A recent study conducted by the Toy Industry Association revealed that parents will spend, on average, approximately $6,500 on toys during the lifetime of their children. Parents also buy their children thousands of dollars of clothing over the years. Sadly, many of these items will be barely played with or worn before they are tossed out or given away to a charity. The money spent on those items could be potentially wasted.
So what should you do if you're a practical parent who would really like to give your children a gift that will go up in value and not end up in the trash? Think gold coins.
A Special Gift
Picture this. It's your child's birthday party. They are ripping the paper off of presents from their friends and family members. They hold each item up for a nanosecond. Everyone oohs and ahhs, and your child tosses it aside to open another present. In that pile of presents will be toys and clothing that your child will promptly forget ever receiving. Some frugal parents have even been known to re-gift those presents back to the children later or give them to other kids on their birthdays. The point? Kids often pay very little attention to many of their presents.
So let's say you gift your child a gold Krugerrand. It's shiny and has a pretty deer on it. Your child may ooh and ahh over it for a moment before burying it under his other gifts. That's when you discreetly pull it aside so that you can put it in a bank safety deposit box or other safe spot later. If you do this every year, you could end up with a nice amount of money that could be used for your child's college fund.
The Value of Gold
Gold prices do fluctuate, but you will never totally lose the money you invested in your coins (unless you physically lose the coin, that is). For the most part, the same cannot be said of toys, clothing or stocks. And, traditionally, gold prices go up during difficult periods, such as a recession. A peek at gold prices over the past ten years is quite revealing.
Based just on the price of gold, a Krugerrand, which contains one ounce of gold, would have been worth $625.63 in 2007. That same ounce of gold reached a peak of almost $1,900 in 2011. Today, an ounce of gold is still worth almost $1,200. Most toys and clothing bought in 2007 would have little to no value today—the exception being a few collectibles, such as Pokemon cards or Star Wars toys.
Types of Coins
Krugerrands, which are from South Africa, are not the only gold coins out there. The following are just some of the countries that offer gold coins:
- The United States. It offers the American Gold Eagle and the American Gold Buffalo, both of which contain one ounce of gold. The Gold Buffalo is, however, 24 karat gold, while the Gold Eagle is 22 karat gold, which means that it includes a little copper in addition to one ounce of gold.
- Canada. Its signature gold coin features a maple leaf.
- China. Not surprisingly, China's signature gold coin features the Giant Panda.
Purchasing Your Coin
Always make sure to purchase your coins from legitimate dealers that sell world gold coins. Avoid purchasing your coins from individuals on online auction sites, such as EBay. And you should never, according to Kiplinger, buy your coins from a telemarketer who cold calls you. To learn more about where to safely buy gold coins for your kids, contact resources like Harlan J. Berk, LTD.