Pay student debt or buy silver?

Discussion in 'Wealth Creation & Management' started by Arcanist, May 28, 2014.

  1. Arcanist

    Arcanist New Member

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    I am stacking in preparation for a financial collapse but still tell me your opinion if you don't think that will happen.

    I'm 18 years old about to start an electrician apprenticeship
    I don't have any silver
    I have $5000
    My student loans are $4000 and increase with inflation each year (usually 2-3% each year)
    I don't have to start paying my loan off until I earn $50000 a year or more

    What the fuck will happen if hyper inflation occurs? Will the debt disappear? Will I have to pay it off in silver? Will it be more cost effective to wait for silver to rise and then pay it in silver? Am I going to be screwed if I don't pay this off before hyper inflation occurs?
     
  2. Arcanist

    Arcanist New Member

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    Wow man it censored me. I did not say turtle
     
  3. Altima

    Altima Well-Known Member Silver Stacker

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    I would clear any debts before buying silver/gold.

    Don't like having any debts hanging above my head like a guillotine!
     
  4. bull_bear

    bull_bear New Member Silver Stacker

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    My advice,
    Do nothing. Leave your $ in a high interest account, pay the minimum off your student debt while the interest from that account is higher than 2-3%, and don't buy silver.
    Its far too volatile in price to put your life savings in, and you don't know when you might need that $5k in a hurry (car engine breaks down, pipe bursts in your house and you get flooded etc etc)
    ignore the hyperinflation talk, unless you live in zimbabwe/argentina/ other countries without functioning governments/markets etc - Australia doesn't count, despite what some here believe :)
    when you have savings of say at least 6 months worth of your salary, maybe buy some silver. otherwise its a big risk.
     
  5. bja

    bja Member Silver Stacker

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    Pay your debt, if you are banking on a scenario where you can pay it back in silver I would think that is probably the last thing you would be thinking about at the time.
     
  6. ego2spare

    ego2spare Active Member

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    pay it off and buy 2 rolls of crocs with the excess (+ abit) . then dont buy anything till u are settled with other stuff and have some saving. then just wait around watch the charts till silver gets lower.
     
  7. Miloman

    Miloman Active Member Silver Stacker

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    Hmm...

    I think silver is at historic lows. If you don't mind it going down and holding onto it for a very long time. Then it might be something to consider.

    The debt is a small one with a small interest rate. Can you pay some of it off even with an apprentice wages? If so I would commit to paying it down, every payday put some money on it.

    If you can manage your debt then I will go against what has been said so far, I would buy some silver.

    Once you pay back the loan the money is gone, so I would put $500 towards the loan to make a dent in it. Buy about $1500 of silver. Keep $3000 in a high interest account for emergencies.

    Then I would try to split any extra money from you paycheck in thirds...
    1/3 Precious metal
    1/3 Short term savings
    1/3 Long term savings (until you hit $7000 roughly 3 months of minimum money for one to live on)

    Do not touch long term savings.

    Onto the debt, you will not go to jail if you don't pay off a debt so don't worry about it so much, just make a commitment and a time line to pay it off, 3% is a tiny interest fee that anyone would love to borrow on. It's nothing like a guillotine. Silver is approaching lows... so I'd keep an eye on the price. Personally my call is we are not going to break below the lows but I could be wrong, though I am putting my $ where my mouth is. Also I'd rather have some silver and possibility a little gold (even 1/10oz) than none.

    If we go into a hyperinflation then your loan will look like lunch money, nothing to worry about either.

    In summary I say I'd "buy some silver", yes.

    I even go so far as to say what I'd buy....
    Silver 1oz Lunars, Crocodile at issue price (don't pay inflated figures to past coins, your young so they should appreciate nicely)
    Maybe 1/10 lunar gold at issue price. Try to get which ever has a low mintage.
    Then some cheap silver bars or say a 10oz lunar horse which is similar in price. Why get the 10oz horse instead of a bar? It has the chance to appreciate more than the bar if the market doesn't hyperinflate.
    I sold a few 5oz coins for about 4x over spot.
     
  8. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    Put $1000 in cash under your mattress for emergencies.

    Put another $1000 in an at-call high interest savings account for slightly less urgent emergencies.

    Do not even think about what you could spend that two grand on. It's gone. In it's place you have a small rainy day fund and some peace of mind.

    Wait until you're a few months into your apprenticeship and then use the rest to pay down your debt. You may have a few expenses that you'll need to cover when you start so don't count on being able to repay a full $3000.
     
  9. ego2spare

    ego2spare Active Member

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    what makes silver so great for young people, and for me (because in am idiot) is that when you buy silver u dont feel like u have money anymore. to tell someone young to just keep $1000 and dont spend it is... well, its astonishingly unlikely that they will do it.
     
  10. Caput Lupinum

    Caput Lupinum Active Member Silver Stacker

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    Buy about $3500 worth of instant scratchies and a 2006 Tuvalu Redback to use on the scatchies
     
  11. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    Not only is a small stash of cash handy for emergencies, but it also teaches you discipline.

    If you can't keep hold of $1000 in cash without blowing it on something, you really need to have a long, hard think about your attitude towards investing.
     
