Personal experience: I buy gold investment coins and earn more than 40% per year on it

I started investing in bullion coins in 2006. I bought my first coin, the “Sower” chervonets, in mid-2006 at a price of 4,650 rubles. Now I can sell it for 41,000 rubles. Over 15 years, Sower has grown by 782% (52% per year).

I made one of the last transactions to purchase coins - “St. George the Victorious” - in August 2021. I bought a coin for 26,000 rubles. Now I can sell it for 38,500 rubles. The profitability for a year and a half of ownership was 48.07%.

In total, I bought 10 gold investment coins, spending 260,000 rubles on it, if today I decide to sell them, then my total income will be 125,000 rubles (48.07%).

My experience clearly shows that over the long term you can make good money on investment coins.

Commemorative coin

Investment coin “St. George the Victorious”

What types of coins are there?

Bullion coins include high-grade gold, silver, and sometimes platinum coins. As a rule, most gold coins have a fineness of at least 900 (90% pure gold in the item) or higher. Example: gold “St. George the Victorious” has 999 fineness. It is issued by the Central Bank of Russia. The authenticity of the weight of the precious metal in the bullion coin is guaranteed by the state.

Coins are legal tender and have a denomination (10, 50, etc. ₽). The face value does not reflect their real value, since the market valuation is influenced by the purity of the metal, weight, existing defects and other indicators. For example, the face value of “St. George the Victorious” is 50 ₽, but you can buy it for at least 38,000 ₽. You can freely pay with this coin in a store, but, unfortunately, it will be accepted at face value (50 ₽).

It is necessary to distinguish investment coins from commemorative coins made of precious metals. Investment coins do not have complex artistic images and are produced in large quantities using simple minting technology (in 2021, the circulation of the gold “George the Victorious” was 500,000 coins). Their main task is to be a means of preserving savings.

Commemorative coins are issued for some event, and they cannot be found in circulation; they are sold in banks or numismatic stores. The cost of commemorative coins does not depend on the weight of the precious metal, but on the artistic value and minting limit. They can have a value many times higher than the nominal value.

Let's sum it up

Commemorative coins from Rosselkhozbank are a treasure for numismatists, as well as a truly precious gift for loved ones. Their feature is a limited edition, which is why they acquire additional significance for collectors.

The cost of minting may depend on various factors, among which it is worth highlighting such as the metal of which the coin itself is made and the appearance of the specimen.

An expert assessment allows you to determine the real cost of minting, which is especially important when selling.

Investment strategy

Earnings from investing in investment coins are made up of the difference between the purchase and sale prices.

When investing part of your savings in coins, it is worth remembering that tangible returns on investments can only be obtained with long-term investing. The longer the term, the more profit you can get. It is better to invest in it for at least 5 years, and better - from 20 years.

For those who expect to make quick money, this investment instrument is not suitable. In addition, the presence of a spread (the difference between the purchase and sale prices), sometimes reaching 10%, significantly reduces profits. That is, if you buy a coin today for 10 thousand rubles, tomorrow you can sell it at best for 9 thousand rubles. It's like buying a car at a car dealership - as soon as you drive it out, the car immediately loses value. All this should be taken into account before you start investing.

I invest about 20% of my savings in gold coins. They are one of the financial instruments with which I create capital for the education of my children and for my retirement. In the future, I think that the coins set aside for children's education will, if necessary, be redeemed from my pension fund.

Read on topic: Gold: investment instructions

Are deposits in GOLD profitable today?

The question of whether investing in gold and directly in unallocated metal accounts is a profitable option today requires indicating the term of the deposit. In the short term, there is no point in buying and selling gold due to high spreads. But over the course of years, the price of gold is constantly rising, and the one who made such an investment 20 years ago today received a profit that recouped the investment several times over.

Few people can answer whether gold will grow just as rapidly now. But it is a fact that the price of precious metals will rise. Compulsory medical insurance allows you to eliminate all the risks and troubles associated with storing bullion and coins, but it is not insured. A metal account can be opened for a child and the deposit can be protected at the legislative level.

Regardless of the type of investment in gold, you can make money on it only if the price of the metal increases. Gold reserves are limited in the world; after a fall, its price still always rises.

Pros and cons of gold bullion coins

➕ Investment coins are an asset that steadily grows in price over time.

➕ This is a protective asset in times when the economy is down.

➕ Over the long term, you can earn from 40% on gold investment coins.

