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JL writes:
Hey silver doctors, here is where my wife and I are at. We are sitting on an excess of 6 figures in gold and silver. We do not own a home because one is provided for us through the company. Of course when we retire the home would no longer be available. The only debt we have is a car payment. We still have a lot of cash in savings but should we buy more silver/gold? We have a good income and live very comfortable, however watching our cash lose value every year has caused us some concern. My wife is very concerned I am going to spend everything on gold/silver. I would highlight the word SPEND because I do not feel I am spending anything when I purchase gold/silver. Your thoughts...
And we just received this question on the same issue this afternoon from an anonymous reader:
After only finding this invaluable site a few months ago I have certainly learned a lot. Today I was just trying to find a place to post the exact same question.
I live in Canada and my husband and I are just newly retired, like you, no debt and house paid, but money is tight.
I quickly came to see the light on this site, that counting on fiat money to see us through retirement was a big misconception.
What I need to know is what % of your liquid assets should you be changing to silver and gold.
I'm understanding here that it is safe to convert most of your retirement money to silver and gold, leaving only what you need to live on now and in the near future in fiat.
I have been pulling money from our Registered Retirement Fund to buy silver and gold, and my husband is moaning about how much fiat money is left.
What I would like to know is why so many "finance people" are saying that you should not have anymore than 15 to 20% of your liquid assets in precious metals. The highest quote I have ever heard was, not more than 50% .
Here I am understanding, change all that you can to silver and gold.
If this is right, please, "Silver Docs" or "Someone", give me a push so I won't feel so shaky doing this when my husband is telling me I am making a mistake.
We have been receiving numerous such questions, that are very similar to a question we just addressed on the site here:
For my answer, we'll compare our personal situations.
Several of the silver doctors personally have over 6 figures in physical gold and silver as well, and yet continue to exchange every paycheck (after expenses of course) straight into physical silver and/or gold. (i.e. we are 100% in gold and silver, and continue to accumulate and add to our positions with each paycheck)
We believe there is no concern about limiting silver and gold holdings to a certain percent of your portfolio if you are convinced it is the right trade. If you are convinced silver and gold will provide the absolute best protection from dollar devaluation, while simultaneously offering the biggest upside potential vs. other real assets, why would you limit your exposure to your protection and gains to 10-20% of your portfolio as most professional investment advisers recommend?
The best investment is being 100% on the right side of a long term move, and holding on to your positions for most of the move!
You are correct that you are not spending fiat cash on gold or silver. You need to lovingly explain to/teach your wife this concept- that you are not spending but SAVING in a more trustworthy vehicle than the US dollar. (Perhaps explain it to her this way: If you take a family trip to Mexico, walk up to the foreign exchange counter, and exchange $1,000 US dollars into Pesos, did you just spend your $1,000? No, you exchanged it for an alternate currency. You will spend it on food, drinks, excursions, etc.)
Your spouse needs to understand that you are SAVING your money in a stronger currency (silver) than the US dollar, just like when you get home from your trip, you would not keep your savings in Mexican Pesos, you would exchange leftover Pesos back into US dollars.
As I recommended to the reader yesterday, pull up a 10 year USDX chart, and 10 year silver and gold charts priced in US dollars and show them all to your wife/spouse.
She needs to understand that gold and silver are MONEY and are in long term bull markets vs. fiat currencies, real estate, and other tangible assets, whereas federal reserve notes in your bank account are DEBT that is being rapidly inflated away, and will continue to do so until the US gets its fiscal house in order (or has it placed in order for it by the market).
Help her understand that gold and silver are in long term bull markets, and will likely be much more valuable in terms of purchasing power vs. other real assets (such as future real estate when you retire) in the next 5-10 years than will be the cash inflating away in your bank account.
Your fear should be in keeping assets in fiat currency when the Euro/US currencies are in the process of collapsing.
Keep stacking.
Hope this helps.
-Doc
9 comments:
Unlike the questioner, I'm not 'well off', but I'm 62 and I have nearly all but a pittance of my life's savings in metals and I'm not about to stop converting over until I'm too feeble to work. This is because those metals are in fact the only real money in this world. They will remain relative in value to costs more accurately over time than any other form of paper-credit 'money'. As the cost of living rises ... they'll appreciate and vice-versa ... so I needn't be concerned about either inflation or deflation (price-wise). Since there will always be sharp young folks with a keen desire to put their savings into a safe form, even if the paper 'money' miraculously survives past my retirement, those young savers will eagerly swap their 'money' for my own and we'll benefit one and other in perfect social symbiosis. On the other hand, if as I suspect, the entire rotten facade of virtual 'money' self-destructs, I will be among the few already provisioned with 'the real McCoy'.
PS: That's so funny! I had to chuckle ... I'm actually 63 ... as though it really matters any more.
Two oz of Silver in your pocket 2000 yrs ago and you had about two months wages in your pocket.100 oz's would last about 10 years.
Jay, ain't modern mining technology amazing? Still, if all the silver ever known to have been mined were evenly distributed to all the people presently alive ... it would only amount to 7.5 ounces each! No wonder an ounce of silver was equivalent to an average day's wage in the 16th through early 19th centuries.
Pat, how much silver do you figure is left, per person, considering all that which has been consumed? I've read varying numbers on what is left.
The Annonymous Canadian Wife says;
Thanks Doc for your advice.
Much appreciated !
All I really needed was that extra bit of confidence to keep changing the fiat to silver and gold when hubby was against it.
I really coulcn't see any other safe place to put your fiat money except silver and gold.
Now I will keep the exchange going !
I will print your answer off for hubby in hopes that I can move him out of the 1950's.
Some diversification won't hurt, especially the older you are.
I also believe gold and silver will hold or gain it's value over time.
But don't forget the price of silver plummet to around 6 USD In 2009, and NO ONE can be sure it won't happen again.
100% in anything it's not a good idea.
Silver corrected to ~$8.50 in 2008/early 2009, very briefly before running back up to $14, and continuing its long term bull run.
Yes, silver can be volatile over the short term ($50 to $32 decline in May), but the sell-offs don't matter long term as long as you hold your position. The 2008 sell-off was a gift to us, because it allowed to more than double the pace of our silver accumulation for several months!
Again, the point is to be correct about the long term trend, and not let the violent moves in the bull shake you off.
Gold is a very safe savings asset/money. One of the reasons why financial planners/advisors don't like gold and silver is that there is no return, no yield. it's not an investment! it's money. Also, they may be misinformed about gold and silver generally like the rest of the population. if your husband or wife wants to invest in stocks and real estate that's completely different strategy (however it's a losing strategy as they are in bear markets for the next 10+years). buying gold is for saving money to beat Inflation from devaluation and any currency collapse. Silver too except it does out perform gold.
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