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School me on the value of having silver please
EWom
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This is the story of why I'm bringing it up at all, and is not really important to the question, but gives two different view points from people I know who buy silver & other precious metals and their reasons for doing so, and why the tell me I should do so. I'd like to know if & why they are right or wrong, and if & why I should if I can afford to buy some precious metals.
Is it worthwhile to buy silver specifically because that is more in the price range of what I can afford to buy, I would have to save literally for months to buy 1 oz of gold at todays market price, as both an investment & as sort of an emergency savings fund.
From what I've read silver is fluctuates a lot in the market, I know absolutely nothing about "the market". I have never invested in anything. My wife and I have some hard times, and we live paycheck to paycheck, we are constantly draining our savings accounts, and even our emergency savings account, which is in a bank that doesn't have a branch in our city, and we don't have a card for that bank and can't transfer funds from it to our local bank, we actually have to drive to the next city over and withdraw it in person. Which then puts as at the mercy of bankers hours & having enough gas/money to get there and back.
We have no credit cards so we can't put something on the card and make payments on it, like a lot of people do. So having a little bundle of metal I can go sell & get some cash in case say I get in a car wreck and suddenly have to pay off something huge I can cash in this metal seems like a good idea.
It seems to me that this is another decent way to save money that we might even make more money off of. However I read that silver goes up & down like a bastard , so we could also lose money on it. And basically I want to know if there is value in buying "fine silver" an ounce at a time, to stow away for a rainy day, or if I'm better of just putting the extra money in the bank. But again I know nothing of the market, and the only thing I can find in my price range is silver...
Thank you H/A!
Hey-o H/A my friend has been swearing by personal investments in precious metals for quite awhile, and trying to get everyone he knows to do so. Of course he's saying to do this because an end of civilization, money means nothing and only gold/silver/food/water means shit as currency, which IMO is pure crap, because at that point, in my mind, whether I get your stuff or your get my stuff doesn't depend on what we have to barter with so much as if one of us kills the other, and takes what they want.
But I've also got another friend who has been buying small amounts of mostly silver, but sometimes gold as sort of an "insurance fund" he says. He claims that he's been watching the markets, and this is basically a small amount of money that he can cash in if he ever needs it in an emergency. (He says he has a couple thousand dollars worth of silver, and like 1 oz of gold which is about $1300 on the market today I think). But his idea is that he just goes and buys silver in 1 - 10 oz increments when he can afford it, and tries to get at least one ounce every paycheck, and just puts them in a small safe in his room. From what he tells me they are doing nothing but going up in value, and at a rate much faster than if he just put that money into a savings account. In addition he as access to it all the time, so long is there is a pawn shop or any other store that buys/sells silver jewelry open at the time he needs the money. And never has to deal with keeping a minimum amount in his account or whatever other BS he doesn't want to deal with, with banks, and he doesn't trust banks after the whole bailout situation and wants to make sure he has real money he can access at all times etc etc etc..
So my question is...But I've also got another friend who has been buying small amounts of mostly silver, but sometimes gold as sort of an "insurance fund" he says. He claims that he's been watching the markets, and this is basically a small amount of money that he can cash in if he ever needs it in an emergency. (He says he has a couple thousand dollars worth of silver, and like 1 oz of gold which is about $1300 on the market today I think). But his idea is that he just goes and buys silver in 1 - 10 oz increments when he can afford it, and tries to get at least one ounce every paycheck, and just puts them in a small safe in his room. From what he tells me they are doing nothing but going up in value, and at a rate much faster than if he just put that money into a savings account. In addition he as access to it all the time, so long is there is a pawn shop or any other store that buys/sells silver jewelry open at the time he needs the money. And never has to deal with keeping a minimum amount in his account or whatever other BS he doesn't want to deal with, with banks, and he doesn't trust banks after the whole bailout situation and wants to make sure he has real money he can access at all times etc etc etc..
Is it worthwhile to buy silver specifically because that is more in the price range of what I can afford to buy, I would have to save literally for months to buy 1 oz of gold at todays market price, as both an investment & as sort of an emergency savings fund.
