🔵 Why I Went ALL IN On Silver!

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Why I went all in on silver over the 2 years... I'm going to be focusing on the difference between a passive and active investment, the gold to silver ratio, paper silver (known as ETFs), and finally, what happens to silver during recessions.

I'll explain why I've been buying physical silver for almost a decade now and why it's many investors' metal of choice.

I talk about personal finance and economics, as well as how to become more financially successful through very simple & straightforward investing practises…

Let's start by distinguishing the two variations with investments that financial experts don’t tend to talk about. These are passive vs active investments and you've got to understand the difference between these two if you want to be a successful investor.

The first type of investment is an active investment:
A great example of this would be a business, real estate or stocks & shares.
When you buy a house for example, you are buying the land and house which is an asset that creates money every single month because you can receive rent. Let's just say you purchase a house for €200,000 and you receive €1,000 every month in rent which you use to pay off the mortgage

After 20 years, you will have received enough income from the house to have paid off the mortgage, it will have also gone up in value due to inflation AND the tenant will have paid down the debt owed, not you. So this type of investment pays you twice. This is why I say that real estate is the best active investment you can ever make. But real estate has a few challenges in that it isn't movable, and takes a long time to sell and is very sensitive to high unemployment and interest rate rises leading to housing crashes.

Compare this to gold or silver which is a passive investment:
Gold & Silver is simply a store of wealth, where it doesn't give you any return annually and you don't receive rent or dividends like a house, stock or business would pay you.

After 20 years, you will have received no income from your metal, and you didn’t earn any rent or dividends on it either.
But you don’t buy metals for an income, you buy them as a way to preserve your wealth.

Gold to Silver Ratio
Now we're going to talk about the gold to silver ratio. This basically means how many ounces of silver it costs at today's price to buy 1 oz of gold

In 1970, it took 18 oz of silver to buy one ounce of gold.

In the year 2000, it took 55 oz of silver to buy one ounce of gold

So what is it today in 2020? It takes 115 oz of silver to buy 1 oz of gold

The average over the last 20 years has been about 70 oz of Silver to 1 oz of gold

So this may leave you wondering what’s going on right now with Silver? If the average has always been around 70:1, then why is it 115:1 right now and why was it 125:1 back in March?

I believe that silver is massively undervalued right now with the current economic situation. People are rushing to gold just like they always have done during times of financial uncertainty and silver simply hasn't caught up yet, but it will eventually.

The thing to understand about Silver is that it’s mainly an industrial metal, so the metal gets used more and more every year, in line with technological & industrial advancements. Combined with this, it's also getting more and more expensive to mine it now.

It costs some mining companies more to mine the silver than it sells for
Coins and bars are less than 20% of annual silver usage vs industrial/commercial/jewellery usage being 80%.

And it's just not cost-effective to try to recycle and scrape out the small amounts of silver from consumer electronics for example, so a lot of the silver ends up in landfill never to be seen again.

In Great Britain over the last hundreds of years, Silver has always been a store of wealth for the rich. You only have to visit any stately home, to see the sheer scale of silver collections in every single one of these houses. The other reason the rich would keep silver like this is because they could and often DID sell it in times of financial difficulty

Moving on to ETFs then...
One thing to be careful of is that when you see many experts talking about Gold & Silver, they are actually talking about gold and silver ETFs (which stands for exchange traded fund).

DISCLAIMER
This video is for entertainment purposes ONLY.
I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.

Видео 🔵 Why I Went ALL IN On Silver! канала Neil McCoy-Ward