Investment coins: how to buy, sell and earn on them

Most investors invest in cryptocurrencies and the stock market. Some of them invest in real estate or precious stones.

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Money is a tool for acquiring goods and services. As such, fiat currency cannot be considered an investment. At most, you can put it in the bank for a deposit and after a while get a small income. But most likely this profit will be “eaten up” by inflation. German investment coins are not exactly money.

Therefore, they can be used to invest funds. Valuable coins issued by the German Federal Bank are not used as a means of payment, although they have such a function. They are made of precious metal, so their value is much higher than the face value. Investment coins are price stable and collectible. In addition, according to German law, they are subject to a special taxation regime (subject to certain conditions). Therefore, experienced investors are very interested.

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What is the difference between investment coins and ordinary money

Fiat currency is a tool for making purchases and paying for services. Investment coins have the properties of a fiat currency, but differ in some features: They are made from precious metals. Pure raw materials are used with virtually no additives that are used in the jewelry industry. Only the Federal Bank can issue investment coins. The main purpose of investment coins is to preserve capital from inflation and profit from overselling.

Investment coins rarely have collectible value. Usually they are issued periodically and in fairly large print runs. Value is formed not by rarity, but by the amount of metal embedded in it.  Investment “money” does not have a high artistic value. As a rule, the pattern on the obverse and reverse is typical.  But even in this case, they are less rare and valuable than collectibles. Coins are usually sold in batches and placed in protective cases. This is due to the fact that gold (or other precious metal) is too soft due to the lack of alloying additives. Therefore, the coin can be damaged. And because of this, it loses its value.

Money is a tool for acquiring goods and services. As such, fiat currency cannot be considered an investment. At most, you can put it in the bank for a deposit and after a while get a small income. But most likely this profit will be “eaten up” by inflation.

German investment coins are not exactly money. Therefore, they can be used to invest funds. Valuable coins issued by the German Federal Bank are not used as a means of payment, although they have such a function. They are made of precious metal, so their value is much higher than the face value. Investment coins are price stable and collectible. In addition, according to German law, they are subject to a special taxation regime (subject to certain conditions). Therefore, experienced investors are very interested.

How to invest in coin sit must be said right away that investment coins are not suitable for a quick and profitable investment. They are better regarded as a way to save capital in gold from inflation and legally avoid paying some tax payments.

You can count on a profit from such an investment only after at least 5 years have passed. And in order for the income to be significant, it is better to store coins for at least 20 years. This is enough to increase the price of gold. Coins can be sold more expensive. The advantage of such a decision is protection against inflation. Fiat money is constantly depreciating, so keeping it in an account or in the form of cash is the wrong decision. Investment coins solve this problem.

Advantages and disadvantages of investing in coins

The main advantages of buying and holding investment coins are: No loss of capital.  Coins are not subject to inflation, so their owner may not be afraid of a depreciation of the national currency. There is no need to be afraid of a fall in the value of the purchased asset. If you look at the growth chart of the price of gold over the entire period of tracking the price, you can only see an uptrend.

There is no risk inherent in stock or cryptocurrency investment. When buying investment coins in Germany, a special taxation regime applies. Therefore, the buyer is exempt from additional payments that would be required when purchasing other assets. Also, you need to consider that some coins may go into the rare section. That is, they will be valued by collectors. Their actual price will rise more than the value of gold in a coin at the current rate. The profit in this case will be more than expected.

If you purchase coins and then immediately sell them to the bank, the investor will receive a loss due to the difference in the purchase and sale prices. The optimal period for storing coins is from 5 years.  When buying coins, you need to worry about where and how to store them.

They are sold in cases, but no one is immune from theft from an apartment or house.  But it is still more difficult and inconvenient than storing stocks or cryptocurrencies on electronic wallets. When purchasing investment coins, you can buy fake money made from a less valuable alloy. To avoid this, you need to invest only in a German banking institution. And when buying from hand, use the services of experts and conduct an inspection.