What Kind of Silver Should I own?
Well, I'm sure that I answered this question sometime in the last few years. But I did receive an email from one of my loyal readers who asked this very questions. They have figured out how much silver to buy, has enough money to buy it all now "Instead of dollar cost averaging", but is wondering what TYPE of silver they should buy.
As you all know, I've written that the main 4 REASONS to buy silver, and to a smaller extent gold, is for:
1. Preserve Your Wealth
2. Reduce debt/Buy items at a discount
3. Economic Armageddon
4. Supplement retirement
Sometimes this list expands by 1 or 2 if we expand the 4 reasons into subsections. But for now, lets just stick with these 4 main reasons. As you notice, I do not include INVESTMENTS as a reason. That's the paper world, it's speculation, it's risky, and I don't do it. If some want to, fine, but this isn't the Blog for you. I deal only in PHYSICAL silver, and that's all I recommend to my followers.
Now the thing is, each person may have different reasons for buying silver. Some may decide that they want it strictly to preserve wealth. Example: They already invest in the stock market, mutual funds, IRA, 401k, etc. But they have a few thousand dollars per year that's going into savings. They know that $1,000 today, WON'T have the buying power in 5-10 years that the $1,000 has today. But silver WILL have the same buying power. So some people buy silver to protect their wealth. Some just want to accumulate to supplement their retirement in 5, 10, 15 years. And of course there are those that think the dollar is going to crash, create economic Armageddon, with the dollar worthless, they want silver as a way to continue economically. And then there's the person who uses it as a savings account, preserving wealth, so they can pay off debt or buy items at a discount when trading the silver back.
My point with this is: YOU DON'T HAVE TO ONLY HAVE ONE REASON!!! You can buy silver for ALL 4 of the reasons above. I personally buy silver for 1) Preserving my wealth and 4) To supplement my retirement. But JUST IN CASE the preppers are right about an economic collapse, doesn't mean I can't have some of my silver with an economic collapse/Armageddon in mind. I'm fortunate now that I don't need to pay off debt, (I'm 100% debt free) and I have enough cash to buy anything I want. But some of you may be accumulating silver for a future purchase or to pay off a debt. Either way, you can keep ALL of the reasons in mind when you buy silver. (You all know when I say BUY, I really mean accumulate). We DON'T BUY SILVER!!! We EXCHANGE 1 currency (Dollar, Euro, Yen, etc.) for ANOTHER MORE STABLE CURRENCY (Silver/gold).
So, with this in mind, I usually recommend that you "Buy" silver so your stack is in 4 parts. I'll list the 4 parts and the reasons WHY it's good to have that type of silver.
NOTE: You don't have to be EXACT with the percentage. It's simply a ball park amount so you can prepare for the reasons you have the silver for.
I'm basing this off of a 1000 ounce stack. Mainly so the numbers are easier to work with. If you have a 500 ounce stack, simply cut the numbers in half. The percentage stays the same.
1. 1 oz generic Rounds .999: 35% (350 ounces)
2, 1 oz Government Minted Coins .999: 35% (350 ounces)
3. 90% junk / common coins: 20% (200 ounces / $280 face value)
4. 10 ounce Bars .999: 10% (100 ounces)
WHY?
1. For supplementing your retirement, preserving wealth, or paying down debt and buying items at a discount, SILVER is SILVER. Doesn't matter what form it's in. Whether it's 1 each thousand ounce bar or 1000 each 1 ounce bar, or any combination.
2. The main reason for having smaller increments, is so if you do want to sell some of it to pay down a debt, buy something, or supplementing your retirement income monthly, you won't have to sell everything at one time.
3. If by chance there is an economic Armageddon or crash of the dollar and you're going to use some of your silver to pay bills and supplement your purchasing power during hyperinflation; you will want smaller increments. You don't want to be forced to sell 100 ounce bars when you only need a few hundred dollars worth converted.
4. Worse case scenario, if the preppers are right and with a total economic melt down, you're going to use silver for bartering or purchasing, you'll need smaller amounts. Similar to #3 above. This is where the 90% comes in. You'll be able to buy food, water, and other necessities with a couple dollars worth of silver 90% coins.