From what I've read silver is fluctuates a lot in the market, I know absolutely nothing about "the market". I have never invested in anything. My wife and I have some hard times, and we live paycheck to paycheck, we are constantly draining our savings accounts, and even our emergency savings account, which is in a bank that doesn't have a branch in our city, and we don't have a card for that bank and can't transfer funds from it to our local bank, we actually have to drive to the next city over and withdraw it in person. Which then puts as at the mercy of bankers hours & having enough gas/money to get there and back.
We have no credit cards so we can't put something on the card and make payments on it, like a lot of people do. So having a little bundle of metal I can go sell & get some cash in case say I get in a car wreck and suddenly have to pay off something huge I can cash in this metal seems like a good idea.
It seems to me that this is another decent way to save money that we might even make more money off of. However I read that silver goes up & down like a bastard , so we could also lose money on it. And basically I want to know if there is value in buying "fine silver" an ounce at a time, to stow away for a rainy day, or if I'm better of just putting the extra money in the bank. But again I know nothing of the market, and the only thing I can find in my price range is silver...
Thank you H/A!
Whether they find a life there or not, I think Jupiter should be called an enemy planet.
EWom on
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Would you tell other people about it? No. Gold/Silver becomes more valuable(BTW, something only measured current day currency) as more people buy it.
Its a very large pyramid scheme.. "Buy some of item X! IT will save you!" and because they bought Item X at 5$/piece, and you are buying it at 6$ piece... they just made money. Because as you buy it at 6$/piece it is suddenly worth 6.50$ a piece.
I don't know if a "commodities market :: pyramid scheme" is quite a good idea to impart here.
Oh I know the first guy is wrong, the only currency that's going to matter in his ideal situation where his gold and silver is going to be worth crazy mad ammounts as he says, are bullets and the guns that people are firing them from to take all your shit.
The other guy is mainly the one I think might have a point. I never considered silver/gold to be a pyramid scheme style of investing, but I can see that now sorta. The main reason I ask is he's been investing in it, for a very short period of time but got a few thousand dollars into it, and if he were to sell tomorrow it'd be all profit for him. But he's convinced precious metals are a sound investment for the long term. BUt again I know nothing of investing at all. But he's been trying to convince me it's worthwhile, but everything I've read says that gold is at an unprecedented peak now, and while it may keep rising a bit, it has to fall sometime. And that silver fluctuates so much if you're going to invest in silver, buy $1000(Face value) worth of early 60's and earlier US coin currency that's made of 90% silver. Because at worst you'll always have $1000 worth of coins you can take to a bank, even if silver tank and is worth nothing, the face value on those coins still holds up, and at best you can sell it off when silver is worth a shitload in silver weight that you can sell for the silver weight.
IMO this won't turn a good profit for you, and if it did, you'd have spent far more time on it then its worth.
The US dollar will never, ever, never ever ever become illegitimate currency. There is no worry about having to have money in hard metals out of some dumb fear that the dollar is gonna topple because a black man is in the white house
If we lived in Zimbabwe well then yeah you'd have a point, get all the gold you can get. But we're in the US, and the dollar is still one of if not the strongest currencies in the world. There is no reason to not use it.
As a matter of fact, buying precious metals right now is especially dumb because a bunch of stupid people with more money than sense are buying tons of it in the US because they have a completely unfounded fear spurred on from such slimy businesses as Goldline that the US dollar is gonna collapse, tomorrow. The price of silver and especially gold is artificially inflated, and soon that bubble will burst and you'll have lost a ton of money on your "investment". So don't do it
That's basically what I wanted to hear.
I still might buy a 1oz silver bullion piece for my soon coming nephew/niece when they are born, not because I think when I give it to them as their newborn gift it will be worth eleventybillion dollars when they're old enough to appreciate, but because I hope when they're old enough to appreciate it, they might think it's a cool thing to have. I have seen some services in my search for information about silver that you can choose from a number of designs for one side & have a custom engrave on the other side.
I realize that, and have said multiple times in this thread I don't believe that's going to happen. I said I happen to have one friend who believes that. Basically he started the entire conversation, saying how we all need to save gold because the US is going to crumble, and everyone knows he's an idiot.
But it started a conversation from the second friend, who believes that precious metal is a safe and sound investment, always, not just if the world is going to end. And my own research knowing nothing of investing, has lead me to think that it's not a safe and sound investment, and that it's a wildly fluctuating commodity, and if I buy it now, I could lose a shit load of money for doing so.
