The basics of Investing in Silver

The basics of Investing in Silver

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In an age where digital transactions and cryptocurrencies are the norms, the concept of precious metals as a form of currency might seem outdated to many Millennials and Gen Zers. However, there’s a compelling case to be made for considering silver not just as a relic of the past but as a relevant and wise choice for long-term wealth preservation and financial security.

For centuries, silver and gold have been the cornerstone of global trade and currency. Our grandparents carried silver coins in their pockets, and the coins in circulation before 1965 were minted from 90% pure silver. Many in America have built their wealth based on gold and silver reserves.

This historical significance isn’t just a matter of antiquity; it’s a testament to the intrinsic value these metals have held across various cultures and economic conditions.

Why Silver is Relevant Today

In our increasingly digital financial world, silver stands out as a tangible asset. Unlike digital currencies or stocks, silver is something you can hold, which has its own appeal and security in an age of intangible assets.

Silver has historically offered protection against inflation. When fiat currencies like the dollar lose value due to economic policies and market fluctuations, precious metals often retain their value or even appreciate. This is because these commodities often have an inverse relationship with other investments

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Compared to gold, silver is much more affordable, making it an accessible investment option for young investors who are starting to build their portfolios.

Diversifying your investment portfolio is a fundamental principle of sound financial planning. Including silver can provide balance and stability, especially during times of economic uncertainty.

For the environmentally conscious, silver offers a sustainable investment. It’s recyclable and crucial in various green technologies, including solar panels.

Beyond its value as an investment, silver’s industrial uses are expanding in the tech and medical industries, potentially driving up its demand and value.

How to Start Investing in Silver

Start by learning about the history of silver as currency and its current role in the economy involves delving into various educational resources and platforms. A good place to begin is with books focused on the history of money and precious metals. Some well-regarded books about precious metals include:

  • Guide To Investing in Gold & Silver: Protect Your Financial Future by Michael Maloney. Maloney is widely recognized as a leading expert on monetary history, economics, investing, and precious metals. He is CEO and founder of one of the world’s largest gold and silver bullion dealers, and host of the wildly popular video series The Hidden Secrets of Money. He has served as an adviser on Robert Kiyosaki’s Rich Dad team.
  • The Case for Gold by Ron Paul and Lewis Lehrman
    Ron Paul, an eleven-term congressman from Texas, is the leading advocate of freedom in our nation’s capital. He has devoted his political career to the defense of individual liberty, sound money, and a non-interventionist foreign policy.
  • The Story of Silver: How the White Metal Shaped America and the Modern World by William L. Silber
    Silber is the former Marcus Nadler Professor of Finance and Economics (2002-2019) at NYU’s Stern School of Business, and before that was the Dean Abraham Gitlow Professor of Economics and Finance (1990-2002) at Stern. In the business world, he has been a member of the New York Mercantile Exchange where he traded options and futures contracts, has managed an investment portfolio for Odyssey Partners, and has also been a Senior Vice President, Trading Strategy, at Lehman Brothers. Silver also served as a Senior Economist with the President’s Council of Economic Advisors and was a member of the Economic Advisory Board of the Federal Reserve Bank of New York. He holds an M.A. and Ph.D. from Princeton University and is a graduate of Yeshiva College.
  • One Nation Under Gold: How One Precious Metal Has Dominated the American Imagination for Four Centuries by James Ledbetter
    Ledbetter is the former editor of Inc. magazine and Inc.com, as well as has worked at TIME, Reuters, The Village Voice, and many other publications, some of which still exist.
  • Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos by James Rickards
  • The Death of Money: The Coming Collapse of the International Monetary System by James Rickards
    James Rickards is a NY Times best-selling financial expert who shows why and how global financial markets are being artificially inflated–and what smart investors can do to protect their assets.

Stay updated with the current role of silver in the economy by following financial news platforms and blogs that specialize in precious metals. Websites like Kitco, The Silver Institute, and FindBullionPrice.com offer news, analysis, and data on silver markets.

Platforms like Coursera, Udemy, or Khan Academy offer courses in economics and history, some of which may specifically cover the use of precious metals as currency.

The CME Group, a company, that runs and operates various commodities markets and exchanges, offers a free self-guided Introduction to Precious Metals online class that provides an overview of various precious metals, how they are consumed by industry, and why they are important investments.

YouTube also offers numerous educational channels where experts and influencers discuss the history and economics of silver. Documentaries or TV programs that focus on economic history or the history of money often cover the role of silver.

Social Platforms such as Reddit, Facebook, LinkedIn, and other specialized online forums have communities devoted to precious metals, such as /r/Silverbugs and /r/Gold. These online communities can be valuable for discussions, resource sharing, and advice from experienced investors and enthusiasts.

You can buy silver bars or coins in physical form, or through silver Exchange-Traded Funds (ETFs). A silver ETF purchases and holds silver or silver-related assets in a trust. The value of an ETF share is thus linked to the price of silver, minus fund expenses and fees.

Investors can buy and sell shares of a silver ETF on a stock exchange, just like individual stocks. This provides a simple way to invest in the silver market without dealing with the challenges of physical silver storage and security while aiming to track the spot price of silver. This means that the ETF’s share price moves in tandem with silver prices in the global market.

Physical silver provides tangible ownership. You have the actual metal in your possession, which can be reassuring and satisfying for many investors. Owning physical silver eliminates counterparty risk. In contrast, with an ETF, you’re reliant on the fund’s management and the financial health of the issuing institution.

Some silver coins can also have collectible or numismatic value, particularly if you buy coins or bars with unique designs or historical significance. The value of physical silver is directly tied to the market supply and demand for the metal, whereas an ETF might also be influenced by other financial market factors.

Like any investment, the spot price of silver fluctuates. Keeping an eye on the market can help you make informed decisions. The “spot price” of commodities like silver and gold refers to the real-time market price at which they can be bought or sold for immediate delivery. The spot price of silver is influenced by various factors, including supply and demand dynamics, geopolitical events, market speculation, and currency fluctuations. For precious metals like silver, gold, and platinum, the spot price is typically quoted per troy ounce.

For Millennials and Gen Z, rethinking silver as a currency and store of value offers a bridge between the past and the future. It’s a way to preserve wealth in a tangible form that has stood the test of time, while also aligning with modern values of sustainability and diversification. In an ever-changing financial landscape, the enduring value of silver can provide both stability and peace of mind.

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