the Goldline ripoff, explained.

[garybeck]

~12 years ago I bought a few gold 1 oz. coins for less than $300. Those coins are now worth $1,700+. Since then I've bought a few more, when I have a little extra money. When gold got too expensive I bought some silver. I don't have a lot of money in these coins but the little I've invested has done very well. Actually I wish I would have bought more when they were $300/oz!

With the Goldline fiasco I've read some misleading comments so I thought I'd chime in with my perspective.

What people have to realize about Goldline and other companies like it, is that they are not ripping people off just by the fact that they're selling gold coins. Gold is still a decent investment in many people's minds. What they're doing is selling gold coins at well over their real value, and not really explaining it to the customers.

If you want to buy gold, you should look up the current value of gold which is easily found on many websites. If you are going to buy a 1 oz. coin, you should pay only a small amount over the value of gold per oz.

Let's say gold is worth $1700 per oz, like it is today. Goldline will sell coins at much more than that, and claim that their coins have more value than their weight in gold because they are collector coins.

In other words, you're not just investing in gold, you're investing in collectibles. Like people collect baseball cards, old barbie dolls, etc.

There's nothing really wrong with investing in collectibles, if you are aware that you're doing it, and you think the value will go up. But you really have to ask yourself, is this coin really worth double its weight in gold, just because it has a picture of the world trade center on it? Goldline and Glenn Beck would like you to think so, but most people who think this through will see it's a complete rip off.

If you want to buy gold or silver, it is still a good investment in many people's minds, but buyer beware. Look up the spot price and don't pay more than a small fee over that. Get a government issued coin like the Canadian maple leaf. Call your local coin shop and see if they have any. You should be investing in the metal only, not the collectible value. You can check the value of your investment daily online. When you want to sell your coin, you can expect to sell it back at the current spot price. The fact that your coin is "collectible" means nothing to the buyer. They see gold and they want to know how much it weighs. That extra you paid to Glenn Beck and his snake-oil salesmen goes down the drain.

Goldline is getting busted because they gave the appearance that they're selling gold, and their customers are investing in the metal, when in fact they're investing in barbie dolls and baseball cards.

[The_Casual_Observer]

1. If you try & sell gold items you would probably be lucky to get

1/2 of the going rate or less. Making a real profit buying things at retail is pretty much impossible.

[garybeck]

6. not true

if you have a 1 oz gold coin and you want to sell it, you can get close to the spot price usually if you call a local coin shop.

if you have several coins you can go to kitco.com and get close to the spot price.

[Turbineguy]

2. Or look at a gold ETF

[supernova]

3. Gold Krugerrands

I remember in the 70s people going to buy S.A. Krugerrands to try to hedge against inflation back then.

Yes, you have to look at what the metal is worth, not it's "value" as a "collectable." Re: collectables, ebay displays daily that most people overvalue their collections. If you like collecting, fine, just don't do it for the money.

[LynneSin]

4. People see $1700 and neglect to realize that is Retail price

when they go to sell their gold they'll only get wholesale which is much less.

[garybeck]

5. not really.

if you call a local coin shop, you will usually be able to sell a government issued gold coin at approximately the gold spot price, minus small fee. that's been my experience.

you can also go to kitco.com and see what they're buying and selling coins for. the difference between the buy and sell price is not huge. there is a minimum transaction though, and a seller fee, but if you bought a coin at $1000 and you're selling it at $1700, you don't mind paying a $15 fee, especially considering that you're probably not paying capital gains tax.

[Yavin4]

8. Gold and Silver Are Long Term Investments

If you're buying and selling it to turn a quick buck, then you're going to get screwed.

[Yavin4]

7. Just Compare The Premiums That Goldline Charges to other Gold Coin Sellers

And you will clearly see that Goldline is a rip off. They sponsor Beck because they know that his audience are suckers.

The tragedy is that most people should own some gold and silver. We're in a debt crisis 30+ years in the making, and it's not going to be solved any time soon. In fact, we're going to see cascading defaults, and having precious metals will be your only hope to survive.

[garybeck]

9. i agree, that's the point I was trying to make in the OP. If you pay a lot more than the spot price

you're getting ripped off.