advice you probably haven't heard before: Absolutely don't declare your safe deposit box on your tax return. The government provides incentive for you to do so, they give you a deduction if you declare your box. The reason you don't want to do this is the government's intentions in this case are not good. In my opinion, they are trying to take inventory of safe deposit boxes by person so they can confiscate your gold and valuables if there is ever another gold confiscation. Take your privacy seriously. Don't discuss your safe deposit box with anyone, especially the government.
Diversify Your Gold Assets By Geography
Many people buy gold as a store of value in case of an emergency. In the case of an emergency, your entire city may get wiped out. Taking this into consideration, you may want to choose a safe deposit box in another city. While it will take you more time to visit your box and deposit your gold, you can rest assured that your risk is diversified. While you may lose your home in a disaster, you will have a stash of gold safely stored in another geography. Taking this a step further, you may wish to own several safe deposit boxes at different banks in different cities. This might make sense if you have a larger gold position. That way, you are not reliant on any one geography or bank, you are mitigating your risk.
Other Ways To Buy Gold
If you are concerned about going the safe deposit box route, there are still some other great options. The first is buying a gold exchange traded fund. Gold exchange traded funds trade like stocks and allow you to buy gold through your regular stock brokerage account. There is a small annual fee that covers the storage of your gold. The only downside in this case is the gold is often unallocated meaning you don't have gold sitting in a vault that is in your name. In the event of a disaster, there may be no gold to recover. Two better options include Bullion Vault and Perth Mint Certificates. Both are end to end solutions that allow you to buy allocated gold bullion stored in safe underground vaults. The gold is allocated meaning there are actual coins and bars in your name on a shelf in an underground vault. In the event of a disaster, you have full right to visit the vault and recover your gold. Moreover, I particularly like this options because you can store your gold in overseas vaults, diversifying your gold assets internationally. There are many different ways to buy gold. The true gold investor owns many different forms of gold. For gold in which you take personal delivery, the safe deposit box route makes sense for the majority of investors.
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