Any other precious metals stackers on VN?

#76
#76
ClearwaterVol said:
Residential real estate prices are insane here. I will continue to invest here because there is no more land available. I only have two houses. One is a rental that my daughter lives in and I lose lots of money every month. I could rent it for 2500/month, but instead I rent it to her and she pays me $1,400, but i pay all the bills, electric, water, yard care, trash, internet etc. I lose money hand over fist on the deal, but she's going to college so...
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You have those losses structured in a tax advantaged way?
 
#77
#77
Vol8188 said:
May I ask where you’re buying physical silver? I’ve seen some gold and silver through estate sales but typically people bid up to the market value and then you’re still paying whatever % auction fee on top.

I’m open to diversifying a bit and like the idea of physical gold/silver, but I’m just not sure how to buy at market price instead of above.
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So here is what I've learned over the years, and am going to divide it up a bit and hopefully some of it will be of value to you.

First, there are two ways to invest in precious metals, physically and by investment vehicles.

Physical

You can physically acquire it and store it somewhere. For silver, given the low value relative to size, a safe depot box is incredibly inefficient as your storage cost is a significant part of what you would have invested. For gold, a safe deposit box may be worth it, particularly if you can store other things with it to justify the cost, but I'm talking silver for the moment.

You asked where to buy. First, understand that the spot price of silver (fluctuates throughout the trading day like any commodity) is not what us consumers pay. We pay spot, plus a premium. Anyone offering to sell you silver at or below spot is almost certainly a scam of some kind, beware.

(There are some easy things you can do to test silver, some involving expensive equipment, others just detecting some properties of silver, I am happy to share more on that later if you are interested.)

Coin Shops

If you buy from your local coin dealer, and its straight generic bullion (silver rounds or bars) you will pay between $2-5 an ounce over spot. So right now the spot price is $23.19, expect to pay $25-$27 an ounce over spot. Now the good news on that is that most coin shops, especially if demand is good, will pay you spot plus a premium. A year ago, for example, when silver spiked briefly towards $30/oz., coin shops had trouble meeting demand and they would pay a premium. You could sell a silver round for $32 each, easily. (American Silver Eagles for more than that -- will discuss below)

The nice thing about coin shops is you know where they are. If they have been around awhile, they are going to be a safer, more reliable, point of purchase, and you minimize the risk of fake bullion (which is a real problem).

Point being, you will pay spot plus a premium, but a coin shop at most times will pay you spot plus a smaller premium. If you've held until the price spikes, you more than make up the difference.

Another point is that in some states, at a certain point, there is no sales tax. Florida is like that. If I buy more than $500 worth at any time, I pay no sales tax. $499 or below, I am paying 6 percent. Duh.

Ebay

Meh, I've done it but generally do not recommend it. The reason is that shipping and other costs get built into the premium they are charging. So, you will see a well known bullion dealer on there, but if you take the time to find their usual website, you can probably get it for a tad less from that site, than Ebay.

Do not EVER buy from overseas. Lots of fakes. And of course if you do buy make sure they are an established seller and take returns if its bad samples.

Direct from private mints

This, in my view, is the best way to go when i want to buy 10 ounces or more. Here is a great website, which tracks the premiums the private mints/dealers are charging.


So for example, as I write this, skip the Ebay listings and you can buy a 5 kilo bar from SD Bullion (very well known manufacturer/retailer) for $3,892.74, just 72 cents over spot ! Now, here's the thing, 5 kilo of silver is a single bar, or roughly 160 ounces. That is going to be very difficult to sell, particularly if the shat hits the fan and people are walking around trying to find bread to sustain themselves.

One ounce rounds will be easier to sell or trade, particularly if the system utterly collapses and silver and gold are the only recognized safe havens of value. Generic ones have lower premium. So, the lowest for that right now per this website is from Monument Metals, for 86 cents over spot, or $24.36 each. Now, important to remember you need to factor into it both amount you will order, and shipping. To get that price and free shipping, you will need to order at least five of them, and pay by check or wire. If you pay by credit card or paypal, the price can be a lot more.

