Need Business Help, 17 years old....

[triplemgold]

Hey everyone,
I really need some advice/guidance or any type of criticism possible. Just to start off, I am a 17 year old senior in High School, I have been doing business related activities since I was in 7th grade (day trading). I recently came across the precious metals business and I am taking part in it. I have come across a few problems that I need guidance on. All the money I make is going to go to college. I live in florida and want to attend the University of Central Florida in Orlando, and without much parental help, its tough.

For now, I have been buying gold online, as in karat gold jewelry. As well as offline from garage sales, craigslist, flea markets and even goodwill. The majority of the amount of gold I buy is at 75-80% spot. I have a guy that I drive to 3 hours roundtrip and I sell to him at 90% spot. This is really good for me, at least I think. Well now, since he is buying so much, (not from just me other people) he is dropping his prices for buying down to 85% spot. This is really hurting me. I sell usually around 50+ grams to him a week. Im selling to him tomorrow, about 100 grams, and at this now low spot price, its really cutting my profits :/
What he does is of course just buy up everyones and sends it to a refinery.
Which is what I want to do, but then legal stuff comes in I believe....
When I sell to him, I get strait cash no receipts or anything. But say I start selling to a refinery, will I have to fill out a 1099 form the very first time?
Another issue that I have is cashflow.
I'm just going to be honest with you guys so don't judge me!
I have 3500$ in the bank,
I can spend that in a week easily. Well the majority I buy online, so it takes a week for me to get it. So I will have an empty bank account until the gold starts coming in. I am trying to get my account up to 10k so I can just keep money going in an out and keep it constantly growing, But right now its so hard to. I don't know if I should keep selling to this guy, or start sending it in to a refinery. From everything I've read and researched it sounds like it takes 15 days to send in your gold and get paid. Is that true? Also what should I do business wise? Should I make this legit and get a business license and all that? I don't have much experience in that right now.
There are so many factors going on in my head. I don't know what to think and what to do.
I am looking for any type of guidance, both legal and personal.
Please through in your 2 cents, i know a lot of you guys have been doing this for years and i really admire yall veterans.
Thanks

PS. feel free to post here or even email me.
[email protected]

 

[Anonymous]

Day trading versus buying gold online and 17 years old.

I admire you, and fear for your college fund. Lots of fake gold/plated gold/ and just plain cheats out there.

Please, use caution.

Jim

 

[4metals]

Welcome to the forum

You are currently paying 15% which is too much. The most cost effective method would be to refine it yourself and send the refined gold to ARA and be charged 2%. You will pay taxes on the income but only on your profit over your declared buying price less fees.

Overall you will be better off paying your taxes and you'll still come out ahead of paying 15%

Another option is to melt and assay and ship to a refiner you can trust. Any way you go a small business venture to carry you into and through college is worthwhile. A small melter can get you started and you can rely on touchstone testing and tallying up your buys to give you a good ballpark what your bar contains.

There are also members on this forum who can toll refine for you and still beat the price you are paying.

 

[triplemgold]

Yea man, I started day trading in the 7th grade. I did great, i invested in oil companies cop, cvx, sun. The hurricanes tore up them rigs in the gulf, oil when up, stocks when up. Huge gains, it was awesome haha. I went from that, to buying and selling on eBay. I bought broken iPhones, fixed, and resold them. Then I got into Internet marketing with google adwords and yahoo. I did really good in that, filed taxes and did all that stuff.I spent WAY to much money on my car...dumbest mistake of my life, (no capital now) It took so much time. Nearly 8 hours a day on the computer and as a high school student thats a lot. Now im doing gold, been doing it for awhile. And trying to get that capital back up. I am definitely not an ordinary high school senior.

But yea man thanks for the advice. I Test Test Test Test

 

[triplemgold]

Welcome to the forum

You are currently paying 15% which is too much. The most cost effective method would be to refine it yourself and send the refined gold to ARA and be charged 2%. You will pay taxes on the income but only on your profit over your declared buying price less fees.

Overall you will be better off paying your taxes and you'll still come out ahead of paying 15%

Another option is to melt and assay and ship to a refiner you can trust. Any way you go a small business venture to carry you into and through college is worthwhile. A small melter can get you started and you can rely on touchstone testing and tallying up your buys to give you a good ballpark what your bar contains.

There are also members on this forum who can toll refine for you and still beat the price you are paying.

Thanks for the reply. Can you please explain the toll refining that you mention?

 

[4metals]

Toll refining is where a refiner charges you a percentage of the gold content your material contains and pays you the balance. It involves you having a good relationship with the refiner because you have to trust you are getting all you deserve as assaying is usually not done. Harold was a toll refiner when he did this type of work. His methodology would be perfect for your application.

 

[triplemgold]

Okay I gotcha. My number one problem is cash flow. Everything that I have seen will take quite a significant amount of days to get paid for.

 

[4metals]

In NYC there are buyers who pay 95% plus for the quantities you are dealing with, cash on the barrel. No waiting. I know similar deals exist in Chicago so possibly in Miami as well.

 

[triplemgold]

In NYC there are buyers who pay 95% plus for the quantities you are dealing with, cash on the barrel. No waiting. I know similar deals exist in Chicago so possibly in Miami as well.

Woah, that would be ideal. Do you know of any on the forum, or how to get in contact with any?

 

[darshevo]

I am super impressed with your work ethic and buy/sell mentality. When I was in high school (some many years ago now) I bought beat up 'muscle cars' and parted them out as the sum of the parts was generally always worth much more than the car itself. It is so refreshing to see a guy your age looking at how to make a buck on the market (regardless of what you are 'marketing') rather than the stereotypical 'Where do I plug in the joystick' attitude so many have today.

