This coming August, I will need about $400 extra for the month for all the school supplies and stuff. I have it in cash right now, and was going to just put it in my safe until then. Then I had someone come to me and offer $420 in melt value scrap silver coins. There were some Walkers, Franklins, Mercs, Roosies and quarters. I knew I could probably sell it for a little more than melt. Then I thought about holding on to the silver until I needed the money and maybe silver will be up some by August and I could make a few more bucks. My question is, what would you do? Would you hold on for the ride and see what happens in August or go ahead and take a little profit now? I know no one can predict the future and am not asking for firm answers. This is more of a fun situation.
If you know you need it at a fixed near-term date, you'd be foolish to risk it. Silver might be back up by then, but it might just as easily be down further. And premiums from the folks buying silver are even more volatile. (Try getting "a little more than melt" for it when it's dropped 10% in the last few days.)
Create a portfolio. If you paid $425 at melt, then you must have around $29 silver face value. If sell it now for 16x you can make $464 today. Sell half now for $232 and keep $14.50 face value. Even if silver goes down 10% and you have to sell at $14.40 you'd still make $209 which added to the $232 total around $440 so you still win. If silver goes down 20% and have to sell at around $13x, then you'd have the initial $232+ 189 which would bring you at break-even point.
There are a lot of "Ifs" in some scenarios, so to rein them in a little here's just one. If you just hold onto the cash you now have, then you will have no work to do, now or later. This money is available to you right now as you need it, when you need it. And as you stated you are going to need it, imminently. It is indeed 'work' to continuously monitor and effectively realize a return on metals. When that need for cash arises it may well not be an opportune moment, either market (spot) / offers-wise or the timing may be poor, because students are in fact busy people with many other things to attend to. Your education is priceless. Devote your time to study and the future returns on the work you do now will assist you along the way and in the future in the acquisition of metals.
Well, if you can buy for melt (14.5x face) and sell for 16x face -- a prompt 10% gain -- why not just do that for a living? Even if it takes you a week to turn it around, 10% per week interest, compounding, is a pretty good rate of return.
Minus of course capital gains taxes one ought to be reporting on their enterprize, the costs of overhead: shipping/handling, supplies, transportation, et al.
I would risk it and check dates etc...Personally I think Silver will be on the rise. Disclaimer : I said that last year also but my time horizon is years not months.
Keep the money in cash. Why risk it for the possibility of making a few bucks? If you want to gamble, go to Vegas. Never put money that you need in the near future at risk.
