Survival Financial Planning - Reader Question on Buying Silver at High Prices

Fluctuating Gold and Silver prices and my advice to buy Silver even at the high prices must have prompted this question: I don't agree with your advice to buy Silver when the prices were high. Granted a person needs to keep on top of the prices and buy when the prices are as low as expected. Most of us out here are trying to prepare on a fixed budget and prepare for all manner of disasters.

UrbanMan replies: Since you did not write your name on the e-mail, I can't attribute this question to you, but will not use your e-mail name (obviously a nickname) to identify you. But, to answer you're question, I first have to ask some questions....

Do you have a price ceiling per ounce for the purchasing of Gold or Silver that you are not willing to buy higher at?

How do you keep on top of the prices? Because at any given time the price you see on the Internet is NOT the price you are going to buy it for. The time it takes for a company to process our order on phone/internet orders, or, the time it takes you to drive to a precious metals dealer will all factor in.

Recently the price of Silver went to right around $50 an ounce and a few days ago it was under $34 an ounce. Did you predict this substantial drop?

Actually, several analysts have predicted this drop and a commonly held assessment is that it may go even substantially lower, maybe to $27 an ounce, before it begins a meteoric rise to never before seen levels. Who knows? I don't! Do you?

But what I do know is that my purpose for stocking precious metals, particularly Silver is for a lifeline and not an investment. But it could be an investment. I have several friends who are less focused on preparing for a major league collapse than they preparing for a big market turn south and the resulting giant depression. So they are safeguarding their investments through the procurement of PM's to be at the higher end of any shift of wealth created by a depression.

I have talked more than one of them into taking physical possession of their Gold and Silver as opposed to having "paper" Gold and Silver....just like the University of Texas did when they took possession of the physical Gold even with the enormous costs of storing such a weight.

I also have a couple people close to me who I'm helping on preps, and they insist on cost averaging Silver and are buying through the Silver Saver program, where a set amount of money is automatically deducted from your bank account every week, 2 weeks or month to buy whatever amount of Silver that deducted amount can purchase until you own enough to have it shipped to you. While I'm not a big fan of this, it is an automatic method to ensure you can buy what you can afford - dollar cost averaging.

The bottom line here is that many people hesitated to buy when Silver went over $20 an ounce. Then when Silver hit $30 an ounce they panicked and bought,...others still hesitated to buy until it hit $40 an ounce. My point is you need to have physical PM's in your inventory for a complete "Surviving the Collapse" plan. How much financial pain you are willing to accept to get there is up to you.