Can you make a magnetic fluid that's drinkable
Read Nails for Breakfast? and see if breakfast cereal manufacturers agree with your assumption "I obviously can't use the traditional method of using iron as it is harmful"


  Most people know that breakfast cereals are fortified with iron and other essential minerals and vitamins. What they don’t
  know is that in some cases the iron is actually added in the form of metallic, elemental iron—nails for breakfast!


Like permeakra commented, only a small amount iron, whether metallic or as a compound, is safe to consume.  See iron poisoning for details.