Borrowing money to buy up right now???????

jpanggy said:
Iluvnumbers said:
NO! Debt is what has caused the financial woes!
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It's not debt itself that is causing the financial woes, but being in too much debt in one asset class.

Americans started speculating with real estate, depending 100% on capital gains and going all in...
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I think you misspelled Australians :)
 
ReturnToZero said:
RetardedMonkey said:
The only asset I'd go into debt for is a house. You'd live in that, so it serves dual purpose.
Your silver doesn't provide shelter, can't be used as food, won't keep you warm.
In fact it's fairly useless except as a store of wealth IMO (oh and to look at - it's pretty). So why are you storing the banks wealth in precious metals?
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Wow, you hit the nail on the head so hard I nearly choked on my cornflakes.

And paying the bank for the privilege as well. Pure gambling if 100% of your holdings is borrowed.
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
What they said, Retarded Monkey summed up and answered about 8 posts now Running on Silver Stackers with that Brilliant reply.

Truly Top gear answer!!
 
It's one of those things that has no right or wrong answer. I mean, if you buy silver on credit and it flies to the moon, then you'll be grinning from ear to ear. Conversely, you will be very disappointed if it goes that other way and i know a hell of a lot of people got burnt in April from doing just that. However, I am personally very bullish for silver and have bought on credit before. I personally prefer to just save as much as i can and buy it outright.
 
If your looking at borrowing to invest you would be better off i think using a margin loan to invest in SLV or GLD ETF's which would also provide you with the leverage as well.

Although you may make money off borrowing to invest in physical metal i wouldn't personally recommend it.

But... sometimes great gains come as great financial risk.
 
I haven't read all the posts, so if this has been covered, plz excuse.
You haven't mentioned the all devouring cancer of wealth creation .... tax. If you are doing this as a "official" commercial venture you can claim any interest accrued against subsequent profits. The obvious potential down side of this is you will get stung by the grim reaper. Alternatively you could, as you seem to be suggesting, wait for a price increase that will compensate for your interest payments.
One other option could be to declare some of the silver bought, and subsequently sold, and claim as much as you can otherwise.
Hope this may have been of some help.
Cheers.
 
I am taking the opposite side of most here, but keep in mind that I live in the US. I used to absolutely hate debt and I still do not like it. But, as soon as my mortgage is refinanced, I am going to take out a home equity loan for as much as they will give me. I am assuming that the interest rate will be under 8% or else I won't take the loan.

My reasoning is that the USD will significantly depreciate and the debt will be repaid with cheaper dollars.

Other than I live in the US, there are other possible differences that you may need to consider.

1. I have been in the gold/silver market for about 4 years now and have nice profits that give me a higher tolerance for dips than a newer investor.
2. I have other assets that I could sell to raise capital if I needed to.
3. I have rented out my house for positive cash flow and my monthly cash requirements are very low.

However, I would never take out a loan to invest in silver. Gold yes, but silver is too volatile for me to buy with borrowed money.
 
I'm anti-debt, so of course I'll say "don't do it!" :P

If you're that bullish, I'd suggest selling items you don't need/hardly use and perhaps some other assets (e.g. badly performing shares) and use the proceeds to buy more silver.

Also, increase productivity. :cool:
 
Stick to your belief that debt is bad and don't deviate from that or play the game to your advantage?

No Debt = no risk

Debt = magnified gains or magnified losses
 
Ok very interesting,
Thank you all for your input,
A question i have is what would happen if you had a loan with a bank and then the s#@t hits the fan?
Can they ask you to pay it all back considering they signed a contract with you?
And why would they need you to pay it back if the currency is useless???
thanks guys
cheers
Scott
 
2eyedcyclone said:
Ok very interesting,
Thank you all for your input,
A question i have is what would happen if you had a loan with a bank and then the s#@t hits the fan?
Can they ask you to pay it all back considering they signed a contract with you?
And why would they need you to pay it back if the currency is useless???
thanks guys
cheers
Scott
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Hi Scott,

Several things can happen.

If shtf is hyperinflation and if you are on fixed term loan, you will be celebrating like mad. Because bank interest will go high >50%, your mortgage will be fixed at .... whatever rate you fixed it at. You practically get something free because they hyperinflation will make your debt go away. However during these times, you will worry more about food and safety.

If your mortgage is variable rate, then you are as stuffed as the banks, your mortgage rate will follow the bank interest rate.

If shtf is financial collapse globally, you might get lucky in the process and somehow your debt just goes away. Or it will come back and haunt you once everything stabilises, assuming they did not erase your records.

In true shtf, like zombie apocalypse/alien invasion/genocide/foreign invasion/apocalypse/rapture, you don't need to worry about your debt and by then your metals are paper weight too anyway.

It is not a good idea to invest in PM with shtf in mind, because you don't know how shtf will shape the landscape of economy and what kind of shtf will take place. PM as a hedge against inflation sort of makes sense if you have enough information to predict inflation.

During early gfc, PM tanked bad vs currency, fiat cash was king during the early days.

Of course if you have entered PM back in 2000-2003, then your asset appreciation will be strong enough to withstand the price corrections, different for everyone I guess.
 
2eyedcyclone said:
Ok very interesting,
Thank you all for your input,
A question i have is what would happen if you had a loan with a bank and then the s#@t hits the fan?
Can they ask you to pay it all back considering they signed a contract with you?
And why would they need you to pay it back if the currency is useless???
thanks guys
cheers
Scott
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If you play their (debt) game you are playing by their rules...and they change the rules to suit themselves. You can not count on anything in a SHTF scenario except yourself...and if you are a bondsman you can't even count on that.

If you've not heard it before then consider this:

Gold is the currency of kings, silver the currency of gentlemen, barter the currency of peasants and debt is the currency of slaves.

