In this post, we’re going to discuss how much silver you might want to own. Now this is a personal question and depends on many factors in my opinion, and as we’ll see there’s not a simple answer. Still, though I’ll give some factors to consider which will hopefully guide you and let you know where you are.
The first and most important factor in terms of how much silver a person should own is their current financial situation. This will be different for anyone and depend on many things like income, debt outstanding and any dependents you have like Family or even Pets.
Generally speaking, I think about 10% of your after-tax money should go to buying precious metals. This of course assumes that you have no debt. Later in the post, I’ll discuss what to if you have debt, but for now let’s dive into what putting 10% of your after-tax salary will get you silver wise and how your stack will grow.
If you are taking home $40,000 after taxes from your salary, this will allow you to spend $4000 per year on silver. Assuming the price of silver is $30 a troy ounce, you’ll be able to accumulate about 133 ounces in a given year. While this might not sound like a lot, this is a pretty conservative figure. For example, if you put 20% toward silver in a given year, you’d be able to get 266 ounces of silver. After just four years, you’d cross the 1000 ounces of silver mark and that would surely put you in the top 5% of the population in terms of silver ownership.
Many will want to go even higher and put 30, 40 or even 50 percent of their salary toward silver. I’m not necessarily against this but the fact is that’s very tough for many people to do these days. Not only has inflation hit the economy and made everyday living more expensive but people also have financial responsibilities like bills, family, pets and keeping up with their homes.
Not to mention, many, including myself like to allot some of our bullion purchases toward gold. Gold is by no means cheap and definitely takes a good chunk of the budget. That said, I believe that most people should buy both.
Don’t Get Caught Up
It’s important to stress here too that you shouldn’t get caught up in trying to buy more than you can afford. Even though our economy appears headed off a cliff and gold and silver, in my opinion, appears undervalued, the fact is one should stay within their budget when buying. There’s definitely a sense of fear right now and it’s easy to get caught up in the fear of missing out, but I personally believe, and this is just my thoughts, that silver and gold have some time before they will truly explode in price. This will give time to accumulate the metal.
What About if you have debt?
In the event you have credit card debt, student loan debt or even auto debt, I believe it’s best to try and pay those off as soon as possible. This is because a late payment or missed payment could really cost you. For example, if you have a $10,000 credit card balance, and you start missing payments you could easily pay hundreds probably thousands of dollars with late fees and interest.
I should probably separate out auto and student loan debt against credit card debt though. A car loan and student debt can take years to pay off and interest rates tend to me more lenient with these. Credit card debt, again, in my opinion is something that you should try and pay off as soon as possible.
All this said, if you are buying precious metals because you think in several months the price will skyrocket, you might be met with disappointment. While I believe the metal is undervalued, the fact is that one shouldn’t out themself in a tough financial situation due to fear of missing out.
In 2024, We’ve seen silver price hit price numbers not seen in a long time. Many think silver will continue rising throughout the summer and hit the $40 or $50 an ounce value. Already as Silver has broken into the thirty-dollar range, mainstream financial news is beginning to cover silver more. Still, more often the large financial media companies tend to cover gold more than silver. You could argue this makes sense as there is much more volume.
In general, when deciding how much silver you should buy remember to stay in budget.
This raises the question should I buy big amounts at once or dollar cost average?
Again, like many things, this tends to depend on your financial situation. However, I want to give some advantages and disadvantages of both.
If you buy in bulk, this gives you the advantage of saving money on premiums. For example, if you buy several hundred Silver American Eagles , the cost per coin is going to be less than if you bought say 10 for example. Still, it’s important to point out that the savings might not be significant for some coins or rounds. This can depend on the dealer and what discounts they are giving at the time.
A disadvantage of buying in bulk is that you might consistently be buying while silver spot price is higher. When the price drops, you won’t have money to buy. It could work the other way too.
If you decide to buy in small amounts, you get the advantage of dollar cost averaging. This ensures you’ll buy less when the price of silver is high and more when the price is low.
As an example, if I spend $1000 a month, with a price of $30 a coin, I will get about 33 coins. If the price of each silver coin drops to $20, I can get 50. Of course, if it goes up to $50, I will only buy 20 coins.
This example is somewhat extreme, but it highlights the advantages of budgeting and being able to buy in small amounts over time.
Of course, you will have to buy typically at some of the higher price points, from a premium perspective. In other words, your quantity will be in one of the lower buckets.
I myself have followed both methods in my silver stacking journey.
In conclusion, the amount of silver to own is a personal decision and one that allows financial independence.
Thanks for the time