BUT everything my friend has bought has done nothing but gone up in value, and again he's only been in it for the short term. I came here hoping that I could get some clarity on the matter, and if it's worthwhile to buy silver/gold other precious metals as an investment, even a short term investment.
A chunk of silver might appear interesting but it is kind of unwieldy and there's a higher chance of burglary in most urban areas than a bank going bankrupt without another bank taking over all accounts. You can probably shop around and get a high and reliable interest rate instead of hoping silver prices are going to rise indefinitely.
You should also probably start an investment trust for the newborns rather than give them something that can be pawned. A modest amount in a low risk investment will compound over their 18 years and then they'll have a sweet little nest egg to spend on school, a rocketship, whatever. As long as their parents dont touch it first.
This sorry.
Precious metals are useful when the market crashes, otherwise they don't really offer massive returns.
Really though if you are regularly hitting up your emergency savings account I'm not sure if you are in a position to invest really.
I'd suggest starting off with some Roth IRA until they gather some value (maybe 1.5k) and then look at investments.
Just make sure you continaully throw ten dollars a week or something into it and it will turn into a good little savings account.
Satans..... hints.....
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Precious metals aren't a stupid thing to invest in in general, but it shouldn't be the only think you invest in and you should research everything you invest in.
In my opinion, I'm not sure the gold bubble will pop because there are so many people chomping at the bit to buy gold the second there is a significant drop. Its probably going to hover in this extreme zone for awhile, maybe dropping slowly over time. If the gold bubble did pop? Man, I'd turn a ton of cash into gold in a heartbeat for long term investment.
You gotta ask yourself, where are you going to get the silver? How're you gonna sell it when the time comes?
If you're going to be buying it from a jeweler or silvermonger (I have no idea where you would go to buy a block of silver) there's going to be a mark up because they're not selling it as a pure commodity. In the same way, the dude you're going to be selling to isn't going to be a silver or gold trader (I also have no idea where you would go to sell a block of silver). So effectively, you're going to be getting screwed on both the buy and the sell side.
What I think you friends are talking about when they talk about the price of silver or gold going up is the price of indexes going up or down. Two popular ones are SLV and GLD but they're ETF's and what they really do is track the price of gold and silver. But ETF's by nature don't follow the price 100%. If you wanted to trade in these, that would make sense and they have shown good returns but it's risky.
Oh and fuck yeah it's a bubble. Going by Improvolones numbers, the holding period return for Gold over the past ten years is (1300/300) - 1 = 333%. What, did everyone in finance just miss out on how to correctly value Gold for the past century? Shit's going to go down and it's going to go down hard. That fact combined with the relative illiquidity of what your friends are suggesting can only lead to bad times.
Like my professor said, "Gold is for jewelery"
If you don't mind my asking, why do you have a bank that you have to expend serious transaction costs to bank at?
If you have no idea where to sell bullion, you really shouldn't use that as a reason to not invest in precious metals at all.
You're right, there are sites where you can trade bullion. http://www.bullionvault.com/ and http://www.bulliondirect.com/ just to name a few. Numismatists will give you a fair deal with small orders but I can't imagine them being cool with large volume.
Anyways, my point was that trading directly in gold and silver has a very illiquid market and judging by these sites, any significant movement in the price is going to make matching hard or make the spreads go crazy.
And if you are rich there are much better ways to spend your money unless you just like being eccentric. What they are doing is only valid if you're expecting the USD to fail and you want to skip out of the country with something that has value elsewhere.
For your average joe it's not going to matter. What is your friend going to do with those few thousand dollars worth of silver and gold? The precious metals market is just like any other, the price fluctuates and by the time he's ready to cash it out, chances are it won't matter. Either he won't have enough saved up to make the price increase mean much (assuming he doesn't get screwed on buyback), or he will have saved up so much over so long that he might as well have invested it in something more worthwhile anyways.
Investing isn't bad, heck even investing in precious metals isn't bad, but not the way they are doing it.
I will say this : I have been in Africa alot and the US Dollar is about the only thing that WILL get you what you need - not gold , diamonds etc. However in The Gambia there is a bizarre sock currency. Hustlers on the beach will trade you cool shit for your socks. They don't even have to match. I am curious about what they do with socks because I started to look and no one was wearing them.
Also, my wife has had silver since her teens as a gift. It's literally in a box and is great to stub your toe on. It's also a big box and not worth putting into a safety deposit box because silver has had decent return rates however you have to have a shit load of it since the 80s to even make a profit.
