A Plan To Get Your Silver Now

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Jake
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A Plan To Get Your Silver Now

BUYING SILVER TODAY WITH NEXT YEAR’S MONEY

Let me explain: (This is not ADVICE, This is What I did)

About a year ago, I ran out of money I had already accumulated though other investments to buy silver and gold. I was left with buying from resources generated from current income. Naturally, this wasn't enough. After converting all the jewelry I could talk my wife out of, we were left with what I felt was a dilemma. How can we keep up the silver buying rate we'd been enjoying when we really don't have the kind of money from current income that we would consider enough? After all, if we wait, I felt there would be less silver to choose from, (as it turned out, silver rounds are now "delayed", and less silver is available from on-line dealers as you all know). So how could I solve this problem?

Open up a new credit card (with a 0% interest rate on new purchases for one year). This only works if you know you'll be able to pay off the entire balance before the card begins charging interest. Otherwise, it doesn't make any sense. You must project your income at least 1 year out and budget for a large payoff before that one-year 0% intro-rate ends.

There really isn't much downside to this. If in the worst-case scenario, we could not pay the credit-card balance, we could liquidate the silver (probably at higher prices) and get out of debt on that purchase. In the event that silver becomes very hard to get one year from now, however, we'll have had the silver in our possession before any price explosions.

One other thing-- this is kind of like sticking it to the banks. You'll be borrowing their FIAT at 0% to buy what they hate, the anti-bankster, silver.

So I went here and found numerous deals for 0% interest rate cards:

http://www.creditcards.com/low-interest.php

If you buy at Provident, they only charge 2.7% on Credit-card purchases and deliveries are very fast.

Edited by admin on 11/08/2014 - 06:09

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bernard
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I would just urge you to be

I would just urge you to be very careful before you start purchasing anything with other peoples' money... namely, the banks. Particularly in this inherently volatile time, I think you'd be better off just buying on dips//when ever you get paid.

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Jake
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Thanks For The Response

bestever wrote:

I would just urge you to be very careful before you start purchasing anything with other peoples' money... namely, the banks. Particularly in this inherently volatile time, I think you'd be better off just buying on dips//when ever you get paid.

Agreed, absolutely, as this was not intended as advice but as a description of what I did to avoid what I perceive as the "coming silver shortage" in on-line and coin-shop dealers.

The idea was to project the funds I will have a year from now and buy silver with it now. There really is very little downside as in the worst case scenario, I could conceivably sell my silver to pay off the credit-card debt created. The upside is that I have my silver now if the price explodes by the time I actually have the cash.

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No1Hunter
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Buying with credit cards

bestever wrote:

I would just urge you to be very careful before you start purchasing anything with other peoples' money... namely, the banks. Particularly in this inherently volatile time, I think you'd be better off just buying on dips//when ever you get paid.

I would have to agree with Bestever.  Also, how many credit cards are you talking about?  What kind of credit line did they give opening a new account?  Finally, if you did this a month or so ago, you may not be sleeping very well right now.

Hackswell
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Buying with credit cards

I did exactly the same thing.  Bringing forward 12 months of savings purchases into one big purchase. :)  I bought at between 37-40 (my cost, not spot).  I'm comfortable with my purchase, and I'll double down if we break below 30.  I know that silver WILL got back up to 50 this year or next... so my purchase still makes sense.  And at 0% for 15 months... the price is right, too!  DYODD. Consult your own budget. YMMV.  I'm not a financial adviser. BYOB. LOL.

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"DYODD"  "YMMV"

"DYODD"  "YMMV"  "BYOB"??

Jesus, kids these days... that kind of speech reminds me of the attendant at the DMV who renewed my license last week.

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No1Hunter
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I agree!!!

bestever wrote:

"DYODD"  "YMMV"  "BYOB"??

Jesus, kids these days... that kind of speech reminds me of the attendant at the DMV who renewed my license last week.

I know what you mean.

So, you guys think it's better to buy a chunk all at once and save to pay it off if you ship doesn't come in?

I think I will stay with accumulating over time with spare $$, keeping some back for the dips. 

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Budgeting is Key To Any Good Financial Plan

No1Hunter wrote:

I would have to agree with Bestever.  Also, how many credit cards are you talking about?  What kind of credit line did they give opening a new account?  Finally, if you did this a month or so ago, you may not be sleeping very well right now.

How Many?...How 'bout one? Doing this myself, it depends on my projected income and how much I think I can payoff in a year. Let's use an example: If we can assume I already buy silver every month, then we know I can afford it. Lets say I buy $200/month right now. Then, I'd have accumulated $2400 in my checking account in a year if I hadn't bought any over that time period, right?