5. Under the prepper scenario, the majority of people initially won't be familiar with the many types or brands of silver. The government minted 1 oz pieces will be more trustworthy. Same with the 90% silver. People will understand that it's "REAL". In time, they will understand and learn that the other silver is "Real" too.
6. If you have a few large items you want to barter for, buy, exchange for; or when you're selling back silver for the debt or to purchase something at a discount; it's good to have some of those 10 ounce bars. This way you don't deplete all your rounds, government 1 oz, and 90%.
So..... Why not just have ALL government mint such as American Eagles, Canadian Maple Leafs, Mexican Libertad, Austrian Philharmonic, etc.? The main reason is because of the PREMIUM you will pay for these. Currently, an Eagle will cost between $3-$3.50 over spot price. Other government mints like canada, mexico, etc. depending where, will cost between $2.50-$3.00 over spot. Generic rounds are usually only around $2.00 over spot. 90% is usually around $0.50 - $1.00 over spot. So, using a 1000 ounces as an example of a stack, that's another 50-100 ounces of silver you can buy with the money you'll save.
And because of reasons #4-#5 above, you don't want just the cheapest generic rounds either. There may be a time where because of an economic collapse, some people may not initially trust the generics.
Of course, it all depends on what you believe COULD HAPPEN. If you're totally a PREPPER, then you'll probably only buy 90% junk silver coins or American Eagles. If you don't think there will ever be an economic collapse or dollar crash, then you could probably just buy 10 ounce bars. That will get you the most silver for your money. But I think that no matter WHY you are buying silver, it's pretty well agreed upon that 10 ounce bars should be the largest you buy. Yes, 100 ounce bars have the lowest premium, but for any of the reasons above, you are forces to sell back 100 ounces at a time. Not good if you are supplementing your income and only want to exchange back 5-10 ounces per month. Also, exchanging back "SMALL AMOUNTS" at a time, will keep you under the radar of others. Theft as well as the "tax man".
So, there you go. ANY silver is better than none. The BEST PRICE is 2nd most important. But try to find a good balance between the smallest pieces of silver; silver that is recognized if need be; and the right combination that allows you to exchange it back in the quantities you want.
CYA: SE:
As you all know, I've written that the main 4 REASONS to buy silver, and to a smaller extent gold, is for:
1. Preserve Your Wealth
2. Reduce debt/Buy items at a discount
3. Economic Armageddon
4. Supplement retirement
Sometimes this list expands by 1 or 2 if we expand the 4 reasons into subsections. But for now, lets just stick with these 4 main reasons. As you notice, I do not include INVESTMENTS as a reason. That's the paper world, it's speculation, it's risky, and I don't do it. If some want to, fine, but this isn't the Blog for you. I deal only in PHYSICAL silver, and that's all I recommend to my followers.
Now the thing is, each person may have different reasons for buying silver. Some may decide that they want it strictly to preserve wealth. Example: They already invest in the stock market, mutual funds, IRA, 401k, etc. But they have a few thousand dollars per year that's going into savings. They know that $1,000 today, WON'T have the buying power in 5-10 years that the $1,000 has today. But silver WILL have the same buying power. So some people buy silver to protect their wealth. Some just want to accumulate to supplement their retirement in 5, 10, 15 years. And of course there are those that think the dollar is going to crash, create economic Armageddon, with the dollar worthless, they want silver as a way to continue economically. And then there's the person who uses it as a savings account, preserving wealth, so they can pay off debt or buy items at a discount when trading the silver back.
My point with this is: YOU DON'T HAVE TO ONLY HAVE ONE REASON!!! You can buy silver for ALL 4 of the reasons above. I personally buy silver for 1) Preserving my wealth and 4) To supplement my retirement. But JUST IN CASE the preppers are right about an economic collapse, doesn't mean I can't have some of my silver with an economic collapse/Armageddon in mind. I'm fortunate now that I don't need to pay off debt, (I'm 100% debt free) and I have enough cash to buy anything I want. But some of you may be accumulating silver for a future purchase or to pay off a debt. Either way, you can keep ALL of the reasons in mind when you buy silver. (You all know when I say BUY, I really mean accumulate). We DON'T BUY SILVER!!! We EXCHANGE 1 currency (Dollar, Euro, Yen, etc.) for ANOTHER MORE STABLE CURRENCY (Silver/gold).