➕ Investment coins, unlike gold bars, are exempt from paying 20% ​​VAT.

➕ Investment coins have good liquidity and are sold with a small premium to the market price of gold.

➖ This is not an asset that will allow you to earn money quickly. You need to invest in it for at least 5 years.

➖ Investment coins must be carefully stored for many years. Any scratches or marks on them will result in a reduction in price.

➖ Income from the sale of investment coins is subject to taxation at a rate of 13%. The investor must independently submit a declaration to the Federal Tax Service.

Prospects for further growth in gold prices

As we already indicated at the beginning of the review, the price of a troy ounce of gold at the beginning of July 2021 exceeded 1,800 US dollars. Analysts do not consider this value to be a peak and hope for further growth. How long will it last? For example, Alpari IAC expert Anna Bodrova indicates the duration of this period from six months to one and a half years. Otkritie Research specialists indicate that in the presence of a second wave of coronavirus, the price of gold will inevitably jump over $1,900 per ounce. Ryan Giannotto (Director of Research at GraniteShares) suggests that by the end of 2021, an ounce of gold will cost two thousand dollars, as financial markets are in a frenzy and capital holders will try to move into more conservative and stable assets, which includes gold. But Bank of America experts suggested that in a year and a half, gold will quite possibly reach the $3,000 mark. However, it is worth remembering the words of experts: “Gold itself does not generate income, does not pay interest or dividends.”

How to choose and buy investment coins

Now the most popular gold coins in Russia are the gold chervonets “Sower” and “George the Victorious”. I buy them.

Coins can be purchased:

• in banks (Sberbank, Rosselkhozbank, Transstroibank and others);
• from specialized coin dealers (TradingGold, Auris Precious Metals, Gold Reserve, etc.);
• from private companies selling them in stores (ShopCoins.ru, MONETNIK.ru, NUMIZMAT.ru, etc.);
• through websites (AVITO, Yula, Flea Market).

To protect yourself from buying a fake, it is better to buy coins in banks. This guarantees authenticity.

Each seller sets their own price, and often the price for the same coin can differ by 1000–2000 rubles.

Once a seller has been selected, it would be a good idea to call and check the sales price directly with a bank employee. In the summer of 2019, when gold prices began to rise, the selling price of coins increased almost daily. One bank offered me to “freeze” the price for three days, which was a pleasant surprise for me and allowed me to buy a gold “St. George the Victorious” at a price that suited me.

When purchasing “St. George the Victorious,” you need to know some features: coins are produced by both the Moscow Mint and the St. Petersburg Mint. The prices of “George the Victorious” from the Moscow courtyard are higher than those of its counterpart from the northern capital. There is an explanation for this: in 2008–2013, diffuse contamination of coins with gold particles was encountered at the St. Petersburg Mint, as a result of which they rusted. Although this problem has been resolved, there is no guarantee that purchased coins will not become rusty.

Before purchasing a coin, it is better to check its condition. To do this, you need to carefully open the protective capsule and carefully examine the coin on both sides. The coin should not have any scratches, abrasions or other defects.

Operations with precious metals

RSHB offers to open accounts based on precious metal. The following options are accepted:

• gold;
• silver;
• platinum;
• palladium.

A separate invoice is provided under the abbreviation OMS, where the amount of metal is displayed in grams. Please note that personal account information is not provided.

If the client’s data has changed after execution of the contract, the user must notify the institution in order to freely use the assets. The contract form and sample form can be downloaded from the official website.

The bank also offers to sell and buy precious metal bars, which are specially marked by Russian refining organizations. The content of chemically pure base precious metal is equal to 99.99% of the alloy mass of the ingot.

How to store investment coins

A purchased coin can be sold at a good price in the future only if it has no mechanical or chemical damage.

The coin must be reliably protected from exposure to direct sunlight, aggressive substances and temperature fluctuations. All this can damage her. It is better not to remove the coin from the transparent capsule in which it is sold, since the latter protects it from dents, scratches, chips and abrasions. You should not take the coin out of the capsule and touch it with your hands - there will be a fingerprint that cannot be removed. This will reduce the value of the coin.

Since coins will have to be stored for many years, it is better to use a safe for this. I recommend a burglar-resistant safe with a small mechanical or electronic combination lock. The price for such safes starts from 4000 ₽.

Read on topic: How to choose a safe for your home?

