money stories Years of Buying Gold and Silver - Here's What I've Learned

 

So i figure if you buy something you get

to call it whatever you like but anytime.

i call gold and silver and investment i

end up having to explain my vocabulary

so i guess we know what this one's about

okay so we're going to take this one.

back just a little bit and cover why a

person might want to save

with physical metals in the first place

on one hand this is the most basic level

in this whole category this whole topic

it's also the most important though

especially if you're new so the easiest

way to go about this is to just

tell you why and maybe how i do it but i

try to look at this from a few different

angles what works for me specifically at

least might not work for you and vice

versa. so i'm going to run through what i

think are universal pros and cons and

then i'll color that up

with some personal history and i'll just

tell you straight out that i don't think

of physical gold and silver the way that

i think of equities i don't trade them

according to price swings and i'm not

investing for quick growth they're just

easier ways to turn a quarter into a

dollar

or a quarter into an ounce however you

want to look at it i'm bringing this up

early to let anyone who's new to the

channel know that this is not a hype

show

i'm not going to tell you that buying

metals is the most important investment

that you'll ever make and i'd actually

say that if you don't think of metals as

an investment you're probably in the

right mindset

the english language is funny though i

have always used that word in my head i

invest in medals i also invest in the

markets and real estate businesses even

crypto i invest in my kids education i

invest in fun so

that word means a lot of different

things

some of those investments are dollar

denominated assets and some aren't but

at the bottom line it can always look at

my physical metals and i can determine

the market value at any current time if

i wanted to liquidate so it's an

investment or an asset or a savings

just depends on how you use the words i

personally see it as all of the above

now the important thing for everyone to

keep in mind is that you are buying an

asset with a fluid price so don't get

caught up in the idea that they're going

to the moon like some of your

speculative investments and keep in mind

that prices can go

three directions they can go up they can

go down or they can go sideways

they won't always track inflation or

money supply or any of the things that

you'll commonly hear sometimes it just

feels like

three blind mice now all of that is just

a good realistic expectation to have to

keep your mind clear because some of the

upsides to metals may not ever present

themselves at least not in a way that

you can profit from there are bad

circumstances that would probably be

very good for the price of gold but

you probably also don't want those

circumstances to happen so if you start

from that understanding

really it's all positive from there

okay so the first big benefit physical

metals and i'm going to use gold and

silver interchangeably to begin here is

its role as a savings account you heard

me rattle off some of the different

asset classes that i invest in you heard

me include fun in there too

at 45

ish

i have a reasonable amount of cash

savings now but saving money has never

been my favorite thing i'd rather have

available cash being invested in a way

that's making more of itself and i also

like to use it for other fun stuff as

well that really hasn't changed over

time i just have a little bit more

stashed away today than i did say 15

years ago at that point in my 30s years

i was probably flying fast and low i was

probably just lucky that i didn't run

into much trouble because i didn't save

first i saved what was left i think a

lot of people do that i have a lot of

friends who like to say you can't take

it with you and i used to hear that a

lot more in my younger years now i

didn't use that one personally but it's

probably not real far off from what i

was thinking 15 years ago when you're

younger it's just harder to see the

forest for the trees i think retirement

is the forest and the toys and the shiny

things well

they can be pretty big trees

so i started investing in metals in the

most basic way possible that was 14

years ago that'll be relevant here in a

minute

if i had extra cash i bought some silver

and gold two but that was at a much

different pace i got to where i was

stopped by the local coin shop if i had

forty dollars eighty dollars whatever

and i'd grab as many american silver

eagles as i could

and then i saved up and i grabbed a gold

canadian maple leaf and then an american

gold eagle but that took a lot longer i

had to window shop for those well i got

the cash and the nerve together it

wasn't long though before i felt like i

wanted more than what i could buy with

walking around money so i started to

budget for it

and i think that's where i started to

look at it as an investment and that's

also coincidentally when the price

started to skyrocket in 2011. so looking

