Tuesday, October 26, 2010

Where to buy gold jewelry

There are a lot of sources for gold jewelry. Jewelry stores are the last place that you want to look. Even at the "80% off blowout sales" you can expect to pay a hefty premium over spot. There are plenty of other great places to buy gold, though.

Department stores like Wal-Mart and K-Mart are probably the easiest places to find cheap gold at close to spot. Just look for the clearance items. You can usually find some really small baubles for $15-$100 in 10k and 14k. You can bring a scale but a lot of times the tag will have the weight on it in grams. I've found several pieces for 10% under spot on the clearance rack. Keep in mind that most of the bigger pieces are hollow so they're lightweight and fragile. This is actually a benefit in my eyes since it's a lot cheaper that way. Department stores are the cheapest source for gold that you know is real without having to test it.

Pawn shops are another option. Most of them will mark down substantially anything that's been on the shelf for a while. I just picked up a ring with a 1/10 oz gold eagle in it for less than spot because they'd had it for over 6 months. Bring a scale and if you're not sure if it's real ask them to test it. They should have an acid gold testing kit handy. I'll explain how those work in another article. If you're not into haggling then you probably won't like pawn shops much. A lot of times the sticker price will be pretty close to retail. I use that as a basis for what I can potentially get the price down to. Since most pawn shops will buy anything it pays to know how to deal with them. They can be great sources for all kinds of preparedness gear. You just have to be wary and know what you're looking for.

Coin shops can also be a good source of gold jewelry. Most shops that I frequent have a small selection of gold jewelry under the glass or in the back. You just have to ask to look at it. The one that I go to sells it at spot. Unfortunately, the selection is usually very limited and a lot of times they won't have any selection at all. Coin shops are by far my favorite place to buy gold jewelry just because they only care about the value of the gold. Unfortunately, they have to have some in stock for me to buy it. Sometimes you can get some really nice pieces that you might even be able to sell for a premium at the right jewelry store or on Ebay. It's always worthwhile to at least ask.

There are a few other sources that I haven't really dabbled in yet. I know that you can get some deals on Ebay if you know what to search for. Starting with "scrap gold" should get you on the right track. I just don't trust it enough. Stick to reputable dealers with high feedback if you're going to use Ebay. After a quick search I saw a few really good deals that were ending in minutes. I imagine that this goes on all day.

Garage and estate sales can work. You won't usually find anything of significant value here, though, without doing some talking. Estate sales may have everything laid out but you can bet that anything that's of significant value will either be long gone or in the beneficiary's jewelry chest. The key here is to talk. I like to pull up to garage sales on my motorcycle. When they ask what I can expect to carry home on it I just tell them that I'm looking for gold or silver jewelry. Most of the time they just give me a confused look but sometimes I get someone who's willing to let me take a look at some jewelry pieces that they don't care much about. You can get some good deals with this method. More importantly, you get an excuse to ride. When you come home from a nice long ride and you have a nice gold necklace for your wife in your pocket then all is quickly forgiven.

If you're really daring you could also try to put together a gold party. You'll probably need a few grand in cash on hand to do this. I don't know how the "pros" do it but I imagine that it involves not telling anyone how much their gold is actually worth. Come up with a number that you use as spot that's significantly under the actual spot price and make offers on whatever people show up with accordingly. If they bought it 20 years ago then they'll probably freak out when they find out how much you're willing to give them. If you're ethical then you'll explain to everyone about the spot price of gold. If you're a dirt bag who's just in it to make a quick buck at the expense of ignorant people then you can tell them whatever you want. There's obviously a cost built into organizing and holding an event like this but I would encourage anyone interested in doing it to be fair. Tell people how much you're willing to pay beforehand and give them time to do their due diligence ahead of time.

So there you have it. If you've got another good source for gold jewelry I'd love to hear about it. For the most part it's pretty simple. It's really easy to pay too much if you don't know what you're buying. Once you get it down, though, then you won't get screwed.

Monday, October 25, 2010

Buying Gold Jewelry

My posts have been getting less and less frequent lately. I apologize for that. Sometimes I just get busy with other things and the blog takes a back seat. Over the last month or so of slow posting I've had a lot of ideas come to mind so the posting should start to pick up a bit.

Anyway, I've finally reached my initial goals that I had set for my silver collection. I actually exceeded it by a decent amount. Having done that I decided that it was time to start getting into gold. Unfortunately, gold is expensive. I built up my silver collection over several months by spending maybe $50-$100 per month. Gold coins and bullion, however, carry a hefty premium if you buy it in small fractional coins. It only took a couple of times buying 1/10th oz gold eagles before I decided to come up with a different solution. Then I remembered Ferfal talking a few times about how he wished that he'd bought more jewelry before the crash in Argentina. He's mentioned this in several forums and in several posts on his blog. There is so much to know and it's so easy to get screwed when dealing with gold jewelry that I never gave it much thought. Then I started doing some research. Here I'll try to give you a little lesson in gold jewelry buying 101. Keep in mind that I'm new at this myself so if I miss anything important I encourage comments. In the unlikely event that I'm completely wrong about something I'd definitely appreciate some feedback. Due to the ridiculously high price of gold and my ridiculously limited funds I did some meticulous research to ensure that I wouldn't get screwed over too badly. Hopefully, this information will help you as well.

