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SilverFlame

End game / why stack / why collect

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Hello all 

 

So i have been browsing the forum for a few hours now. Trying to get as much info in to my scull as possible in that given time. I see allot of silver here silver there, do you have, look what i have, my stack and other requests and topics like this. But what i cant seem to find is the. 

  • Why do people stack.
  • how does this play out when you want to sell. 
  • who do you sell to. ( if you answer with "when there are sellers there are buyers", you do not understand my question)
  • Its claimed that you secure your purchasing power. How so? If silver wont increase in value then your premiums will leave everyone at a loos or break even. 
  • There is not allot of indicators pointing to a soon to be financial crisis where fiat drops to 0. 
  • No signs of stocks crashing. 
  • Silver does not seem to be a secondary income where your investment makes you more money. Right now bullion is a dorment investment with no option to sell with a gain. 

I am very new to the silver world and have bought a few things here and there, but the more i looked in to it i find my self struggeling to see when and where the win of silver is. 

I like silver and i will keep buying silver but i will not be using the money i first intended unless i find a reason to. And i need the brilliant minds of the community here to brainstorm with me. 

 

I do not hope that i come off as being offensive in this post, my mind is just riddled with questions that i am looking for answers for. 

I hope we can have a constructive debate where all oppinions can flow freely. 

 

Kind Regards 

SilverFlame 

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Well in general silver does increase in value in the long run, it's not amazing, unlikely to beat well chosen shares but probably better than currency in a savings account.

Personally I use it mostly for savings discipline. Silver is that bit harder to liquidate than a savings account, so I tend to be less likely to spend it.

There's different opinions on what will and won't happen and motivations for stacking what and how

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3 minutes ago, PansPurse said:

Well in general silver does increase in value in the long run, it's not amazing, unlikely to beat well chosen shares but probably better than currency in a savings account.

Personally I use it mostly for savings discipline. Silver is that bit harder to liquidate than a savings account, so I tend to be less likely to spend it.

There's different opinions on what will and won't happen and motivations for stacking what and how

Okay. So you use silver as a personal kind of bank where money you do not want to spend on silly consumer items go. But what would you do if suddenly something happens that forces you to turn silver in to fiat... If silver has not increased in price you would be forced to sell lower than you bought. making it a worse investment than a savings account, or bonds or even shares. What is your motivation so choose silver. It cant only be because you don't want to spend the money? 

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A great topic. 

I can't answer for other people but I buy physical silver to take a punt on its future value in other goods - probably relative to stocks and shares or another asset type. I stack because I am not confident that the conditions that will lead to silver being valuable relative to other assets will be kind to paper claims on silver, or whether those will have any value at all at that time. In my dream world I will sell to someone who wants silver via a middle man (dealer) who will pay me for my silver so he can sell it on to the people at a profit. There are always buyers. 

Silvers value in terms of what it can purchase is what matters. If everything remains equal in terms of cost of resources to mine an ounce of silver in 10 years and population remains static, and demand/supply balance remains static, you have the same value in 10 years as you do now. How likely is that? I think silver will at least be more expensive to mine in 10 years, probably due to the cost of energy (oil) to extract it and failing that, the amount of additional energy that will be required to access harder to get deposits. Even if we half the cost of energy, if silver is twice as hard to find and mine you are breaking even. Then add population growth. Then add potential for increased demand for silver. That is why it 'preserves purchasing power' but there are no guarantees, the opposite in theory could happen, demand could fall off a cliff because we find something to replace silver in components or don't need as much any more per capita. 

Financial crisis is a good reason for holding physical as I said above (not paper), but a crisis is not necessary to at least preserve purchasing power as I have demonstrated above. Stocks do not need to crash for silver to do well. Perhaps not as well as other assets - you should diversify.

Silver has no yield but that is because it is a commodity and some argue it is money like gold. I am in agreement with this, but it is not the best form of commodity based money, that would be the role of gold. I will explain this in another thread when I have the time.