at it more like an investment and not in

the sense that i was hoping for those

quick gains just in a sense that i could

grow my savings i was watching and reading charts

and i was doing all the things you do

when you're making trades i was doing

that research so i started to watch the

charts with silver and gold and i also

had that real experience of going to the

local shops to pick up a silver eagle

and the price was increasing every time

i went in and because i was paying cash

it was very apparent so that plus the

charts eventually made me pump the

brakes on those purchases the price was

just getting too hot all of a sudden

especially as i was paying more

attention to what it was doing it just

felt too expensive to be buying

and even though i sat out most of that

2011 price run my average cost on silver

was in the mid-20s it's probably even

inching up into the high 20s i didn't

buy any gold into that run though so i

was a lot better off there so i had that

marker i knew what my average cost was

and when the price fell in 2013 back to

the low 20s well i started to come back

in it had lost 50 percent of its highs

from 2011 so at that point

i thought it had probably found a floor

now i didn't have a high average cost

for gold but it was doing more or less

the same thing it was coming down over

the same period of time so july of 2013

is when

i started buying that monthly quarter

ounce of gold that i've talked about

and that at the time felt like it was

going to be a good long-term investment

to me so i set up a budget and just

allocated cash to it a lot like i did

with my retirement accounts so at that

point i was a little bit more suspicious

about silver and those purchases for me

i didn't quit but they were extra i'd

get on kicks i'd pick up a tube of

eagles now and then but mostly it was

just spending pocket money when it was

convenient

and i had other sporadic purchases over

those years as well as buying 20 francs

roosters early into that kind of got

sucked into that as well and then i

purchased some larger pieces over time

but

mostly i was just buying american gold

eagles and american silver eagles i had

a few sales over the years and i found

out that there is a big difference on

selling certain types of gold so

i went years only buying eagles and if i

was to look back and say what worked out

best for me well that was it consistent

purchases of the most popular bullion at

the time

so i don't think the vocabulary is

important if you understand that metals

are typically pretty slow movers and

that there are price runs and there are

corrections along the way but 14 years

in now with the few years sitting out

2011 2012 i'd say my decision to

allocate cash to physical metals has

worked out well that budgeting kept me

from stealing money from other

investments and if i was buying like it

was when i first started just basically

spending money any time i had it

everything i think would have gone a

little bit differently like i mentioned

earlier i was investing in real estate

and other asset classes all along and if

i had been stealing all of my

discretionary income putting it all

toward medals then i wouldn't have

gotten in on my best performing assets

in terms of value so that budgeting was

really important my metals budget was

more about cutting out unnecessary

expenses for ongoing purchases and then

making a few bigger buys only when i

could when it was comfortable

so in that regard it's worked out to be

a lot like a savings account even heard

me say that i sold some down twice to

free up some capital so fast forward to

today i have a significant asset value

in gold if an issue came up it's not

something that happened overnight there

was no 10x moonshot along the way but it

was fun and it was relatively painless

the entire time so when i think about

where i'm at today with it i'd say it

was a good investment regardless of how

we use that word

so talking about physical metals

generally speaking and then getting back

to the reason for the article in the first

place buying precious metals gives you

stored value in something that's easy to

sell so because of that it's a lot like

a savings account and i started buying

when gold was somewhere around a

thousand dollars an ounce so there's the

long-term growth as well add to that

that it's just a hedge against economic

issues we can see that playing out right

now and it's also a good way to keep an

asset outside of the banking system if

that's important to you

and beyond that it's just

kind of fun it's a lot more interesting

than moving numbers around in a bank

account so there are a lot of reasons to

do it

that don't depend on an unlikely

moonshot i'm sure we'd all take that

moonshot though if it does come

okay so let's call it good there let us

know what you think whether you're new

or you've been at this for a while i

know there are a lot of people still

deciding so it's just good to get some

thoughts from more people than just me

and while you're in the comments the

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thanks again for reading i always

appreciate your time

take care.