Reasons Why You Should Invest in Silver
People have been investing in precious metals for hundreds of years.
First, people invested in gold because it was rare and valuable.
As technology developed, people began to invest in other metals like silver.
There are many reasons why you should consider investing in silver. Here are 12 reasons why you should buy silver.
The History of Physical Silver
Most people know that we have been buying and investing in silver as a precious metal for hundreds of years.
However, history goes back even further than that. Silver has been used as money at different times throughout history.
It was first mined around 3000 BC in Asia Minor (now modern-day Turkey). That was over 5000 years ago.
Silver is formed through star explosions called supernovae, the same as physical gold. The big difference is that unlike gold, which is very rare, silver is more common (but still rare).
Some call it the poor man’s gold. I call it gold’s little brother.
Silver was used to barter with in ancient times, but it became a coin around 550 BC.
Silver has been mined for thousands of years all over the world, particularly in Peru and Mexico. Places like China were mining so much silver by 1000 AD that they had reduced its value down significantly.
Silver also played a huge role in modern photography. It was used for the film in cameras and to develop photos. This rising demand caused a huge spike in the value of silver between 1880 and 1900.
It's also used in other electronics and jewelry. Silver is also used in medical applications like bandages because it kills many types of bacteria. It's even been shown to kill the Ebola virus!
Silver Price History
One reason why you should consider investing in silver today is that its price history has stayed consistent besides some anomalies.
As you can see from this chart, the value of silver skyrocketed and then went way down after 1980 due to the Hunt Brothers attempting to corner the physical silver market.
Again in 2011 with the global financial crisis (GFC) in full swing stock markets were nosediving and many investors decided to add physical silver to their portfolios.
This is a common occurrence when there is a financial panic. Many sell off their paper investments (futures contracts, traditional stocks) and buy physical metals like gold and silver and other physical assets.
The Current Price of Silver Today
If you're still not convinced that there's a good reason to invest in silver today, let me give you one more piece of evidence. As of right now, the price of silver is over $20 per ounce today.
The price of silver does fluctuate. However, it always tends to go up. Even during the low points of its price history, this metal never went down for long.
The Modern History of Silver (and other precious metals)
As I mentioned above, people have continued investing in silver today because of how valuable it can be as an asset. It is very rare compared to other metals out there which makes it desirable among investors looking for real money and who don’t like the idea of the government printing money at their desire.
Did I mention the US government has printed over $3 trillion since 2019?
This is the modern era of modern monetary theory and will be the demise of all fiat currencies.
Yes, even the almighty US dollar will fail at some point with the Federal Reserve and its ability to create an economic slowdown with bad policy.
In other news, silver is the best conductor of electricity out of any metal. The reason copper is used instead of pure silver is that copper is much cheaper.
This makes silver as an industrial metal very valuable to scientists and engineers who can use it in semiconductors, circuits or batteries, like your laptop for example.
Silver was first used by Thomas Edison because he needed silver electrodes that were better than anything then available at the time (the late 1800s). It's also highly reflective, which made mirrors much more effective before glass-coated aluminum came about.
Another reason why people invest in silver today has to do with its value as currency all over the world. The US minted 90% pure coins up until 1964. Then they switched down to 40% from 1965-1970 and now coins are 0% silver and are scrap metal.
Reason #1: Silver Can Be Bought In Physical or Electronic Form
You can buy silver as a tangible asset like physical silver coins or bars. You can also buy into the silver market with silver stocks and shares of royalties to new silver mines and silver futures contracts.
You don’t have to hold silver in physical bullion coins to have exposure to the silver market.
Reason #2: Silver Is A Hedge Against Inflation and a Weak Dollar
Physical metals can be a hedge against inflation. This includes both gold and silver.
The US dollar is becoming less valuable over time which means all the money in your savings account is losing value every month.
Buying silver (and other precious metals including gold) protects your money from this devaluation of currency and is financial insurance against out-of-control governments.
Reason #3: The Price of Silver Rises During Recessions
Another great reason why you should include some silver into your portfolio is that historically speaking; the price of silver rises during recessions. During that same period, the bull markets with stocks ended, and the bear market came with force.
If you haven't been an active investor for a while, you may not have noticed the 2008 recession.
This happened when I was in high school so I was not concerned with financial markets. When I began researching and learning more about the Global Financial Crisis of 2008 (GFE) I was blown away by what happened.
The ramifications of government intervention are still being felt today.
Reason #4: Silver Is Not As Risky As Gold
Between the two precious metals, silver can be less risky than buying gold. This doesn't mean it's without risk because making, or not making, any decision contains some risk.
If something like a global financial collapse were to happen silver prices may rise more quickly than gold due to industrial demand.
