Gyroscopic Investing

The Perth Mint Certificate from Australia was mentioned on this forum as a way to hold gold in an IRA.  Comments, criticisms, opinions,....

It is a good program. The limitation is you need minimum of $10k to purchase and you need to use an authorized dealer. If you have over $50k you can go to the mint directly and bypass the dealers, which is what I'd recommend if you are in that situation. Bron Suchecki posts here and works at the Perth Mint and will hopefully chime in. I'm not sure you can use the certificates in an IRA though. Perhaps someone has better info though on this than I do.

Overall the mint is a very solid institution and runs a very good business.

Pros and Cons as compared to IAU in an IRA?

Gebo wrote: Pros and Cons as compared to IAU in an IRA?

Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

Frankly the level of trust I have for Perth Mint over an etf like IAU is radically different. The ETFs are for convenience and not safety. Perth mint you get geographic diversification of physical gold bullion. It's on a completely different level than IAU in terms of diversification power against bad market events in the US.

Craig, Do you have any research about Goldmoney.com?

escafandro wrote: Craig, Do you have any research about Goldmoney.com?

I put goldmoney.com and bullionvault.com in the same category as gold etfs. More for convenience than safety. Perth mint is a better option for geographic diversification.

craigr wrote: I put goldmoney.com and bullionvault.com in the same category as gold etfs. More for convenience than safety. Perth mint is a better option for geographic diversification.

Thanks.
The only thing is that with GoldMoney in theory one would be buying physical gold actually.
I like Perth Mint but the 1.00% storage fee is a little high number.

If you come direct above $50k we still charge the same entry/exit fee so it is personal preference but most prefer the convenience of dealing with someone local.

Our storage fees are not the cheapest, but then our metal is fully insured with the backup of a Government Guarantee should the insurance not pay out. Plus our Depository computer systems are not connected to the internet, so a lot harder for hackers to get to.

craigr wrote: Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

With a 35% collectibles tax, why would you not want to hold gold in a tax deferred?

craigr wrote:

Gebo wrote: Pros and Cons as compared to IAU in an IRA?

Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

Frankly the level of trust I have for Perth Mint over an etf like IAU is radically different. The ETFs are for convenience and not safety. Perth mint you get geographic diversification of physical gold bullion. It's on a completely different level than IAU in terms of diversification power against bad market events in the US.

Help me understand.  If I am committing to the PP  and am in the process of investing money now, what do you mean when you say "Gold is the last asset you want in tax deferred."?  It's gonna take me an hour or so to do all my investing with Vanguard once I make my decisions.  I am going to roll all of my IRA from Fairholme to Vanguard.  I will have the money "in hand." No period of accumulation needed.

Also, are you suggesting I put say 1/2 my 25K in Perth and the other half in IAU?  Seems like a reasonable ratio which would leave me 10K or so in IAU to do any rebalancing with?  Perth charges 2.25% to purchase and it seems the storage would be 1% per year. 



I've never purchased gold bullion or coins at any time in my life.  I'm not a doomsday kind of guy.  I am committed to the Browne plan  with 1/2 my IRA savings.

Gebo wrote:

craigr wrote:

Gebo wrote: Pros and Cons as compared to IAU in an IRA?

Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

Frankly the level of trust I have for Perth Mint over an etf like IAU is radically different. The ETFs are for convenience and not safety. Perth mint you get geographic diversification of physical gold bullion. It's on a completely different level than IAU in terms of diversification power against bad market events in the US.

Help me understand.  If I am committing to the PP  and am in the process of investing money now, what do you mean when you say "Gold is the last asset you want in tax deferred."?  It's gonna take me an hour or so to do all my investing with Vanguard once I make my decisions.  I am going to roll all of my IRA from Fairholme to Vanguard.  I will have the money "in hand." No period of accumulation needed.

Also, are you suggesting I put say 1/2 my 25K in Perth and the other half in IAU?  Seems like a reasonable ratio which would leave me 10K or so in IAU to do any rebalancing with?  Perth charges 2.25% to purchase and it seems the storage would be 1% per year. 



I've never purchased gold bullion or coins at any time in my life.  I'm not a doomsday kind of guy.  I am committed to the Browne plan  with 1/2 my IRA savings.

I think the point is that if you are still in the wealth accumulation stage of life you want to use tax deferred accounts for the other PP assets first because they generate otherwise taxable income in the form of yield and dividends. Gold pays no dividend. The only time you will be taxed on your gold is if you are selling it. So yea you want to give preference to the other assets in tax sheltered accounts. Also ideally you should hold at least some of your gold physically as a hedge against something really really bad happening. Gold in an IRA may not be easily accessible in a crisis.

MachineGhost wrote:

craigr wrote: Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

With a 35% collectibles tax, why would you not want to hold gold in a tax deferred?