Edited by KDave

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19 minutes ago, SilverFlame said:

Okay. So you use silver as a personal kind of bank where money you do not want to spend on silly consumer items go. But what would you do if suddenly something happens that forces you to turn silver in to fiat... If silver has not increased in price you would be forced to sell lower than you bought. making it a worse investment than a savings account, or bonds or even shares. What is your motivation so choose silver. It cant only be because you don't want to spend the money? 

Yes I'd lose out in that scenario. The other part of savings discipline is budgeting. I avoid having to liquidate suddenly by not putting more into silver than I can afford to. ☺️

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13 minutes ago, PansPurse said:

Yes I'd lose out in that scenario. The other part of savings discipline is budgeting. I avoid having to liquidate suddenly by not putting more into silver than I can afford to. ☺️

Same here i see lots of really nice silver for sale on the forum but i have a budget which i stick with otherwise to me its no longer a hobby

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the spread(buying price minus selling price) on silver can be big.

this makes it more suitable as a long term investment(decades).

silver could rise a lot, it's swings from it's average are bigger.

gold sovereigns are better as savings. due to the time it takes

for a return, silver is a higher risk higher reward option and should

be recognised as such with the appropriate limit on exposure. if

you are finding it harder to see an exit strategy for silver, maybe

it's because silver is harder to turn a profit. recognising all of the

characteristics of silver will allow you to plan better how best to

invest(or not).

 

HH

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7 hours ago, PansPurse said:

Yes I'd lose out in that scenario. The other part of savings discipline is budgeting. I avoid having to liquidate suddenly by not putting more into silver than I can afford to. ☺️

But isn't that budgeting discipline the same as not touching money in a savings account. I know it's kind of the reverse thing. But not spending money is not spending money. 

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5 hours ago, HawkHybrid said:

the spread(buying price minus selling price) on silver can be big.

this makes it more suitable as a long term investment(decades).

silver could rise a lot, it's swings from it's average are bigger.

gold sovereigns are better as savings. due to the time it takes

for a return, silver is a higher risk higher reward option and should

be recognised as such with the appropriate limit on exposure. if

you are finding it harder to see an exit strategy for silver, maybe

it's because silver is harder to turn a profit. recognising all of the

characteristics of silver will allow you to plan better how best to

invest(or not).

 

HH

Thank you for the reply. My own take on silver is very long term. As in retirement. And that is about 30/33 years from now. My problem is probably more the silver bug you get at first wanting to buy ounce after ounce every day. But that is to expensive here so I need to find a steady and reasonable way to stack. 

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7 hours ago, KDave said:

A great topic. 

I can't answer for other people but I buy physical silver to take a punt on its future value in other goods - probably relative to stocks and shares or another asset type. I stack because I am not confident that the conditions that will lead to silver being valuable relative to other assets will be kind to paper claims on silver, or whether those will have any value at all at that time. In my dream world I will sell to someone who wants silver via a middle man (dealer) who will pay me for my silver so he can sell it on to the people at a profit. There are always buyers. 

Silvers value in terms of what it can purchase is what matters. If everything remains equal in terms of cost of resources to mine an ounce of silver in 10 years and population remains static, and demand/supply balance remains static, you have the same value in 10 years as you do now. How likely is that? I think silver will at least be more expensive to mine in 10 years, probably due to the cost of energy (oil) to extract it and failing that, the amount of additional energy that will be required to access harder to get deposits. Even if we half the cost of energy, if silver is twice as hard to find and mine you are breaking even. Then add population growth. Then add potential for increased demand for silver. That is why it 'preserves purchasing power' but there are no guarantees, the opposite in theory could happen, demand could fall off a cliff because we find something to replace silver in components or don't need as much any more per capita. 

Financial crisis is a good reason for holding physical as I said above (not paper), but a crisis is not necessary to at least preserve purchasing power as I have demonstrated above. Stocks do not need to crash for silver to do well. Perhaps not as well as other assets - you should diversify.

Silver has no yield but that is because it is a commodity and some argue it is money like gold. I am in agreement with this, but it is not the best form of commodity based money, that would be the role of gold. I will explain this in another thread when I have the time.

Thank you for your very in depth answer. 

I agree with most of your views. And the biggest factor that I see in silvers favor is the fact that allot more silver is used in the industry every year than there is mined. They try to collect and reuse used silver but it sill does not cut it. And this will eventually drive silver prices up if this is true Ofc. 