Ok...so let's assume I think that, in a year, silver will be both higher in price accompanied with delays and have a smaller selection to choose from.

I would open a credit card account with 0% interest intro for a year  with a $2400 balance and buy my silver now. It costs a little (2.7% extra) to make a credit card purchase, but chances are, the increase in silver prices will make that up in a year's time.

Ok---(With $2400 worth of Silver In My Hands Now), I make minimum payments with no interest for 10 months. On the 11th month, I pay it off. My minimum payment will be roughly $48/month. By the 11th month, I will have paid $480 into the card, leaving me with $1920 payoff. If I didn't buy any other silver during that time, I'll have enough to pay it off. It's a matter of budgeting. If I can't budget this then I'm not in control of my finances or I'm unemployed or whatever. It assumes I have good credit.

Assuming something goes wrong, I sell the silver and pay the credit card off.

What Kind of Credit Line?...It'll vary with my credit standing.

Well...of course anyone buying at the top will see a drop in silver price, but gaming the system by guessing price is impossible. Holding physical isn't about price although fundamentally, prices should rise over a year's time. It's about getting my hands on silver ASAP.

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No1Hunter
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small purchases

I  see, for small purchases, you plan might workout.  That is why I asked the credit line question.  They generally start you small and if things go good, start raising it after a year or so, depending on how many other CC's you have.

One last question and a little advice:

First, the question.  After you do this, do you pay it off, cancel the card and start over?

Second, the advice.  I would stash that $152 a month away to pay-off the card just in case things go south.  Generally, all those "free interest" cards have a clause that indicate they collect interest from day one if you do not pay it off at the end of the "free interest" period.

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If you have good credit, then

If you have good credit, then do it. 100% of my PM's up until I opened another card (0% for 15 months) have gone through our friends at The Morgue/Chase. 

So essentially it's physical now paid for by the future at little risk. It would be like a t-shirt company taking free money to buy a truckload of cotton before the prices go up in the future. 

I thought my credit might dip a little with an additional CC, but it didn't budge a digit. Opening new lines only seems to hurt if you're %age of avail credit on current accounts gets above 30% or so. 

Never close CC's unless there was fraudulent activity or you had to for some reason. 

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Response to No1Hunter

No1Hunter wrote:

They generally start you small and if things go good, start raising it after a year or so, depending on how many other CC's you have.<---Jake Responds: Raising your credit card line will not help you as the intro time frame will be on the original purchase. In other words, if I were to open a card in July 2011 that expires the intro rate in July 2012, the year will only apply to that original purchase. Any new purchases will still expire at a 0% rate in July 2012.

One last question and a little advice:<---I do not give Advice. This was to illustrate what I did, PERIOD.

First, the question.  After you do this, do you pay it off, cancel the card and start over?<---Yes, I would cancel the card (Notice, I'm saying "I"?). Then I would apply for another and keep doing this. I believe there will be a time when buying silver will be very difficult, but that's just me. If I let these credit cards go un-cancelled, I'll build up "too Much Credit Liability" that actually hurts my ability to get new credit to start over with these 0% interest rate cards. The only reason why this works is the 0% interest rate liability. Heck, if I paid 5% on them or something, it defeats the purpose.

Second, the advice.  I would stash that $152 a month away to pay-off the card just in case things go south.  Generally, all those "free interest" cards have a clause that indicate they collect interest from day one if you do not pay it off at the end of the "free interest" period.<---You can "stash" any amount you like. However, I believe the "stash" is the silver I bought. I believe there is no need to "stash" any additional money as I've budgeted a certain amount to pay the minimum against the credit card each month and enough to pay it off in a year because I haven't bought any silver since the original purchase as I have already got what I want NOW.

Again, BUDGETING ABILITY AND DISCIPLINE are key to a sound plan to avoid the silver rush IMO.

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blackshirtuk
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It may be a good strategy to

It may be a good strategy to get your silver now,

But....

You will be adding to the economic crisis because the "money" you use to buy your silver does not exist until you make the purchase with your card!

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Sarchasm From The UK

blackshirtuk wrote:

It may be a good strategy to get your silver now,

But....

You will be adding to the economic crisis because the "money" you use to buy your silver does not exist until you make the purchase with your card!

I'm assuming you're joking. If all the above ground available (so-called investment silver not including silver for industrial uses and silver locked up in countries that hoard like China), were to be purchased in this way, it might equal 12 billion---enough to fund the govt. for a little over 160 hours. Hardly making this a major contributor to the "crisis".

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No1Hunter
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Advice???

