New Stacker with $250-$350 Monthly PM Budget

Rookie stacker just getting started... just bought 16- 2017 American Silver Eagles from MCM and 1- Pamp 2.5 gram gold bar from APMEX... anyway I want to spread the investment $200 silver and $150 gold each month. I like silver eagles and gold bars but is there a better strategy with my budget such as 90% silver coins or the 1/10 oz American Gold Eagles?

 

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You're off to a good start, 20 yrs ago I had about the same budget and I was buying ASE and AGE which really paid off back in 2011. Nowadays my budget runs 3-4 times that and my stack has really grown and I'm still buying ASE and AGE and I've added ATB 5 oz. One thing I did do different though is to buy all silver one month and then all gold the next, that way I could buy bigger gold eagles instead of just the smaller ones.

 

Thanks! I like the idea of 1/4 oz gold instead of the 1/10...

 

Although it's not something you'd probably want to reveal to the community, it's important for you to keep in mind what percentage of your income that $350 monthly PM budget represents. More importantly, what percentage does that $350 represent of your overall savings and investment each month?

If $350 spent on silver and gold represent more than 5-10% of your total monthly savings, let me be the first to tell you you are making a huge mistake.

 

In terms of what to buy, there are a couple different sound strategies:
1) Set aside that 5-10% of what you would contribute to your savings/investments, and use that on silver and gold.
2) Set times of the year where you will spend that same amount on larger purchases (such as an ounce of gold or tubes of silver)

The advantages of those strategies are as follows:
1) You get to buy every month and have fun. You also don't have to bother watching spot prices much, since you are buying every month.
2) When you buy an ounce of gold all at once the premium is usually only $30-$50, whereas if you are buying 1/4 oz or 1/10 oz to get up that same 1 oz total you will pay premiums of $75-$100. Same with a tube of Silver Eagles or Maples. Buying many at once will save you a lot on the premium.

The disadvantages:
1) Buying monthly costs you more
2) Waiting to buy at set time each year makes bullion investment feel more like traditional investing. It's just not as fun to buy at regular intervals than to buy all the time.


So what should you buy?

Avoid generic bullion. Especially avoid generic gold. For all gold, buy AGE, Gold Maples, etc. Generic bars may be cheaper right now, but when you go to sell in the future you will not recapture any premium (you may even have to sell under spot) and counterfeits are rampant (Perth bars, etc). It is extremely difficult to counterfeit Gold Maples, on the other hand.

Silver: buy what you like in the government issued category. You'll have more leeway here because silver is so much cheaper than gold. I like to buy a wide variety of the things I like. My favorites are Silver Maples, Mercury Dimes, Canadian currency, and Britannias. All of these are very easy to resell. Maples, Mercuries, and Britannias also always regain their above spot premium. Reselling 80% Canadian currency is a little more difficult and often results in a spot only resale.

 

I don't understand the huge mistake part.... The $250 represents about 25% of my total monthly savings.. I do like your recommendations on what to buy...especially with all the fake gold appearing....

 

I might should have mentioned.... No car payments, zero credit card debt, and 6 months emergency cash in the bank, a little cash emergency fund in the safe. No other bills other than utilities, food, meds, pets... Our kids are on their own and self supporting is a big plus too....

 

Not sure you thought of this, but with an increase in holdable wealth you may question yourself of how to "safely store" it.

(a) Bank Safety Deposit Boxes, or
(b) Home Safe (a real one, not the stuff you buy at a general store that someone can carry or open with a screwdriver)

are the general first options.

 

Thanks.... I have a safe deposit box and a medium quality safe... I don't think you can't open with a screwdriver and it is anchored to the wall. I also have an alarm system and camera that notifies my cell phone. I live in a small town of 4,000 where response time for the police is under 5 minutes... I plan to invest in a commercial quality safe in the near future.....

 

Dont shut down the idea of 1/10 oz Gold, with price ranges in the $135 to $175 way more flexibility on what you can buy moving up to 1/4 OZ at your
Budget will only allow you to buy one a month you can double that with the
1/10 OZ versions.

 

In contrast 4 kids one 34 and two in there mid 20,s and one in her teens
much of the opposite of your situation but still invest, but do have an MPC collection
Valued at over 100K so that makes it ok

 

What is an MPC collection?

 

The idea is that you're doing yourself a disservice if you're not putting other money in 401k, IRA, real estate, etc. Things that pay dividends over time. Precious metals are great but don't pay any dividends so the general rule is 5 to 10% of your portfolio only should be for metals.

If you think the world is ending then this probably isn't a strategy you're interested in. Or maybe you're retired?

 

Not worried about dividends....I'm a retired Fed program manager. I was aggressive in my TSP and put up as many pre tax dollars... didn't have much left over for investing in metals back then....

 

That's great! You're ahead of the pack. Most people aren't saving/investing anymore.

 

I found this to be a real issue and have some silver I put away slowly. But truthfully gold is easier and cheaper to store. Easy math. A monster box of ASE weighs about 32+- pounds and is very large. The same in gold would be something you could hold in your hand and easily store in a safe deposit box. You don't get the same fuzzy feeling of having a lot of coins, but a lot more practical in the long term.

Some people on this site who focus on silver have had to buy a fire rated gun safe, which can cut into your investing for a few months. But if they need a large fire rated safe to hold their silver, then I guess the cost of the safe is irrelevant.

 

MPC (also called Military Payment Certificates ) were used all over Europe, Korea, Vietnam etc, and there primary use was to pay are servicemen and woman in the
Country they were fighting so that local economies would not be affected how ever
Many black markets traded in these but when they were recalled, the previous
Series became worthless when the new ones were issued here are some examples
I have several that are one of a kinds, that are of the highest possible grades here
are some examples, dont want to hi jack the thread so i will just post a few examples