I'm just trying to figure what ratio I am long term investing. Silver/reduce debt/invest in stock or other assets. 

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1 hour ago, SilverFlame said:

But isn't that budgeting discipline the same as not touching money in a savings account. I know it's kind of the reverse thing. But not spending money is not spending money. 

Again, it's a tool to help, like keeping cash in a wallet but no cards. If I had great discipline from the start this wouldn't be an issue.

Proof of the pudding? I can contrast years of struggling to put funds to one side with the last six months and the stack I've accumulated in that time and knowing the funds it represents, even at melt value.

Also, as others rightly point out, it's a fun hobby for me ☺️

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10 minutes ago, vand said:

It's not about the end game. It's about staying in the game. 

Well that was vague lol.. 

2 hours ago, PansPurse said:

Again, it's a tool to help, like keeping cash in a wallet but no cards. If I had great discipline from the start this wouldn't be an issue.

Proof of the pudding? I can contrast years of struggling to put funds to one side with the last six months and the stack I've accumulated in that time and knowing the funds it represents, even at melt value.

Also, as others rightly point out, it's a fun hobby for me ☺️

Thank you for all your time and answers. You have been very helpful and I wish u well in your future silver endeavors. 

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My reason is very simple. I'm a waster lol. I've spent all my money on nothing including a lot gambling. I haven't gambled in 2 month and have bought precious metal instead. 

Short term I think I've done quite well apart from a couple of over priced common sovs at the start. 

For example two 10oz bars I've picked up, I've turned down £40 and £45 profit on each. I've also picked up a 10g gold bar from this forum for below spot 

if you shop about and spend some research time (ask my missus about this lol) investment increase, in my opinion can be very good 

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2 hours ago, zeusss4 said:

My reason is very simple. I'm a waster lol. I've spent all my money on nothing including a lot gambling. I haven't gambled in 2 month and have bought precious metal instead. 

Short term I think I've done quite well apart from a couple of over priced common sovs at the start. 

For example two 10oz bars I've picked up, I've turned down £40 and £45 profit on each. I've also picked up a 10g gold bar from this forum for below spot 

if you shop about and spend some research time (ask my missus about this lol) investment increase, in my opinion can be very good 

Good for you man. That's a great way to turn a negative to a positive. I'm very happy for you and your missis. That's really cool. Thank you for your input, I value that allot. 

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My reason for it is a simple one.

For my children 

Things in life happen and that has ment that I've not been able to purchase my own home so I don't have that luxury to leave them so instead I've been ingesting in silver for them but with some of it when the time has been right I've moved bits on and slowly turning some into gold in the form of sovereigns so they will have a mix of silver and gold.

And if you can buy close to spot on most things then you can accumulate a lot in little time with any budget.

So my end game is that it's all there's when the time comes for me to push up the daisys they can do as the please with it carry on or sell, but I will make sure they are educated in where, when, how etc how to look at spot prices to make sure they get a fair price.

So it's just not an investment for my children but also an educational ride as well 

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8 hours ago, SilverFlame said:

And the biggest factor that I see in silvers favor is the fact that allot more silver is used in the industry every year than there is mined. They try to collect and reuse used silver but it sill does not cut it.

 

not entirely true. mining can be like baking fresh bread, you

only bake as much as you can sell for that day. for physical

silver, there are only 3 variables; current supply, current

demand and stockpile. miners are not idiots, they mine

close to enough to meet supply and thus maximising their

revenue and profit. companies that sell on bullion silver in

various forms are being supplied with sufficient stock.

otherwise they would be paying more to source stock that

is guaranteed to make them a profit(wouldn't you?).

 

consider having a read on the gold to silver ratio, and maybe

consider owning some sovereigns.

 

HH

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2 hours ago, HawkHybrid said:

 

not entirely true. mining can be like baking fresh bread, you

only bake as much as you can sell for that day. for physical

silver, there are only 3 variables; current supply, current

demand and stockpile. miners are not idiots, they mine

close to enough to meet supply and thus maximising their

revenue and profit. companies that sell on bullion silver in

various forms are being supplied with sufficient stock.

otherwise they would be paying more to source stock that

is guaranteed to make them a profit(wouldn't you?).

