You can buy a 1gram gold bar for $65, and probably get most of the premium back when you sell Four silver coins? $90. Which is cheaper? People think silver is cheaper because you get more. But it only seems that way because its less valuable. Why not buy copper, it's cheaper. But people who bought silver rather than gold in the past Couple of years and lost 50% have found it's not so cheap. Gold still at 90% of its max. Because something cost less doesn't mean it's a better buy.
I think the answer depends a bit on the rest of your financial details and what your goals are. If you have a bunch of debt, I'd argue that paying down an extra $80/month of debt would be a better idea. The argument is that every dollar you permanently reduce your debt by gives you a guaranteed return that is equivalent to the interest rate that you were paying on that debt. Generally, paying off high interest debts is going to give you a better long-term return than buying bullion. Paying low interest debt, just pulling a number out of the air, say less than 3-5%/yr, the benefits are less clear. If your debt is more minimal, how much of a savings cushion do you have? If you have a month or two's worth of living expenses saved up in cash, then it would start making sense to accumulate some silver/gold. If you don't then hold off on that til you have the cushion so that you hopefully aren't forced to sell things off at a loss in order to keep a roof over your head and eat or to pay for car repairs or medical expenses. Murphy's law would suggest that you'll lose your job the same week that something expensive breaks on your car and the price of bullion plunges 10%. Having the cash on hand gives you the opportunity to wait for prices to come back or for you to seek more optimal ways of scraping together the necessary funds. If you have a month or two of savings, I'd be tempted to go 50:50 on accumulating more cash and possibly some silver/gold until you have 6-12 months of living expenses saved up and then you could start spending the $80/month on just silver/gold. Diversity in how you have your money saved is generally a good thing. Again, having cash on hand gives you the option to sell when the conditions are right rather than when you are desperate. As others have said, buy local or save up for bigger purchases to reduce your per oz purchase costs. Postage kills! The other advantage of saving up for bigger purchases is that it gives you time to pick and choose and perhaps you can buy your new stuff when it is on sale or there's been short-term drop in prices or you happen upon someone who is desperate to sell their silver now or as someone posted earlier today, they found these amazing bargains at an estate sale.
That's assuming that the choice is: a) Stack metal or b) Piss the money away But if it's: a) Stack metal or b) Hoard cash or pay down debt Then stacking metal can be arguably questionable.
Pay down debt pfft i wouldn't worry about paying down debt unless its student uni debt or even like a car loan type of thing but a house nah...just spend the money else were...why should the banks get money from you in relation to your biggest loan you are likely to every take out... Cheers, HAPPY STACKING
You're kidding, right? 5% compounded return on your home loan is a better bet than stacking metal. How much is a car loan or credit card loan? 15%? You'd have to be insane to think stacking metal is better than than paying off those loans.
Using that big brain of yours, would there ever be any scenario/s when stacking metal would be better? If so, what would they be?
They all involve hindsight. The thing with paying down loans is that: a) It's compounded b) It's a guaranteed return You get none of that with stacking metal. It's only a good bet if you happen too get lucky and buy in before a big sudden boom. Don't kid yourself it's anything but luck either. But hey, if you like being a debt slave, knock yourself out.
I see where he is coming from! If I had debts I would not have started stacking silver and gold,my aim would be to pay off debts or a huge proportion of the debts before I knew I had enough spare funds available to actually buy PM,s or even invest in shares. I am at a time in life where I am now just about debt free but this could change in an instant! If I had to take out new loans then paying off those loans would take precedent over buying PM,s. If I still had a mortgage I would pump any spare money into an off set acc with redraw facility. Some people live on credit and make a fine living from using credit but for the majority credit and loans are a burden well rid of before deciding to invest in anything else other than essential home and transport. While people I know were pumping extra cash into super with the carrot dangle of company/ government match I used that money to pay off my debts, they lost in the GFC and still owe on their mortgage.
Yeah, that's crazy. I don't see how putting money into super is better than paying down your home loan?
Property prices go up and down as do the price of gold and silver. As it is we are paying to much for housing in Australia (over valued to the max for what you get) Im referring to not putting all your money, ever last cent into paying off your home loan but still enjoy purchasing precious metals Of course credit car debt, student loan debt, etc pay them off as soon as your can as the % is fkn crazy...cash is king, credit cards are well...just plastic shit cards...nothing more nothing less... Its just one mans opinion And sorry if i have trailed off the "is stacking silver really worth it" thread Cheers, HAPPY STACKING
Loss of income before retirement! I still have at least 10 years (20 if the government has its way lol) but my intention is now mainly accumulation and also preservation of the little wealth I have. I may have done it all wrong by not investing when I was much younger but at least now I am debt free and want for nothing! You can become wealthy by taking chances and loose out by being careful or cautious but once debt free life becomes so much easier in my opinion, you can see that previous debt and interest charge money grow very quickly in your bank acc. I am still cautious about the amount of PM,s I buy but at least I can afford to forget about the money I pay out for them because I am still accumulating money by being debt free.
Well the only two valid debts you mention are house and student. Anyone silly enough to get stuck with a credit card debt or a car loan are silly. The worst I ever did and still regret was buying a new car out of my offset. As for your point of houses going up and down, that basically means shit all unless you're going to sell up and live on the street(or rent/caravan park whatever). But the one thing that will constantly be going up is your total interest bill. If you think you can neglect your mostlikely single biggest investment ever to pursue hobbies like 'stacking' then go for it
When we were paying off our home we knew the quicker we paid it off the better off we'd be, but we were always looking for other avenues to put spare cash to hopefully get a better return than dollar for dollar that in turn we could then use to pay down our home debt. We won some we lost some but overall a fair amount ahead. Cash is king. Be curious the advice given to a young couple with a small child priced out of the property market were to do? Keep saving that deposit year in year out whilst the market gets away from them. What is the guaranteed compounding interest on savings these days? It's a tricky one.
Yes I see your point too but the truth is once you get to a certain stage in paying off your mortgage it gets easier if not only in mindset for some. It also depends, in my opinion, on whether you treat your primary property as a home or an investment! I treat my house as a home so in that aspect it doest bother me if house prices fall sharply or go to da moon. In fact even though I own my house and home I would love to see house prices fall way back to a level of affordability for all, I would never see this as my loss
Yes I made a stupid mistake some years ago by taking out a mortgage "supplementary loan" for renovations without fully understanding the terms! well it almost knocked me back to square 1 re debt, so I knuckled down and got rid of it quick smart. I think the bank was hoping on me consolidating with a new mortgage but I was having none of that.
The advice of a Canadian investment advisor that I read fairly frequently would be for them to fight off their house horniness and remain property virgins. He would argue that financially, they are much better off to rent and place their savings into a well diversified investment portfolio. Part of his argument seems to be that it makes very little sense for the typical consumer to use all of their savings and then borrow an additional $500k and use that money to buy shares in a single company, say Ray White, Commonwealth Bank or BHP. Thus, why would it make sense for them to do what is roughly the equivalent when buying a house? He seems more comfortable with buying a house if it's share of your personal financial portfolio is a lot smaller, I'm guessing less than 50% of your networth... A second part of his argument is that for many places in Canada (and probably Australia as well), it costs you far less to rent a place then to own that equivalent place with rents being much less than the costs of mortgage, maintenance, taxes, insurance, etc. He further argues that your investment returns in the stock market if you used your house deposit and the cost savings between buying and renting would exceed the appreciation in house prices over the longer term.
Agree with invest in property while still renting is better off then paying a mortgage (living in your principle place of residence) while investing in property...with the spare cash u can then invest part in pm's... Cheers, HAPPY STACKING
