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 Replies: 10 / Views: 5,580 |
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Valued Member
United States
77 Posts |
Hello all, and happy Independence Day! I need some help as a college student who has been in the world of coins for about 6 months.
I started out getting all the silver I could, getting my stack to about 45 ounces or so. Yesterday, I couldn't resist buying gold for the first time. I pulled the trigger on a 1/10th oz eagle for $158. I absolutely love the coin and would love to acquire more gold. I have the itch.
The thing is, I really don't care a whole lot about the price of gold because I see myself holding on to whatever gold I buy for a very long time regardless of how high the price goes. It's just cool to own. I wouldn't buy more if the price jumped hundreds of dollars, but since I won't buy more than a couple ounces over the next couple years anyway, the difference between $1200, $1300 or even $1500 doesn't mean that much to me.
My silver stack is a different story. I'm absolutely committed to buying at the best prices I can and selling it all when the price hits that "magic number." For me, it's probably $40.
Am I going about this the wrong way, with either metal? Should I be more cautious with my gold purchases? Is there a way I could end up losing a ton of money with this strategy? I would really appreciate some input. Thanks everyone, and enjoy your holiday!
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Pillar of the Community
United States
1158 Posts |
Silver was $5 an ounce just 10 years ago.
Gold spent about 25 years at $300-400 an ounce before the huge runup.
So yes, you could end up losing your shorts in a huge way. Gold and Silver aren't really going to compound interest like stocks and funds, either. At your age, I'd be all stocks/funds to take advantage of compounding time.
Edited by tkbslc
07/05/2014 01:06 am
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Pillar of the Community
Canada
2019 Posts |
Seeing that your not spending a great amount of money on gold/silver and it is a form of enjoyment for yourself then I see nothing wrong with buying some P/Ms. This day and age there are no guarantees , personally I stopped buying all types of investments. I have my home and P/Ms but that's my choice good or bad as I have been burnt badly back in 2008 on my "investments". I wont get into that but vowed never to hand over my money to someone for a piece of paper with some ink on it that I receive every few months.
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Pillar of the Community
United States
5825 Posts |
Unless you like the designs stay away from all of the fancy bullion coins.
Yes, I said bullion coins.
You are paying extra for all of the work required to make them look nice.
If you want just bullion then stick to bars and rounds which you should be able to get for less than 5% over spot.
And buy the largest size you can afford; the markup is less percentage-wise.
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Valued Member
Canada
147 Posts |
At the risk of sounding self-serving, being a dealer, my opinion is not to worry too much about things like premiums. Buying bullion isn't about making money or turning a profit. Is first and foremost purpose is to protect your wealth from the economic uncertainties like inflation. My father-in-law once explained it to me thusly: in 1964, you could buy a soda and some chips for $.25. Today, that same silver quarter will buy you a soda and some chips.
When my customers ask for my advice, I tell them to explore the prices various dealers are charging for bullion. Some will be cheaper, some will be more expensive. Find out what price you are comfortable paying. If that price is close to spot, junk gold and silver will be more tempting. If you find that paying premiums above spot is easy to swallow, then go for the pure bullion.
Just remember that if you ever decide to sell your bullion to a dealer, they will take a percentage off because they have expenses.
And please. Please. Please. Budget yourself and stay within it. I have had more than a few recent retirees who have taken golden handshakes and dropped it ALL into bullion, only to have to sell a year later because they didn't factor living or tax expenses.
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Pillar of the Community
United States
2335 Posts |
In 1964 I suppose you could have bought a soda & some chips for a quarter. Today a quarter is worth somewhere around $4 & I can buy a soda & a bag of chips at my local convenience store for less than $2. Between 1981-2004 the price of silver ranged from $4-6/ozt.....while prices of various consumer goods fluctuated at varying rates. The belief that the buying power of silver/gold has remained the same throughout history is not supported by the facts.
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Pillar of the Community
United States
1261 Posts |
If your goal is to invest, then compare the historical charts for the S&P 500 to that of gold and silver. It's a no-brainier, especially, for someone young. Precious metals are at the top of the historical curve right now. They aren't the highest they've been but they are up there compared to their historical. Does that mean they will eventually go down (or even up)? No one knows but the best thing you can do is to go slow and steady and don't drop a lot of money into it all at once.
Personally, I'd be putting the money into college as that is an investment that will pay off bigger than any PM, oh, that and girls. lol.
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Valued Member
United States
374 Posts |
In my opinion, put that money into a savings account or very conservative investments to pay off debt you will accrue in, or shortly after getting out of college. Credit cards, cars, marriage, family, bills, a house, these things will become a reality very soon. Debt is a drag, and it accrues interest extremely fast.
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Pillar of the Community
United States
1037 Posts |
My advice is not to put all your eggs into PM. PM's should be a comfortable part of your portfolio, along with real estate and stocks & bonds.
Being a college student, I'd buy PM's for sure. At today's spot prices, gold and silver haven't been this low since late 2009. Gold and silver will go back up again. The magic question is when? Once you graduate and start working, you'll have a chance to get a 401K to invest in.
Best wishes toward your future.
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Valued Member
 United States
77 Posts |
Appreciate all of the input everyone.
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Pillar of the Community
Canada
3692 Posts |
You can make money off pretty much everything. If I had saved all of my toys as a youngster and not opened the packaging or played with them they would be worth a lot today. As a kid I saved up all my US change and exchanged them for Canadian dollars when it was favourable to do so. In college I sold consumable tools like sandpaper and solder, and word spreads like wildfire in college - you could even cut hair! - just sayin'. Everywhere you go you can make a buck, it doesn't have to be about buying diamonds or anything extravagant. You can buy a jalopy and fix it up and sell, same with houses. Use whatever wisdom and skills you have....but use them! Resist the urge to hoard whatever is on sale or available because you'll regret it later when all you have is junk. Take your time with this hobby - don't be impulsive, and don't believe everything you hear on the internet - it's okay to get a third opinion.
Edited by Libertad
07/09/2014 10:16 am
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Replies: 10 / Views: 5,580 |
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Posted 07/05/2014 06:00 am