Your statement is humorous and actually hits at the crux of the point when it comes to any currency. As soon as an object is deemed as "currency," it essentially floats and is subject to inflation, deflation, stagnation, all the fun things that currencies go through — because currencies are used as a sort of "float" above an actual bartering transaction. The sock market you mention is a closer approximation of a barter/currency model, since it's an object that you're trading them but it doesn't appear to be used directly.
My point, though, is that gold, silver, other precious metals, will fluctuate and have fluctuated against other currencies, and will continue to do so. Look at the charts on this page: http://blog.visiblecertainty.com/post/108292837/gold You'll note that it hardly is straightforward as to what the future value of gold will be -- just like it's impossible to know how strong the dollar will be against the euro, yen, etc. Gold has an advantage over other currencies in that it can be used for jewelry, which gives it a more intrinsic value, but you just have to talk to a jeweler about how prices fluctuate to see that it's hardly clear cut. Why? Because people still have to buy (and then sell) gold, silver, platinum, etc. It's not consumed or used up so, yes, it will hold its value. But there's no guarantee what that future value will be.
That's part of the reason they have "value" is because they do have functional uses that make them desirable beyond aesthetic choices.
And the cost of diamonds is seriously a whole other issue. Diamonds are not an investment, precious metals (in non jewellery form) are.
OK, I guess this is a tangent.
Anyway, the difference between copper wires and gold is that gold is traditionally a more valuable metal and will hold value even if we didn't use it in cell phones.
I have an investment account. To be honest though, I have no idea what's in it. Because I don't expect to be dipping into it for the next ten years and more realistically it'd be closer to twenty. I make my month contribution to it, and I check once a month how the stocks I own are doing, but I don't really look at the account more than once every four months or so because I consider it money I don't have yet.
Investment accounts are purely about time and if you want to play the stock market that is what you really need.
Satans..... hints.....
No not quite. Buying a piece of jewelry can be an investment. Just not from your big-box Korean produced jewelry stores.
Not unless the piece is made by a very special and sought after artist.
No, my expectation was that if we invested say $100 dollars into silver, in a year if we needed to sell it, we'd be selling it for around $110 dollars. Which is a whole lot more than the $100.80 cents it would have made in our standard savings account in that same year, and that is an optimistic estimate of the amount we'd get on the $100.
Basically I was hoping that silver would be a nice short term investment, that would basically keep our money safe, and inaccessible without a hassle, so that if we were to touch it, we would have to consider our actions strongly before doing so.
Which is exactly why we have a savings account with a bank that is a hassle to get to.
I think some people in this thread have not been poor enough to understand what a huge difference $10 can make. But on the other hand if I invested $100 dollars into silver, hoping to make even $1 off of it, and ended up losing $10 on it, that could ruin our week.
The general idea I get from this thread is that I have no business investing in anything, until we are making more money.
Secondly, you can buy either paper or physical.
You can buy paper pretty easy. I would suggest getting SLV via sharebuilder. A discount broker will probably kill you in fees.
If you want physical, try bulliondirect. Shipping costs are high, but you can keep them in your vault and either trade out of them or wait till you have enough to make shipping worth while.
It's too violate, I won't suggest it as a short term "savings account".
If you are looking for safe investments with better than savings account, look into:
High Yield Savings Account (online ones tend to be higher than most brick and mortar banks).
CDs.
Money Market (though rates will be around that of savings, maybe a pinch higher).
Bonds (http://treasurydirect.gov/)
Anything other than those I won't suggest for short term savings.
Also what are you saving for? Looking for some tax friendly accounts.
529 accounts will help with educational expenses.
HSA will help with medical expenses.
IRA/401K for retirement funds.
Federal Bonds (see above) also have tax benefits. Federal Bonds are exempt from state taxes IIRC.
Btw, most all interest will be taxed at your highest rate. Capital Gains (dividends) are typically lower if your not a day trader.
Another trick:
Get a high yield savings account. Pay with everything on high rewards CC. PAY IN FULL every month. This has two benefits:
A: You get the rewards from the CC (typically around 1-5% depending on what you buy. Make sure they have a cash rewards).
B: You get the interest between time of purchase and when bill is due (typically 20-30 days).
