Category: Money & Personal Finance

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Invest In A Successful Home Business This Year

Building a small business as a freelancer can be one of the best ways to invest in your lasting success. You don’t need a huge office or a lot of capital to get started. All you need is an idea and some space at home, and you can begin growing your successful home business from the ground up.

The following tips can help you reach your goals.

How To Start A Successful Home Business?

Set Up the Right Home Office

Finding the right place to work is a big part of starting a business. You will spend a significant amount of time building your company, so you need the right environment. It is worth investing some time and money into your home office. Make sure you keep this area as stress-free as possible; the less stressed you are, the more productive you will be.

You could redesign a room in your existing home to serve as an office. Alternatively, you may consider moving to a new home to get the right space. If you have very specific requirements, new construction may be the right option.

To find the right real estate for your home office needs, start by establishing a realistic budget and reviewing the steps involved with buying a house. Then, consider what your requirements are. They may include needing space for other team members or clients, for example. It often helps to get pre-approved for a loan before you start your search.

Register Your Business

One of the most important parts of starting a small business is registering it with the state. Many home business owners think that simply operating as a sole proprietorship is fine. However, it often makes sense to form a single-member limited liability company. This provides you with extra protection if you ever run into financial or legal difficulties. It also has tax benefits versus a C-corporation.

Registering your business will also help you with important steps, such as opening a business bank account and getting loans. Once you have formed your business entity, make sure to also register for the relevant tax identification numbers.

Make a Plan

Creating a business plan should also be part of your process. Even if you are the only person who will be involved in your business at the start, it is helpful to have a written plan. The process of writing will require you to carefully think through how you plan to run your company.

You’ll also need to perform some key analyses. For example, you will need to research the competition and perform a SWOT analysis to determine your strengths, weaknesses, opportunities, and threats.

Lastly, while you might not be ready to hire employees for a long time, you may find at some point that it’s highly beneficial to tap into freelancers with specific skills to help bring certain projects to life. When the time comes, look to freelancing job sites, where you can connect with a variety of freelancers who are experts in their fields.

Consider a Loan

Finally, you will need to ensure that you have enough capital to build and run your business. Most small business owners invest several thousand dollars themselves. However, it is not uncommon to need more funding. One option is to pursue a business partner or investor. Alternatively, you can apply for a small business loan; think first about the type of loan that will fit your circumstances, and then compare lenders.

Fortunately, there are a variety of entities that lend to new companies. This includes banks and alternative lenders. Additionally, you may consider an SBA loan. These are provided by traditional lenders but with the backing of the Small Business Administration. The SBA’s microloan program can be especially helpful for new home business owners.

When applying for loans, you’ll likely be having to send multiple documents to prospective lending institutions. You can simplify this process by using an online tool to combine PDFs into one file. Then you’ll only need to attach one file that contains all your documents.

Take the Leap Today and Begin Your Business Journey

Starting a new business as a freelancer can be an exciting and lucrative journey. Working from home and creating something that you own could be your ticket to professional satisfaction. However, many small businesses struggle at first. So, take the time to do things right and set yourself up with the resources (and real estate) you need to succeed.

May 4, 2022
From Unemployed To Self-Employed: How To Make Money As A Freelance Writer

It’s a tough time to be creative. Unemployment skyrocketed in the creative sector during the coronavirus pandemic. While pandemic relief programs extended a lifeline to unemployed writers and authors, those benefits have ended while the creative economy is still rebuilding.

What can you do if you’re still unemployed and searching for the right opportunity? You could walk dogs, drive for Uber, or pick up any number of gigs, but there’s a more lucrative way to use your time and talents. Becoming a self-employed writer keeps your skills fresh and your resumé current while between jobs.

Laying the groundwork for self-employment

Whether you’re working in the gig economy or starting a freelance business, there are certain things to know before striking out as a self-employed writer.

