You’ve heard a lot about how gold is the best investment decision you can make. It may even start to sound like gold solves all kinds of financial troubles. Whilst it is true that it is the best long term investment decision you can make but there are strict rules on how you can own it. Here’s are the common mistakes that people make when buying gold the first time around.

#1. Buying too much gold

Gold isn’t invincible. There are a lot of gold IRA companies that will try to get you to buy more gold than you need by selling you the idea that we are heading towards some financial crisis that will somehow destabilise the economy and your money would be safer invested in gold. These might not be altogether baseless, but you need a balanced view. Gold is a commodity, it’s not money be wary of bullion dealers who play on your fears and fan hysteria.

Remember that you still need actual money to transact and fulfil financial contracts that are payable in actual dollars. You need money to pay for your mortgage, buy a car, groceries, buy mutual funds and various other things. You cannot pay for everyday expenses with gold.

#2. Disregarding the purity of gold

You can get great deals on gold, but gold comes in various purities. You can buy gold that is 90% pure and cheaper or buy gold that is 99.6% pure. However, if you want premium gold bullion you should buy gold bullion that is 99.99% pure and LBMA accredited. This is regarded as fine gold, the purest you can buy. When buying gold bullion as an investment, you want to put your money in the best gold you can find and the best is always 99.99% pure.

#3. Disregarding spot price

The easiest way to get ripped off when you buy gold bullion is to do so without checking the spot price. Most dealers will tell you what the spot price of gold is but they are not obligated to. Some might tell you what the spot price is but not disclose the spread or their commission on the sale. Again, they aren’t obligated to do that. When you are looking to buy gold bullion, you really need to know and understand what you are doing. The salesperson might be friendly and the place might look decent enough, but do not assume that they want to deal fairly with you. Do your homework at least to get a sense of what you should expect. Gold buyers are in business to make money and the only way they can do that is with the spread. You won’t know if you are being given a fair price if you don’t even know what the spot price is.

Call as many gold dealers as you can. Ask them about the type of gold they sell and what they charge. Don’t be afraid to ask about other gold dealers near you. A little research can go a long way into helping you get the best deal on gold bullion.