Electric vehicles, solar panels, and many other products in the industrial sector would push silver global demand higher than gold. Seeing how there is a large push for going green and industrial demand for solar panels is rising, the mining industry will be a good investment.
Related reading: 9 Reasons Why You Should Invest In Gold
Reason #5: Silver Is Used In Many Products (not only a precious metal)
Silver is used in making many different products.
Some examples are jewelry, silverware and electronics. All of these things make silver an industrial metal that can give you financial insurance against economic uncertainty.
Again, as the stock market takes a hit, other investments like gold and silver become really good investments.
Reason #6: Silver Can Be Stored For Long Periods of Time With Little To No Loss Of Value
Store your physical silver in a place away from you (if you have a lot) or at home in a secure location like a fireproof safe behind a deadbolt.
There is always a risk when you hold physical silver. You’ll want to take precautions to protect any physical precious metals you own.
Let’s just say I have my 12 gauge right next to my safe should the occasion call.
Reason #7: Silver Has Been Around For A Long Time
Silver has been around for a long time.
Silver has played an important role as money. Precious metals cannot be printed at will such as fiat currency. Many people will continue to flock and buy physical silver due to its rich history and because it is a liquid investment.
Reason #8: There Are Many Ways To Buy It
A perk about silver is that it's easy to store. Some common options include owning physical coins, bars, and paper certificates. If you don't want any of these items; there are also electronic forms such as ETFs or online wallets which can be bought and sold virtually.
Whether you buy silver stocks or silver bullion you will be able to add silver investment into your portfolio.
Reason #9: Silver Is Less Expensive Than Gold
The silver price is much lower than gold. Gold is more expensive because it's more rare than silver.
You can buy one ounce of silver bullion for less than $30. And the more silver you buy the lower the price will be.
Compare this with gold that is over $1800 per ounce.
When silver first interested me I bought one singular ounce when I was young.
I remember looking obsessively at silver prices afterward and learning everything I could about if it’s a safe haven investment, the global silver supply and a lot about why the silver price rises.
Once I put a little money into precious metals I became fascinated with everything about them.
Reason #10: Silver Is Accessible To Everyone
Silver is accessible to virtually everyone. There are many different forms to invest in all precious metals. You can buy an ounce of silver for less than $30.
Reason #11: Silver Has A Higher Return Than Gold In A Recession
During times of recession, silver has a higher return than gold.
Reason #12: Silver Offers Anonymity
You can begin to exit the fiat system by buying silver. There is no formal record of your transaction such as a credit card or bank account.
The less the government knows, the more freedom you have.
Cons of Investing In Silver
- It is not as liquid. Since you can't use silver bars or coins to make purchases, silver is not an immediately liquid asset. You can go to your local coin shop or pawn shop and convert it to dollars if you’d like.
- There is a danger of theft. Another con of silver is that there's a danger of theft when it comes to owning physical items. If you invest in this type of metal, be sure to take care and store your purchases well so they don't get stolen.
- High demand means higher premiums. If silver demand is high, then you will probably have to pay a higher premium when buying coins or bars. This makes the investment less attractive compared to if it were lower which would result in better deals and prices.
- Interest rate. Lastly, silver will not pay out any interest so it's important to keep this in mind. This means that the only way to make money is by selling items for more than what you originally paid, which can be difficult depending on current market prices and demand. Look at silver as an insurance policy against the government printing presses.
How Do I Invest In Silver?
Investing in silver can be done in many different ways.
- You can buy physical bars or coins
- Invest through ETFs
- Take out paper certificates that represent the metals you own electronically
- Buy a stock of a mining company
- Buy a stock of a royalty company
You can also purchase silver bars and coins through the U.S. Mint. Only buy silver from a reputable dealer. There are scams out there so do your research before spending any money.
Should I invest in silver?
That's a great question to ask. Only you can decide if silver is the right investment for you. If you are looking for a way out of the fiat system and want to own real money. Silver may be a good buy for you.
How much money should I invest in silver?
If this is your first time investing; stick with small amounts until you're confident about what's going on and how everything works.
The more comfortable one feels making these types of decisions, the better they'll do long-term since their confidence will increase which means fewer mistakes overall.
Only invest in something you really understand. Don’t buy on hype or because everyone is doing it.
When should I sell my silver coins or bars?
I see silver as real money. I don’t plan on selling my silver ever. Unless there is an economic collapse I cannot see any reason to sell my silver.
You may find yourself in a situation where you need fiat money for whatever reason. This would be the only reason to sell silver.
Are there risks of investing in silver?
There are always risks associated with investments since they can go up as well as down over time. Do your research before spending any money and make sure you have a very good budget in place before investing in anything.
Keep reading: 20 Budgeting Tips for Beginners