Question for Precious Metals investors

BluAffiliate

BluAffiliate

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Sep 6, 2009
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Humor me for a second with this theoretical scenario..

Say I go to the local jewelry store and buy $50,000 worth of gold and silver coins, in cash. If that's not believable, buy some gold/silver for a bunch of different stores in small quantities ($1000-$2000) in cash.

I keep these coins in my safe until I retire at age 64. The value doubles to $100,000.

I report no income and collect social security.. but whenever I need to buy anything, I take a few coins to the jeweler/pawn shop and get some cash to spend. Everything is theoretically off the books.

So I wouldn't have to pay any income tax on this kind of scheme?

What if I purchased jewelry/precious stones instead? Or any asset that is very likely to appreciate?
 


Pawn shops won't pay out top dollar ! Hard assets are harder to move than bonds, stocks, and other securities. Start a ROTH IRA and save the worry for someone else.
 
Don't assume they'll go up in value, but yes its the same as if you keep the money under your mattress. You pay tax on income when it's earned. There may be some bullshit self-reporting rule about something like that if it appreciates in value, but I've never heard of anyone abiding by it.
 
I keep stuff like that in a safety deposit box at the bank. Regardless of whether it appreciates in value or not it's nice to have some of your money in "hard assets."
 
cheshire said:
I keep stuff like that in a safety deposit box at the bank. Regardless of whether it appreciates in value or not it's nice to have some of your money in "hard assets."
Click to expand...

I was reading a book by a survivalist expert who would stash golden coins, foreign currency (Canada apparently has $10,000 notes so they take up less space than American $100s), and other precious metals all around his house in case of a disastrous situation, so theres definitely a use for that
 
cheshire said:
I keep stuff like that in a safety deposit box at the bank. Regardless of whether it appreciates in value or not it's nice to have some of your money in "hard assets."
Click to expand...

Except when the bank goes bust.

@OP Yes, that'd work in theory. But in your efforts to commit tax evasion you're screwing yourself out of a lot of money. Pawn shops aren't going to give you shit, and buying gold locally at run of the mill operations isn't a wise course of action.

Regardless of any of that gold and silver go in cycles of 20-30 years. Silver isn't even close to all time highs despite lower amount of silver actively available. For decades gold and silver barely moved. Now they are, but you have to know why and how to make money from it.

If you want hard assets to hold for life, get real estate. If you want to hedge against fiat currencies at the end of their lives (the dollar) invest in gold and silver until it's at bubble stages. But holding them long term is not necessarily as effective as you're thinking.

tl;dr - Only will be even slightly smart if you retire on the top of a gold/silver bubble which is incredibly unpredictable. You're young, aim for more than a few hundred thousand in precious metals.
 
Yeah, you can get around taxes that way. Though, I wouldn't recommend it for high dollar amounts, since if the gov does find out you'd be in a heap of shit... but a few grand here and there and I don't think you'd have a problem.

For me metals are more a hedge against inflation than an investment. It's a way for me to preserve the value of what little wealth I have, rather than watching it get eaten away by mad bankers printing loads of cash.

I started buying silver heavily at 18 and went all in at 22. My local coin shop will buy back my silver at $3 under spot, which kinda sucks, but they gotta make their monies too. If I was to drop in the coin shop and sell everything today with silver at over 28 I'd still make a good amount of profit. If I want top dollar I can always sell on ebay or elsewhere and get spot or close to it.

If you've got hundreds of thousands, I'd recommend real estate too. Not shitty houses tho, more like productive farm land that you can rent out (farm land rents are about $150/acre in my state) or timber land that you can harvest lumber from. Land that can generate revenue for you with little upkeep and not much of a tax burden.
 
One of the problems with your idea is that you pay over the odds when you are buying and getting a poor price (compared to spot price) when selling.

For gold jewellary, the price of spot gold price would have to very nearly double for me to break even with my local jewellery shop The shop includes a charge for manufacture of the item(when selling to the customer) as well which is complete bullshit because most of the stuff is made in China.

I know for a fact that the gold chains come in large premade bundles and the chinese manufactures sell for: weight of gold X spot price + fuck all markup for manufacture.

For a hedge against inflation, I'd recommend something like Buy Gold Bullion TODAY &#9655 Buy Gold Online at LIVE Gold Prices - BullionVault.com. They have a good reputation amongst investors.
 
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