Investing in Gold to Help Pay For Graduate School

I recently lost money in the stock market, and would like to preserve the funds I have left in metals. My ultimate goal is to be able to easily liquidate the value of the metal assets I acquire to allow me to help pay for graduate school in about 4 years. I have around 9K that I am ready to invest.

While this goal is very clear to me, I have no idea how to get there. With little experience/knowledge in bullion purchasing, I am having a very hard time sifting the authentic and prudent investment advice/options out there from the thousands of scam/rackets. Someone recommended SwissAmerica to me -- are they reputable? I am averse to ETF's as they seem volatile and lacking in the stability of owning real metal(s).

How do you suggest I go about investing? Should I simply buy gold on ebay? The only bars people seem to be bidding on are PAMP Suisse -- why is this? If I buy a Credit Suisse backed bar, will Credit Suisse give me the cash value for it if I bring it in to their bank years later? Please help clarify what sort of option(s) would be best suited for this kind of situation. I would like to enter the market but am extremely confused.

Thank you,

James

 

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If you're looking for a place to buy metal, Apmex is definitely the popular choice, and they're very reputable. I wouldn't buy any gold off of ebay unless it was slabbed by PCGS or NGC, there's lots of fakes otherwise. I do silver instead of gold myself, but I've heard it said that you should get all gold coins certified to be able to easily sell them and be 100% sure that they're the real deal. Here's a link to Apmex's gold page http://www.apmex.com/Category/502/Gold.aspx

Hope I helped!

 

Thanks, this looks like a good site. How does one sell the gold once one is ready to "cash in" ? Is it possible to make money or only to retain principle? Can I bring a credit suisse backed bar to credit suisse and have them pay me the cash value?

 

Your plan is terrible. Gold and silver cannot do what you want them to do. Both are highly speculative [moreso than the stock market] and have high bid/ask spreads. If preservation of capital is the goal, buy 4 year Treasury notes. If you follow through on your plan, kiss grad school goodbye.

 

If you understand the (considerable!) risks of precious metals and are willing to take them on even at today's prices, then take another look at the ETFs. They solve the problem of where to sell, lower the transaction costs, and they have almost the same volatility as the metals themselves: if the ETF price diverges from the metal price, there are people in the business of making money by pushing the prices back together.

You can sell physical metals to online dealers, brick and mortar dealers, private parties locally, and private parties on eBay. All have drawbacks.

If you're trying to preserve your money and are worried about severe inflation during the next four years, I think the best fit for your needs would be inflation-adjusted Treasuries. They go up with the consumer price index.

 

Whatever you decide to do, do this for fun. Go to APMEX and put 6 raw 2010 1oz. gold buffalos in your shopping cart, figure out shipping as if you were to purchase. Write that number down and put it someplace safe.

In 4 years ...see what they are worth. Compare that appeciation to what you actually decide to do with your 9 grand and you will know if you made a smart decision or you got dogged by the gold naysayers.

Fun.

 

I disagree. Whether the metal goes up or down, buying is a stupid decision if you need the money to attend grad school. The money you allocate to gold and silver purchases must be money you are willing and able to lose without it affecting your life or standard of living. I like owning gold a lot, but I would absolutely never bet the rent, food, or education budget money on it. Just because something has been rising for a few years doesn't make it "safe."

 

Please read Cloudsweeper99 posting above many times. Sometimes the Bullion Investing group seems to be the Gambler's forum. Precious metals is an area to help balance a range of investments. But as the prices go up, caution should also go up rather than the reverse. Many of us have been through these cycles before, and it always seems that the smaller person who doesn't do investing on a professional level is the one who gets hurt the most. To think that values will always continue only upward has occurred in the stock market, housing, precious gems, real estate, Forex trading, Option trading, etc. All thought that the downward move would be easily seen and every one could get out.....and that is the problem. The more people that try to get out, the steeper the fall. People who had homes or stock based IRAs that fell 30% know the hurt, and it occurred fairly slowly ( months). I can easily see Gold falling by 30% within a week due to its liquidity. But, since I limit myself currently to 5%-10% PM, I am not too concerned about it either way at the moment ( at $800 oz, I went gradually from a 40% PM to current, so I am not anti-PM, just balanced.

I concur with only "investing" what you can afford to lose and not affect your life plans. IMO.

