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I Bought My First Gold Coin!

by J. Money on Wednesday, March 28, 2012

Buffalo Gold Coin Proof - Mint

Arrghhhh Matey! I’m a modern day pirate! ;)  Though now I don’t really know what exactly to DO with this piece of gold, other than just stash it away in my safe and hope I never have to use it one day, haha…  So I guess it begs the question, “Why even get it in the first place?” ;)

Well, to that I answer three-fold:

  1. I’ve always wanted to own real-life gold!  Granted, in my dreams I owned a LOT of it and could nose-dive into ‘em a la Scrooge McDuck (you know you wanna do it too!), or at least own a few golden bars I could stack up, but with everything in life you gotta start out small :) And now I’m officially an owner!
  2. I think it’s a safe semi-hedge against the economy imploding one day.   I’m not as hardcore as my gold-obsessed investor friend I talked about the other month (THAT takes balls), but I am somewhat afraid of a possible attack on all that “fake” digital money out there that we all now have.  I think it’s smart to hold some physical investments too just in case something horrible happens to this world of ours – Like all money getting wiped away and people having to fend for themselves and what not… I’m praying that never happens, of course, but you really do never know.  And in which case my gold is just valued at whatever crazy price the economy sets it ;)
  3. I wanted to invest in something new, and experience the process.  I like dipping my toes into new avenues out there, and buying gold was a first for me.  And although it WAS as simple as clicking the mouse a few times at the US Mint’s website (they’ve got the process down pat!), getting your investment in the mail and opening it up and feeling it all, and then transferring it into my safe were all new experiences for me.   Which is getting harder and harder for me to come by as I slowly get into more of this money stuff :)

All reasons that may not be worth it to anyone else, but for me – it’s super exciting.  And of course the next thing you’re probably wondering, is how much it ended up costing me :)  Which is the scary part, haha… and you know I can’t ever do anything half-assed and just pick up a quarter or a 10th of an ounce or anything like that, so I “went for the gold” sorta speak and picked up a full 1 oz worth. To the tune of $1,964.95 (the Mint marks it up to cover its packaging and engraving and profit, etc – so it’s always more expensive than any given day’s *value* of gold). It’s a lot of money to get your feet wet, but better to spend it on something like that than, let’s say, trying out a new 4-D TV ;)  At least in my opinion…

NOW the trick is trying to value it every month for our Net Worth updates, as well as finding a category to stick it in.  My boy told me to price it at “spot + $50,” meaning the value of an ounce of gold that day + an extra $50 for the type of coin I got (The “2011 BUFFALO 1 OZ GOLD PROOF“), and I’ll think I’ll do that unless anyone else has some better ideas. And for the Net Worth, I’m thinking I’ll just make a new section called “Stuff In My Safe” or something like that, and hope it doesn’t get too big where I can’t share it anymore ;) Haha… you won’t see that too often in a net worth break down!

What are your thoughts on all this?  Anyone else own physical gold too?  And before you mention it as an alternative (you know who you are), I also invest in gold through a fund too, specifically the SPDR Gold Trust. But that doesn’t help me with the “owning it in case the world tumbles” objective here ;)  The fact that everything is digital these days still scares the bejesus outta  me, even though there’s not much you can do to avoid it…  Don’t y’all worry about that too?

UPDATE: I now have a coin collecting blog! Check it out! CoinThrill.com


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{ 35 comments… read them below or add one }

1 Bonnie March 28, 2012 at 7:04 am

Awesome! I love gold coins. I bought one in 2007 or 8 for about $750 and everyone around me told me I was crazy so I stopped at one. Of course I regret this now.. lol

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2 BDub March 28, 2012 at 7:07 am

Your monthly updates say that you have money yet everything you do during the month would indicate that you should be broke.

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3 Frugal Fries March 28, 2012 at 7:12 am

Wow! That is one nifty “doubloon!” I have never purchased gold, other than in jewelry, but if I had a coin like that I’d probably carry it around and attempt to buy things with it.

What do you do when you want to cash in though? I imagine since it’s a specific type, you’d want to find a buyer interested in the value and the coin?

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4 Matt March 28, 2012 at 7:49 am

Personally, I think for your purposes (hedging against zombie apocalypse) silver would have been a better choice. I mean if you were to barter for something you will need $2k worth of something…..that’s a lot of water or apples or what ever else one would need to survive.

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5 Brian March 28, 2012 at 8:17 am

I love the design of the Gold Buffalo and I love a nice proof coin. Tracking it as spot + 50 is a good idea, but that coin will almost always carry a premium because it is not a simple bullion coin. That would be like do spot + 50 for a Saint Guaden’s double eagle (ok that’s a little extreme of a case).

