Gold Storage
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Is Gold Storage Right for You?
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Every investor has different objectives and requirements when it comes to their precious metal investment. The golden rule is to ensure that your invested bullion is owned outright and unencumbered.
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To achieve this:
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Do not hold metals on the books of a company you do not control.
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Avoid metals that are or can be “hypothecated” by the trustee, i.e. lent out to cover anyone’s debts but your own.
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Be sure your metals will be there when you need them.
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Avoid promissory notes and certificates.
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Avoid schemes that require the trustee to purchase metals at the market when you request delivery.
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Gold storage options are:
Home gold storage: Place your gold in an inconspicuous area of your residence or in a safe. Do not share this information with anyone except someone you trust.
Offsite gold storage: Place your gold in retail banks (safe deposit box/bank vault), bullion banks, or bullion depositories. Offsite storage does not allow immediate physical access to your gold.
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Types of accounts available offsite are:
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Segregated Storage
Segregated Storage means that your bullion is kept physically separate from all others. You retain ownership of your bullion while the vaulting service only serves as a custodian. When you retrieve your bullion, it is the same exact items you put into storage. This personalized bullion storage service costs the most.
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Allocated Storage
Allocated is the most common type of “you own it” bullion vault storage. Your bullion is kept in a vault with that of other investors. You still retain ownership of your bullion while the storage company acts as a custodian. When you request your bullion, you will receive the same type of bullion, but not necessarily the exact same item.
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Unallocated Storage
The cheapest, most common type of offsite gold storage but you do NOT own the bullion. The bank buys bulk bullion bars, then sells fractional claims to the gold to investors. The bank actually owns the bullion and investors are unsecured creditors. The bank lends or leases the actual gold to make a profit, or uses it to back derivatives. This means that if the bank or storage company goes under, you might get a fraction of your investment back because the gold will be pooled with other assets to pay off secured creditors like bondholders.
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To secure your nest egg for the long run, consider a self-directed IRA. An advantage is the storage is taken care of for you. You do not have to worry about transfer or storage while investing in gold and silver in your self-directed IRA. Qualifying gold must be stored in accordance with IRA rules and personal storage of precious metals owned by an IRA is not allowed.
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Bottom line
A great way to start is to roll over an existing retirement account. A 401k will not permit you to own precious metals therefore, you would have to roll it over to a self-directed IRA. Don’t wait. The time is now to prepare for a volatile future.
A great rollover company is Regal Assets. Click here to secure an IRA, hands-free, with an easy rollover process.
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