Continuation of Buying Silver:
Well, I left off with mentioning buying about 1/10th of the silver you need each week for about 10 weeks. Assuming you know how much money you are trying to make and your goal, this is a practical amount to buy. For instance. Let's say that you want to invest $5,000 with the hope that it will increase in value to $10,000. That's about $500 a week for 10 weeks. Now remember; we're talking about buying silver for the purpose of paying off debt or buying something at a discount. We're not talking about buying silver as a means of "SAVING". E.g. buy $100 of silver per month. That's definitely a method of buying silver. And I'll probably get into that as my next topic. But this topic up until now was specifically about paying off debt or buying something you were going to buy anyway; but at a discount. In other words, you have money to work with. So anyway; buying $500 of silver per week for 10 weeks is not that difficult. But here's where it gets interesting and you have to be aware.
Each ounce of silver you buy, initially has a LOSS built into it. Huh!!! Remember; the dealer or coin shop you bought it from needed to make a profit. If the "Spot Price" of silver is $34 an ounce, you probably paid around $36 an ounce for it. So that means that you're already $2 down on it's value. So it's real important for you to keep a spreadsheet of what silver you bought, and how much you bought it for. And on this spreadsheet, a spot that shows the "AVERAGE" price you paid. For instance: You buy 10 ounces at $35 for $350. A couple days later, you buy 5 ounce at $33 for $165. Now you have 15 ounces total, and you've spent $515. That averages your 15 ounces out at $34.33 an ounce. But initially, you may find that what your average is, is higher than what the spot price of silver is going for. That's natural. Again, you had to pay a markup so the seller could make money. After all; that's his business. He needs to make a living too. This is the reason you you aren't buying just $5,000 in silver all at once. This is why you buy a little at a time for 10 weeks. But you have to be proactive and monitor the price. If you bought $300 worth on tuesday and the price dropped heavily on thursday, then go ahead and buy the other $200 worth then. DON'T go spending NEXT WEEK'S ALLOTMENT. Now, if you bought some on thursday, and it was the end of that weeks allotment, and next monday/tuesday you see the price take a dive and you want to buy all $500 of that week's allotment in one day; that's fine too. Just don't go into using the following week's money.
Let's be honest. NONE of us know what the price is going to do tomorrow. You can do all the would of, could of, should of, you want. You might think that it dropped so much, you need to spend $1500. Who's to say it's not going to drop EVEN MORE the following day or week??? Yes, you could get lucky by buying $2000-$3000 all at once and the price could head back up. On the other hand, you could watch the price continue to go down, and then you're screwed. Here's an ACTUAL example. Between August and October this year, the price continued to climb. If I could read the future, I would have bought my entire allotment in August instead of spreading it out through until October. I still made money, but I guess I could have made more. IF I WAS A FORTUNE TELLER and knew the future. But what if I saw that trend, and I was first buying in October. If I bought it all at once in October, thinking it was going to continue up, I would have gotten screwed because it totally took a dive in October. It took all of November, just to break even again. But by spreading out the buying, I've actually made about 7%. Not bad for 1 month. Below is a chart of the last 6 months. You'll see why what I am saying is important. Yes, if you know the future and what the price of silver will do, then you can invest more. But if you know that, then you don't need me or anyone else to give you advice.
My next post, I'll mention what kind of silver to buy. CYA: SE
Well, I left off with mentioning buying about 1/10th of the silver you need each week for about 10 weeks. Assuming you know how much money you are trying to make and your goal, this is a practical amount to buy. For instance. Let's say that you want to invest $5,000 with the hope that it will increase in value to $10,000. That's about $500 a week for 10 weeks. Now remember; we're talking about buying silver for the purpose of paying off debt or buying something at a discount. We're not talking about buying silver as a means of "SAVING". E.g. buy $100 of silver per month. That's definitely a method of buying silver. And I'll probably get into that as my next topic. But this topic up until now was specifically about paying off debt or buying something you were going to buy anyway; but at a discount. In other words, you have money to work with. So anyway; buying $500 of silver per week for 10 weeks is not that difficult. But here's where it gets interesting and you have to be aware.
Each ounce of silver you buy, initially has a LOSS built into it. Huh!!! Remember; the dealer or coin shop you bought it from needed to make a profit. If the "Spot Price" of silver is $34 an ounce, you probably paid around $36 an ounce for it. So that means that you're already $2 down on it's value. So it's real important for you to keep a spreadsheet of what silver you bought, and how much you bought it for. And on this spreadsheet, a spot that shows the "AVERAGE" price you paid. For instance: You buy 10 ounces at $35 for $350. A couple days later, you buy 5 ounce at $33 for $165. Now you have 15 ounces total, and you've spent $515. That averages your 15 ounces out at $34.33 an ounce. But initially, you may find that what your average is, is higher than what the spot price of silver is going for. That's natural. Again, you had to pay a markup so the seller could make money. After all; that's his business. He needs to make a living too. This is the reason you you aren't buying just $5,000 in silver all at once. This is why you buy a little at a time for 10 weeks. But you have to be proactive and monitor the price. If you bought $300 worth on tuesday and the price dropped heavily on thursday, then go ahead and buy the other $200 worth then. DON'T go spending NEXT WEEK'S ALLOTMENT. Now, if you bought some on thursday, and it was the end of that weeks allotment, and next monday/tuesday you see the price take a dive and you want to buy all $500 of that week's allotment in one day; that's fine too. Just don't go into using the following week's money.
Let's be honest. NONE of us know what the price is going to do tomorrow. You can do all the would of, could of, should of, you want. You might think that it dropped so much, you need to spend $1500. Who's to say it's not going to drop EVEN MORE the following day or week??? Yes, you could get lucky by buying $2000-$3000 all at once and the price could head back up. On the other hand, you could watch the price continue to go down, and then you're screwed. Here's an ACTUAL example. Between August and October this year, the price continued to climb. If I could read the future, I would have bought my entire allotment in August instead of spreading it out through until October. I still made money, but I guess I could have made more. IF I WAS A FORTUNE TELLER and knew the future. But what if I saw that trend, and I was first buying in October. If I bought it all at once in October, thinking it was going to continue up, I would have gotten screwed because it totally took a dive in October. It took all of November, just to break even again. But by spreading out the buying, I've actually made about 7%. Not bad for 1 month. Below is a chart of the last 6 months. You'll see why what I am saying is important. Yes, if you know the future and what the price of silver will do, then you can invest more. But if you know that, then you don't need me or anyone else to give you advice.
My next post, I'll mention what kind of silver to buy. CYA: SE
I know this is a new site, but for the Noob, you provide some very insightful information and a good perspective. Kevin
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