My Silver Buying Strategy:
I mentioned in my last post why people buy silver and gold. I mentioned why I specifically buy silver; which is to pay off debt or to buy something at a discount. So now, I'll talk about my strategy. Remember; this is not a strategy for someone who wants to invest in silver for retirement 20-30 years from now. It's also not for the survivalist who thinks the dollar is going to crash soon and that there won't be any currency in our economy. It's for paying off debt and/or buying things at a discount.
It's real simple. 4 basic steps and a procedure.
STEP 1: Decide what I want to buy or what debt I want to pay off.
STEP 2: Decide how much I want to pay and how much from profit
STEP 3: Buy silver
STEP 4: Sell silver and buy the item I wanted to or pay off the debt I wanted to
The first step seems simple enough, but it must be realistic. Also, there can't be a "TIME LIMIT". You might have to sit on silver and/or gold for months or even years. And remember; I also believe that "JUST IN CASE", you should have some silver for a "SHTF" type scenario where the dollar is useless, and you can use silver in the interim until a new currency has been implemented. For this purpose, I suggest somewhere between $50 - $100 FACE VALUE of pre-1965 American Dimes, quarters, or half dollars. This will cost you at current prices, around $1100-$2300. You should buy this silver first; put it away; and NEVER SPEND IT. Anyway; back to the purpose of this post.
Once you have a realistic goal; e.g. paying off a $100,000 home loan all at once is NOT a realistic goal. Paying off a $10,000 car loan, buying a new car, paying off other loans, paying TOWARDS a loan like being able to contribute an additional $5,000 this year on your mortgage, etc.... are good goals.
Anyway; once you have this realistic goal, you need to determine how much you want of your money to go towards it. E.g. If you want to buy a new/used car and it costs $20,000 ; do you want to put down $10,000 of your own money? Maybe $15,000? Remember; like I said in my 1st post; DON'T BE GREEDY. If you say you want to put $5,000 of your money on a $20,000 car, you can do that. It might take you a few years however. What are the odds at today's rate for you to buy $5,000 in silver at $35 an ounce, and it's going to go to $140 an ounce??? Pretty slim. Or it's going to take a very long time. I NEVER try to do more than DOUBLE my money. Sometime not that much. Let's be real here. If you bought $5,000 in silver, it went up 50% and became worth $7,500, and you bought a $10,000 car; then that meant you added another $2500 to what you had. That means you bought a $10,000 for $7500. NOT BAD. Also. Name me one place that you can get 50% increase on your investment with little or no risk. Remember; it's not a matter of risk with silver. It's a matter of time. You don't ever want to sell your silver for less than you bought it for.
Ok; so we'll assume that I want to buy $5,000 in silver, and I want it to turn into $7,500 or more. Maybe even $10,000. I guess we need to buy some silver. Well; do you go out and buy $5,000 in silver today? Ummmmm, NO!!! Not unless you want to wait a really long time to get your money back, OR, you like the risk. There's 2 parts to buying silver. a) The person selling; usually a coin shop, needs to make a profit to stay in business. That means if the price of silver today is $33.50 an ounce; you will PAY about $35.00 an ounce for it. That's how the seller makes his profit. Most will buy it back at the day's SPOT PRICE, so it's really when buying that you have to take into consideration. and b) The price of silver is going to go up and down a lot. You want to do, similar to your 401K or IRA; DOLLAR COST AVERAGING. Imagine if you bought an ounce of silver at $35. Then you bought another ounce later at $30. Then another at $25. The AVERAGE you spent was $30. I suggest buying SOME silver each week. Usually Tuesday and Fridays are good days. As you get use to watching the price, you'll get use to when to buy it. And don't get caught up in thinking; "It's the lowest it's been in a long time; I'll buy all of it now". DON'T BE GREEDY!!! Stick with the dollar cost averaging. If you're going to spend $5,000 in silver, buy $200-$300 worth a week. No more than $500. Basically; you want to be able to buy all you NEED in approximately 10 weeks. Any time after that is designed to "WAIT, SEE, then SELL".
Yes, it's possible that each week, the price keeps going higher and higher. You think: "God, I could have had so much more if I bough $1000 all at once instead of $300-$500. True. But it's also possible that the price could drop 30% tomorrow. Yesterday, silver was at $34.25. Today it got down to $33.20. In buying $5,000 worth of silver, that's a difference of about 5 ounces of silver, which is a difference of about $180.00. Stick with the plan. 1/10 maximum each week for 10 weeks.