  12. ego2spare

    ego2spare Active Member

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    i cant. if i had $1000 it would be gone in days. without even paying bills or wanting anything. but investing has nothing to do with cash. its about turning cash into other things. so if u NEED to not have any cash, so u HAVE to have many investments. then i see alot more pros to being this way than cons
     
  13. Arcanist

    Arcanist New Member

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    Did you see that my loan increases with inflation?

    Splitting up my money like you said seems like a good idea.

    Wouldn't it be important to be able to trade in amounts lower than 1oz? I was going to buy granules so I can trade with any weight and because they have no premiums. Why did you choose the ones you chose?

    @everyone
    I'm not getting silver to solve money managing issues. I put a lot of thought into my money
    Someone that trades currencies, silver and gold told me that silver is a good place to store wealth even without factoring hyper inflation. I will, of course buy physical silver

    SUMMARY
    Thanks everyone for your answers. My current plan now is:
    - Buy $500 silver (I really don't want to be caught without any silver if the price suddenly rises)
    - Allow bank account to reach $7000 and don't let it go below that often
    - Pay off loan in one go if I can pay it off before the annual interest ticks

    Nobody answered what will happen to the inflation-increasing-loan if hyper inflation occurs but you have been valuable
     
  14. whinfell

    whinfell Well-Known Member Silver Stacker

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    I'm fairly sure that granules attract GST when bought from a dealer - which could be considered a 10% premium :/
     
  15. ego2spare

    ego2spare Active Member

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    We can all have different opinions on what to do with the money. But we will all agree. Do not buy granuels or shot.
     
  16. spannermonkey

    spannermonkey Well-Known Member Silver Stacker

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    something doesn't add up
    How can you have a student loan already ?
    Been to uni already& your 18 ?
    Starting a sparky apprenticeship ?
    :rolleyes:
     
  17. scrooged

    scrooged New Member

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    Find out what allowances you are entitled to for your apprenticeship and go from there. If up, pay debt.
    It's possibly all irrelevant if you can't get through your apprenticeship and then, earn an honest living.
    I doubt you'll miss too much in the next 4 years, so your 5k may better serve you paying the difference for tools etc. which you would normally pay from 4 years of shitty wages.

    No tools, no money.
    No money, no honey.

    http://www.fairwork.gov.au/industries/vehicle/pay/pages/allowances
     
  18. Miloman

    Miloman Active Member Silver Stacker

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    Ok I can only touch on the surface of things, there's too much information to try to pass on to you. I am trying to help you as much as I can and share my knowledge/experience.

    Yes your loan will increase with inflation but remember inflation will always be calculated using the government CPI which is a scam anyway. Your borrowings and interest rate will always be below "real inflation". So honestly don't worry about your loan, if it all goes pear shaped, the probability is that the obligation literally won't exist. I am all for pay it down though but not in one hit I think it's smarter to pay your loan as you go for a number of reasons. I'm not sure how your loan works and how the interest is calculated, I doubt that it is yearly. It will teach you how to divide money and have different "portfolios", this lesson becomes very important later in life when you'll have a lot more money. Plus it helps your current position the most.

    DON'T buy granules ever, unless you can get them below spot and can assay them after melting etc. You can't so don't touch them. Resale is terribly difficult.

    I've been doing this gold silver thing for over 10 years now and have a few years under my belt.

    My thoughts on what I would do- Buy crocodile coins tube of 25 and leave it sealed, buy 1/10 gold snake or horse lunar, buy 5oz or 10oz horse. (notably all perth mint products)

    These coins are low premium (price above spot) and people pay more because they are collectable plus you have silver at the end of the day, hyperinflation or not. You score in the best of all worlds here and maximise your potential profits on all side whilst minimising your risk. Forget about fractionals for the moment. You can add a bit of pre-decimal junk later down the line. When you have an even bigger stack.

    Hyperinflation may or may not happen but I can be certain that those crocodile coins will have a greater premium than they do at this moment in time. There will be a time when you can use that increase in value and sell them and get more silver. Say 25 x 1oz crocodile tube buying you 35 x 1oz coins in maybe just a few years. And if hyperinflation does set in and the value of silver soars you still have your silver.

    The division of funds is specific, I looked at your position, age, earning potential, portfolio/savings, economic environment, price of silver, current opportunities in the market. Plus more!

    Basically stack more, pay debt, save more in 2 forms (1) short term (2) long term.

    It's excellent that you see the wisdom of about $7000 not to be touched, on pain of certain death :) savings.
     
  19. Arcanist

    Arcanist New Member

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    Haha that is confusing. I quit my IT course at uni before my first semester was over so I have a $4000 loan. Now I'm going to be an electrician. I would much rather have the 1 on 1 style of learning with an apprenticeship than whatever you call what they do with you at uni. Programming seems similar enough to Electronics. Both have problem solving
     
  20. Arcanist

    Arcanist New Member

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    I don't think I can edit my posts yet.

    You're right about investing in low-premium silver. I was putting all my eggs in one basket with granules. This way, my silver will be useful before and after hyper inflation. I'll just buy what you say since you have so much experience. A crocodile coins tube of 25, 1/10 gold snake lunar and a 5oz or 10oz horse. And then stack junk after that for a while.

    I'll look into the interest cycles on my debt then

    Thanks for your help. I have a plan now for a while
     

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