Opinions Needed: Should I go into debt to buy more silver?

Gino said:
thatguy said:
Gino said:
, but the smart people did the prudent thing of waiting for an uptrend to re-establish itself before getting back into the market.
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Could I please get your definition of this or is it a gut feeling? TIA
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Well, I'm not a trader but a stacker, but assets trade within price ranges based on perceived value. In a bull market, these ranges rise along a trend line, or within an upwards rising trend channel, where the channel defines the anticipated trading range in the future. Eg. Silver today:

http://www.oilngold.com/images/stories/contributors/forexcom/2011042261.gif
Source:http://www.oilngold.com/analysis/commodity-technical-analysis/silver-confined-within-a-rising-channel-2011042217313/

A dip is when the price drops towards the bottom of the channel (this is the context for the acronym BTFD), but what occured in 2008 was a crash, when the established trading pattern was broken, the price fell through the bottom of the upward rising channel and continued to drop. In such an event, buying on the fall (catching a falling knife) is not smart (just ask me), rather, waiting until another upward rising trend is established is good practice. Hope that satisfies.
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Gino thanks - this is a great explanation.

Regarding the crash in '08 though, i suppose for some of us who didnt shit in our pants the main reason was because we believed that the crash was due to manipulation and was unsustainable given the fundamentals of silver...
 
SilverBaron said:
There is one way you can reduce your risk if you choose to borrow to invest in silver. Those with investment property(s) can redraw and access the equiity in the house. This will increase the interest on the repayments, but the interest will be tax deducatible. A low interest debt, that is also tax deductible is much much better than a 18%+ creadit card debt.
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Careful with this. Interest is only tax deductible if you are making income from your silver. Tax deductibility is based on what you are doing with the money (in this case buying silver) not what the loan is secured against (in this case an investment property). If the purchase does not produce any income then the loan is not tax deductible. If you borrowed to buy PMs, a boat or take a holiday it is not tax deductible unless you can show that the purchase will produce income.

However - you can keep track of the tax paid and then claim it against the profit when the item is sold and thereby reduce your CGT.

Of course - see your tax advisor for specific advice!

malachii
 
You could lose your job/buisiness.

A housing colapse would really shake up the economy, the knock on effects would be pretty full on.

Anything could happen.
 
SilverBaron said:
There is one way you can reduce your risk if you choose to borrow to invest in silver. Those with investment property(s) can redraw and access the equiity in the house. This will increase the interest on the repayments, but the interest will be tax deducatible. A low interest debt, that is also tax deductible is much much better than a 18%+ creadit card debt.
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Silverbaron, do you have a link or source for this? Applies only to Aussie or Canada as well?

cheers mate.
 
Yippe-Ki-Ya said:
Gino said:
If you want to bet on the direction of silver, but need to liquidate in a hurry in a downturn, try an ETF (asx: ETPMAG) with a stop loss limit applied.

If you want the security of physical metal in your possession, buy only what you can afford and accumulate a position over the long term that you own outright.

Edit: Here the fact sheet on ETPMAG.
http://www.asx.com.au/documents/products/etfs_fact_sheet_physical_silver.pdf

Disclosure: I don't own ETPMAG, but the more speculators motivated by greed that enter the market, the more I am thinking about it with trailing stop losses on the way up.
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Buying into paper silver and using a stop loss strategy will lose you a lot of money in the long run.
You shouldnt be buying silver for short term gain anyway ... it should be for medium to long term gains.
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Buying physical silver is a whole lot different to trading paper derivatives. The idea that precious metals will increase your wealth long term is incorrect also. They will, at best maintain your purchasing power for generations, but will never deminish to zero value like paper. Long term physical gold and silver is about wealth preservation.

aud.png

Source: http://dollardaze.org

Seeking short-term gains in irredeemable paper currencies using leverage (debt), trading derivatives (something that represents silver but isn't) is the way to do it.

I wonder how those leveraged buyers of physical felt these past few days, especially after hearing that guy who sold his investment stack saying we were going to $27. (que pant pooping sounds)
 
Gino said:
Seeking short-term gains in irredeemable paper currencies using leverage (debt), trading derivatives (something that represents silver but isn't) is the way to do it.
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Many would disagree with that. I among them...

Gino said:
I wonder how those leveraged buyers of physical felt these past few days, especially after hearing that guy who sold his investment stack saying we were going to $27. (que pant pooping sounds)
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I believe that those who know and understand the fundamentals of why silver is in a long term bull run would have been very comfortable. i know i was ... and feeling more comfy every single day as the ratio (avg house price) : (1 Oz silver price) continues its downward trajectory....
 
Gino said:
I wonder how those leveraged buyers of physical felt these past few days, especially after hearing that guy who sold his investment stack saying we were going to $27. (que pant pooping sounds)
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It didn't compare to the day the love of my life rejected me when I proposed marriage.

Ok ok, so I've never even proposed marriage....

....and I'm not leveraged.

Both things would be a mistake :P

Actually, no, that's not supposed to be the point :/

Alright.

Anyone who took the risk of getting into debt for a volatile asset probably has some contingency plan.
They may also be used to the feeling of bulls turning into bears.
Though if it's someone inexperienced they will probably rip a hole through their assets in a messy bear-all explosion.
 
Yes because your buying more silver will help drive prices up for me and the more momentum the better, I will also get that nice warm safety of the herd feeling if the herd grows.......got to say asking a loaded question like this to a biased crowd is worrying - do some serious research and due dilligence before pulling the trigger.

Personally I wouldn't go into debt for PM's as it defeats my savings/hedge purpose for PM's.
 
