Video summary

I Tried the Costco Gold Hack (How Much I Actually Made)

Main summary

Key takeaways

Finance

Summary

The video explores a niche investment and arbitrage strategy involving buying 1 oz gold bars from Costco at below spot price and reselling them online for a profit.

Key Points

  • Asset: 1 oz gold bars, notably “Lucky Dragon” and “Double Dragon” bars sold at Costco.
  • Market Context: Costco sells gold bars at prices slightly above spot but below typical retail premiums, creating an arbitrage opportunity.
  • Geographic Focus: Dallas Fort Worth Metroplex, TX, with about 14 Costco locations; example purchase made in Plano, TX.
  • Pricing Details:
    • Purchase price around $4,290 per 1 oz bar.
    • Local gold buyers offer significantly less (~$3,900), making local resale unprofitable.
    • Online marketplace (Collectpure) offers about $4,150 to $4,160, enabling profitable resale.
  • Selling Platform: Collectpure.com — a marketplace for precious metals acting as an escrow intermediary, validating authenticity and handling shipping logistics.
  • Transaction Process:
    • Buy gold bars at Costco.
    • List and sell on Collectpure.
    • Ship gold via FedEx with sign-on-delivery and triple packaging.
    • Collectpure authenticates and holds gold in escrow, then pays the seller.
  • Returns & Rewards Strategy:
    • Earn up to 7% effective return combining:
      • 3% cashback from credit cards (e.g., Venmo card or grocery-category cards if Costco qualifies).
      • 2% cashback from Costco membership rewards.
      • Additional 2% cashback via a specialized service that pays credit cards with debit cards.
    • Selling gold incurs a 1-2% loss on price spread.
    • Net effective cashback return estimated around 5%.
  • Volume & Risk:
    • Profit ranges from $2,000 to $20,000 per week for high-volume buyers.
    • Requires multiple Costco memberships (“disguises”) to buy multiple bars (limit 5 per membership per visit).
    • Risks include price volatility, local liquidity constraints, and shipping risks mitigated by escrow and insurance.
  • Investor Profile:
    • Suitable for investors with an “investment eye” who want immediate liquidity.
    • Not recommended as traditional financial advice.
  • Additional Notes:
    • Gold buyers include jewelry makers, holders, and flippers.
    • Demand fluctuates with price psychology—higher prices increase demand, lower prices cause hesitation.
    • The presenter personally invests mostly in Bitcoin but acknowledges gold’s lower volatility.

Methodology / Framework

  1. Identify Costco locations with gold bars in stock (call ahead, typically Wednesdays).
  2. Purchase gold bars using credit cards that maximize cashback rewards.
  3. List gold bars on an online marketplace (Collectpure) for a price above local offers.
  4. Ship gold securely with tracking, insurance, and triple packaging.
  5. Receive payment after gold authentication and escrow release.
  6. Repeat process for volume-based profits.

Disclaimers

  • The presenter states: “I’m not your financial adviser.”
  • This strategy and savings approach are intended for those with an investment mindset.
  • Emphasizes risks and the need for careful handling and verification.

Presenters / Sources

  • Primary presenter (unnamed) conducting the experiment.
  • Costco store employees providing stock and pricing information.
  • Local gold buyers at Dallas Gold and Silver Exchange, Frisco Gold Buyers.
  • Mention of friend Braden who has a full tutorial on the hack.

Tickers / Assets / Instruments

  • Physical gold bars (1 oz Lucky Dragon, Double Dragon).
  • Credit cards with 3% cashback (Venmo card mentioned).
  • Online marketplace Collectpure (precious metals marketplace).
  • Bitcoin (mentioned as an alternative investment).

This video provides a detailed walkthrough of a physical gold arbitrage strategy leveraging Costco’s pricing, credit card rewards, and online marketplaces for profit.

Original video