Cash flow can be inconsistent

Self-employment income ebbs and flows. Unfortunately, your bills don’t. Budgeting and building an emergency fund is more important than ever when you don’t have guaranteed income. Try a budgeting tool that lets you track expenses by category and watch your progress towards savings goals.

You need to pay quarterly taxes

Unlike W-2 employees, self-employed workers don’t have taxes deducted from their paycheck. You’re responsible for tracking earnings and paying quarterly estimated taxes if you’ll owe $1,000 or more in tax.

Insurance is a must

Writing is unlikely to cause personal injury or property damage, but there are other risks to worry about as a self-employed writer. Professional liability insurance protects against lawsuits related to copyright infringement, defamation, libel, and errors and omissions. It also makes you a more attractive hire for clients concerned with their own risk profile.

Creating a portfolio

Help yourself find job opportunities by creating a stellar portfolio, which will include sharing your best work with prospective employers. You can conveniently share your writing samples in one file by using an online merging tool to combine PDFs. Once all your samples are in one PDF, you can order them as you see fit.

8 ways to make money as a self-employed writer

What are the most lucrative ways to put your writing skills to work? Here are eight ways writers can jumpstart their income while between jobs.

Self-publish on Amazon

Amazon’s Kindle Direct Publishing system has made self-publishing easier and more accessible than ever. Of course, simply publishing an ebook doesn’t guarantee it sells. Research your book idea to see if it has traction on Amazon and invest in a great cover design and book description. When your e-book is complete, map out a launch plan to promote your work.

Pitch guests posts to blogs

Websites are hungry for content and willing to pay for high-quality blog posts in their niche. By selling guest blog posts, you meet this demand while building your own following as well. The most successful guest posters target blogs in their niche with an engaged readership. Look for blogs with a high volume of comments and social sharing and pitch posts that align with the site’s brand voice. If you have something you’re passionate about, you could even launch your own blog!

Join a content platform

You won’t earn as much writing for content platforms like Contently and Textbroker as you would as an independent writer, but you do avoid a lot of the legwork that goes into finding writing jobs. That makes content writing services a good solution when you’re juggling a side hustle on top of parenting, school, or other responsibilities.

Become a copywriter

If long-form content isn’t your style, copywriting is a reliable way to pay the bills for writers with a marketing background. Most copywriters specialize in a particular type of copy, such as advertising copy, product copy, social media copy, or email marketing copy. While you don’t necessarily need the experience to break into copywriting, a portfolio is a must for landing jobs. You can build a portfolio with spec work if you don’t have copywriting experience.

Find freelance jobs online

Writers can also compete for assignments on freelance job boards like FlexJobs, Upwork, and Guru. Clients on these sites are looking for technical writers, editors, PR experts, white paper authors, and other specialized writing services. However, freelance platforms do charge fees to users so you’ll need to adjust your rates accordingly.

Offer ghostwriting services

Do you know someone with a great story who needs help getting it on paper? Authors with established reputations can earn good money ghostwriting. Tap your network to see if old clients are sitting on a potential project. You’ll have the most success as an up-and-coming ghostwriter if you position yourself as an expert in a particular niche.

Host writing workshops online

Hosting workshops is another way writers can leverage their following. Writers can sell pre-recorded courses or livestream instructor-led workshops covering a wide range of writing topics. The most successful writing courses include multiple sessions and opportunities for feedback.

Sell subscriptions

No, I’m not talking about magazines. Subscription marketing takes one-off sales and turns them into a recurring income stream. Paid newsletters, short story subscriptions, and fee-based membership sites are three ways writers can earn money with subscriptions.

No one wants to find themselves out of a job and out of cash. But when you’re a writer, temporary unemployment is no reason to panic. Experienced writers are in high demand and you can earn good money for your skills on the freelance marketplace. Who knows — it might even be the start of a flourishing career as a self-employed writer.

December 17, 2021
Tips From Successful Small Business Owners

Small business owners have a lot of responsibilities on their shoulders, from making sure daily operations run smoothly to taking care of their employees, and it takes some careful planning to ensure success with it all. That’s where a solid set of practices comes in because it takes a lot of time and energy to stay focused on a quality product or service while also ensuring that the business as a whole runs like a well-oiled machine.