So, with this in mind, I usually recommend that you "Buy" silver so your stack is in 4 parts. I'll list the 4 parts and the reasons WHY it's good to have that type of silver.
NOTE: You don't have to be EXACT with the percentage. It's simply a ball park amount so you can prepare for the reasons you have the silver for.
I'm basing this off of a 1000 ounce stack. Mainly so the numbers are easier to work with. If you have a 500 ounce stack, simply cut the numbers in half. The percentage stays the same.
1. 1 oz generic Rounds .999: 35% (350 ounces)
2, 1 oz Government Minted Coins .999: 35% (350 ounces)
3. 90% junk / common coins: 20% (200 ounces / $280 face value)
4. 10 ounce Bars .999: 10% (100 ounces)
WHY?
1. For supplementing your retirement, preserving wealth, or paying down debt and buying items at a discount, SILVER is SILVER. Doesn't matter what form it's in. Whether it's 1 each thousand ounce bar or 1000 each 1 ounce bar, or any combination.
2. The main reason for having smaller increments, is so if you do want to sell some of it to pay down a debt, buy something, or supplementing your retirement income monthly, you won't have to sell everything at one time.
3. If by chance there is an economic Armageddon or crash of the dollar and you're going to use some of your silver to pay bills and supplement your purchasing power during hyperinflation; you will want smaller increments. You don't want to be forced to sell 100 ounce bars when you only need a few hundred dollars worth converted.
4. Worse case scenario, if the preppers are right and with a total economic melt down, you're going to use silver for bartering or purchasing, you'll need smaller amounts. Similar to #3 above. This is where the 90% comes in. You'll be able to buy food, water, and other necessities with a couple dollars worth of silver 90% coins.
5. Under the prepper scenario, the majority of people initially won't be familiar with the many types or brands of silver. The government minted 1 oz pieces will be more trustworthy. Same with the 90% silver. People will understand that it's "REAL". In time, they will understand and learn that the other silver is "Real" too.
6. If you have a few large items you want to barter for, buy, exchange for; or when you're selling back silver for the debt or to purchase something at a discount; it's good to have some of those 10 ounce bars. This way you don't deplete all your rounds, government 1 oz, and 90%.
So..... Why not just have ALL government mint such as American Eagles, Canadian Maple Leafs, Mexican Libertad, Austrian Philharmonic, etc.? The main reason is because of the PREMIUM you will pay for these. Currently, an Eagle will cost between $3-$3.50 over spot price. Other government mints like canada, mexico, etc. depending where, will cost between $2.50-$3.00 over spot. Generic rounds are usually only around $2.00 over spot. 90% is usually around $0.50 - $1.00 over spot. So, using a 1000 ounces as an example of a stack, that's another 50-100 ounces of silver you can buy with the money you'll save.
And because of reasons #4-#5 above, you don't want just the cheapest generic rounds either. There may be a time where because of an economic collapse, some people may not initially trust the generics.
Of course, it all depends on what you believe COULD HAPPEN. If you're totally a PREPPER, then you'll probably only buy 90% junk silver coins or American Eagles. If you don't think there will ever be an economic collapse or dollar crash, then you could probably just buy 10 ounce bars. That will get you the most silver for your money. But I think that no matter WHY you are buying silver, it's pretty well agreed upon that 10 ounce bars should be the largest you buy. Yes, 100 ounce bars have the lowest premium, but for any of the reasons above, you are forces to sell back 100 ounces at a time. Not good if you are supplementing your income and only want to exchange back 5-10 ounces per month. Also, exchanging back "SMALL AMOUNTS" at a time, will keep you under the radar of others. Theft as well as the "tax man".
So, there you go. ANY silver is better than none. The BEST PRICE is 2nd most important. But try to find a good balance between the smallest pieces of silver; silver that is recognized if need be; and the right combination that allows you to exchange it back in the quantities you want.
CYA: SE:
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