Unless you are going into business trading PMs, it is greed talking you into debt. But of course if you go large on silver using debt every one here will benefit from the increase in aggregate demand generated. There are even those who will sell into that kind of demand strength with the expectation that if irrational, such demand spikes will correct and they will be able to buy back in at a lower cost base. Ask yourself who is smarter; the newbie taking out a loan to buy in or the seasoned investor selling into the spikes in prices to buy up the anticipated correction.

Greed is a liar.
 
I don't like the idea of more debt either. We have used some savings and are selling our house. Even in this crap market we will be happy to just get out of debt and have a little bit left over to buy more silver with.
 
2eyedcyclone said:
Ok very interesting,
Thank you all for your input,
A question i have is what would happen if you had a loan with a bank and then the s#@t hits the fan?
Can they ask you to pay it all back considering they signed a contract with you?
And why would they need you to pay it back if the currency is useless???
thanks guys
cheers
Scott
Click to expand...

If you default on the loan, if for example you lose your job or become ill:

Are there debtors prisons (yet) in Australia?
If the loans were secured on your assets then your creditors may force you into bankruptcy and repossess.
If the loans were unsecured and you used said loans to buy off-balance-sheet assets (e.g. physical metals now buried in Grandma's back yard) what can happen to you?
If you buy on leverage do you have a strong enough stomach to ride out the inevitable price roller coaster, as you sometimes watch the paper value of your purchases fall below their purchase price? And not get shaken out of your position?

Debt isn't for everyone and I'm not recommending you get into debt. Please do your own due diligence.

http://news.goldseek.com/radio/1315207425.php

Robert Kiyosaki said:
Life is a point of view, you know, and which side of the view are you on? You've really gotta be playing the game from the side of the rich 'cause if you're not, you're getting crushed right now. Buy a house that's a joke. Get out of debt that's a joke. You're supposed to be getting into debt. And you put your funds, your money, in say in a 401K and a 401K is only good for people who are planning to be poor when they're retired. So, I don't have any plans of being poor, so I don't have a 401K. If you're not gonna get educated and understand that the whole game is rigged by the rich, and once you figure out the rules of the rich, then you play by the rules of the rich. And everybody else is kind of just being whip-sawed right now and it's quite a tragedy.
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Robert Kiyosaki said:
And then, I talk about debt and how I use debt to get rich. So, I'm so counter to, Susie Orman or the other guys and it's made me a very rich man. The other side the book is Unfair Advantage and there's another book called Conspiracy of the Rich. And the reason I wasn't caught in this crisis is because I understand how the markets are manipulated. So, once you know that, you're not sucked into the tos and fros and the ups and downs or the yelling or the screaming. And the thing is, if a person has been hurt in this crisis, you know, I would really look at changing my thinking or getting new advisors or something because getting bad advice like, just now, my stockbroker called me and he told me to sell my gold and go into equities. He's gotta put food on his table, I understand. But, why would I get into equities? I don't and why would I sell my gold? I don't understand that. And I'd rather have gold right now and I'd rather have silver than anything else.
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Depends on your motives and your means.

I suck at saving money, but I am awesome at paying off debt... mostly because I hate debt so it works as a great personal motivator.

I borrowed to buy my first 3kg of silver as a sort of 'savings' plan. I ended up paying it off in 4 months, 20 months ahead of the loan term, and the silver has earned (as yet an unrealised) profit of somewhere around 1k. Some of that has been absorbed by interest, but the interest paid is proportionate to the length of the loan term.

So yeah it cost me a few hundred in interest, but the end result is a tidy little stack of pretty shiny stuff that I have wanted to start building for a long time, paid for with cash that would otherwise have been spent on useless purchases of little to nil value.

There is always concern about whether the price is going up and down, but realistically it's going to do that whether you're paying with cash you already have or cash you're paying off. Consider what your motivations are and whether you actually care what the currency value of the metal (or money) is at this point in time, or whether you are in it for some other reason that makes you consider the cost to be 'worth while'.

Do what works for you; in a quantity you can handle; with associated risk you are willing to accept.

After all, I hear the buzz words "measured in ounces" on this forum all the time... So why does it matter where the paper comes from, as long as you can comfortably cover it at short notice?

*commence bombardment*
 
Grimnar said:
Depends on your motives and your means.

I suck at saving money, but I am awesome at paying off debt... mostly because I hate debt so it works as a great personal motivator.

I borrowed to buy my first 3kg of silver as a sort of 'savings' plan. I ended up paying it off in 4 months, 20 months ahead of the loan term, and the silver has earned (as yet an unrealised) profit of somewhere around 1k. Some of that has been absorbed by interest, but the interest paid is proportionate to the length of the loan term.

So yeah it cost me a few hundred in interest, but the end result is a tidy little stack of pretty shiny stuff that I have wanted to start building for a long time, paid for with cash that would otherwise have been spent on useless purchases of little to nil value.

There is always concern about whether the price is going up and down, but realistically it's going to do that whether you're paying with cash you already have or cash you're paying off. Consider what your motivations are and whether you actually care what the currency value of the metal (or money) is at this point in time, or whether you are in it for some other reason that makes you consider the cost to be 'worth while'.

Do what works for you; in a quantity you can handle; with associated risk you are willing to accept.

After all, I hear the buzz words "measured in ounces" on this forum all the time... So why does it matter where the paper comes from, as long as you can comfortably cover it at short notice?

*commence bombardment*
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Whack!!!!!!
I would have been embarrassed to admit to that by my self but now that your here i will. I am a terrible saver, and a loan keeps my in check, just gently nudges me in the right direction. The obvious thing to say to this is "yeah but your losing money in interest", but as far as i am concerned i would have probably bought something useless and virtually wasted my money anyway.
 
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