While some of these practices are generalized for any company, there are a few things you can do that are more tailored to your specific business and employees. Look for online resources for inspiration and ideas, such as Work Money Fun, a lifestyle blog that covers multiple topics. Then think about ways you can take action and make your business the best it can be.

Small Business Owners Should Use These Applications Toward Success

Make sure you have the right business structure

Your business structure plays a big role in the way you pay taxes and can offer you a measure of protection against liability issues, so it’s important to consider the right one for your needs. Forming an LLC means you can avoid double taxation while ensuring less paperwork than a corporation would have, and it gives you a structure that clearly spells out all the ownership terms for your business. There are several steps involved in forming an LLC, so read up on the rules and make sure you understand them before you get started. Once you’re familiar with the requirements, you can speed up the formation process with Zenbusiness, an online service that offers support to your business throughout.

Organize and prioritize

Once you have your business structure laid out, you can focus on getting the rest of your company organized. This might include delegating certain jobs to specific employees, such as social media management or customer support. It can also include going paperless and digitizing your invoices and receipts, setting up meetings to plan for sales or big events, or physically improving your workstations by updating technology and adding organizational tools. Planning two or three months ahead of time can help you prioritize projects and tasks and will ensure that everyone is on the same page.

Give yourself the right tools

While you’re getting organized, it’s important to think about the kinds of tools your business needs and how to implement them. CRM tools, accounting software, time tracking, and productivity management apps, and payment system upgrades are all great ways to keep your business on track, and many of them are either free or low-cost. These tools make it easier to stay in touch with your customers and provide them with quality service, and they’ll also help you and your employees communicate with each other more effectively.

This is also a good time to think about your marketing tools and how to connect with both existing and potential customers online and in person. Utilizing social media for sharing posts and ads is a major benefit, but you can use old-fashioned marketing methods–like billboards, flyers, and postcards–to bring attention to your business without breaking the bank.

Be responsive

When it comes to staying in touch with your customers, it’s a crucial practice to make sure you’re responsive to their needs in a timely manner. Offering a chat option on your website as well as your email address and phone number will give them a way to get in touch immediately; you can also consider having an app created for your business that works in harmony with your website and allows customers an easy way to find what they need even when they’re on the go.

Give your employees what they need to succeed

Sometimes, the best business practices aren’t just about what you can do for your customers; it’s also important to think about how you can make your employees feel supported so they can meet their own goals. You might start by offering paid time off or sick leave, financial assistance with tuition, health insurance, or childcare, or a work environment that helps them reduce stress. Create various forms of communication–such as private messaging, group messaging, and one-on-one meetings–so that everyone on your team can share ideas or solutions amongst themselves and with you. Making your employees feel valued is the best way to ensure that they stick with your business and give their job 100%.

Give yourself permission

Just as it’s important to take care of your employees, it’s crucial to make sure your mental and physical health is in good shape. Give yourself permission to say no, to wait until tomorrow to take care of a business issue, to take a day off. Running a business is a huge job, and if you don’t set some boundaries you face burnout, which in turn affects your ability to stay on top of things. If time management is a problem, look for helpful apps that will help you get through the day without feeling like you’ve left a dozen tasks unfinished.

Protect your business

You work hard every day to build your business into a success, so why put it in danger by ignoring things like cybersecurity? Create a multilevel approach to protecting your business by coming up with a training program for all employees that teaches them how to avoid scams, handle fraud, and keep passwords and emails secure. Invest in a payment system that offers secure transactions so your customers never have to worry about having their info exposed. Look for cybersecurity software that keeps your data safe and blocks malware and other online threats throughout the year so you aren’t faced with a costly surprise down the road.

The best actions to take to ensure a successful business will vary according to the city you’re in, how many employees you have, what your budget is, and what your goals are, and they’ll change depending on the year. Take a few minutes each month to sit down and plan for the coming weeks so you’ll always have peace of mind about what comes next.