For example, I spend $100 in gas each month. If I put it on my Shell card, I get 5% rewards.
I also have a 30 day grace period and my checking account is 1%
That means I save about $6 on gas per month. $5 from CC rewards and $1 from float (before taxes). Doesn't sound like much, but if you do that with everything and multiply it by 12 months; you get a good amount of savings that are basically free. The only downside is to make sure you pay your CC in full each month so you don't get nailed with fees. Just setup an automatic payment.
bulliondirect and bullionvault for physical, any broker for GLD/SLV.
I've made tons of money on both glod/sliver in the last few years. It's really simple and cheap to trade (in terms of fees/time).
There are other reasons I don't suggest the OP doesn't trade em (since they are far from a safe investment ); but the entry barrier is really low.
Never buy/sell to a physical store. 99% of them will give you shit prices. The only brick and mortar places I would suggest buying from is thrift/pawn shops, if and only if; they have mispricings on their sliver dollars, etc.
The thift store near me prices all sliver dollars out of a book from 2007. I buy everything they have every time they get something new in.
We try to tuck money away wherever and however we can, because when those ER trips come up, they are expensive as fuck even with health insurance, and it's looking like we're going to lose our health insurance next year, which is going to make them hurt even more.
In talking to some people I know, they seem to believe that precious metals by weight typically barely keep up with inflation. However, collectible coins and jewelry can actually pay off quite nicely.
If losing 10$ were to ruin my week I would try to minimize the risk for that to happen. I am rather conservative when it comes to money, but I would keep it save and go for that 50c interest while looking for a job that'd blow the 10$ profit on silver out of the water.
Look at it like this: an investment in a bus ticket to a career fair might turn out to be the best investment you'll ever make.
We are already heading down this road, somewhat. We just need to make it until May when we move, and my wife goes to a tradeschool while I work, any job I can get. Retail, fast food, doesn't matter so long as I'm working. We will be living with family, under the understanding that I'll either be working, & doing pretty much whatever they ask of me around the house, as well as paying what rent we can afford, once I secure a job.
It is kind of crazy, me and several of my cousins kind of went completely separate ways after high school, and these 10 or so years later, we all end up with one thing in common we would have never predicted. We all lost our jobs, pretty much all at the same time.
I had my time to try and shine, and I crashed and burned, my wife and I came to an agreement, she wants her chance now, she's going to put in the hours at the school and go a completely different direction in life than what she had "planned". (Her big plan was real estate...you can figure out how well that plan went, based on the fact that she's working retail now) we've been taking what jobs we can get over the years & doing what we had to do, and it's time to change what we've been doing, and attack the problem at a different angle.
Saving is for short term needs, and should not exceed a year of expected bills. If you have a years worth of bills in savings, you should start investing extra cash. This cash should be highly liquid, and stable. The goal is preservation of capital, any profits earned are gravy.
Investing is for long term needs, after your days of earning an income are at an end. This is long term investment cash, stuff that is tied up and largely inaccessible until retirement.
Crossing the two very different animals can be dangerous. At the least, you jeopardize the effectiveness of each. At worst, it will cost you in taxes and penalties.
Also, for Gold. It is a highly speculative market where small investors, that don't have market heft and the ability to accurately analyze the market and buy and sell when it is profitable will get hurt. Inflation alone will knock the legs out from under you.
Ex. an ounce of gold bought in 1980 would run you $850 (in 1980 dollars) adjusted for inflation, that would be $2184 (in 2009 dollars). The price of gold has a long way to go to reach that point. Never mind that the price of gold, prior to the run up in 2007 was $650 at its low.
A similar investment of $850 in a S&P index fund from 1980 to 2009 would be worth 92,000.
It's stupid.
You'll get better return on your investments if you take $20 a paycheck, give it to me, and then I earn interest off it for you, and then give it all back to you in 5 years. Gee that sounds awfully familiar. Sort of like an institution that deals with valuable goods and pays you to make money off your money. I think I'll make up a word for it. Like. A bank.
Investing money in commodities is best saved for commodities traders. If you want to invest money, invest it the traditional way.
Yeah, you really should get your finances in order before you consider investing in silver.
Driving to another city to get emergency fund money is silly. Put that shit in an High Yield savings account online. It'll take you a day or two to get your cash transfered, but you won't have to spend $5 in gas to get to the bank.