Jim

 

I applaud You for getting out the market while You still have Your shirt.....However, if You had 9k to spend on the metals and You were not dependent on turning a profit for Your education, I would gladly encourage You, (as my opinion on the future of the U.S. markets is not optimistic) but not this time. You don`t know how long You might have to wait for the metals to get to where You need them to be.....You could be farting dust by the time You sold Your investment and had enough for school. (I don`t know Your time frame) Either way, You have options regarding investing. Do Your research and be fully convinced in Your OWN mind no matter what You choose to do and invest in. : )

 

Great response! Take out very low interest rate student loans for graduate school when the time comes. It is the best money you will ever borrow. BTW: Welcome to the forum. TC

 

I don't understand your responses. Why do you invest in metals if you don't think it is a good investment? No investment gives 100% guarantee, but I think that gold will go up to $2000 an ounce in the coming years and I want a peice of the pie; I am just trying to figure out HOW to do so in a way that will allow me to easily cash out.

I would rather do this than put it in a measly 1.5% CD or invest in volatile stocks.

Bonds too are risky as backers can default on loans (see Harrisburg in recent news)
ETF's, Stocks, and Mutual Funds are controlled by large investment companies who can short stocks on whims with billions and FLASH TRADING algorithms that put the average investor (AKA ME) at a huge disadvantage and likely to lose a lot of money if i am not contanstly managing my portfolio which I don't have time to do.

Give me a better option and I will gladly leave this forum and pursue it. But as of yet I haven't found one.

Metals have consistently gone up and with *** please read the FAQ on language and politics** this economy to its core they will continue to do so as inflation goes up with the treasury being forced to print more money to fund the administration's outlandish schemes to attenuate the vast poverty being perpetuated by a cyclical culture of government handouts. Of course I am waiting to see what happens in Nov. 2 election before I pull the trigger but I am fairly confident in this.

 

I think what everyone is saying is best explained in short vs. long term investment. Historically, metals fluctuate wildly on an year-to-year basis. Over the long term, 10 - 20 years or longer there is a marked, steady growth. You need an investment that will pay off in the short term. It is possible that metals will see rapid growth over the next four years. It is also possible that they will be relatively static in that time as well. You do not have the massive potential for loss with metals, but growth could be very limited. Additionally, I would think it imprudent to sink all of your investment into a single source. (Think eggs and baskets.) It may be wise to put 1/4 into metals and split the other 3/4 between other items according to what you feel will give you the best growth.

That is really the bottom line, it is your money and education and I, as do the other posters I'm sure, would not want to give you a false sense of security about any investment. Especially when it relates directly to something so important as your education. You will do what you decide is best in the end, but my advice would be to do tons of reasearch and consider all opinions on such an important decision.

 

Welcome to the forums in_ten_city!

From the responses you've been given, it's pretty clear everyone is really trying to look out for your best interest. But you see, we don't have a crystal ball. I'd guess that some here who invest in PM's, including myself, invest a certain amount that they are willing to LOSE if the prices take a dump.
Lots have come here to do their homework before investing, just like you.
You're the first person ever to make a post regarding paying for graduate school, I guess there's a first time for everything!

I think what's scary is that you need this money short term. Also, if you do make a profit, don't forget you have to pay capital gains tax. So include that in your calculations. So the Uncle Sam is willing to take your profits, but won't subsidize any of your losses. It's a win win for good old Uncle Sam!!

Sometimes your best move is not making any!! You can always CD ladder your $9K. This way you get different returns for the different lengths, and if you ever have an emergency, you could have access to some of those funds quicker without penalty. But if the rates are that low on CD's, you might as well just stick the cash in your savings account so you have access to ALL the funds depending on your emergency.

But back to PM's. I do think they will gradually rise, i started investing last year and they are higher than when I bought my PM's. And I see nothing about this gov't that is going to change course. I just personally just need to not invest too much into PM's and make sure my cash/PM ratio is at a comfortable ratio....

Anyways, don't rush your decisions, keep hanging out here and see what others have to say!

 

In the end it all amounts up to a crapshoot. There`s no tried and true formula because civilizations are always changing. Economies change with them as well. The bottom line is that nobody knows the future, but as I said before.....After You have done Your research and come to Your own conclusions, (which it sounds like You have) be fully convinced and have no regrets....no matter what the consequences.

