Budgeting For Beginners

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Budgeting For Beginners

Few things are more frustrating than running out of money. When you are staring at an empty checking account, it can feel like the whole world is against you--especially anyone who you owe money. However, a few years ago I learned a few tricks for budgeting that really made a difference in my life. I have been able to get my spending under control and learn how to save. I have also learned how to prioritize my spending so that I don't have to worry about running out of cash. This website is here for anyone who has ever struggled with money.

Should You Cash In On Gold's Record High Prices Now Or Wait?

If you have some old gold jewelry you've been hoarding in anticipation of rising gold prices, or if you recently inherited some gold items you don't plan to use, you may be wondering whether the recent rise in the per-ounce price of gold is here to stay. Selling your gold, even scrap gold, during a time of high prices can be a lucrative investment -- however, there are some arguments in favor of waiting even longer to sell. Read on to learn more about some factors you'll want to consider when liquidating your gold supply, as well as some situations in which investing in gold at a high price point could prove valuable.

What should you consider when deciding whether to sell scrap gold?

With "we buy gold" storefronts popping up in every city and some companies even offering mail-in exchanges of gold and silver jewelry, it can be hard to know where to begin when it comes to selling your scrap gold. 

First, it's important to know how your gold is used (and how the various gold-exchange businesses operate). Because gold is "infinitely recyclable," never returning to the ground once it has originally been mined, even the trace amounts of gold present on old jewelry or coins can hold value. Gold is also one of the softer metals in its pure state, making it easier to recycle than some other non-ferrous metals that require a high melting point.

When gold is sold to a storefront or mail-in retailer, it is sent off to a refinery, where it is melted down and purified. The refinery will then return this gold to the retailer or sell it to a manufacturer, giving the retailer a cut of this profit. Because the refining process can take some time, these stores will generally weigh your jewelry on the spot and estimate how much pure gold it contains, then offer you a purchase price based on the current per-ounce value of gold. If you disagree with this price (or the amount of gold estimated to be in your jewelry) you can contest the appraisal or simply seek out another store.

The question of when to sell your gold largely depends on your age, finances, and future plans. Because compound interest works in your favor during your younger years, selling this gold at the beginning of your career and socking the proceeds into a mutual fund can yield huge dividends. On the other hand, if you're later in your career with a shaky job situation and not enough saved for retirement, keeping this gold "illiquid" and selling it when you truly need the money may be a better idea. 

Is investing in gold bullion or stocks during a time of high prices ever wise?

Once you've decided that selling your old gold jewelry or other scrap gold is a wise decision at this point in time, you may be a bit discouraged to no longer have gold in your portfolio -- even in scrap form. However, purchasing gold bullion or coins at record high prices is often a recipe for a bad investment unless prices continue to skyrocket for years.

However, those who want to capitalize on rising gold prices without putting their own assets at risk when gold prices drop may want to investigate gold options. Unlike a stock, bond, or exchange-traded fund (ETF) that tracks the price of a commodity or company, an option simply gives you the choice to buy a specified number of shares at a certain price in the future. Options can be useful for "bubble" commodities that may be headed for a downward slide soon, as they allow you the flexibility to buy at a lower price if the slide has already begun or hang on and wait for prices to drop further without risking your capital.

Purchasing gold options can often be a good hedge against volatile prices by allowing you to "lock in" the ability to purchase shares of gold stocks (or even physical gold itself) at a lower price in the future, without forcing you to buy these shares if prices remain high through the end of your option period. 

For more information and options, talk with a company that buys and sells gold, like Rocky Mountain Gold & Silver Exchange, directly.