"One last question and a little advice:<---I do not give Advice. This was to illustrate what I did, PERIOD.'

I didn't say you were giving advice.  I offered some advice which it appears from your other answer, you are already doing it though you don't call it stashing;

"I believe there is no need to "stash" any additional money as I've budgeted a certain amount to pay the minimum against the credit card each month and enough to pay it off in a year . . . "

Now, a budget only works if you follow it (discipline) and you are saving (or stashing) the funds budgeted for that future event.  However, if you budget each money to save and your don't, you should work for the Federal Government.  you would fit right in.  Granted, you could sell the silver but that is not the idea as you want to accumulate wealth and if silver drops to $20 oz when your CC bill comes due, Houston, you have a problem.

Like I said, your method will work great for small, one time purchases and like you said, " Again, BUDGETING ABILITY AND DISCIPLINE are key to a sound plan to avoid the silver rush IMO."

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Comex Silver Dwindling Too

blackshirtuk wrote:

It may be a good strategy to get your silver now,

But....

You will be adding to the economic crisis because the "money" you use to buy your silver does not exist until you make the purchase with your card!

Also, here's a nice concise way to respond to your post:

This is right to the point:

Excerpt From: http://babybulltwits.wordpress.com/2011/06/15/ranting-andy-28-million-ounces-my-arse/

“…of the now 98.8 million ounces of silver “inventory” on the COMEX (which I parenthesize because I don’t believe any statistic EVER published by the government), just 27.9 million ounces are held in the “Registered” category, which theoretically means it is owned by bullion dealers, while the great majority of 70.9 million is in the “Eligible” category, in other words already owned by COMEX customers and thus not available for delivery.

So that means that, at the current COMEX fraudulent paper price of $35.60/oz, all that’s standing between the current position and a COMEX silver default (yielding instant $100+ silver prices) is a measly 27.9 million ounces x $35.60/oz, or a measly $993 million of paper money. Given that the U.S. fiscal deficit is currently projected at $1.5 TRILLION for 2011 (and that excludes “off balance sheet” expenses like the three wars and unending FNM/FRE bailouts), that means that U.S. money printing is running at the rate of $1.5 trillion / 365 days = $4.1 billion PER DAY, and thus $993 million EVERY SIX HOURS!”

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A plan to get your silver now

My 2 cents. 
FYI  Each person's situation, income, expenses and resources will vary.

Dollar cost averaging buying silver works pretty well.  I promise.
I have been buying silver that way on a low income for years.

Yeah, I know it sounds boring and oh so terribly slow but you will be pleasantly surprised how quickly and inexorably it accumulates.

I don't like the 0% credit card strategy except as an theoretical exercise.

Money is always easy to borrow and always annoyingly difficult to pay back.
For several years, I utilized a parallel strategy. Every January for my small business, I took a low or zero percentage advance from a credit card to buy about 10K in inventory.
With my surplus cash flow from projected monthly sales, I figured to easily pay it all back by May or July at the latest.  Well, life would get in the way, i.e. something always came up and my scheduled paybacks became more and more protracted and twice they ran all the way to the brink in October when the promotional rate ended. And that was when the economy was on better footing!
What is different about my scenario is that when I purchases inventory in January and I began selling it in February.

Also, there is human nature to wrestle with.  From personal experience and exemplified by the recent real estate bubble, I believe a person "feels" wealthier with plenty of money in his pocket after taking out a low rate home equity loan (or promotional credit card loan) than he would with having no debt while having almost no money in his pocket. This perceived wealth effect works directly against frugality and thrift.

If one thinks this year's "summer doldrums" is their absolute last chance to get some silver, then by all means, scrounge every extra dollar you can this summer (this may mean real sacrifice or selling some unneeded stuff on eBay) and put it into 90% or 1 oz rounds.  For additional source of funds, we all have indulgences (Starbucks, TGIFriday's) that we can significantly cut back on.  
For what it is worth...

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This is kind of like playing

This is kind of like playing the futures market in a strange way, isn't it.

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Jake's Responses

rock collector wrote:

My 2 cents. 
FYI  Each person's situation, income, expenses and resources will vary.
<---Jake's Response: That was my point...If you can't hold to a budget, then this idea wouldn't work. It worked for me as i am disciplined enough to stick to a financial plan

Dollar cost averaging buying silver works pretty well.  I promise.
I have been buying silver that way on a low income for years. <---Jake's Response: Of course DCA'ing works and it's worked until recently. My thought experiment that actually turned into reality for me was that: "will I always be able to obtain the silver in the form that I want at a reasonable spread into the future?" I said: "Probably Not". When will we see such a shortage that it impacts my ability to get silver within a reasonable time?" I don't know, but I do know availability looks to be changing even now.

