It would come as no surprise at all to me if you have been asking yourself the question “is a gold IRA a scam?” because it really can seem like that if you haven´t had the time to research the subject properly. Is it true? Are ALL gold IRA endavours scams or are there legit ones?
Are all gold IRAs scams? While scams happen everywhere, the risk is very high when investing in a Gold IRA in particular. A Gold IRA is a unique type of investment that does not include any physical or digital currency but rather takes Gold as an asset. It is an attractive investment option, especially to hedge against inflation, and while some make a success out of it, some fall for the scams.
That causes mass confusion among many people, and in this article, we will discuss if a gold IRA is always a scam and everything you need to know about it. We will cover the benefits and negatives of this method of investment, along with tips to avoid the scams. Our hope is that you will get all the answers in this article! Let´s get started!
What is a Gold IRA?
An IRA is an individual retirement account, and in this case, this account allows investors to invest in metals like Gold. Instead of investing in other assets or currencies, this type of investment not only diversifies your investment portfolio but makes it more secure against frequent economic uncertainties.
Is a Gold IRA a Scam?
So, are all gold IRAs a scam? No, of course not, eventhough it might be easy to think so if you have been doing just a little bit to little research and are new to the industry.
Just like every other investment option, Gold IRA has its pros and cons. However, it is still more attractive because of its being unique. Is a gold IRA a scam? This type of investment can be a legitimate investment as well as a scam, and it depends on various factors, including the dealer you choose.
So, if you have a good understanding of how things will work out with your dealer then it will be a legit thing. On the other hand, if you lack understanding or transparency, then it will become a scam of some sort.
Pros of going for Gold IRA for your investments
Investing in a Gold IRA has its certain advantages and here are some that you must know.
1. It brings the opportunity to diversify your investment portfolio
During this era, one cannot rely on one asset for all one’s investments. In fact, picking a few assets is not enough. It is important to look for multiple assets and diversify your investment portfolio. Luckily, Gold IRAs make the perfect option.
2. Gold holds high growth potential depending on the economic situation
Whether you pick a currency, property, or anything else, its value usually drops according to the economic situation. Gold is among those few assets that hold their value. In fact, Gold can hold high growth potential even when the economic situation is unstable.
3. Investing in Gold is a safer investment.
Gold is a physical asset, and on top of that, it is a more tangible asset. These two qualities of Gold as an asset make it a much safer investment. So, if you want to hold an investment that is just not digital, but you can have a physical hold of it, then it is a great choice.
4. You become eligible for tax advantages this way.
Opting for a Gold IRA can bring you multiple tax advantages. You can profit from Gold with this investment, and the profit will not be immediately taxable. Meanwhile, other methods of investment make income immediately taxable.
Cons of going for a Gold IRA for your investments
Regardless of multiple benefits there are some demerits of Gold IRA investments. It is crucial to know if these cons outweigh the pros for you or not. Here is a list of cons of Gold IRAs that you must know.
1. This investment has insurance and storage costs because of physical asset
Since Gold is a physical asset, you cannot hold it just in the records like digital investments. Gold is highly valuable, and when you opt for a Gold IRA, you need to manage storage and insurance costs for your investment. Depending on how much you invest and the costs for holding, it can impact your total profitability.
2. There are no dividends of yield like other investments
Investments like bonds or stocks generate income through dividends or yield in the form of interest. The downside of going for a Gold IRA is that it does not bring any such profits. However, it may not be a major issue for people with a highly diverse portfolio.
3. Gold has a highly volatile market price.
The market value of Gold is highly volatile, and sometimes liquidating this physical asset can be a cumbersome experience. If you are looking for short-term investments, then it may not be a good choice due to the high price volatility.
4. Gold IRAs have complex rules and restrictions.
Lastly, when you want to invest in Gold IRAs, you must meet all rules and restrictions. Different IRAs have different complexities. If you don’t meet every regulation, then you are not eligible for this investment. It is a huge downside of holding you back from a potentially profitable investment.
Tips to stay safe from Gold IRA Scams
Now that you know is a gold IRA a scam, its pros, and cons, lets discuss some tips to stay safe from scams. There will be some legitimate investment options along with many scammers in the market. Instead of skipping this amazing investment idea, you may look for factors to identify scams. In this way, you can make secure investments with reliable returns. Here are some tips you may follow to stay safe from Gold IRA scams.
First of all: Get a gold IRA for the RIGHT reasons (It´s NOT for everyone)
Please do NOT think that a gold IRA is right for everyone as it´s not. The good old saying everything is not for everyone comes into place here as it really depends on your personal situation. This is something that most representatives from gold IRA companies “fails to address” to potential clients. This is why I always recommend that you sign up to the live web conference offered by Augusta, it´s held by a Harward trained professional economist and he will be brutally honest with you if it isn´t for you.
**You can learn more about their web-conference and service in general on this page
Discover how gold IRA salespeople trick you
There are many different ways that the wolf in sheeps clothing pray on uneducated retirees. It is very important that you are very careful when you move in this industry, just like in any other financial industry. There is so many stories of people getting scammed with so-called hidden fees for example. So make sure that you always know exactly how much you have to pay before you sign anything.
How do you find LEGIT Gold IRA dealers?
This is a very important question that you want to know how to answer.
1. Do your complete research about dealers before making your investment
The first tip is to ensure that the dealer you are working with for your Gold IRA is reputable. Checking their track record will give you a clear idea of their legitimacy. Moreover, research and understand all the regulations you must meet. Anything that seems suspicious will signal a scam.
2. Understand the complete fee structure and look for any hidden charges
Every Gold IRA has a fee structure that covers different types of costs. Some of them you may know about while some are hidden. Remember to go for options that provide complete transparency. Different types of fees include:
- Account setup fee
- Storage fee
- Insurance fee
- Dealer fee, etc.
3. Beware of investment promises that are too good to be true
Remember that Gold IRAs never promise high returns in a very short time. It is a type of investment that cannot even promise long-term high returns. So, if you are getting an opportunity that is too good to be true, then it is good to refrain from it.
4. Always seek independent advice before making your investment
Lastly, you must consult with an individual with whom you are not involved in your Gold IRA deal. Such a financial advisor may provide bias-free advice considering the deal and your current financial situation or future goals.
No matter what type of investment you make, it is important to understand how things work. Getting transparency and an in-depth understanding of all technicalities is crucial. Hopefully, you completely understand everything relevant to “Is a Gold IRA a Scam?” by reading this article. Remember that no method of investment is 100% safe and provides high returns as well.
There is always some risk in making investments, no matter what type of asset you choose. So, the best practice is to list out the pros and cons and ensure the pros outweigh the cons before you invest. When investing in Gold IRA, you can follow our tips for extra safety from scams.