My advice is to check the terms for each one, and find the mechanism that keeps your overall, delivered price, the lowest.

ETFs or the like

The second way is to invest in a company, or a stock, or an ETF. The most direct way that I know of is to buy shares of SLV. This is a trust that issues shares to correspond to physical silver the trust holds. They have over 430 million ounces of silver in trust. Here is a description of the Trust and how it works:

iShares Silver Trust | SLV

I have some of these, too. The upside is you can literally buy in the morning and sell at lunch, with no need to store anything. The downside risk is that if the system did collapse and it was an Armageddon scenario, there are a lot of people who don't trust that you'd be able to sell a share of SLV any more than sell a share of Walmart. Depends on what you are going for.

I do both.

Some people use companies that auto-invest for you as part of an IRA. I do not know enough about them, but am personally skeptical and suspect they are charging an even higher premium.

ASEs

The standard for newbies is the American Silver Eagle. These are one ounce of .999 fine silver, backed by the U.S. Mint. They are legal tender. So, they have a premium associated with that. On the flip side, when demand peaks, ASEs command a higher premium. Newbies come in to the coin shop and want the safest form available. The ASE is pretty. They buy those in the FOMO scenarios, so the shops pay more for them to turn them around.

Remember my discussion above when silver spiked at close to $30/oz last year. If you could find an ASE at your local coin shop, it was going to be close to $50, not the $32 for the one ounce round. If you look at that bullion link I sent you above, an ASE right now will cost you basically $29, landed, which is considerably more than the generic round.


Disclaimer: I am no financial adviser. Prices go up and down. Do not rely on me. One thing I really enjoy is going on to youtube, there are maybe a half dozen coin shop owners or "stackers" that post every day or so and explain what they are paying, what they are charging, trends, etc.

Happy to answer any questions as it is in some respects a hobby as much as an investment.
 
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#81
#81
ClearwaterVol said:
Got any suggestions for structuring losses on a rental above and beyond setting off the rent? This was my first year of this one.
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The rental should be a separate business. The difference in fair market rent and what you're getting from daughter is meaningless for taxes.
Insurance, utilities, maintenance, repairs, etc could all be deductible up to a max (25k I think). There are limits to this deduction based on your AGI. This may be limited to passive income only but you'll need to run that by your cpa. As long as you're actively managing the property and you meet the other criteria, you will qualify.
Also, you get depreciation on the property as long as you owned it as a business and it was in useful service (ready for tenancy).
 
#82
#82
McDad said:
The rental should be a separate business. The difference in fair market rent and what you're getting from daughter is meaningless for taxes.
Insurance, utilities, maintenance, repairs, etc could all be deductible up to a max (25k I think). There are limits to this deduction based on your AGI. This may be limited to passive income only but you'll need to run that by your cpa. As long as you're actively managing the property and you meet the other criteria, you will qualify.
Also, you get depreciation on the property as long as you owned it as a business and it was in useful service (ready for tenancy).
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Even if she is a dependent?
 
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#84
#84
McDad said:
The rental should be a separate business. The difference in fair market rent and what you're getting from daughter is meaningless for taxes.
Insurance, utilities, maintenance, repairs, etc could all be deductible up to a max (25k I think). There are limits to this deduction based on your AGI. This may be limited to passive income only but you'll need to run that by your cpa. As long as you're actively managing the property and you meet the other criteria, you will qualify.
Also, you get depreciation on the property as long as you owned it as a business and it was in useful service (ready for tenancy).
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I’m meeting with an accountant because I have some countervailing concerns with homestead tax breaks here. I am considering putting the property in my daughter’s name (while holding an unrecorded quitclaim deed back to myself) . I need to figure out what provides me the most benefit
 
#85
#85
ClearwaterVol said:
I’m meeting with an accountant because I have some countervailing concerns with homestead tax breaks here. I am considering putting the property in my daughter’s name (while holding an unrecorded quitclaim deed back to myself) . I need to figure out what provides me the most benefit
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Homestead tax breaks? Breaks besides the primary residence 250k single /500k married cap gains exemption???
 
