Well today I decided to cut my % I invest in my 401k in half and deversify roughly 10% a month into PM, s. I have been studying on it for awhile and today is the day. Advice or thoughts would be great. I don't know if 50% in each is the best route but I'm starting with it.
Think about what happens at the other end. Think about whether you want to be a stacker or a numismatist. You can't have it both ways. The most convenient PM for an emergency is, and will always be, the silver dime. And unlike rounds and bars, you don't have to convince a buyer (way down the line) that it's really silver. You are buying PM's for a 5 or 10 year holding period, through the hyperflation and anarchy that are coming. I cannot think of any reason to buy Eagles or other Mint products, due to the premium(s) built into the price. When the crunch comes, all those premiums will evaporate, and "heavy" silver (like 10 or 100 ounce bars) will probably trade at a significant discount, because only a tiny fraction of sellers will be able to "make change" for them. Stackers need to provide for their families first, which means food, water, and a means of protection. The thing that will bring many families down is prescription medicines, which at the peak, will be unavailable at any price, as production will simply STOP. I don't know the answer to this problem, and I don't see it discussed very often. Without my prescriptions, I would be dead in two weeks. Silver is so bulky and hard to store (roughly 65# per $1,000 face value) that you should diversify, buying both gold and silver, even though a good many folks think that silver will increase percentage-wise faster than gold, looking ahead, as the gold-silver ratio reverts toward its historical mean. Paper money may be virtually worthless; it's happened many times before, and will happen again. Not 5 in 100 Americans believe as I do, or as you are beginning to believe. That's fine with me, and my heirs. Good luck.
Honestly OP, I would try to convince you to keep your 401k savings and try to save any money you can out of your current budget to buy PM. I never like it when people do not put every cent they can into their retirement account. I am a believer in pm as a contra asset, not as any type of doomsday investment. I buy pm to protect against high inflation, the same reason I own farmland. I do strongly agree with many of Doug's points. though. You have to know WHY you are buying, and buy accordingly. Too many people SAY they are pm investors then turn around and pay way too high of premium for collectible coins. If you want to collect coins fine, I am a coin collector myself, but I do not lie to myself and consider my coin purchases to be "pm investments". I also like junk silver, but that is because they are low premiums, known to be real silver, and have a side benefit of being real coins. The weight is a concern, though. My sdb has well over 1000 ounces of silver, plus all of the coins, gold, etc. Yeah, it weighs a couple of hundred pounds at this point. As for gold/silver ratio, I am not going to predict anything. They are two completely different markets nowadays, no longer tied together in a monetary system. That really is the only reason historically they traded at fixed ratios, by government dictate because they were in a monetary system together. I honestly do not know which direction the ratio may take, but suspect that as government purchases taper in the future, (there is only so much gold China wants to build as reserves), the ratio may tighten. However, this tells us nothing because that can mean silver goes up OR gold goes down. Unless you wish to make a risky spread bet, you are not guaranteed to profit even if you call this narrowing of the spread. Anyway, lots to think about. Best of luck sir.
Good points you guys have made. I am a collector and enjoy the hobby. This to me is why I set aside the 10% for strictly PM investments as not to be confused with items I purchase for my collection. I plan on continuing to build in my 401k as my salary goes up since I do recieve an annual raise. I just didn't feel comfortable with all my savings being out of my hands reach. I also plan to have gold coins as well as silver down the road. I agree on junk silver being the easiest to readily use and liquidate if the edited:Rules! . I would like to have a mix of junk silver and ASE for starters. I have accumilated a respectable amount of junk silver from just following the hobby. Roaming the flea markets,roll searching and of course friends has added up. I believe you can be a collector as well as a silver stacker as long as you are honest with your reason for the coin purchase as you have stated. After all thats what got me started looking at silver.
You can, I suppose, but the way you buy gold or silver coins determines your basic leanings. It's also the principle of alternative uses for capital; every numismatic coin you buy = fewer junk silver coins you can buy. If you buy, for instance, a 1995W $5 gold "Civil War" piece "because it's gold," then you really haven't made up your mind yet, and you post on CT, did I do the right thing?
I was going to comment and add some thing about Paper Momey (PM) then I realized you meant Precious Metals.. I too buy precious metals but only fractional AGE and 1oz ASE.. Good luck..it is a very expensive journey either way! RickieB
I agree. And while I think a smart investor is one who diversifies as much as possible, which it sounds like the OP wants to start doing, the first rule of investing that I've learned through many years of successful investment, is never, no matter how tempting it may be, use one investment to fund another. Thats not diversifying, thats slash and burning. Wait until you get your yearly raise and use that. If it's 10%, invest that 10% in silver. Next year do the same. If you can live on what you make now, basically your employer will fund your investing in the future.
