Do I have spare or extra cash to buy with?
Do I have spare or extra cash to buy with? This is the fourth question you should ask yourself in the process of establishing whether you are ready to buy/acquire silver. If you missed the previous questions, you will find it here.
In order to establish whether you have spare or extra cash to buy silver, physical silver that is, you need to consider your personal financial situation. There is no sense in trying to buy silver if you cannot afford to do so. However, that being written, doesn’t mean that you cannot take steps to improve your personal financial situation in order to be able to do so. In all honesty, this and the previous question go hand in hand. We actually want to stress the importance, not only of the idea that physical silver should be bought and hold for the long-term, but that when you buy physical silver you don’t risk going without the basic necessities of life (food, water, shelter, etc.). It’s all about getting one’s priorities in line. You don’t want to spend your last penny on silver and when your family starves, you come running to us and accuse us of giving bad advice or anything down those lines. Hell no!!
Now back to the original question: “Do I have spare or extra cash to buy with?” If you can answer “yes” to this, then you’re ready to move unto the next question in the process of establishing whether you are ready to buy/acquire silver or not. If “no,” then we salute you for your honesty. The good news is that you don’t need to despair. This is especially true if you consider that no rule says that you must buy silver ever month and a 100 troy ounces of silver at a time for that matter.
E.g. at the time this was written silver was trading at $18 per ounce, per troy ounce of silver that is, which equates to more or less R144 per fine ounce in South African terms (assuming a USD/ZAR exchange rate of more or less 8). However, you can normally expect to pay more than the spot price of silver, especially when you buy physical silver. Ok, let’s assume for a second that American Silver Eagle coins are available for sale at $25.00 per coin (P&P incl.). Now that equates to R200 per coin or troy oz of silver in South African terms, considering that each American Silver Eagle contains exactly 1 troy oz of silver. You realize, after reviewing your budget or assessing your personal financial situation, that you at best will have R50 spare or extra cash to spend each month. You decide to save up enough money to buy at least one American Silver Eagle. You calculate that it will take you 4 months to do so (assuming that a personal financial crisis doesn’t emerge). Ok, fast forward, 4 months have passed; you have managed to save up R200 in spare or extra cash. Let’s assume an American Silver Eagle now costs $28 (P&P incl.) and that the USD/ZAR exchange rate is at more or less 7. This equates to more or less R196 in South African terms. Brilliant, you are able to buy 1 troy ounce of silver and have R4 left over in spare or extra cash. Congratulations, you’ve just bought your first troy ounce of silver! Now if you keep repeating this, you will be able to build up a fairly decent arsenal of physical silver, that will surely serve you and your family well during times of political and economic turmoil or distress, especially when the fiat currencies that came into existence through the “paper gimmick,” come crashing down. It’s not a matter of if the existing fiat currencies will crash, but rather a question of when the existing fiat currencies will crash, especially the U.S. Dollar (USD). Do you think this is far-fetched? Well, then we recommend you read about the history of fiat money before finally making up your mind on the matter. If you still think that fiat currencies are God’s gift to the earth after reading it, well then my friend, you will know exactly why the “paper gimmick” is working so effectively!
In all honesty, in the above example the cost to buy a American Silver Eagle could have shot up to $30 or more, leaving you with a shortfall of at least R40. This is however no reason to despair, you just keep saving up and hang unto your spare or extra cash, until either you can afford to buy at $30 (or more) or when the price drops to levels below $30. Unfortunately the prices charged for silver are not set in cement, so if you have an extremely limited budget like in this example, you have to be extremely patient and committed, but there is no need to despair.
The next question: “How to best approach the silver market?”