How to sell investment coins

Coins can be sold through a bank, coin dealer, or numismatic stores. Every day, the Central Bank of Russia sets quotes for precious metals. This price affects the value of investment coins. Following the Central Bank, based on its quotes, commercial banks also set their purchase and sale prices for coins, setting a small percentage of the margin. The price for purchasing a coin from each bank may vary. In addition, some banks only sell investment coins, but do not buy them back.

Most banks buy investment coins, but they do this only in certain branches; it’s just that not all branches have appraisers. The appraiser examines the coin, determines its authenticity and condition. He looks for defects: scratches, dents, stains on the surface. Many defects are not a deal breaker, but you need to know that they reduce the redemption value of the coin. Some banks only buy coins in perfect condition.

Before selling, you need to call the call center of a particular bank and find out if they are engaged in buying back investment coins. If yes, then you need to find out which branch you can go to.

For example, Sberbank redeems coins in Moscow only in two branches (on Tverskaya, 22 and Vavilova, 19). Rosselkhozbank can only accept coins in four Moscow branches.

To get the maximum price for a coin, it must be in perfect condition.

To sell investment coins through a bank, an individual will need a passport. During the transaction, the bank will issue incoming and outgoing orders.

Selling coins through a coin dealer or numismatic store is similar to selling through a bank. It is necessary to pre-arrange a meeting with the responsible employee. He will inspect the coin, assess its authenticity and set a price. If agreed, the transaction will be formalized as a purchase and sale agreement between an individual and a legal entity.

Unfortunately, I cannot yet share my experience of selling gold coins. I invest in them for a very long time. So I won’t be able to tell you how and for how much I’ll be able to sell the coins until I retire.

Put your earned money into a deposit with a high rate

Denominations

The denominations accepted by Sberbank are divided into those purchased on an ongoing basis and periodically. At any time, you can sell domestic investment and some commemorative (anniversary) gold coins. Denominations issued in limited quantities are well appreciated.

Sberbank accepts the following Russian gold coins:

Exchange methods

The exchange service is not provided at Sberbank. It can only be exchanged for banknotes, that is, sold. If you are into collecting and there are two identical pieces in stock, you can try to exchange it for one of similar value with a colleague - a numismatist or collector.

Another option - selling and buying a new one - may not be as profitable due to the bank spread (the difference between the sale and repurchase prices).

What taxes do you need to pay?

Bullion coins are property. Therefore, profits received from their sale are subject to personal income tax at the rate of 13%. If you bought a coin, sold it and made a profit, then you will need to report it on your tax return for the year. For example, in 2021 you sold a coin, you will need to file a return and indicate this income by April 30, 2022. The tax itself will need to be paid by July 15, 2022.

But if you own a coin for more than three years, then you no longer need to pay tax after selling it (clause 17.1 of Article 217 of the Tax Code of the Russian Federation). In this case, the date of purchase of the coin must be documented, otherwise tax may be charged on the full cost.

Read on topic: Who needs to pay taxes and how much in 2021

Alternative places of sale

Gold coins are sold in specialized markets and forums, to resellers and collectors. Severely damaged copies can only be returned to a pawnshop; in this case, the item of pledge will be assigned the category of scrap.

Expert opinion

Alexander Ivanovich

Private collector with 4500+ coins and bonds in his personal collection. Knows the value of each of them today.

The pawnshop issues money for its weight in gold, without taking into account the collectible and artistic value.

Internet auctions

Popular platforms in Russia where you can buy and sell gold coins are Avito, auction.ru, rarecoins.ru, numismatic.ru, wolmar.ru. The site displays an item at a predetermined price or waits for the buyer who will offer more than the rest.

You must pay a commission to participate in the auction. The advantage of the deal is that you can get the real value of a rare item for the lot.

Sale to private collectors

For a sale to a collector to be profitable, you need to have at least a little understanding of numismatics. The potential buyer will lower the price. If you want to sell a foreign, Soviet or ancient coin, you should look for a buyer on numismatist trading platforms.

My advice to those who want to invest in gold bullion coins

1.

It is necessary to buy investment coins for a period of at least 5 years.

2.

To avoid becoming a victim of fraud, it is better to buy investment coins from a bank.

3.

Each bank sets its own prices for selling coins. It is better to study their offers and choose the most profitable one.

4.

Investment coins must be carefully stored and protected from mechanical and chemical damage. The better the condition of the coin, the more favorable the price it can be sold.

5.

You must keep all documents confirming the purchase of coins. This will help you avoid paying tax in the future when you sell them.