I have not touched my current 401k plan. I have only moved 10% of what I was paying into it over to PM,s. I plan on building the % I place into each as I grow older. I plan on having my 401k maxed before retirement but I wanted to get started into PM,s now so I changed my investment direction to 50/50 split 401k/PM,s. I'm 39 so I think this will get me on track spreading the nest egg around. I have the option of changing my 401k investment at any time so that is great also. 401k plans scare the heck out of me but my company has a pretty good one if thier is such an animal. They match up to 6% so I would be crazy not to stay with it. Just something in my gut saying BUY Silver Now you know what I mean?
There are several people on the forum with the same affliction. Nothing wrong with spreading excess income around. Use the first month's to buy tools ( magnifier, good scale with reference weight, a SDB or a real safe if you don't trust the bank, and if you are going to be buying bars or rounds, chemical testing tools, and maybe 1 sample of each bullion products : Maple leaf, ASE, sliver bar , silver round, etc. Most people jump in and do not even know the difference between troy and avoirdupois ounce, let alone be able to spot fakes. So, buy a bag of silver dimes like suggested. They are fun to play with or give away to friends and relatives. Mercury dimes cost a little more, but are more fun and they can satisfy the gut feeling.. But most of all ~ Have patience. The end probably will not come in your lifetime and very unlikely in mine, so plan for your heirs. Do not buy all at once unless there is a very good margin.
I would never "touch" my retirement savings plan. While I can see why people invest in PMs, I think half of the "stackers" are waiting for doomsday. I am not.
It has NOTHING to do with Doomsday. It's ALL about preserving the purchasing power of whatever money you already have, and that involves "exchanging" the depreciating and increasingly-unwanted paper dollars for real hold-in-your-hand money (going back 5,000 years), gold and silver. Silver happens to be more convenient for commerce and barter. I'm sure you can Google a dozen examples of paper money that's gone worthless since World War II. How much hyperinflation does it take to cut your purchasing power in HALF? It takes 26% annual inflation for 3 years: $1 plus 26% inflation = price now $1.26 (end of Year 1) $1.26 plus 26% inflation = price now $1.59 (end of Year 2) $1.59 plus 26% inflation = price now $2.00 (end of Year 3) I like the "loaf of bread" analogy. Today, a silver dime buys a good loaf of bread. Hyperinflation comes, and the odds are excellent (better than any other type of emergency "currency," except perhaps ammo) that a silver dime will STILL buy a loaf of bread. Yes, they'll gladly take gold, except nobody can make change for your 1/10th ounce coin. ===== The second premise involves taking some precautions against what desperate people might do, and "interruptions" of what we (in our rich blessed country) consider normal, events like no food trucks arriving at your grocery for five days; electric, gas, and water shut off until "we" can get replacement parts or fuel; gas stations temporarily "out" of gas; and a few other scenarios that the naive and the clueless and heretofore well-fed consider impossible. "Somebody" will fix all these problems. Take a lesson from Syria, where over a million have left homes they have occupied for generations, and fled to adjacent countries, taking only what they could carry. Back home, take a lesson from Hurricane Sandy, where millions suffered simply waiting for the power to come back on, losing their frozen foods, air conditioning, water and sewage, computers and cable, etc., in the process. And that was just weather, not a currency-hunger-anarchy problem. Wake up.
Doug, the scenarios you've stated where money is worthless and food and fuel are scarce, if not completely absent, has already happened...here in the US. New Orleans after Katrina. Yet, you cannot cite a single instance where silver or gold saved the day for anyone in that situation. It would have been the perfect disaster to prove this way of thinking was accurate, and yet nothing happened.
Those exceedingly poverty-stricken people did not have any gold or silver, and the area affected was far less than 1% of the continental United States. Moreover, they were told to evacuate and decided not to. Some evacuation vehicles arrived in Arkansas and Texas with only 4 or 5 persons on board. In addition, New Orleans' advance planning was absolutely worthless, and the Corps of Engineers' levee program was criminally negligent. Anyone who lives below sea level, in a hurricane-prone enclave, should have their head examined anyway. Now a couple billion of your tax money has been spent to shore things up, so we can go through yet another disaster down the line. And besides, my point was that even a regional weather problem (Sandy), much less a global economic collapse, can cause massive hardship and economic loss to households. Consider the big picture, when the problems are systemic, and global, rather than local; the unprepared middle class will get whacked again. I don't have to ask what State you live in; it is a state of denial. Good luck.
39 is a good age to start getting semi-serious about paying off a home and getting kids in the picture (if not already).
Less than 20k left on the home and the three kids will all be over 18 in three years. I agree that silver will not be a trade item when everyone is short on ammo and food. I however do feel after these items are accquired my money will be safer in my hands if the government has some crazy idea to sieze 401k plans and banks can't pay out your cash to you. In this scenario at least I have a percentage of my lifes savings physically in my control. I believe if you wait until everyone else wakes up to this you will be standing in a soup line and not have a penny to your name.
