Investing in Silver

While I’ve been working on creating a passive income system, I’ve also been reading about different investment opportunities, and have taken an interest in investing in silver. There is a lot of information available about investing in silver and it could be a little overwhelming, so I’ll break it down into what I see as the basics:

Silver is Currently Undervalued
Traditionally, silver has held a 1/16 value to gold. Gold is currently trading for about $940/oz and Silver is only about $18/oz, which means silver is currently trading at about 1/52 the value of gold. Even if gold stays put, silver will eventually come up to at least $58/oz. Investing in silver at $20/oz, should bring you at least a 3x profit in the future - imagine if you had invested when silver was $4/oz.

Silver is in Demand
Silver is used in all sorts of electronics and jewelry, which means it is becoming more scarce. This will add to the eventual rise in the value of silver, because there will be more demand (more electronics being made) and less supply available.

Investing in Silver is Cheap
When I say “Silver is Cheap”, what I mean is that it is easy for the average person to walk into their local coin shop and purchase silver. Your main options are to buy silver coins, or silver bars. From my research, I think silver bars are a better investment. I just called my local coin shop and they have one 10oz silver bar in stock, which would currently cost me $193.10 (USD). That includes a $1.50 per ounce service fee.

Silver is the Real Money
Silver is the money of the world. Currently, the US Dollar is worth “something” only because you think it is worth “something”. This can be a difficult idea to wrap your head around. The US Dollar used to be backed by gold and silver. Since the 1970s, the dollar has not backed by gold or silver, and we see the inflation that has taken place. The government prints more and more money, and the “something” that the dollar is worth continues to go down. In contrast, there is a finite amount of silver in the world and the value of silver will only continue to rise.

It is important not to look at silver just as “how many dollars is it worth” but also “how much gold is it worth?”, “how much oil is it worth?”, “how many ounces of silver would it cost to by a 3 bedroom home?” - These tangible items, not the dollar amount, hold the real value. Sure, your silver might be worth $500,000 - but the real question is what else can you get for that $500,000 ? That changes over time. For more information on Investing in Silver check out SilverSeek.com or Kitco.com.

The ideas in this article are only my opinions. Please consult your financial adviser before making any large investments - though your financial adviser might not really know what’s best.