November 28, 2021
Beginner’s Guide: How To Trade Crypto
There have been numerous news stories lately about cryptocurrencies, especially Bitcoin, and just how popular they are becoming. Bitcoin has hit all-time highs recently, and everyone is talking about how high it can go.

The Bitcoin Buzz

There has also been a buzz about how much money people have made with current Bitcoin prices.

In 2010, Bitcoin was worth $0.08, which means $1,000 would have purchased 12,500 Bitcoins. In April, Bitcoin hit the $60,000 mark, which is an impressive profit of $750 million.

Whilst you can never make any guarantees, there could still be potential trading Bitcoin and other cryptocurrencies. However it’s important you take the time to learn the basics and educate yourself before delving into any kind of investment.

What Are Cryptocurrencies?

Cryptocurrency – or crypto, is a form of digital currency. Bitcoin is the most popular, but there are other cryptocurrencies that can be traded.

Crypto is not controlled by a country or by banks. Cryptocurrencies are free from a country’s monetary policy. This decentralized currency is supposed to cut out the middleman, like banks, and make monetary transactions easier, and cheaper.

At this time, the most popular cryptocurrencies are:
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Tron (TRX)
- Chainlink (LINK)
- Cardano (ADA)
- XRP, formerly known as Ripple (XRP)
- Stellar (XLM)
Cryptocurrencies are held in a person’s digital wallet. These digital wallets can be mobile apps or on a desktop computer. Crypto transactions are recorded on a blockchain. A blockchain is like a database or a digital ledger that records transaction information.

Where Do Cryptocurrencies Come From?

Most cryptocurrencies are mined. For example, Bitcoin is just a number on a computer blockchain. In the case of cryptocurrencies, mining has nothing to do with digging into the ground.

Crypto mining is a process of verifying the transactions and then recording them in the blockchain ledger. This is accomplished by solving cryptographic puzzles using powerful computers. Once solved, it is added to the blockchain as a new Bitcoin. Miners receive rewards for their efforts.

Mining takes a great deal of computer power and electricity. It is estimated that the electricity needed to power these Bitcoin operations is 0.21% of all of the world’s electricity, or about what the country of Switzerland uses in a year.

What Factors Influence Cryptocurrency Price Fluctuations?

Before you can trade cryptocurrencies, it is helpful to know what causes them to rise and fall in price. Most cryptocurrencies, like Bitcoin, have a finite number of how many Bitcoins will be produced. Bitcoin is limited to 21 million tokens. It is estimated that the final Bitcoin will be mined in the year 2140.

Bitcoin’s price can change each day just like stocks, bonds, precious metals, and currencies. Fluctuations in price are how traders make or lose money. Supply and demand is one reason that cryptocurrency prices go up and go down.

Bitcoin is unique as unlike actual goods, the algorithm to mine Bitcoin only allows for one block to be found or created on average once every ten minutes. As more miners join in this competition to solve the math puzzles, the more difficult, and expensive mining becomes. This is to preserve the ten-minute interval.

As more companies accept Bitcoin as payment for products and services, the demand for the token will only increase. Other reasons that can cause a cryptocurrency to change in price include:
- Good or bad news can affect the price of cryptocurrencies.
- A major event like regulatory changes or security breaches.
- Major corporations buying and holding a cryptocurrency can reduce the supply, causing the price to rise.
How to Trade Cryptocurrencies

Cryptocurrencies can be volatile, which makes trading them potentially profitable but risky. Before someone can begin trading cryptocurrencies, they need to take the following steps.
- Open a brokerage account. Not all brokerage firms allow cryptocurrency trading, and the ones that do, might limit the trading to just a few of the popular cryptocurrencies.
- Fund the account. Before trading is allowed, money is to be transferred into the account.
- Decide on which of the cryptocurrencies to invest or trade in.
- Decide on the strategy or strategies that will be used for trading.
- Get a digital wallet to store your cryptocurrencies in.
Cryptocurrency Trading Strategies

Traders might use only one strategy or utilize several to trade cryptocurrencies. Before trading, traders need to become familiar with each trading strategy and the risks involved. Always have an exit point for any trade before entering into it.

