Invest in Silver

Why Should You Invest In Silver Over Gold?

Is it worth it to invest in silver?

Investing is a tough game and requires a strong mindset, a sound knowledge of market stats and a decision-making ability. Without these, one can’t get a profitable outcome in investing.  If you are an investor looking to invest in precious metals, you have mainly four different options to invest in – Gold, Silver, Platinum, and Palladium. In this article, we will focus on choosing between Silver and Gold.

For investing, you need to choose an option from these two, whether you will select Silver or you will select Gold. The decision to buy gold or silver can’t be made on an assumption, it needs deeper analysis on market stats. Let’s see, where to invest in and why.

So Why Invest In Silver?

There are many reasons to choose Silver over Gold. Like gold, silver is a precious metal with a high intrinsic value as well. Silver is a form of commodity (refers to investing) and as a form of money. Not only that, due to its inherent value, silver has been used for thousands of years as a standard of exchange.

Top Reasons to Invest in Silver over Gold

#1 Demand of Silver in China | Invest In Silver

The demand of silver in China is skyrocketing and will increase continuously for the long term. Silver is mostly used in solar panels which is the largest application of industrial silver. It will be a wise decision to invest in silver because of its excessive demands in the area of renewable energy.

#2 Silver is Cheap | Invest In Silver

The most common reason to invest in silver over gold is the price tag. Silver is much cheaper than gold. You need a small budget to start investing in silver compared to gold.

#3 Easier to Liquefy | Invest In Silver

One of the best reasons to invest in silver is that it is much easier to liquefy if you want to convert it into money. Silver can be sold easily compared to gold.

#4 Uses | Invest In Silver

In a large variety of various technologies and industries you will find silver. On the other hand, you will find gold mostly in jewelry and investment industry.

#5 Smaller market | Invest In Silver

You also will find Silver used in many areas, but has a much smaller market. Silver has a tendency to swing high and low (high volatility) more frequently which can make a big difference to its price. By moving a much smaller amount of money into silver you can get nice upswings in price (and downswings too).

Silver is an affordable commodity for those who have a small budget for investing or for an average investor. The great thing about silver is that you only need a small amount to start investing. Silver is nearly as precious as gold to help maintain your lifestyle. It is well believed that you will get much more satisfaction investing in silver rather than gold. If you can’t afford to buy gold, silver can be a great option for those that want to hold precious metals as part of their portfolio.

Gold or Silver

Gold or Silver – Which is Better Investment?

Gold Or Silver – Which Is A Better Option for Investment?

If you are willing to make investments in precious metals like gold, silver, or others, the early excitement sometimes quickly transform into frustration. This is because of the multitude of availability of these materials. It is necessary to do deep and thoughtful research towards the markets to make sure that the product is best for your style of investment.

This short guide is limited to gold and silver only. After reading this article, you will be able to get a clear concept of the differences between these two precious metal – gold and silver.

Gold or Silver – Where to Invest?

You already know that the two renowned precious metals are Gold and Silver. They both provide various types of investment opportunities for investors. If you are a newbie investor, investing in these two metals may not be a wise decision.

Before making any decision you must do deep research and analysis in many sectors. This includes personal wealth, risk, market analysis and many other types of analysis. Market analysis is the crucial part of all. In this analysis, you have done product quality research, availability research, and market demand as well as price margins. The quality of the metal, price margin and the market demand will tell you if this investment will be profitable or not.

Now, the question is where to invest? Gold or Silver?

Gold and silver, both can be profitable if you have done your analysis thoroughly and accurately. There are many circumstances where you have to make a choice between gold and silver.

Let’s talk about some benefits of gold and silver.

Gold or Silver | Advantages of Gold

VAT Exempt

The precious metal gold is eligible for VAT exemption and some of the gold coins can be purchased free from capital-gain-tax. This benefit attracts investors to invest in gold in larger numbers.

Storage Capabilities

When there is a concern about holding more or less storage capacity, gold wins over silver every time. You can easily invest larger sums into small quantities due to its higher price-per-ounce and it therefore requires less storage.

Popularity

Gold is much popular than silver all over the world. It is widely used in jewelry industries to make precious ornaments. In the region of Asia and Russia, central banks purchase gold by means of investment and stocks.