#86
#86
ClearwaterVol said:
Residential real estate prices are insane here. I will continue to invest here because there is no more land available. I only have two houses. One is a rental that my daughter lives in and I lose lots of money every month. I could rent it for 2500/month, but instead I rent it to her and she pays me $1,400, but i pay all the bills, electric, water, yard care, trash, internet etc. I lose money hand over fist on the deal, but she's going to college so...
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Yeah my ex wife has all those now. I got to keep my testicles car and main business and she got the house, real estate, and cash. Good times, good times.
 
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#88
#88
Vol8188 said:
May I ask where you’re buying physical silver? I’ve seen some gold and silver through estate sales but typically people bid up to the market value and then you’re still paying whatever % auction fee on top.

I’m open to diversifying a bit and like the idea of physical gold/silver, but I’m just not sure how to buy at market price instead of above.
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You’re not gonna get “market” price. Everyone (well, majority) pays Spot+

You can easily purchase silver bullion online from well over a dozen sites. Pick a big one, look for a deal.
They’re legit - I do it all the time.

One ounce silver rounds.
It’s the silver that matters - not what’s stamped on it.

If you buy American Eagles - Don’t buy proofs. Buy the most recent, random offering, circulated. They’ll be the cheapest.
 
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#89
#89
Question…what are we hedging against with PMs? Inflation/US dollar, correct? I understand that from a traditional economic perspective. So, what’s the protection if we switch over to a digital currency and we see a complete repricing of assets against that digital currency? And how can PMs actually be used in the real world as currency if we don’t know how goods and services will be repriced under a digital currency? And won’t that render PMs basically useless as a form of payment? Unless of course, it becomes a black market all its own.

Will be very difficult to determine fair value of PMs wrt a collapse of the dollar that initiate price resets and the possible wiping out of debt making existing bond obligations worthless. I’m more of a lead, brass, meds, liquor and gas guy myself. I just don’t know that we can predict how effective PMs will be in that type of scenario, which I think could be coming.
 
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#90
#90
Vol737 said:
Will be very difficult to determine fair value of PMs wrt a collapse of the dollar and price resets. I’m more of a lead, brass, meds, liquor and gas guy myself. I just don’t know that we can predict how effective PMs will be in that type of scenario, which I think could be coming.
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You just answered your own question. PMs offer more options for bartering and trade.
 
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#91
#91
Rasputin_Vol said:
You just answered your own question. PMs offer more options for bartering and trade.
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Sorry Ras, I edited my original post. You’re right, I think there could be a place for PMs, but wouldn’t it seem likely to take on a black market type transaction if what a posited in my op were to take place? I wouldn’t think it would be part of our exchange system (legally) with a shift like that, but I do see where it would be part of a bartering economy on the periphery and away from “regulated” transactions.
 
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#92
#92
Vol737 said:
Sorry Ras, I edited my original post. You’re right, I think there could be a place for PMs, but wouldn’t it seem likely to take on a black market type transaction if what a posited in my op were to take place?
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Possibly. No different than the ammo or liquor you spoke about earlier.

Vol737 said:
I wouldn’t think it would be part of our exchange system (legally) with a shift like that
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So if the USD does collapse, are you going to be looking for legal ways to engage in trade or are you wanting to have every option available to you?

Vol737 said:
but I do see where it would be part of a bartering economy on the periphery and away from “regulated” transactions.
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You make it sound dirty. The regulators got us to the point where the USD is losing value, but we must make sure that these regulators have the ability afterwards to track and trace transactions.