Congrats on your purchase and welcome to the world of gold and coins! If you decide to pursue the hobby it can get a little pricey, trust me I know…

PS. If you want to sell me that coin for spot +50 I’ll totally cut you a check right now!

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6 Marianne March 28, 2012 at 8:17 am

We’ve just recently begun buying silver coins. Our mint has had some great deals on silver ($20 coin for $20) and we bought as many as we could.

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7 IntelligentSpeculator March 28, 2012 at 8:19 am

Great post, and yeah, I do see some appeal to gold, I’m more worried about the cost. You said you had received $1965 of gold, which would imply a cost of nearly 2% (1.75%). Just want to confirm, could you resell that gold to the same party for $1965 or would you have more fees added? Just trying to figure out, if you bought and sold that same coin, how much would you be down? I think that value would be the most accurate for the net worth

I’ll eventually get into gold, have not yet, but the fees part is the most annoying part for me.

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8 Leah March 28, 2012 at 8:57 am

Okay, contrarian opinion here (and for what it’s worth, I own a gold coin, too). If we get to the bartering system–assuming all financial systems melt down entirely–who on earth would want our gold??? Wouldn’t you rather have seeds & animals to eat, a horse to get you around, and some supplies to keep your roof from not leaking??

I’ve heard over and over about the “going back to the gold standard” thing, but I can’t help but think if things get THAT bad, that gold has no pracitcal uses for which anyone would want to barter.

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9 J. Money March 28, 2012 at 9:09 am

@Bonnie – Woah! Yeah, yours is worth like 3x mine now, haha… but of course it can go the opposite REAAAAAL fast these days, so I’d consider it a nice win for sure and be happy with it :)
@BDub – Hah! How do you figure that? Most of my cash flow goes straight to some sort of investments or paying off the mortgage, so even if I had no pyshical cash anymore, it’s hard to say I’d be broke if I can tap the investments at any time?
@Frugal Fries – Oh man, I have no idea… I guess sell it to a dealer or on eBay? That’s the part I don’t like about the whole thing – a TON harder to sell than, say, stocks and mutual funds/etc. But I figure I’ll be holding on to it for years and years to come, and maybe even passing it down to my kids when we all get old and gray, so I might never have to give it a shot ;) It’s one of the main reasons I don’t pick up a few more coins now too — they’re not liquid at all.
@Matt – Haha, true that. Especially since that $2k coin will probably be worth a LOT more if gold is the only valuable thing then ;) Maybe I can buy land or a small house with it? Haha… or invest in a good metal saw to chip away fragments to buy groceries each week ;)
@Brian – Hah! You would? You could probably buy it cheaper from the US Mint still right now cuz I think gold has gone down since I picked this up actually (though ofcourse it always fluctuates)… I’m def. intrigued by all this coin stuff though – esp. since it’s so new to me and I don’t know what the heck I’m getting into ;) I’m a bigger fan of collecting old US (and foreign) paper currency though, I love looking at them and imagining how they were spent dozens and dozens of years ago. Just last month I picked up an oversized $1 silver certificate from like the 20′s – it’s pretty cool!
@Marianne – Oooh awesome! I’ll have to look into more silver stuff next time around – probably smart to pick up that stuff too, like Matt mentioned up above there. Congrats on the good deals!
@IntelligentSpeculator – Yeah, that’s the whole problem right now – I haven’t researched it, but I’m pretty sure I’d take a hit if I were to turn around and sell it right now for sure. And since I bought it from the US Mint, I don’t even think you CAN sell it back to them? I guess I could “return” it though within the next few weeks, haha… I’m hoping that if I ever go to sell it one day (and I probably won’t, as I’ll more than likely hand it down to my kids as we get older) that gold will be worth a ton more, and the fees or small hit I’d pay to offload it wouldn’t even matter in the whole transaction. But if I ever find out and I’m still blogging, I’ll be sure to let you know ;)
@Leah – Yup! You’d want all that kinda stuff for sure :) But I guess there still needs to be some sort of currency unless everything REALLY goes to the bartering system? But even then the people who have the most and don’t need anything would prob. still want to do lavish things and need gold for that? I dunno, the whole thing is pretty crazy if you ask me, but it does make me feel a tiny bit better that if God forbid something insane happens like that, that I have at least something that may be of value at that time… it would also probably be smart to bone up on some farming and gardening skills too just in case ;)

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10 Tyler S. March 28, 2012 at 9:14 am

Quite the price for a single coin, pretty awesome though!

Moving everything to digital is pretty crazy. One successful large- scale EMP attack and we’re in trouble.. maybe I’ve played too much Call of Duty.

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11 Einstein March 28, 2012 at 9:17 am

That gold coin is pretty cool looking, I do have to say. I think the important thing to remember is that it’s a fun buy, and also a fun investment of sorts.