Take some time and read read read what is available here. You sound like someone who will take to this like a duck to water. If you haven't been to Lazersteves site goldrefining.us check it out as well. You may very well find you are better off dealing with your raw material 'in house'

-Lance

 

[nickvc]

Personally I would do what 4metals suggested and set up your own furnace which can be done for about $250 at a guess which allows for gloves tongs ingot mould crucible propane bottle and torch and some lightweight fire bricks.
Work out the gold content of your scrap using the lowest assay thats legal to be called 14K or 18K and base your returns on those,if it comes better, great. Do a deal in advance with one of the trusted refiners on the turn round and payment terms and method,bank to bank is fast and might be possible, most large buyers have xrf guns so a quick confirmation of what's in your bar should be possible and even perhaps an instant payment of perhaps 90% of the value with the balance sent on assay,this will be your extra profit if you can get 97% of spot and you buy with caution!
$1000 worth of scrap sold to your present buyer = $850 return.
$1000 worth of scrap melted sold at 97% allowing for below assay metals =$950
90% up front payment = $855
I'm not to sure on your allowed variance on marked karat jewellery but if I'm wrong GSP or
4metals will adjust the $950 to be closer to the real figure.
I wish you luck and admire your enterprise and hope you find these ideas useful.

 

[triplemgold]

Personally I would do what 4metals suggested and set up your own furnace which can be done for about $250 at a guess which allows for gloves tongs ingot mould crucible propane bottle and torch and some lightweight fire bricks.
Work out the gold content of your scrap using the lowest assay thats legal to be called 14K or 18K and base your returns on those,if it comes better, great. Do a deal in advance with one of the trusted refiners on the turn round and payment terms and method,bank to bank is fast and might be possible, most large buyers have xrf guns so a quick confirmation of what's in your bar should be possible and even perhaps an instant payment of perhaps 90% of the value with the balance sent on assay,this will be your extra profit if you can get 97% of spot and you buy with caution!
$1000 worth of scrap sold to your present buyer = $850 return.
$1000 worth of scrap melted sold at 97% allowing for below assay metals =$950
90% up front payment = $855
I'm not to sure on your allowed variance on marked karat jewellery but if I'm wrong GSP or
4metals will adjust the $950 to be closer to the real figure.
I wish you luck and admire your enterprise and hope you find these ideas useful.

thank you for replying, that's some really good information.
So what you are talking about doing is me melting down the scrap....but not refining it to pure gold?

 

[HAuCl4]

Get in touch with fournines and his company in NY. Melt whatever you buy and send him an ingot. He pays 98% of spot deposited into your bank account. Try to keep it simple while you learn more, and learn slowly to assay and refine and re-sell yourself. Not sure about how the tax, etc, etc stuff works in the U.S. anymore. Surely must not be that complicated to make these small transactions in your own name and declare in your taxes. Keep receipts of everything you spend money on and attempt to deduct all business related expenses. Schedule C form rings a bell, not sure.

Sourcing and getting the material at good discount is 99.99% of the work, the rest you can outsource to the pros, like fournines, and others.

That's what I'd do if I were starting out.

Good luck!. 8)

edit: I was going to recommend getting credit and using it to purchase metals at the discounts you mention, but I read that you are 17, so probably can only borrow from friends and family, and if you get robbed or something you may get into trouble with loved ones...so I'd go with no credit for the time being, but it's up to you. 8)

oh...and sell the car!. :shock:

 

[triplemgold]

Thanks for the reply.
What are the benefits of sending in scrap karat jewelry, compared to melting down the scrap myself and sending it in?

 

[HAuCl4]

Thanks for the reply.
What are the benefits of sending in scrap karat jewelry, compared to melting down the scrap myself and sending it in?

Generally after melting some weight loss occurs. If you melt it and assay it yourself, you know pretty good what they must pay you. Impossible with loose karat pieces. But maybe an option for you. Get in touch with a reputable mainstream refiner, not a re-buyer, and talk to them.

Many people here vouch for fournines, that's why I mentioned him and his Co. in N.Y. You maybe better off with a large refiner in your area and selling the unmelted scrap directly to them. Your call.

 

[4metals]

Republic Metals in Opa Locka Florida may give you the same deal. Melting yourself and bringing in a bar eliminates some of the gray area associated with refiners, better accountability for you.

 

[4metals]

I just noticed you're on line, it's 9:45 in Florida now, shouldn't you be in school? :shock:

 

[triplemgold]

I just noticed you're on line, it's 9:45 in Florida now, shouldn't you be in school? :shock:

I was! School starts at 7:30 and my first class is criminal justice. It was towards the end of class and the teacher is done teaching. I have a iPhone so I always go on it and do business!

 

[cyberdan]

Try this place. They have "stores" all across the country. I use the one out here every now and then. I also use ARA. They both pay the same.
http://www.ntrmetals.com/location/miami-fl-precious-metal-refiner

When I am in a hurry for some buy money I drive the three miles to their shop during lunch. Drop off my load of jewelry and eat my lunch in the parking lot. Without fail I go back in and a check is waiting for me and it is usually a bit more than expected.

This will solve your cash flow problem. Don't know if they have the same "drive thru window" as out here.

 

[triplemgold]

Try this place. They have "stores" all across the country. I use the one out here every now and then. I also use ARA. They both pay the same.
http://www.ntrmetals.com/location/miami-fl-precious-metal-refiner

When I am in a hurry for some buy money I drive the three miles to their shop during lunch. Drop off my load of jewelry and eat my lunch in the parking lot. Without fail I go back in and a check is waiting for me and it is usually a bit more than expected.

This will solve your cash flow problem. Don't know if they have the same "drive thru window" as out here.

Ahh man that would be so ideal. The only problem is I live in panama city, so thats about 13 hours away. I did see they have one in tampa, but that is still 6.5 hours away.