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.

Survival Planning - Gold and Silver Investment

UrbanSurvivalSkills.com received the following comment on a prevous post about Gold and Silver procurement for Survival Planning: Anonymous said...." I bought silver dollars in 1974 for $5 apiece. In 1979-80 when silver peaked at $50/oz I held onto my silver for the long run. I began buying gold coins in 1984, a few each month. The lowest I paid was $230/oz and the most I paid was about $330/oz. I had over 100 ozs of gold goins. I again bought silver for a few years beginning in 1992, over 1500 ozs of rounds. I held these for years and years with no profit while the stock market doubled every other year. I finally had the chance to sell recently when gold and silver finally took off. Yes I finally made a nice profit but I could have made twice as much perhaps four times as much if I had not invested in PM's.

My feeling about PM is if you have lots of time OR if you are buying it for "insurance" then go for it. But it is not really an investment it is a "bet". You are betting that the economy will crash so you can finally make a profit. When it finally happens you will pat yourself on the back and remind yourself how smart you are but if you do the math there are far better investments both in good economies and bad. But here is the important thing to know; at some point in this "bubble" the price of PMs will be two or three times it's value the day/week after the PM market crashes. Your $2000 gold will be worth $1000 and the following week worth $500. Your $50 silver will be worth $25 or $15 or who knows. It will happen quickly and will/may not return to those stratospheric values for another 20 years or so. Now I HOPE this happens because it will mean that the economy is coming back. I know all the theories; we may never have full employment again or we might have a long depression, yada, yada, yada. Well! It's gonna do what It's gonna do and eventually it will come back. I would prefer jobs for our people and fiscal sanity by our government over expensive PMs. I can't predict the future, no one can. But just like the real estate bubble burst so will the PM bubble. So buy some if you want, buy a lot if you like to gamble, but recognize it for what it is."

UrbanMan's response: Great advice in what you write. However, I'm not interested in patting my self on the back nor getting "rich". My interest in PM's, really only silver, is to have a way to purchase or barter for something I need IF it comes to that.

I too, hope for a better economy if those clowns in Wash D.C. can ever get it right. I hope to pass on my silver to my grandchildren. I hope I never have to kill another human being again, or even fire a shot in anger. But I have learned to prepare for the worst.

Just as there are people basing their survival plan around firearms and only firearms,...I am sure there are people leveraging everything just to procure PM's. I think the resonable strategy is ensure all contingencies are planned for,.....the most likely as well as the most dangerous to your survival.

Again, great advice and I like the analogy to a "bet". Nope, I'm buying for insurance and I don't go without other things just to ensure I have a little silver. I only started buying small amounts recently after a 20+ year hiatus. Some months I buy 3 or 4 Silver Eagles or Maple Leafs and some months I buy 10 or 12. Again, I would much prefer to leave all my PM's to my grandchildren, rather than to be able to say "I told you so."

Thanks for your comment. I hope others will read it.