 

consider having a read on the gold to silver ratio, and maybe

consider owning some sovereigns.

 

HH

Hmmm very interesting. The opposit of what all the doomsday youtubers say. Precisely why i joined here when i found it. Can you be a gentleman and explain me Sovereigns ???  From my search i presume its gold. Small gold coins. But what are their advantage? 

 

Kind regards 

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2 hours ago, AgD said:

My reason for it is a simple one.

For my children 

Things in life happen and that has ment that I've not been able to purchase my own home so I don't have that luxury to leave them so instead I've been ingesting in silver for them but with some of it when the time has been right I've moved bits on and slowly turning some into gold in the form of sovereigns so they will have a mix of silver and gold.

And if you can buy close to spot on most things then you can accumulate a lot in little time with any budget.

So my end game is that it's all there's when the time comes for me to push up the daisys they can do as the please with it carry on or sell, but I will make sure they are educated in where, when, how etc how to look at spot prices to make sure they get a fair price.

So it's just not an investment for my children but also an educational ride as well 

Also a very good option to take when in a position as your self. Thank you for your input. It is very interesting to hear what other people are doing. This is help stearing me in the right direction. 

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3 minutes ago, SilverFlame said:

Hmmm very interesting. The opposit of what all the doomsday youtubers say. Precisely why i joined here when i found it. Can you be a gentleman and explain me Sovereigns ???  From my search i presume its gold. Small gold coins. But what are their advantage? 

 

Kind regards 

Sovereigns are a 22 carat gold coin, a little under a quarter ounce. There's lots of them, they're very popular, which tends to mean they're also very liquid (easy to find a buyer or seller when you want one)

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1 minute ago, PansPurse said:

Sovereigns are a 22 carat gold coin, a little under a quarter ounce. There's lots of them, they're very popular, which tends to mean they're also very liquid (easy to find a buyer or seller when you want one)

Hmm so buying them would be to flip? Or are they known to gain value over time. I see that they are made every year almost and have the same motive. europenamint sell them for ex. 

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2 hours ago, HawkHybrid said:

 

consider having a read on the gold to silver ratio, and maybe

What i see on the gold to silver ratio is that it is 80 to 1 more or so. And almost everyone says silver is the better buy when the ratio is so high ??? 

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7 minutes ago, SilverFlame said:

Hmm so buying them would be to flip? Or are they known to gain value over time. I see that they are made every year almost and have the same motive. europenamint sell them for ex. 

They contain a set amount of gold so many people buy them as bullion (so their value will go up with the value of gold. Like with silver this is more wealth protection rather than making profit).

There is also the collector side. Some sovereigns have a "numismatic" value. For example the Royal Mint offers proof sovereigns and special editions which are limited mintages (the premiums of these can go up over time, but there's no guarantee). Sovereigns have been made for nearly two hundred years and old sovereigns, particularly those in very good condition, are sought after by collectors. A good example is that a Victorian "shield back" sovereign will typically sell for more than one with the later St George and the Dragon reverse. There is a wealth of potential for getting interested in sovereigns and many collectors (eg @Numistacker ) can do a much better job than I of explaining their allure to collectors.

Other important factors are to do with taxes. To buy gold in the uk you pay no VAT, whereas with silver you have to pay 20% VAT (unless you're importing from Europe). Another benefit of coins over bars is that UK coins (including sovereigns) are capital gains tax exempt.

Edited by PansPurse

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19 minutes ago, PansPurse said:

Other important factors are to do with taxes. To buy gold in the uk you pay no VAT, whereas with silver you have to pay 20% VAT (unless you're importing from Europe). Another benefit of coins over bars is that UK coins (including sovereigns) are capital gains tax exempt.

Yah here in Denmark there is no VAT on gold either. But the sellers are greedy AF. We have 3 buisnesses selling gold/silver and they demand waaay over spot. So my only option is from europeanmint. Even buying 1 gold coin and paying 20EUR in shipping is cheaper than going to a local store.. 

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