And I totally hear you out on the 4-D TV thing – I, too, would rather have a shiny coin to hold in my hand!

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12 Christopher @ This That and The MBA March 28, 2012 at 9:18 am

J$ Where do you live again?? lol jk I am waiting for the day you tell us you are buying bars now. With the way things are going for you, I can see it happening soon. Good buy my man. Not to mention it looks freaking cool.

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13 Stephanie March 28, 2012 at 11:22 am

I don’t have any gold coins. I think the full extent of gold I own amounts to one pair of earrings, a necklace, and two rings. I guess that counts for something, right? ;-)

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14 Jules March 28, 2012 at 11:32 am

My father-in-law took me aside on a recent visit and told me where he has a small stash of precious metals — “in case anything happens,” he said. Geez, it was like a movie! I was so shocked that I’ve forgotten where he said it is. (me <– idiot) That's not the kind of thing that comes up in casual conversation.

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15 Modest Money March 28, 2012 at 11:42 am

I had no idea that gold cost so much for an ounce. I don’t think I’ll be buying gold anytime soon, but it would be pretty cool to own. Is this purely as an insurance type investment or would you actually consider selling it if the price went up enough?

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16 Nick March 28, 2012 at 11:53 am

I’ve only invested in GLD or in stocks of companies related to gold like AUY or ABX, just for liquidity and low transfer costs (presumably – I assume there are some transfer (or storage) costs built in to the ETF or company.

I do have a bunch (seriously – maybe a dozen or so) of Britain Sovereign Coins from the early 1900s or something like that, which were given to me by my Godmother as gifts. Those are a few hundred bucks or so last time I checked. Pretty interesting coins though…

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17 John | Married (with Debt) March 28, 2012 at 12:16 pm

It would be very difficult to get spot plus $50, but I see that you plan to hold it for the long term.

Next step is a tube of Silver Eagles from the Mint.

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18 Leigh March 28, 2012 at 12:40 pm

It is my humble opinion that gold coins are not a good investment, especially right now. Gold is ridiculously high, so you’re buying at a high point and there’s no room for this investment to appreciate. Second, it’s difficult to sell an object (versus a share of stock) and get its full value.

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19 Squeezer @Personal Finance Success March 28, 2012 at 2:00 pm

I admire you for being able to drop $2grand on a coin. I think if the world were to come an end, that guns and ammo would be a better bet, because you can use those to hunt with to eat, but you can’t eat gold.

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20 SavvyFinancialLatina March 28, 2012 at 2:24 pm

Congratulations! I never thought of doing that. It’s a pretty cool heirloom, and nice to have in the safe. :)

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21 Jen @ Master the Art of Saving March 28, 2012 at 3:43 pm

Congrats on your first gold purchase and becoming a pirate. :-) The funniest thing is that your 1 little coin is worth like 6 times that of my entire pirate’s gold stash. It also takes up WAY less room. :-)

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22 Evan March 28, 2012 at 3:57 pm

Very cool to have but if shit hits the fan…I think what you need is a gun not a buffalo stamped on metal.

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23 Kevin @ Thousandaire.com March 28, 2012 at 4:17 pm

If you are really worried about a dollar collapse, I suggest you get involved in some cheaper precious metals. Having $2k worth of gold is great, but you’re not going to be able to split that coin up to buy a loaf of bread.

A lot of survival bloggers recommend junk silver. One silver dime is worth about $2,30 right now, and is the most logical barter currency in case of a dollar collapse.

If you don’t mind the link, I wrote more about it on my blog.
http://www.thousandaire.com/why-you-should-buy-junk-silver/

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24 The Happy Homeowner March 28, 2012 at 4:55 pm

Haha…I laughed while reading the intro of this post. Welcome to the world of gold, Captain J$$! Please keep us updated on how you eventually evolve into a full-blown pirate with your new coin collection. I envision something along the lines of the lost ship in The Goonies. Just make sure you rock an eye patch and all will be well in the world ;)

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25 Jefferson March 28, 2012 at 8:58 pm

that is a good looking coin indeed.. i certainly understand your ideas about diversification, it is a wise route to go.

myself.. id be afraid that i would lose the coin.. i wouldn’t want something so small that was worth so much!

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26 Emily McCormick March 29, 2012 at 8:16 am

We’re a coin collecting family, and my husband is dreaming of the day that he can get a gold coin much like you have – but we’re waiting. The price of gold is just so high now.

I like ancient Roman coins myself, but that’s how I roll.

The coin is beautiful.

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27 Edward Antrobus March 29, 2012 at 11:11 am

In high school,my sister went on a trip to Alaska and brought back as a souvenir for me a vial of gold flakes in water. It was about 1/10 of an ounce of gold. They actually sold it for less than the spot price of gold. It was $10. Unfortunately, I lost it in a move, because now that $10 investment would be worth 16X as much!

