G'day to you all! I came across this forum 2 weeks ago and I have been on this site everyday since. After reading all these info, I can't resist but to get my first 10oz bar 1 week back. Now..here is the tough question..and I will give you guys a snapshot of my $$ situation first.. I'm currently 25 and working, 1 x variable rate home loan (199k to go..the unit is worth around 300k now i think..), and a total yearly income of $90k together with my partner... Would you agree that our main goal now is to pay off the homeloan asap? or can we start stacking a bit of silver..? I asked this because I do agree with most of you guys that there is a bullish outlook in silver price ...and I couldn't stop myself from thinking about it since I came across this forum!!!!
The rate on home loans is around about 8%PA (or whatever) and if you can see silver going up by more then 8%PA then the situation is simple. Remember to factor CGT into that % silver increase. Silver FTW. BTW in about the same situation and am fully into silver
+1 Any high interest debt you want to work on eliminating as soon as possible. However, out of every paycheck, you may want to consider trying to save 10% to use for savings/investing/PM purchases if you're not doing that already. If you do not have an 'emergency fund' (enough cash to cover 6-12 months living expenses), I would make building that a top priority. Pay down debt, establish emergency funds, anything else goes to savings/investing.
I'd be ploughing that money into small denom silver until I had enough to renovate that unit of yours then converting that to fiat to complete the job.Really difficult to give advice as we have to make a whole bunch of assumptions,is the loan a redraw facility? Location of the unit(In regards to Capital improvements) Loan repayment should be around $1442 per month.In the current Bubble pop climate(I don't agree with this) Emergency funds in the form of liquid silver/gold would be my first priority for the shrt 12month term.I agree with the others re paying down the debt first,worst case scenario you or your partner loose your job if you don't have liquid funds/savings on hand to pay the mortgage then your in trouble.Choosing a strategy depends on many personal variables ie job security,family backup,current valuation of property,budget,type of housing loan,current liquid assets outside of AU/AG.All the above are sound you can't go much wrong listening to the above. REDBACK
I'm in a similar situation, but most of our savings are in an offset account which offsets the loan and can be used in case of an emergency. We put a little bit on top of our loan repayments as savings.. Any extra spare dosh i come across i spend on PM
Well I am seriously thinking about selling real estate completely, we are seeing the first signs of failure with prices beginning to slide, and moving 100% to PMs with the idea of buying back in to real estate after if fails. Taking your example. . . $100k worth of silver @ $41 per ozt (say)=> 2439 ozt of silver . . . we had a $2.5 price rise this week => $6,097 asset appreciation in a week! What are the prospects for real estate? This is not advice, I'm just thinking out load because that works for me, you have to figure it out for yourself.
If you already purchased a 10oz bar then you've already started stacking. Keep stacking and paying off your debt. If you can, pay over your monthly amount so more will go towards your debt vs the interest. Look at cutting things you can live without, and throw that amount towards your loan.
I think your main goal should be to clear your debt as fast as you reasonably can but that you should also stack some silver. Throw as much money as you can out of your wages at the loan, then find some ways to free up some extra cash for buying metal - get rid of the Foxtel, put all your spare change in a jar and bank it every month, stop buying new junk you don't need, start selling existing junk you don't need, sit down and do a proper household budget and find out where you're spending money that you don't need to, etc. Discipline + Thrift.
Yes get stuck into paying off that loan. It is a struggle, I almost threw my hands up a couple of times while paying mine off but gradually, if you stay persistent the light at the end of the tunnel looks brighter. Buy silver when ever you can. As your stack grows so will your enthusiasm.
ppl keep saying to pay off debt as fast as possible, is this not by buying silver with the end to paying off debts as soon as possible with the proceeds?
Thanks for the great advices everyone!!! Gino...This is what my heart is telling me to do, but my brain (+my partner maybe...) is stoping me from doing.... I mean...I understand there is significant risk but...the chance of silver price going higher in the next few years is a lot greater than the prospect of my unit. What sucks is... my hands are tied until Nov this year before I can sell for a few reasons.... OHHHHH...I really don't want to regret my decicison later down the track!!!!
I reduced my debt payments to a minimum and built a core position of 1000 oz as quickly as I could. Now I'm back to a combination of paying off debt and adding to my stack.
If you pay off your home/house debt you can be sure there will be another forum in five or ten years with another commodity (or other investment class) due to have its turn. People will be asking the same question. However, you will be more aware and be able to put more of your funds into that in the future. You may miss out on silver, but sometimes compromises need to be made. New opportunities will arise and this needs to be compared and contrasted with the possibility of being debt free in five years if you pay your mortgage off instead of buying silver.
I think it needs to be said that the quickest way to pay off your mortgage and get out of debt is to sell the damn property. With the cost of living going up, the prospects for quickly paying off $200,000 are looking unlikely, especially if you think you are going to be faced with increased interest rates (next up for the RBA) to "fight" the inflation in prices (caused by the creation of new money in the first place). Again, not advice, but just stating what no one else seems to want to say. The very last place you want to be is out on the street with no where to live, but neither do you want to be watching the value of your "unit" shrink, while interest on your mortgage increases and your ability to meet repayments deminishes or you start to fall behind. A tough call I know, there is a lot of emotion in a house, especially if it is the family home. I had the dicussion with the wife earlier this afternoon while driving, after watching a real estate agent standing outside a block of units with streamers and signs saying one was for sale. He looked pretty lonely there on his own! My strategy? Keep an eye on market value and get ready to sell quickly. Engaging laywers, drafting contracts, title searches, advertising, etc. all takes precious time if the market starts to seriously tank. That means a call to the lawyer on Monday. Actually, it raises an interresting question tha is much more pleasing to consider than timing an exist out of the housing market. How to split 1/2 a million in precious metals. 2/3 silver + 1/3 gold? What would happen to the value of the investment as Silver moves to $50? Hmmmmm . . .