My personal opinion is that You should hold onto some of Your investment in the metals even after You decide to cash out for college, but again....it`s Your money, it`s Your move. : )

 

Assimilate into the core of your being the concept of "risk capital". Risk capital is money you can afford to lose. It is often wise to put risk capital into investments that can go down, but which you think are more likely to go up. But it's a very different thing from money you know you'll need to spend in four years.

 

OK. Let's say I decide to put 2K out of the 9K into metals. This is what I am willing to lose relative to my certainty that metals will go up. Still, no one has given me clear advice as to HOW to invest in metals in such a way that will allow me to cash out easily later in time.

I'm not uncertain about what I want my portfolio to look like, I am uncertain about HOW to go about investing in the things that I want in my portfolio - aka PM.

I am very confident that unless there are major changes in the administration, our economy will continue to collapse. PM is the only thing that will give me the peace of mind that I am looking for.

 

Lots of good advice has already been offered. Here's my take. PMs are just like any other investment in that you cannot predict whether they will go up or down. Your time horizon of 4 years is relatively short. That, combined with the fact that PMs are trading near historic highs, could work against you in terms of investing in Gold/Silver.
I tend to agree that inflation is bound to push the price of Gold/Silver up in relation to the dollar, more likely over the long term, which I define as at least 5-10 years. But it could be a bumpy ride. The problem is that both those precious metals have already been run up around 300% in the last 5 to 6 years. It reminds me of Tech Stocks in 1999. Remember what happened to them in 2000? Is it too late to get in? No one can tell for certain. If you didn't really need the money, I would say go for it.
But the fact that you will need the money to pay for school in 4 years, puts you at the mercy of the market. You need the money at a given time, the market could be down when you have to sell. It could rebound 200% the week after you sell. You want to be in a position where you dictate when you sell. You're much more likely to have a successful investment that way.

 

There is a saying that a fool and his money are soon parted.
You can go to any reputable dealer either online or locale and purchase gold coins.

some recommend gold buff's other gold eagles. the point is this. there is a bid price (melt value) and a asking price.

for example. the price of silver is like 18.70 the best deal i have found on ASE's is about 21.00. there is a 3 dollar spread. before i make a profit i have to beat that spread.

when it comes to gold the spread is much worse.

apmx is selling 1 oz gold eagles for about 1300. they are only buying them for 1267.00
to make a profit gold would have to go higher than 1300 in order for you to turn a profit.

it is never a good thing to put all your eggs in one basket. it can take 5+ years to get a return on your investment from PM's.

you are better off sticking that money into a education savings account or something else that will yeild a straight interest rate. i mean if you want to buy PM's then take about $500's buy some fractional gold and some 1 oz ASE's. put the rest into a ESA and just let the interest ride. another thing is to look for a good mutual fund that gets about 8-12% return per year. they are out there. these are way better investments for what you are wanting to do than gold or silver.

gold and silver are long term investments and mostly for asset protection. i have some gold and silver coins not only for asset protection but also as something to pass down to my kids when i go.

nothing like passing a 200 year old coin to my son or daughter. should be worth a pretty penny at that point in time.

 

From your previous posts, I don't think you know enough about markets or economics to have the degree of confidence you express. For example, 4 year Treasuries carry NO default risk if you hold them for 4 years. Also, if you believe the bond and stock markets are easy to manipulate, keep in mind that gold and silver are far easier to manipulate because they are smaller and less regulated. But if you insist on pursuing the plan, there are two ways to go.

First, put $1000 into the GLD and $1000 into the SLV ETFs.

Second, put $1000 into American Gold Eagle and $1,000 into American Silver Eagle coins. They are the most liquid and easily resold compared to almost everything else. Shop around at a couple of local coin shops and online coin dealers to find the best price. Just keep in mind that whether gold and silver rise or fall in price, you will do worse due to the high bid/ask spreads.

 

To answer your question, I personally either bought on APMEX when I saw a good deal during a dip or I looked around ebay and once in a while I got silver around spot. Buying in bulk helps on ebay, as less people bid on the metals when the price gets too high. Like on ebay you can buy 1 oz of silver for 23$ but you can get 10 oz for 215$. Basically if you want to invest, look around apmex and ebay then buy. Keep track of how much you spend over spot with an excel sheet. When the price moves or you want to sell, sell on ebay. You can sell it in 24 hrs in a quick auction and usually get a good price even after fees and shipping. Good luck.