Hi guys,
I thought I would post my little story on how I made a little over $4,000 in one month buying old jewellery and selling it as scrap gold.
I had always had an itching for gold, or even gemstones and crystals as a young boy. I remember I once visited the Barringer Crater with my parents, and all along the way I found fools gold, or iron pyrite. I was always dissapointed that it wasn't real gold, but to me at the time, I didn't really care too much, I still thought how cool it was to find even the fake stuff.
Fools gold:
I even panned for gold in the Black Hills of South Dakota - for those of you that don't know, Deadwood is a town in S.D, it was famous for its gold production and murder of Wild Bill with his "dead mans hand":
http://en.wikipedia.org/wiki/%22Wild_Bill%22_Hickok#Death
Fast forward to 2007-8 and I started to get into gold again, by 2008 with the entire financial collapse, I was once again a true gold bug!
I decided that there was good opportunity to purchase old, unwanted or broken gold jewellery, so I started to trawl online classifieds for good value, cheap broken gold. Boy did I find some.
Over the course of 6 weeks, after buying a gold testing kit (just some acid drops) and a bit of reading up on how to detect fake gold, I accumulated about $4,000 worth of purchases. I would seek out good deals online, haggle, and finally come to a good price, that was worthwhile to me.
Here is an outline of what each gold piece contains in total gold, based off of its karats:
So, what I did, was weigh the piece in question, so for example, if it weighed 100 grams and was stamped as 18 carat, I would use this formula:
The value of the gold = (weight x (%ofGold)) x Price of gold per gram
Then I would buy a price at least 25% below that value. I want to comment that you make your money in the purchase, not in the sale. Also, you are exposed to the gold price, so if it goes up after you purchased the item, great you make even more. But be aware, it can also go down on you.
I was lucky, it did not go down, for me it actually went up, and this also helped my profits.
I found a good place to melt it down, that had good costs for my country, and I made a total profit of $4,000!
Not bad considering this was just a part-time HOBBY of mine.
Here is a video on how to test gold:
I didn't always hit a home-run, some deals were better than others, sometimes I made no money, other times I made like $300 just in 30mins, I was hooked!
Anyway, just thought I would post my story, if you have any questions feel free to ask or comment. I hope it helps someone, I always wanted to get back into scrap gold buying, I found the problem to be that you tended to need a fair bit of money to make the actual purchases - running capital.
Soon, I will do a post on why gold stocks are so amazingly good to hold. There is an amazing characteristic that mining stocks hold, and I will tell you about it very soon, so follow me if you want to know.
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