In our previous SPOTLIGHT, we explained why you should consider buying gold and precious metals to build a solid financial safety net for your children.

As any other form of investment, gold requires some planning and preparation.

But don’t worry, we’re here to help.

We’ve made a checklist of the key things you should think about before getting some gold coins and bars for your children.

Here it is:

#1: Make sure you choose the right gold product

As you probably already know, there are two different types of investment gold – physical gold (gold coins and gold bars) and gold traded on the stock exchange a.k.a paper gold.

While paper gold may seem like a convenient way to invest in gold, it might carry some risks. For example, gold ETFs (paper gold) are prone to counterparty risks. This means that your gold is held by a financial company you must rely on to manage your investment.

A company or broker in charge of your ETFs could go bankrupt or fail to live up to their obligations, misrepresenting the true state of their portfolio.

Also, the amount of gold reserves held by this company is not always sufficient to support the sale and trade of paper gold certificates.

So if too many investors wanted to cash in their paper gold, the fund that sold it to them might not have enough of the physical metal to repay everyone.

Physical gold, on the other hand, can’t go bankrupt and will belong only to you and your family, which makes it a safer long-term investment to build generational wealth for your children.

Read our SPOTLIGHT to learn more about the key differences between paper gold and physical gold.

#2: Think about buying gold bars vs. gold coins

So if you decide to buy physical gold, you have two options to consider: gold bars and gold coins.

Both have certain benefits to offer:

Some collectible coins are aesthetically pleasing as they are a sound investment, which makes them a family heirloom, much like jewelry that can have an emotional significance for your kids.

Also, legal tender coins, like the 20 Swiss Franc Vreneli gold coins, are easily recognizable and can be sold in smaller amounts at different price points.

Gold bars, on the other hand, give you only one chance to sell all your gold at one particular price.

They are a long-term investment that will potentially let your kids benefit from gold price gains over the long run.

Quick tip

Larger gold cast bars offer a good opportunity to buy more gold at a cheaper price per gram. This is simply because bars carry lower production and design costs than coins.

So if you can’t decide what to buy as a gift to your children — gold bars or gold coins — a healthy mix of both could be a good option if you want them to benefit from potential future gold price gains.

#3: Think about storage

Before you buy physical gold for your children, remember to think about storage.

What would be the most convenient way to store it for them?

You basically have three options:

• keep your gold at home
• store it in a bank safe deposit box
• store it in a secure vault

For example, if you choose home storage, you will have to make sure you keep it somewhere safe.

You can find all sorts of creative places for storing your precious metals, just make sure they’re dry and fireproof.