In older times, people built wealth by working hard, cutting down on expenses, and saving cash.
In modern times, people have realised that even though it is possible to save cash by working hard and reducing expenses, the value of the saved cash reduces over time due to various geo-political factors.
Thus, we need to find ways to increase our wealth in more ways than just working hard. And the best way to do so is by investing our wealth into streams that can generate additional wealth for us.
A common mistake that most people make while planning their investments is that they focus on the shorter-term goal only. An ideal investment scenario is where we’re investing in such a way that it satisfies our short-term and long-term goals.
One of the common long-term goals that most of us have is to have enough savings to live comfortably and satisfy our needs post-retirement. Out of all the retirement saving options out there, Individual Retirement Account (IRA) is a very popular one.
Specifically, gold IRAs have become a very attractive option for people interested in diversifying their retirement savings.
What is a Gold IRA?
There are two main categories of IRA plans: Traditional and Roth. The difference between both is basically whether your investments are done pre-tax or post-tax and how much tax is deducted when you withdraw from the IRA account.
The money that you add to a traditional or Roth IRA account can then be invested in stocks, mutual funds, etc. which helps you earn returns on your investment.
Gold IRAs can be either traditional IRAs or Roth IRAs. However, unlike standard IRA plans, investments in gold IRAs are done in the form of precious metals.
Why is Gold IRA Popular?
So, what makes gold IRA plans appealing?
First of all, precious metals like gold and silver have always had value as an asset. Also, despite short-term falls, we’ve only seen the prices of gold increase over time.
Moreover, as investing in gold IRAs means that the investor owns physical assets of the precious metals, it gives a better peace of mind than investing in other assets such as stocks, bonds, etc.
3 Tips to Get the Best Results from Gold IRA Investments
Pick the Best Gold IRA Custodian
One of the essential things to consider while investing in a gold IRA is to pick the best gold IRA custodian you can find.
As investors cannot directly invest in gold IRAs, they need to partner with a custodian to buy/hold/sell the precious metals in the IRA. There will be a fee charged by the IRA custodian for providing the services.
Always choose Gold IRA custodians like Lear Capital, which have years of industry experience and happy customers, are open about the fees and procedures followed to buy/hold/sell the precious metals, as well as have a well-knowledged team to answer all your queries.
Consider Storage and Insurance of Your Gold
As you’re buying physical gold in a gold IRA, storing it is a crucial part of the investment. Some custodians provide in-house storage facilities whereas others partner with third-party storage facilities.
Before joining a gold IRA plan from a custodian, make sure to enquire about the storage method followed for your gold and if any additional charges are incurred for the same.
Also, again, considering that you’re investing in a physical asset, it is always best to get them insured. Insurance against your precious metals will give you a guarantee on your investment in the unlikely event of theft, natural disasters, etc.
Understand the Type of Precious Metals Allowed in the Gold IRA
Even though it’s called gold IRAs, your investment isn’t restricted to gold itself. In most gold IRA plans you can invest in other precious metals such as silver, platinum, etc.
However, one important point to note is that not all forms of precious metals are considered eligible for the IRA. For instance, you cannot add the precious metals you already own into the IRA, nor can you purchase jewellery and add them as your investment.
Just like any other form of investment, gold IRAs also come with their own set of risks. Therefore, it is best to consult a financial advisor before investing in gold IRAs to understand whether the investment can meet your long-term goal and fits your risk appetite.