Some of these strategies are investing more than trading, and other strategies are complicated and involve technical or fundamental analysis. Those that are interested in trading chart movements should learn about technical analysis and reading charts.

Trading cryptocurrencies is no place for learning on the job or the risk-averse. Serious traders will not take money for food or their mortgage and risk it on trading crypto. But some strategies are simple enough that with some knowledge, a trader can start profiting on the price fluctuations of crypto.

Buy and Hold

Buy and hold is more about investing in cryptocurrency than trading, but it’s one way to enter the cryptocurrency market. It is unlikely we will see the incredible gains that some people made when they bought Bitcoin years ago. But other cryptocurrencies that are cheaper, could potentially appreciate considerably.

Even though Bitcoin is currently around $60,000, investors can still buy smaller amounts to hold. Other cryptocurrencies cost much less to buy, like Cardano, which costs $1.42 at this time. The value could increase if it becomes popular. (Again, there are never any guarantees.)

Dollar Cost Averaging

Dollar-cost averaging is similar to buying and holding. An investor can take a fixed amount of money to invest in crypto and buy it once a week or once per month. Dollar-cost averaging smoothes out the highs and lows of the cost. Some days it might be higher when purchased, and other days it will be lower in price.

Day Trading

Day trading is a common trading strategy used for trading stocks and crypto. Day trading is simply opening and closing a trade on the same day. Day traders are hoping to profit on the intraday price movements of the crypto they are trading.

Day traders will typically use technical analysis and charting to spot price direction and movement. The key is to sell all positions before the end of the trading day and not hold a position overnight.

Swing Trading

Swing traders will hold positions longer than a day but usually no longer than one month. These traders will use both fundamental and technical analysis to make their buying and selling decisions. Swing trading is not as stressful as day trading and allows for a trade to fully develop.

This type of trading is usually dependent on waves of volatility. Volatility in the crypto market can move the underlying crypto for days or weeks in the same direction. Volatile conditions can be caused by unexpected news, expected news, or economic developments that affect a cryptocurrency. Traders can go short if the volatility is driving the crypto down or long if up.

Trend Trading

A trend that is moving the crypto markets can last up to several months to fully play out. Trend trading is taking advantage of that trend. Traders might look at trend lines, moving averages, and other charting techniques that can point to a developing trend.

Trend traders are always watching the price movement and the charts for a reversal of the current trend. When the trend switches, a trend trader can always start trading in the opposite direction. If the trend was up, they can close the long position and go short the downtrend.

Summary

Having a sound knowledge of how cryptocurrencies work is helpful for beginner traders to understand what might cause their price to move. Trading crypto does not have to be restricted to Bitcoin only, as there are plenty of other cryptocurrencies available to trade.

Beginners should stick to basic trading strategies until they get a feel for the crypto market in general and the various conditions that cause the market to move. When trading any market, including the crypto market, the key is to stay in the game, so start by making smaller trades as opposed to a substantial amount of money on one single trade.
July 2, 2021
A Beginner’s Guide to Investing in Gold
Investing in gold is one way to protect your portfolio against economic recessions. Many do not have gold in their portfolios because they are afraid of the risks or don’t know how to invest in gold. There are several ways investors can add gold to their stock and bond portfolios.

Why Invest in Gold

Unlike other forms of currency, gold has held its value fairly well for centuries. Gold has value beyond its use as currency. Much of the gold mined today is used in jewelry as well as electronics, industry, and aerospace.

Gold can be a useful way to hedge a stock portfolio against stock market declines. Gold tends to be countercyclical — when the stock market is falling, gold can often move upwards. For example, as the COVID-19 pandemic spread, gold outperformed most major commodities.