Gold or Silver | Benefits of Silver

Lower Price

You will get more for your investments because of the low price tag of silver and if you have a low budget issue, Silver is the best option to invest in.

Greater Industrial Use

You will find silver used widely in different industries for a variety of purposes. The solar panel industry requires silver to produce renewable energy sources. For this reason, the demand for silver is growing steadily.

Volatile

The market for silver is more volatile compared to gold. However, it makes investors take a risk and make higher returns. Volatility gives the opportunity to invest more frequently and to gain more profits as well.

Verdict

Gold can be an option for a solid long-term investment for high-budget investors. On the other hand, Silver is great for smaller investors.

The market of silver is volatile and it can result in higher returns. However, it also loses value rapidly due to volatile price in the market. Pro investors invest in both to minimize the risk of their investment.

Whether it is gold or silver, no one can accurately suggest which one will be most profitable and which to invest in. It depends completely on you and the market stats.

Cautions: If you don’t have any experience in investing, you should be careful in bigger investments. Before making any decision, it is advised to consult with a financial advisor. There is always a risk associated with any kind of investment.

 

investing in gold and silver

Investing in gold and silver. Why do we invest?

Why do we invest? As elementary as that question is, the answer is worth restating here: we invest to secure our money and to reap interest on the initial investment.  There are many investment vehicles.  Some are: stocks, crypto-currency (Bitcoin for example), real-estate, bonds  and precious metals (gold and silver). Investing in gold and silver may be a smarter way to invest.

All of the fore mentioned investment vehicles have historically grown in value, thus allowing an owner in any of the above to earn money on the initial investment. However, Bitcoin has dropped sharply and is a very volatile investment. Also, of concern, other Crypto-currencies like Bitcoin have failed altogether. Names such as SpaceBIT, Gems, DogeCoin, & Dao have gone away in a blaze of notorious fire for the history books. Likewise, however, under authoritarian governments, access to trading stocks and the ability to own and profit from real-estate has been historically unsafe.

Therefore, it’s necessary to think of investment vehicles as being a unit of two components: profitability and safety.

A particularly unique thing about precious metal investments such as investing in gold and silver is that they are portable investments. Unlike real-estate where you must secure the location you own, with the help of local police or otherwise, Crypto-currencies where you must have access to an internet source, or stocks where you, at this point, require access to an internet source to trade, precious metals can be secured and moved and still retain the value that those precious metals have.

When it comes to the safety aspect of investments, it’s hard to beat investing in gold and silver. In the worst case scenario where all investments besides precious metals have become unsafe or impossible to use, you’ll likely be protecting your precious metal investment by merit of your ability to protect it physically. No other investment vehicle allows you such flexibility with regard to safety of your investment.

When you go back and examine the profitability component of investment vehicles, even while being very safe, precious metal holds its weight against all the other competitors with gold yielding over a double increase in value over one hundred years such as seen in the info available on this website here:

http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

Comparing several investment vehicles with respect to the criteria of safety and profitability, investing in gold and silver as precious metals comes out as the best investment. It contends well with other investment vehicles with regard to its profitability while being totally unbeatable with regard to safety of investment.

Lastly, gold and silver prices raise considerably during times of turmoil when safety in other investments are in jeopardy. In uncertain times, money from other investments, and bank accounts are poured into precious metals to secure money. Thus, given this is being read in a time of relatively low turmoil, it would be irresponsible of me not to mention that you’re likely getting a bargain price on precious metals. That historical trend is worth considering when investing in gold and silver and will likely be discussed on this site another time.

Fiat Money

What is fiat money?

According to InvestorWords, fiat money is money which has no intrinsic value and cannot be redeemed for any commodity, but is made legal tender through government decree.

If something has no intrinsic value and can’t be redeemed for anything that does, how could people value such a thing? In other words, how can such a thing like that be used as money?

In order to understand the relatively new phenomenon of fiat money we have to look at how money has changed historically.

Way back when during the times of kings and kingdoms, the medium of exchange was gold, silver, or copper coins, just to name a few. All was well with regards to normal commerce in marketplaces as people would exchange these valuable commodities for goods or service. However, whenever a kingdom would decide to go to war there was a problem: in order to pay the soldiers a salary of gold coins to wage war, the kingdom would be limited to however much gold resources the kingdom controlled.