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28 cashflowmantra March 29, 2012 at 1:11 pm

That is a very nice looking coin. I hope that gold continues to rise for a while so that your purchase ends up being the right decision. Although, if you lose your shirt, maybe the economy is going strong with low inflation.

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29 J. Money March 29, 2012 at 9:02 pm

@Tyler S. – I know!! Real freaky if something should happen later… bleh.
@Einstein – Haha yeah – it’s def. a fun buy/investment ;) Doens’t do much but it sure looks pretty!
@Christopher @ This That and The MBA – Hah! Beleive me, if I’m buying bars I’m not gonna be blogging about my net worth anymore ;) I don’t see myself going that route though anyways unless I hit the millionaire one of these days (Mega Millions is up to $500 MIL btw! Crazy!). I don’t believe in the apocalypse THAT much ;)
@Stephanie – I think that would be worth something in a worst case secnario ;) And in the meantime you can enjoy the beauty by wearing ‘em! Unlike my coin, haha…
@Jules – Woahhhh really? That is so cool! And yes – you better remember some time in case something shall happen! Haha… I remember a story back in the day where the dad died and the kids found THOUSANDS stashed away up in the attic and no one ever knew about it (or *how* he came across all that money). Guess he didn’t have time to explain :(
@Modest Money – Right now it’s more of an insurance/curiosity kinda thing, but I’d consider selling it for sure if the timing/price was right. But more than likely I’ll keep it and hand it down to future generations :)
@Nick – Oooooh I’d love to see one of those things in my collection! Wanna sell one to me? Haha… I still have my GLD funds too (and a lot more of it), but something cool about being able to hold it in real life :)
@John | Married (with Debt) – Ya never know ;)
@Leigh – I actually agree with you 100% :) Though not sure it’s at the peak here – people have been saying that for years, even when it was at $800/oz. But yeah – as of today I def. bought at the high point.
@Squeezer @Personal Finance Success – True that, but I can use the gold to buy guns and food and all ;) To someone who wants to then use the coin for something that’s important to them (there will still need to be some sort of universal “money” I’d imagine – not everyone would want to trade him something for his guns if they already have enough).
@SavvyFinancialLatina – Hehe, yup! It’s nice to cross it off the list :)
@Jen @ Master the Art of Saving – Haha… yes, but can I jump into mine a la Scrooge McDuck like you can? Nope ;)
@Evan – I’m pretty sure if it came to that, you’d gladly have my coin that 1 gun when I could by like 20 w/ it ;)
@Kevin @ Thousandaire.com – Ooooooooh I am so interested in that!! Just read your post – that is great man. I am SO going to do that one day! haha… a bag of cool coins like that??? Shoooooot… even w/ the world remaining in tact, that would be awesome to have :) Thanks for the info my brother, you’re a smarty.
@The Happy Homeowner – Oddly enough I just bought a skull and crosbones pirate flag ;) Arghhhhhh…
@Jefferson – Haha, I can understand that :) Luckily this thing came in that big box you see there, and the coin itself is inside some plastic thingie so I can’t even touch it! Haha… probably a good thing though cuz I’m sure I’d smudge it all up and what not… but def. hard to lose unless I forgot where I hid it or something.
@Emily McCormick – I love ancient ones too! Much more cooler in my opinion, but I guess they don’t satisfy the “gold” part of this latest experiment for me :) But for pure “awesomeness” – I’m totally with you there.
@Edward Antrobus – Wowww totally!! Back then gold was SUPER cheap :) I wonder if Goldschlager gets more expensive as gold rises? Haha… if you’re a liquor drinker you’ll know what I’m talking about.
@cashflowmantra – Haha yea. Win-Lose situation or Lose-Win situation :) Guess that’s what hedging does for ya…

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30 Matthew Doyle March 30, 2012 at 1:15 am

I am not really worried about everything being digital, but I do think that gold pieces are a good investment. The only problem I see is the spread or commission you pay to purchase and sell gold really hurts the ROI. Diversifying is very important and adding gold can’t hurt. Like Tyler S. said that is a lot for ounce of gold, but it is pretty cool.

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31 J. Money April 1, 2012 at 8:32 pm

I guess that’s where the extra $$ makes it worth it – the “cool” factor ;) I love looking at it! Def. worth something.

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32 Megan April 3, 2012 at 9:48 am

This makes me very happy :)

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33 J. Money April 3, 2012 at 2:28 pm

Haha, good! Do you still hit up that Mint store down in Chinatown at all? I wish I lived nearer so I can hang out there every now and then ;)

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34 Megan April 11, 2012 at 8:51 am

I most certainly do!

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35 J. Money April 11, 2012 at 10:30 am

Jealous! :)

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