The biggest selling point of any gold piece is how many karats it is. Don't get this confused with carats or ct. A karat is the percentage of gold that there is in the piece. A carat is .2 grams. If the piece has a number followed by ct. then it's probably just an old piece that has the weight stamped on it. Pure gold is 24 karats. To figure out how much gold is in a piece you take the number of karats and divide it by 24. For example, a 14 karat gold necklace contains .583% pure gold. Here's how the percentages break down:

22k - .917%
20k - .833%
18k - .750%
16k - .667%
14k - .583%
12k - .500%
10k - .417%

I carry this little list in my wallet written on the back of a business card. For the most part, most of what you'll find will be 10k and 14k. 18k tends to carry a ridiculous premium over spot and anything higher just isn't all that practical. 12k and 16k isn't easy to find. .583 and .417 are the two most important numbers to remember. 10k and 14k are probably the only grades that you'll find at or near spot.

So what do all of these numbers mean? If you're trying to buy jewelry as close to spot as possible then you need to bring a scale and know how to calculate the spot value. First of all, most pocket scales measure by grams. They'll probably also measure by ounces but they'll be less accurate per ounce. Most people who are trying to sell jewelry sell and buy by the gram so you want to know how to calculate the price by gram. First of all, precious metals are measured by troy ounces rather than normal ounces so when you're calculating grams you need to divide spot by 31.1. Once you have the spot price converted to grams you just weigh your piece by the gram and multiply it again by the karat makeup. Here's the equation: (spot price/31.3) x (weight in grams) x (karat %)

Most gold pieces will have the karat stamped on it somewhere. It will be followed by a maker's mark. Usually it's on or near the clasp on necklaces and bracelets, on the posts of earrings and inside of rings. The writing is pretty easy to identify. It's just ridiculously hard to read most of the time unless you have a good loop. There are a few things that you need to keep an eye out for when looking for this stamp. If there's just a number followed by a k and some letters or a symbol that don't make sense then that's probably how many karats the piece is followed by a maker's mark. If the letters GP follow the karat mark then the piece is probably plated. If there's a fraction before the karat mark or seemingly part of the karat mark then it's gold filled. The fraction is a percentage of a percentage. It might say 1/20 14k. It could also say 20/14k. Either way, this means that 1/20th of the piece is made up of 14k gold. If you want to figure out the gold value in this piece you use the first equation and take 5% of that. If the fraction is different then adjust accordingly. To be honest, gold filled and gold plated jewelry is usually pretty close to worthless. Filled is better than plated but not by much. Generally, don't waste your time with it. If you see a fraction or you think it's plated then just walk away.

That's pretty much it. Knowing where to go to buy and sell gold is also helpful. I'll get into that in a future post. If you know where to shop and you know what you're buying you can buy gold jewelry at spot regularly. You just have to be vigilant and you have to know what you're buying.

Thursday, October 14, 2010

Off the Grid: Life On the Mesa

If you haven't seen this yet it's worth a look. There's a documentary on youtube (embedding disabled by request so you have to click to watch) that highlights a small community in New Mexico. Here's the trailer.

The community is off the grid. Everyone lives in trailers, shanty shacks and other buildings that they manage to hobble together. There seem to be a lot of vets, old hippies and crazy people in the community. Then there's the little group of runaways who think that the rules don't apply to them. The only real government are the "elders". Everyone has a say but ultimately the elders make the decisions. Resources are limited. They have to haul their water from miles away. It's interesting to see how they interact.

This particular community probably wouldn't last in a grid down, supply lines cut, SHTF scenario. Once the gas dries up they wouldn't be able to haul water, anymore. They also can't produce enough of their own food. If they really put their heads together and started working towards that goal now they could probably come up with some viable solutions but for now they don't seem interested in doing anything more than is necessary to get by. A couple of them look like they're trying but they have a long way to go to get anywhere near being self sufficient.

Despite all of that I still think that it's a pretty good look at what some communities could look like once things start going down the tubes. Resources will be extremely limited. People will do what they have to do to get by. They'll start accepting the fact that their own security is up to them. Are you ready to have to live like that?

Friday, October 1, 2010

10/1-10/3 Cheapo Generators at Harbor Freight

This weekend Harbor Freight is having a parking lot sale. Their 2 stroke 800w generators are on sale for $79.99. If your local store is compliant then you could also get another 20% off. There's a very long review thread on Arfcom that contains just about everything you need to know about this generator. The general consensus is that it's a hell of a deal, very durable and works as advertised. This little guy isn't going to run your whole house but if you use it wisely it will make a disaster a whole lot more comfortable. It will keep the lights on and it's a good solution to keep a battery bank charged. For basic stuff it's a whole lot better than nothing...especially for $80 (less if they honor the coupon). I'm not affiliated with Harbor Freight. I just know a good deal when I see one. If you don't own a generator and a genset that can run your whole house is out of your price range then consider grabbing something like this.