Some time in the next couple days this weekend, I'll post on how much to buy at one time based on the direction of the price, as well as when and how to sell it. CYA: SE
I mentioned in my last post why people buy silver and gold. I mentioned why I specifically buy silver; which is to pay off debt or to buy something at a discount. So now, I'll talk about my strategy. Remember; this is not a strategy for someone who wants to invest in silver for retirement 20-30 years from now. It's also not for the survivalist who thinks the dollar is going to crash soon and that there won't be any currency in our economy. It's for paying off debt and/or buying things at a discount.
It's real simple. 4 basic steps and a procedure.
STEP 1: Decide what I want to buy or what debt I want to pay off.
STEP 2: Decide how much I want to pay and how much from profit
STEP 3: Buy silver
STEP 4: Sell silver and buy the item I wanted to or pay off the debt I wanted to
The first step seems simple enough, but it must be realistic. Also, there can't be a "TIME LIMIT". You might have to sit on silver and/or gold for months or even years. And remember; I also believe that "JUST IN CASE", you should have some silver for a "SHTF" type scenario where the dollar is useless, and you can use silver in the interim until a new currency has been implemented. For this purpose, I suggest somewhere between $50 - $100 FACE VALUE of pre-1965 American Dimes, quarters, or half dollars. This will cost you at current prices, around $1100-$2300. You should buy this silver first; put it away; and NEVER SPEND IT. Anyway; back to the purpose of this post.
Once you have a realistic goal; e.g. paying off a $100,000 home loan all at once is NOT a realistic goal. Paying off a $10,000 car loan, buying a new car, paying off other loans, paying TOWARDS a loan like being able to contribute an additional $5,000 this year on your mortgage, etc.... are good goals.
Anyway; once you have this realistic goal, you need to determine how much you want of your money to go towards it. E.g. If you want to buy a new/used car and it costs $20,000 ; do you want to put down $10,000 of your own money? Maybe $15,000? Remember; like I said in my 1st post; DON'T BE GREEDY. If you say you want to put $5,000 of your money on a $20,000 car, you can do that. It might take you a few years however. What are the odds at today's rate for you to buy $5,000 in silver at $35 an ounce, and it's going to go to $140 an ounce??? Pretty slim. Or it's going to take a very long time. I NEVER try to do more than DOUBLE my money. Sometime not that much. Let's be real here. If you bought $5,000 in silver, it went up 50% and became worth $7,500, and you bought a $10,000 car; then that meant you added another $2500 to what you had. That means you bought a $10,000 for $7500. NOT BAD. Also. Name me one place that you can get 50% increase on your investment with little or no risk. Remember; it's not a matter of risk with silver. It's a matter of time. You don't ever want to sell your silver for less than you bought it for.
Ok; so we'll assume that I want to buy $5,000 in silver, and I want it to turn into $7,500 or more. Maybe even $10,000. I guess we need to buy some silver. Well; do you go out and buy $5,000 in silver today? Ummmmm, NO!!! Not unless you want to wait a really long time to get your money back, OR, you like the risk. There's 2 parts to buying silver. a) The person selling; usually a coin shop, needs to make a profit to stay in business. That means if the price of silver today is $33.50 an ounce; you will PAY about $35.00 an ounce for it. That's how the seller makes his profit. Most will buy it back at the day's SPOT PRICE, so it's really when buying that you have to take into consideration. and b) The price of silver is going to go up and down a lot. You want to do, similar to your 401K or IRA; DOLLAR COST AVERAGING. Imagine if you bought an ounce of silver at $35. Then you bought another ounce later at $30. Then another at $25. The AVERAGE you spent was $30. I suggest buying SOME silver each week. Usually Tuesday and Fridays are good days. As you get use to watching the price, you'll get use to when to buy it. And don't get caught up in thinking; "It's the lowest it's been in a long time; I'll buy all of it now". DON'T BE GREEDY!!! Stick with the dollar cost averaging. If you're going to spend $5,000 in silver, buy $200-$300 worth a week. No more than $500. Basically; you want to be able to buy all you NEED in approximately 10 weeks. Any time after that is designed to "WAIT, SEE, then SELL".
Yes, it's possible that each week, the price keeps going higher and higher. You think: "God, I could have had so much more if I bough $1000 all at once instead of $300-$500. True. But it's also possible that the price could drop 30% tomorrow. Yesterday, silver was at $34.25. Today it got down to $33.20. In buying $5,000 worth of silver, that's a difference of about 5 ounces of silver, which is a difference of about $180.00. Stick with the plan. 1/10 maximum each week for 10 weeks.
Some time in the next couple days this weekend, I'll post on how much to buy at one time based on the direction of the price, as well as when and how to sell it. CYA: SE
Comments
Post a Comment