Opinions Needed: Should I go into debt to buy more silver?
- Thread starter ThisIsJoe
- Start date
Depends, there's ways to turn a premium into a higher premium.
like if I had an amex platinum with $1m credit, 28 days interest free.
I'd go out and buy all the current year 1oz kook's, clean out gold stackers, bullion bourse etc and voila!
all gone, and I have 'em.
before the 28 days are up I market my sell out kook's, take a 10% profit, pay the million back to amex and there we go.
$100,000 in the pocket even if silver doesn't budge.
like if I had an amex platinum with $1m credit, 28 days interest free.
I'd go out and buy all the current year 1oz kook's, clean out gold stackers, bullion bourse etc and voila!
all gone, and I have 'em.
before the 28 days are up I market my sell out kook's, take a 10% profit, pay the million back to amex and there we go.
$100,000 in the pocket even if silver doesn't budge.
When this thread was first created, the price of silver was approaching it's peak, and interest rates were still high from the recent financial crisis.
The situation seems to be quite different today: Silver is much cheaper, and the economy is much stronger.
I don't know what the banking policies are like in other parts of the world, but here in the USA, most of the new credit cards are being issued with very generous credit limits, and 0% interest for the first eighteen months.
This might be an excellent opportunity to build a large silver stack, using cheap and easy credit. Also, most of the major bullion sellers provide free shipping on all domestic orders, and there is no tax charged on internet sales. The price you see on the website, is the total price you pay.
So, I would say that - if you are disciplined in your purchasing, and can afford at least the minimum monthly payments - Go for it !!
The situation seems to be quite different today: Silver is much cheaper, and the economy is much stronger.
I don't know what the banking policies are like in other parts of the world, but here in the USA, most of the new credit cards are being issued with very generous credit limits, and 0% interest for the first eighteen months.
This might be an excellent opportunity to build a large silver stack, using cheap and easy credit. Also, most of the major bullion sellers provide free shipping on all domestic orders, and there is no tax charged on internet sales. The price you see on the website, is the total price you pay.
So, I would say that - if you are disciplined in your purchasing, and can afford at least the minimum monthly payments - Go for it !!
mrearthman
New Member
There's no way I'd do it, not at any price.
Only thinking of this, this afternoon. I had a 45 minute drive ahead of me and thought to myself that we are well and truly at the lows. If I borrowed $50k at 12%, it would cost me $6k for the year. If with the $50k I bought say 2,000oz at $25 each, what would they be worth in 12 months time? I reckon as they would owe me $28 each, spot would be above and beyond it.
I may go ahead with this, so, in answer to the question, yes!
I may go ahead with this, so, in answer to the question, yes!
BiGs
Active Member
sammysilver said:
Plan with a 20-25 aud spot sideways range for years and then see if it's worth it. And just because 19 $ us has resistance doesn't mean it will not break lower. Assuming this is the bottom is taking a risk.
And I would definitely not go into debt to buy physical. Instead, take out a futures contract at 1-2% margin and offload it to physical over time. This way you're doing the same thing but without the interest.
Pirocco
Well-Known Member
I'm gonna give you an entirely different perspective.sammysilver said:
What happens with lending: you sponsor a bank. Because the intrest they demand on borrowing, is way higher than the intrest they pay on saving.
So if you borrow money from the bank, to buy silver at $X, to then sell silver at $X+Y, then a part of that Y will have gone to the bank.
Effectively, you will have drained off money from silver market people, to the bank.
My question to you then is: do you consider that positive, or negative?
Phiber said:
I have heard of some people using credit to finance vacations, cruises, televisions, and even wedding engagement rings. Though the actual return on such investments may be questionable, I see no problem with a sane and sober individual using his personal credit line to finance any item he wants, provided he has the discipline and capacity to pay it back.
Purchasing bullion while the price is low, can provide an individual with a valuable sense of security. This is a tangible personal benefit to some, and it's nobody else's business what value an individual derives from his personal investment choices (whether fine art, real estate, or beanie-babies).
At least, using credit and leverage to purchase bullion is not money down the drain - the investment is extremely liquid and can be cashed-out quickly, if it becomes necessary. The key to using credit (as with all things), is to be moderate and reasonable. Using the metals market as if it were a casino, in the hope of hitting the jackpot would be ridiculous. But we are not talking about blind gambling here - investing and hedging can be a wise use of one's resources, when done with restraint.
This concept is no different from buying a house. You choose a hard asset of your liking, borrow to purchase it, down the track sell it at a profit. It is not risk free, but what a consenting adult does in the privacy of his own underwear is his own business.
Like a house that you can live in, you have silver to fall back on should the SHTF. And of course this is the crux of this argument, will silver rise or not? If you believe it will, go with it, if you don't, then don't.
