Pragmatist's Guide to Silver and Gold Investing

(And why it should not be seen as an "investment")
Are you someone who wishes to expand his portfolio into gold and silver and looking for a comprehensive guide to silver and gold investing? This guide may not be for you. Our Founder, Armen Rizal Rahman, explains why he sought to create a different type of online guide.

Perhaps the most common question I get about silver and gold would be: “How much money can I make from it in about (insert timeline)?”

Usually, I would explain that “silver and gold is not a short term investment”. Or maybe I would say “The bull cycle comes every 8-10 years”. Sometimes I would add, “Judging from history over the past (insert timeline) it could go up/down (insert percentage) by (insert year)”.

But when I set about doing this guide, I decided to get real. I believe that in order to be successful with silver and gold, perceptions need to change.

So here’s the truth, folks: if you’re thinking of becoming rich, silver and gold are not for you.

And my reasoning is simple: the truth is, many people are more interested in not losing wealth than they are in gaining it. That is why I will say this instead: silver and gold was never meant to be an instrument to make you rich. They exist to help prevent you from becoming poorer.

That simple shift in belief about silver and gold will save you from losing money, build a good financial foundation for yourself, and with the right strategy, create strong growth for your general wealth. And that is what this guide is all about.

Guide to Silver and Gold Investing

Silver and Gold as Commodities

To understand why silver and gold can’t make you rich, we need to look back briefly at the function of gold and silver and how it has changed over time.

In yesteryears, gold and silver were money and they were treated as money. It works just like how you would imagine it to work: you exchange several pieces of silver or gold for something that you wish to buy and use.

Today, gold and silver have become commodities. The term “money” is now often associated with fiat “dollars and cents” – your average notes/bills and coins are now the new “money”. In fact, gold and silver today get their value measured with fiat currency. People no longer talk about “How much gold and silver do I need to get me this item?” That statement is only relevant when silver and gold functions as money. Instead, people today talk about “How many dollars and cents do I need to get gold and silver?”… because silver and gold have become commodities.

Are Silver and Gold No Longer “Money”?

So has silver and gold stopped becoming money altogether? Look at it this way: a dollar bill would not generate another dollar bill unless someone offers more than a dollar for it. It may seem weird on the surface, but that’s how forex and currency exchanges work. In forex, people buy “money” for more or less than what that “money” is worth in order to sell it for more than what they bought it for.

Isn’t that how silver and gold works too? Yes! Gold and silver don’t generate its own money. But when money (as is silver and gold) functions like commodities, its value is driven simply by supply and demand. People buy silver and gold in the hopes that it becomes so sought after enough that people will be willing to pay a lot more than what they bought it for. That’s how silver and gold “makes” money.

The Unknown Future

Silver and gold bugs believe there will be a scenario where the modern financial system collapses and that silver and gold prices will punch through the roof. That’s basically how silver and gold investors can “strike it rich”.

But the truth is, no one is absolutely sure if it’s going to happen. And if it did, there are many other factors to consider as well. Cost of living, for example, could also fluctuate dramatically as well, negating much of the profit you think you might gain from silver and gold.

Becoming The Pragmatic “Gold-Bug”

If I were to equate financial solutions like insurance and savings as your basic foods, silver and gold should your vitamin supplements. It should be part of an entire system to wealth.

It’s true that history shows that silver and gold were one of the most stable forms of money in history. The truth is, though, they were not the only form of money available. Because of that, the economy of yesteryears thrived. A great system was organically in place to facilitate fair value of exchange. Hence, silver and gold should function as part of a portfolio and not the only mode of investment. Also, the economy has evolved in such a manner that we have no choice but to re-evaluate our present situation. Clinging too much on the “gold is money” past will not help us progress towards our personal goals.

At the same time, we shouldn’t disregard the significance that gold and silver have over in the economy over the years. History is a great teacher. It welcomes anyone to look back at reference material, but you need to put a lot of effort to find the right answer.

So, What Does This Guide Cover?

The guide will touch on:

  • the basics of gold and silver investing from a holistic financial portfolio standpoint
  • why they are beneficial to have
  • common mistakes that happen when people invest in gold and silver
  • details you should keep in mind before dipping your toes in
  • gold and silver’s role in the history of money
  • how silver and gold can address some real wealth problems
  • how silver and gold may cause more harm than good on a seemingly “fool-proof” wealth portfolio

Guide to Silver and Gold for the Pragmatic and… the Sceptics?

This guide is comprehensive enough to give you the confidence needed to get yourself started, and more importantly, simple enough to cover the critical basics.

What I hope, above all, is to correct certain misconceptions about gold and silver which have built up due to inaccuracies, false assumptions, or worse yet, false promise and expectations. I feel that there are just too many of it.

So, here it is; Silver Coins Singapore’s pragmatic and practical guide to gold and silver.

Click on the topic you wish to explore and we’ll take you there.

DISCLAIMER

You should be aware that in ANY type of investment, a certain risk is involved. Gold and silver investments comes in many forms and it is absolutely necessary for you to be aware of the various degrees of risks each type of investment carries, especially gold and silver trading on CFD and Forex platforms. If in doubt, talk to your personal financial advisor for clarification.