I don't understand why you can rationalize using consumables like liquor and ammo as acceptable forms to trade in, but PMs are just a bridge too far... using PMs would be criminal or have connections to an underworld network. I never knew the sentiment towards PMs was this bad, but you seem to have absorbed this idea without realizing it. PMs have been used for thousands of years and it is established as money in our Constitution. There is nothing illegal, unsavory or unscrupulous about using PMs.
 
#93
#93
Vol737 said:
Question…what are we hedging against with PMs? Inflation/US dollar, correct?
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Yes. Buying PMs is essentially you buying a put option against the USD.

Vol737 said:
I understand that from a traditional economic perspective. So, what’s the protection if we switch over to a digital currency and we see a complete repricing of assets against that digital currency?
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Your ammo and liquor will also be just as vulnerable to this repricing, yet you can seem to understand how it will work in your favor with them, yet (seem) to have a pejorative view of PMs and can't (seem) to see how the same market forces would work in their favor.

Vol737 said:
And how can PMs actually be used in the real world as currency if we don’t know how goods and services will be repriced under a digital currency?
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How can ammo and liquor be used in the real world as currency?

Vol737 said:
And won’t that render PMs basically useless as a form of payment? Unless of course, it becomes a black market all its own.
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But trading ammo and liquor wouldn't be black market?
 
#94
#94
Vol737 said:
Question…what are we hedging against with PMs? Inflation/US dollar, correct? I understand that from a traditional economic perspective. So, what’s the protection if we switch over to a digital currency and we see a complete repricing of assets against that digital currency? And how can PMs actually be used in the real world as currency if we don’t know how goods and services will be repriced under a digital currency? And won’t that render PMs basically useless as a form of payment? Unless of course, it becomes a black market all its own.

Will be very difficult to determine fair value of PMs wrt a collapse of the dollar that initiate price resets and the possible wiping out of debt making existing bond obligations worthless. I’m more of a lead, brass, meds, liquor and gas guy myself. I just don’t know that we can predict how effective PMs will be in that type of scenario, which I think could be coming.
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I think liquor is an underrated asset in this type of scenario.

Compact, doesn’t spoil, widely consumed, would be in tremendous demand.

Remember Covid when the idiots shut everything down, but quickly designated liquor stores as “essential”?

That was for good reason… cut of the booze and just watch the large scale medical emergency that unfolds.
 
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#95
#95
Rasputin_Vol said:
Yes. Buying PMs is essentially you buying a put option against the USD.


Your ammo and liquor will also be just as vulnerable to this repricing, yet you can seem to understand how it will work in your favor with them, yet (seem) to have a pejorative view of PMs and can't (seem) to see how the same market forces would work in their favor.


How can ammo and liquor be used in the real world as currency?


But trading ammo and liquor wouldn't be black market?
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I am aware, understand all that and don't disagree. And yes, lots of transactions would fall under the "black market" umbrella. The same principles apply to varying degrees between different commodities. I would say ammo, liquor, fuel, medications and other tangible, useful and consumable goods would be real world "currency" in a broader bartering economy. I get that PM's have value due to it's scarcity/supply/demand but I think far fewer people actually own physical gold or silver and likely wouldn't have it as their primary medium of exchange. For this reason, I think once you get outside the use of a forced digital currency, that's where these other commodities come into play as a more practical "currency" among most people.

Most people now don't have $1000 stashed away for an emergency fund, so I highly doubt they own any gold or silver.
I can only imagine how personal assets will get repriced with the introduction of a govt implemented digital currency, surely not in our favor. But I bet a lot of these people have booze, bullets and other bartering instruments. Doesn't mean I don't think PM coins/bars or other forms wouldn't be at least a part of the "currency" equation and find it's new equilibrium in such a market. Even though it's scarcity is very much the driver behind it's value, it's also that scarcity that will force people to use alternative forms. My hypothesis doesn't mean I hold PM's in a pejorative view at all, I don't. I hold forced, weaponized digital currency in a pejorative view, if not outright disdain, due to it's implications. Probably a futile exercise in discussing this anyway because we're all likely to just accept the digital currency and continue on.
 
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