I may be one of the members who has borrowed to buy silver... In my post 'where's there's a will there's a way' - i mentioned that I bought some bullion on Credit card and made use of the balance transfer option with the banks to pay only 2.9% for 18 months. That was purchasing during the dip and paid around $27 for it. Feeling pretty good about the decision.

Like many stackers I have followed Mike Maloney's writing for some time and feel that while inflation is rising at present we really could be heading for a short-term deflation followed by significant inflation. Therefore I would not recommend taking out large loans that you may have difficulty servicing should things get tough... Even public sector employees may find their income limited if governments begin cutting expenditure significantly...

Anyone else working in health industry or one that allows salary packaging? You can use Salary packaging to also help you buy more silver. Up to $9000 of your income is able to be accounted for tax-free using salary packaging as Type A expenses. One of which is paying off a credit card. Allowing you to claim back tax on paying off the credit card. Essentially works out as a 30 % discount on your purchases. Many people I know work between at least two hospitals and can claim two lots of salary packaging. While the loopholes are there in the system it would be rude not to make the most of them.

Two ways I can think of to help people accumulate a little more bullion now that things you don't get quite as much bang for your buck. I would also recommend looking at storing silver in countries where there is no capital gains tax on PM's...

regards

DrJ
 
DrSilver said:
Two ways I can think of to help people accumulate a little more bullion now that things you don't get quite as much bang for your buck. I would also recommend looking at storing silver in countries where there is no capital gains tax on PM's...

regards

DrJ
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pls enlighten... via PM if nessisary
 
i received a card with an 18 month introductory 0% rate - there's a fee for transfers but i can use the credit card for purchases too which makes buying some large quantity on ebay seem the best choice (on ebay there's no credit card mark-up). still, i've been waiting to see if silver is knocked down a bit further, although turk suggests we may have hit bottom.

but there's a related issue - i have used some credit on my apartment to buy PMs at a price higher than today's prices - it is not expensive and within my comfort level, but i do recognize it is not great to go in over my head. but considering i have acquired some ounces at about 15 sometimes i think of selling some silver to get out of debt but i am loathe to sell in the 30s and was biding my time until the end of the year and hoping for at least the mid-40s. the 0% introductory rate would at least close that gap for 18 months by a fair number of ounces. other times i just think about getting as much as i can regardless.
 
GREAT topic, generally covered most of the things, interest costs and cash flow and all.

but has anyone considered or done impact study before?

this is a great case study, but I have considered some points, such as the use of credit that caused us to try to be ahead to get our hands on the silver or gold ahead of everyone else :)

when making the comparisons, we are calculating in terms of gains if % paper, rather than , say I have 1kilo bar and after my CC activities, I would end up with say 1 kilo and 3 ounces by the end of 2 months and so on.

If we do not own the money, it must belong to some one.
we do not have it to begin with, how in the end would we end up with something ? :)
we do not cheat or steal.

by using CC, we may cause a fake increase in demand, like those paper silver, and caused a dealer to stock up at higher prices, then we do not get to buy them on the cheap.
:( what comes around goes around.

by using credit, we are paying so much fees, and in the end we are getting discounted on our facility :(
like eBay, PayPal and fees, then the mark up ouch! Forex spread.

want to get free silver without work, go and rob a fellow member?

in conclusion, it just does not make sense to sell gold and silver to pay off those debt, debt that should not be supported to begin with.

Sell the house or dogs to buy silver :p
 
gbickle said:
ThisIsJoe said:
Would love some stackers thoughts on this. I've heard one camp say don't ever go into debt, but I've also read on here that a lot of you guys have done so, maxing out credit cards, etc.

I have an OK stack, but would like to double it to be sufficiently happy. I'm considering borrowing $25k from the banksters.

Thoughts? Yay or nay? Reasons with your answer would be great. And can anyone reccommend a "good" bank/lending outfit to go with?

Cheers guys!
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Yes I was one... back in beginning of Feb when it went below $30 I maxed out $35,000 on a credit card....
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Agree, im currently in the process of borrowing another 100k to spend purely on silver.... and as an investment loan, is claimable for tax
 
ThisIsJoe said:
Would love some stackers thoughts on this. I've heard one camp say don't ever go into debt, but I've also read on here that a lot of you guys have done so, maxing out credit cards, etc.

I have an OK stack, but would like to double it to be sufficiently happy. I'm considering borrowing $25k from the banksters.

Thoughts? Yay or nay? Reasons with your answer would be great. And can anyone reccommend a "good" bank/lending outfit to go with?

Cheers guys!
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If you can afford the payments on that, i'd go right ahead and do it.

maybe do it in 3 lots in case the price drops.

Also remember with an unsecured loan, there isn't a whole lot they can do about it if you run into trouble, and you can negotiate ridiculously low payment plans on financial hardship, and figure it out later on (obviously not ideal - but you can do it)
 
If you borrow the money and state that the purpose is to buy Silver then you could claim the interest against your income just like people do when buying houses. However if you do go down this route then the taxman will want to charge you CGT.

If you borrow the money "for a holiday" or "for a car" or some other consumption item you won't be able to claim the interest and how long you've had that silver for is any ones guess.....


Life's about trade offs. It really is
 
at what rate would you not pay?
and at what rate can you or your silver price increase pay?

this comes with the assumption that you still have free cash flow from your week day job.
 
I see a dark stranger comming into your life !...Wait.. what is that motiff on his brief case ! Ah !...

A.. T.. O.. Beware! Greeks baring gifts!
 
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