Hence, the birth of contractual money. Instead of paying the soldiers gold coins directly, the kingdom would issue contracts promising to pay the soldiers a certain amount of gold. The contract could be brought to the kingdom and it could be exchanged for gold.

This type of money persisted for thousands of years up until the previous century when fiat money was invented. At that time, gold, and silver-backed currency in the form of paper dollars was commonplace. More importantly, the paper dollars were contracts for an amount of gold, or silver they could be exchanged for.

When fiat money was introduced, the contracts for gold and silver were decreed to be null and void.

The obvious question, then, is why was that fiat money still able to be used as money after such a heinous decision to render the contract for gold or silver void?

Economists generally concede that the reason why the new fiat money maintained value was because the vast, general populace had been used to trading paper dollars.

Fiat money, then, is like owning stocks in a company that is generally accepted to be a very valuable, stable company, but in reality is worth nothing and has no assets or earnings. But because it’s generally accepted to be valuable and people purchase stocks at a generally high rate, the stocks in that company remain valuable.

However, if the stocks were to stop being generally accepted as valuable, or if the company were to issue more and more stocks trusting on general ignorance to maintain the stock’s value, historically, the price of the stock will plummet.

Switch the terms in the above analogy from company to government, and stocks to money and you have the fiat money issue that is facing the world today.

How long will something without value remain accepted as valuable, or how long will it take a government to overestimate public ignorance?

Only time will tell….

What is money?

What is money?

According to the Merriam-Webster dictionary, the definition of money is something generally accepted as a medium of exchange, a measure of value, or a means of payment. So, what is money? This definition has three critical components:

• Generally accepted as a medium of exchange
• A measure of value
• A means of payment

If any kind of ‘money’ were to fail the criteria listed above, it would cease to be money. So, lets take a closer look of what is money.

Historically

Historically, ‘money’ has ceased to be money, and a great example of this was during the First World War. When the German Empire ‘temporarily’ suspended their gold-backed money, the gold Mark, to use debt-backed money to finance their war, the money in the form of the Mark started gradually failing the criteria of being money.

After the Allies won the war, the value of the Mark was so low that they would not accept it from Germany to pay for reparations. The German government then made the following decision: buy gold and foreign money at any cost in Marks to pay the reparations they had to pay. If they ran out of paper Marks, not to worry, they would simply print more.

  • By 1920 10 paper-Marks were worth one previous gold-Mark.
  • By 1922 100 paper-Marks were worth one previous gold-Mark.
  • By 1923 10,000 paper-Marks were worth one previous gold-Mark.
  • And by the end of 1923, 1,000,000,000,000 paper-Marks were worth one previous gold-Mark.

But in 1924, the German government instituted a new form of money: the Rentenmark. It was backed at a rate of 2790 Marks per kilogram of gold.

The change in value of the Mark by backing it with gold was dramatic:
1923: 4,210,500,000,000 Marks per US Dollar.
1924: 4.2 “Rentenmark” Marks per US Dollar.

By backing, meaning the paper “Rentenmark” Marks could be exchanged readily, and easily for a bond for gold, the Mark once again became:
• Generally accepted as a medium of exchange
• A measure of value
• A means of payment

So when did the Mark stop being money?

The moment the decision was made to stop backing the Mark with gold as its measure of value, the Mark as a form of money was totally in jeopardy. The man who made the decision to back the Mark with gold, Hjalmar Schacht, wrote in his biography, “Unbacked paper money is political money and as such is a disruptive element in a system of free markets.”

Once the German government chose to use paper money it became unsafe money for the German people. While it was seen by other countries, and trading individuals as valuable money for a little while, in the end it would cease to be money. Anyone holding only that form of money would have been destitute; they would have no money.

The only people that would have money, and not be financially ruined after the failure of the paper-Mark would be those people holding other forms of money; a form of money—gold, silver or an equivalent generally considered valuable, or a currency backed by gold, silver or an equivalent generally considered valuable, or similar— generally accepted as a medium of exchange, a measure of value, or a means of payment.  So asking the question of what is money really opens up a very large discussion as you can see.