Like a house that you can live in, you have silver to fall back on should the SHTF. And of course this is the crux of this argument, will silver rise or not? If you believe it will, go with it, if you don't, then don't.
anighttrader
Member
No.
Ouija said:
This is pure speculation.
People where saying the same thing when it was at $30.
Remember it was under $10 just 5 years ago, and $5 10 years ago.
But yeah feel free to go in-debt, I could not care less - at least you will have the reassurance of knowing you pondered this decision and hopefully won't come crying.
This is one of the worst ideas I've heard. If you're buying silver as a means for a physical savings account, then it's counter-intuitive to put yourself in debt to hold this PM savings account. But if you're buying it purely for an investment to profit in the short term, then there are other much better investment opportunities.
Let's say your credit card interest rate is 18%. If silver price goes sideways for the next couple years, you're in the huge negatives from the interest rate. If silver price drops, then you're taking a double whammy. Even if silver price goes up, you can still be in the negatives, unless the appreciation is higher than the interest, and the lost premium when you go sell it. So in other words, unless silver price shoots up to the moon, the odds are against you.
And people wonder why so many are caught in credit card debt and can never pull themselves out....
Let's say your credit card interest rate is 18%. If silver price goes sideways for the next couple years, you're in the huge negatives from the interest rate. If silver price drops, then you're taking a double whammy. Even if silver price goes up, you can still be in the negatives, unless the appreciation is higher than the interest, and the lost premium when you go sell it. So in other words, unless silver price shoots up to the moon, the odds are against you.
And people wonder why so many are caught in credit card debt and can never pull themselves out....
gbickle said:
I wonder what ever happened to this character. Seeing how this was posted 3 years ago when silver was at its all time high, there are 3 possible outcomes:
1) He already shit his pants
2) he lied, and already sold his stash at a loss to pay off the credit card
3) told the truth and kept his stash, but took it up the arse in interest for 3 years.
Seems like a lose-lose...lose situation to me.
The most interesting thing about this thread is the question it poses regarding borrowing to purchase silver. It is one thing to put your spare money into silver, possibly even buying a wanted item on a credit card for a short while; but to take a long term gamble over one or more years on the belief silver will increase beyond the cost of the interest payments is putting your nuts on the line.
It's not as simplistic as choosing a car, or a tie or a wife, it is the risk that should silver drop, one may have to sell the purchased stack plus some of one's initial stack to cover the loan.
So for us thinking about it, it is quite the dilemma.
It's not as simplistic as choosing a car, or a tie or a wife, it is the risk that should silver drop, one may have to sell the purchased stack plus some of one's initial stack to cover the loan.
So for us thinking about it, it is quite the dilemma.
Pirocco
Well-Known Member
People that say it now are certainly more right than people that said it at $30.Phiber said:
Remember a house costed 33% less 10 years ago. And that's one of the biggest markets out there.
Nevertheless, going in debt to buy silver, buh, he better had that 45 minute drive to jail!
It seem to me that if you are using money to buy silver, when that money could be used to make a loan payment (car, house, whatever), you are staying in debt to buy more silver.
It may seem more reasonable, but truthfully, it seems to me to be the same as borrowing to buy silver.
I used a lump sum insurance settlement to pay off a vehicle loan, instead of buying silver.
If I would have used the windfall cash to buy silver, same as borrowing to buy silver.
My guess is that most of us that are buying silver are also making loan payments (I still have a house payment).
If we are, we are staying in debt to buy more silver.
It seems to be a matter of degrees, but the principle remains the same.
For some reason, if our household budget includes a car payment, and disposable income to be spent on luxuries - like silver - that is okay.
It may seem more reasonable, but truthfully, it seems to me to be the same as borrowing to buy silver.
I used a lump sum insurance settlement to pay off a vehicle loan, instead of buying silver.
If I would have used the windfall cash to buy silver, same as borrowing to buy silver.
My guess is that most of us that are buying silver are also making loan payments (I still have a house payment).
If we are, we are staying in debt to buy more silver.
It seems to be a matter of degrees, but the principle remains the same.
For some reason, if our household budget includes a car payment, and disposable income to be spent on luxuries - like silver - that is okay.
SilverKendo
New Member
My question would be; do you ever intend to pay off the credit card? A credit card is unsecured debt. The credit card company can't send a repo man after you for the silver you bought on it any more than they can send a repo man for the steak dinner you bought a few nights ago. They can ruin your credit score, harass you with collectors and even call your family to see if they're dumb enough to pay on your debt but at the end of the day there isn't much they can do. So if you are done buying houses and cars and don't care about your credit score max out those credit cards and get ready to change your phone number. When/if I hit 70 I know my game plan 
BTW I'm not actually advising this. It is ethically wrong.
BTW I'm not actually advising this. It is ethically wrong.