The best way to diversify a portfolio is to spread your risk in a variety of investments that are not closely related to each other. Stocks and bonds are one way to diversify a portfolio. Adding gold will further diversify a portfolio, protecting against stock and bond market downturns.

Gold as a Hedge

Gold can also hedge against a falling dollar. There have been some notable times in history when the dollar fell against other currencies. A recent example occurred starting around 1998 when the dollar fell due to large trade deficits among other reasons. When the dollar falls, gold usually rises as traders sell their dollars and buy gold.

Geopolitical concerns also cause gold to rise in price. When tensions rise around the world, many will start to buy gold. World tensions can increase for reasons like war, pandemics, economic problems, and a loss of confidence in the government. In times like these, gold is considered a safe haven compared to other forms of investments.

Investing in gold can also protect against inflation. As inflation increases, the purchasing power of currency drops. History has shown us that gold usually increases in value as the purchasing power drops. During periods of high inflation, stocks can drop in price, which is another reason some use gold to hedge their portfolios. But do note, that not everyone views gold as a hedge against inflation.

Inflation is one concern, but deflation is another. Last seen globally during the Great Depression of the 1930s, deflation is much rarer than inflation. Deflation happens when the price of items drops in price. That might sound like a positive thing, but it isn’t for the vast majority of people who are not sitting on a large amount of cash. Deflation can occur when business activity slows and the economy is under pressure by excessive debt.

Increased demand for gold will cause it to rise in price. During economic upturns, the need for gold can increase for industrial uses. Demand also increases when emerging countries have an increasing middle class. As their wealth increases, their demand for gold jewelry as well as electronics increases. During times of economic uncertainty, investors rushing to buy gold will also increase the demand.

A decrease in the gold supply could push gold prices higher. But the supply of gold is not expected to run out any time soon. Barrick Gold’s Nevada Gold Mines, the single largest gold mining complex in the world, produces 3.5 million ounces of gold per year. Problems at mines like worker strikes and accidents can cause production to fall.

How to Invest in Gold

There are numerous ways investors can gain exposure in gold, each with its advantages and disadvantages. And an investor does not have to stick to just one way to invest, by using several ways, risk can be lessened. The ways to begin investing in gold include:
- Buy gold bars and gold coins
- Buy gold exchange-traded-funds (ETFs), closed-end funds (CEFs) or mutual funds.
- Buy stocks in gold mining companies
- Buy gold certificates.
Gold Bullion

Gold bullion is normally purchased in the form of bars or coins. This is as easy as going to a precious metals dealer in person or buying it online. Investors can buy gold bars in sizes ranging from a quarter-ounce wafer to a 400-ounce bar.

Buying gold coins is the most common way for beginning investors to own gold. Gold bullion coins purchased for investment purposes should not be confused with collectible coins which have a numismatic value.

Unless you are a coin collector, avoid collectible coins. Their values are based not only on the gold content, but also on the age, rarity, and condition of the coin. Avoid proof coins as well because they will cost more.

The most popular gold bullion coins for gold investors include:
- The American Eagle
- The South African Krugerrand
- The Canadian Maple Leaf.
Always buy gold coins from reputable dealers. Avoid special commemorative gold coins that investors might see advertised. Stick with the popular gold coins minted by governments like American Eagles.

When buying gold coins, investors will always pay more than the spot price of gold. Dealers have to make a profit, and this profit is called the markup. Before buying gold, check the “spot price.” The markup (or “premium”) will be anywhere from 5% to 9% of the spot price (per ounce). Investors shouldn’t pay more than that when they buy gold coins. But be aware that shortages can drive the premium higher.

There are numerous advantages to owning gold coins. A person can hold $50,000 in their hands. Gold coins cannot be destroyed by water or the passage of time.