I don't like the 0% credit card strategy except as an theoretical exercise.
Money is always easy to borrow and always annoyingly difficult to pay back. For several years, I utilized a parallel strategy. Every January for my small business, I took a low or zero percentage advance from a credit card to buy about 10K in inventory. With my surplus cash flow from projected monthly sales, I figured to easily pay it all back by May or July at the latest.  Well, life would get in the way, i.e. something always came up and my scheduled paybacks became more and more protracted and twice they ran all the way to the brink in October when the promotional rate ended. And that was when the economy was on better footing! <---Jake's Response: Again, this goes back to a person's ability to stick with a financial plan. This doesn't mean no one can do this. And again, If "life gets in the way" you can always sell some or all of the silver to pay the debt.

What is different about my scenario is that when I purchased inventory in January and I began selling it in February. <---Jake's response: You need better budgeting>

Also, there is human nature to wrestle with.  From personal experience and exemplified by the recent real estate bubble, I believe a person "feels" wealthier with plenty of money in his pocket after taking out a low rate home equity loan (or promotional credit card loan) than he would with having no debt while having almost no money in his pocket. This perceived wealth effect works directly against frugality and thrift.<--Jake's Response: "I have no clue what you're taking about here. This is about obtaining the "perceivably unobtainable" before it becomes unobtainable."

If one thinks this year's "summer doldrums" is their absolute last chance to get some silver, then by all means, scrounge every extra dollar you can this summer (this may mean real sacrifice or selling some unneeded stuff on eBay) and put it into 90% or 1 oz rounds.  For additional source of funds, we all have indulgences (Starbucks, TGIFriday's) that we can significantly cut back on. <---Jake's Response: "My point Exactly" thank you. 
For what it is worth...

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pourty
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Jake, I hope it works out for you

Personally, I don't feel the economy is secure enough for most people to be doing this, though.  The problem with precious metals is that, like other investments, their value can go up or down, and not always in ways we'd predict.  If one were to suddenly lose his job or other source of income after doing this and be strapped for cash, he might have to sell as a price much lower than expected and come out of it with a balance on a credit card accruing interest at the end of the year, with no income to make ends meet.

I, too like the idea of getting a bunch of PM's all at once, coupled with the fact that when you buy online, the fees are less if you buy larger amounts (i.e. shipping, insurance, etc.).  So beginning of this year I bought a bunch of silver by "borrowing" from myself.  i.e. I have savings in fiat dollars that I spent a lump sum out of for PM's, and I'm paying my own savings back month by month.

Of course, this only works for someone who saves money to begin with.  I have no debt beyond my mortgage.  The reason I continue to save money in fiat money is because it's very liquid and not subject to a single-day massive decline if I have an emergency (at least not yet ;-).  I'd love to put it all into silver and gold, but then I'd be paying fees every time I needed to unexpectedly dip into savings for some reason (i.e. home/car repairs, etc.).

My advice to all is to cut up those cards if you're not already paying them off each month.  The potential downside of keeping a credit balance is huge and the potential upside is rather weak.

Just my 2 cents.

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Jake's Response

pourty wrote:

Personally, I don't feel the economy is secure enough for most people to be doing this, though.  The problem with precious metals is that, like other investments, their value can go up or down, and not always in ways we'd predict.  If one were to suddenly lose his job or other source of income after doing this and be strapped for cash, he might have to sell as a price much lower than expected and come out of it with a balance on a credit card accruing interest at the end of the year, with no income to make ends meet.

Jake's Response: Agreed, 90% of the population would not only be strapped for cash, living paycheck to paycheck, unemployed, but unable to budget, etc. etc. I'm not referring to them, they can read Jon Nadler Articles. So I probably should have made myself clear, This is not for the un-educated masses that would otherwise by in line for food stamps. Now---selling the silver because one might have to in order to pay the debt off---Well, isn't this always the case?...Not only do we live in an uncertain world of joblessness, but we all also live in a world where our accumulated silver rises and falls with day-to-day markets. To me, one of the worst "risks" might be that I wait for a dip and end up buying above $50 within the year where I could have had it in my hands before the price explosion. Generally, the best time of the year to buy, (this is not advice), is the first week in July by my observations.

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Bingo

That's the Gold! (and Silver) That's What it Make's of us!-- It's a devilish sort of thing!

Not Even The Threat of Miserable Death Would Keep You From Adding $10,000 More! When The Piles of Gold Begin to Grow, That's When the Trouble Starts!

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