The maximum tax rate federally for gold is 28%. But that is only if you are the very highest tax bracket for income. The marginal tax rate or 28% is what is owed, whichever is lower. Most people will not be in the 28% bracket. Of course there are state taxes possible on the gains as they are with stock gains and that is situation dependent.

But since gold does not pay interest or dividends like bonds, cash or bonds you can control the taxes better. You can decide when to take the gains. They are are not dumped into your lap constantly like the other assets will do. So there is tax advantage sheltering those other assets first. If you have room left over, then put in some gold if you'd like. But I still think leaving some out for emergencies is a good idea. You can deposit gold American Eagles into an IRA according to the IRS, but the custodian needs to hold them and not you. So if you needed to access the asset quickly in an emergency it could be difficult.

Gebo wrote:

craigr wrote:

Gebo wrote: Pros and Cons as compared to IAU in an IRA?

Gold is the last asset you want in tax deferred. IMO. Fill it first with bonds, cash and stocks. Keep some cash out for emergencies though. Gold can go in last, but don't put all of it in there.

Frankly the level of trust I have for Perth Mint over an etf like IAU is radically different. The ETFs are for convenience and not safety. Perth mint you get geographic diversification of physical gold bullion. It's on a completely different level than IAU in terms of diversification power against bad market events in the US.

Help me understand.  If I am committing to the PP  and am in the process of investing money now, what do you mean when you say "Gold is the last asset you want in tax deferred."?  It's gonna take me an hour or so to do all my investing with Vanguard once I make my decisions.  I am going to roll all of my IRA from Fairholme to Vanguard.  I will have the money "in hand." No period of accumulation needed.

Usually you want to first shelter your bonds, cash and stocks first as they are constantly paying off interest, dividends and capital gains. If you have room left in the IRA (and in a rollover you will), then you can also put in a gold allocation as well. But it will be an ETF for gold, or maybe a Perth Mint certificate, or maybe gold eagles at a custodian.

The main thing though is you won't have direct access to the asset in an emergency. So personally I like having some gold in a way that is not tied up in tax-deferred because there are penalties and other blocks in the way to get to it if you need to. In this case I would say keep some gold (and cash) outside in some form that you can get to in an emergency or handle unexpected events. You don't want all your liquid wealth tied up in tax-deferred savings.

Now I'm not saying pull out money from tax-deferred and pay penalties to do this if you don't have it now. But what I am saying is with future savings it may make sense to build up outside cash/gold that is not tax-deferred as an emergency savings asset.

Also, are you suggesting I put say 1/2 my 25K in Perth and the other half in IAU?  Seems like a reasonable ratio which would leave me 10K or so in IAU to do any rebalancing with?  Perth charges 2.25% to purchase and it seems the storage would be 1% per year.

If you were going to use Perth, personally I'd do it outside the IRA. This is because the main feature of Perth (for me anyway), is you get this geographic diversification that is more closely controlled by you. Once you dump it into an IRA you lose some control over these things.

But you know I'm the kind of guy that is wary of things like govt. nationalizing retirement assets (for your own protection of course). So I don't want all my money in custodian accounts that are easily snatched in the event of a national emergency. I want to have some assets that I'll have the final say what will happen and not some politician like happened in Argentina a few years back:

http://online.wsj.com/article/SB122471757680560465.html

Argentine President Cristina Kirchner announced this week that her government intends to nationalize the country's private pension system. If Congress approves this property grab, $30 billion in individually held retirement accounts -- think 401(k)s -- managed by private pension funds will become government property.

So by all means you can use an ETF in the IRA if you'd like for the gold for the convenience. But I would also have some gold allocated outside the IRA and if you could do some in Perth Mint for geographic diversification that's all the better.

Did Kirchner say that you didn't earn that retirement money...the government did before she seized it?

Reub wrote: Did Kirchner say that you didn't earn that retirement money...the government did before she seized it?

I use countries like Argentina as the model for government destruction of an economy. So it's interesting to see how they do things because a variant of the government response will probably be what happens in the U.S. if they hit the same situations.

BTW. Some academics have testified in front of congress about the need to take over private retirement savings in the U.S. The fact that such people are allowed to even voice these things in front of congress means that they are floating up trial balloons to see if they take flight.

Investor's Business Daily talked about Ireland's grab for retirement plans as well:

http://news.investors.com/article/57195 ... htm?p=full

Ireland says it will seize parts of its citizens' private pensions so politicians can spend more — a truly awful idea that may be coming to a government near you.

Ireland? Surely, it can't happen here, you say. But it can. Indeed, governments at both the state and federal level have moved more than once to seize all or part of the money you've saved for retirement.

Ireland's plan might not seem like much. Britain under Labor Party Prime Minister Gordon Brown did something similar in 2008. And Argentina actually seized all private pensions that same year.

Not trying to fan any flames here. Just stating again that having some money outside of retirement accounts (and even outside where you live) is not a bad idea.