Other advantages to owning gold coins include:
- Gold coins have high liquidity. Unlike other types of collectibles, gold can be sold almost anywhere in the world.
- Gold holds a lot of value per ounce. They can be stored in a small safe at home or in a bank’s safe deposit box
- It is free of what is called counterparty risk. This means it doesn’t require the backing of a country or central bank.
- Gold cannot be hacked like digital currencies that are held on cryptocurrency blockchains.
- Owning gold is private and confidential.
There are a couple of disadvantages to owning gold coins.
- Storing too much gold at home puts you at risk of theft.
- Gold doesn’t produce income as dividend-paying stocks do. But then again, many of today’s hottest stocks also don’t produce an income in the form of dividends.
- Another disadvantage is that gold can have a higher capital gains tax than other investments.
Shares in Gold Funds

Exchange-traded-funds (ETFs) are bought and sold like stocks. Gold ETFs track the movement of the price of gold. But depending on the particular ETF you invest it, it may or may not be backed fully by gold bullion.

One of the largest gold exchange-traded funds is GLD. Its shares are traded on the New York Stock Exchange with other stocks and ETFs. Each share of GLD represents slightly less than one-tenth of an ounce of gold. If the price of gold is $1,000, one share of GLD will cost around $100. This gives investors an easy and less expensive way to invest in gold and profit from the increase in gold prices.

Be aware that for many gold-backed ETFs, when you buy shares you do not own the actual underlying gold represented by the shares, but you may be taxed as though you do. In the United States, for example, physical gold is usually taxed under the “collectibles” rate, which runs at a maximum of 28%.

For US citizens, an exception is the Canada-based Sprott Physical Gold Trust (NYSE:PHYS) which is backed 100% by gold but is a foreign “CEF” — or “closed-end fund.” This means that the same capital gains tax rates that apply to stock, would apply to your ownership of gold through Sprott. This makes it probably the most cost-effective way to buy and own gold in the United States.

Gold Mining and Exploration Stocks

Those new to gold investing will hear about gold mining stocks. These stocks are another way to invest in gold without actually owning the metal itself. Most of the mines not only produce gold but other precious metals like silver.

Gold mining stocks are far riskier to invest in though. It requires more knowledge on your part. Employee strikes, mining accidents, not finding as much gold as they thought, or finding a new vein of gold can affect the stock price of gold mining stocks.

Gold Certificates

Gold certificates are a way for investors to own gold without having it in their possession. The most trusted gold certificate is offered by the Perth Mint in Australia.

The government of Western Australia guarantee will cover all of the gold held in storage for holders of their gold certificates.

Taxes on Gold

As we mentioned, gold and all precious metals are usually considered “collectibles” by the US Internal Revenue Service. They are taxed as collectibles when you sell your gold at a profit. This carries a maximum rate of 28%.

The exception is if a US citizen invests in a foreign closed-end fund (CEF), namely the Sprott physical metal trusts, which are taxed at the lower capital gains rate applied to stocks.

All beginners to gold investing should understand capital gains taxes on precious metals and speak to a tax professional before investing.

Wrapping It Up
- Buying gold coins and small bars is the costliest way to invest in gold because each piece carries a retail markup called a “premium.” Also: these items are taxed as “collectibles” at a high rate.
- If you are a US citizen, the Sprott Physical Gold Trust (NYSE: PHYS) is perhaps the most cost-effective way to buy gold, because of its favorable tax status. Shares are quite affordable at little over $14 per share. At this price anyone can afford to invest in gold. Plus you will own the underlying metal that the shares represent.
- There are many ETFs available to invest in. Be sure to understand though how you will be taxed for them and whether or not you will own the underlying gold. You may not care about the latter, but it doesn’t make sense to invest in a gold ETF that is taxed at a higher rate than the Sprott Physical Gold Trust (NYSE: PHYS).
- Mining and exploration stocks are riskier than investing in the metal itself.
- Online services like BullionVault.com provide an easy and cost-effective way to buy gold and they’ll store it for you. But you’ll be taxed at the higher “collectibles” rate if you are a US citizen.
Summary

There are many ways to invest in gold, but taking a bit of time to learn the basics will help you avoid overpaying for it.

And that will make you wiser than many people in the market.
March 8, 2021