When considering precious metals, most people automatically turn their attention toward gold. Silver, however, is a tried-and-true store of value and has been used for over 4,000 years as currency. There are many benefits to investing in silver, but also a few downsides, one being that silver fluctuates more than gold because it has a smaller market cap and the demand for it industrially fluctuates enormously. The benefits of silver far outweigh its cons, but only if you know how to properly invest in it. Below we detail best practices for investing in silver and why now is the time to do it.
Ways to Invest in Silver
Most investors buy silver in two forms: either physical silver or silver IRAs. Depending on what stage you are at in life or what your intentions are when investing in silver will determine which route will be best for you. When it comes to physical silver, you can opt for either bars or coins. When it comes to silver IRAs, you can back it with physical silver or silver ETFs; most opt for the former, however.
What is a Silver IRA?
When most people think of an IRA, they think of a traditional one that you open at a brokerage firm and buy paper assets such as stocks & bonds and mutual funds to back it.
When you invest in a silver IRA, it is considered a self-directed IRA which means you manage the investments instead of your financial advisor like this company explains in detail. A self-directed IRA has the same tax benefits as your traditional IRA and allows you to diversify your portfolio in ways you wouldn’t otherwise with your traditional investments. In your self-directed IRA, you can invest in a number of things such as real estate, businesses, precious metals, cattle, and other assets you most likely weren’t thinking of as value holders.
The Benefits of a Silver IRA
Precious metals in general, but, more specifically, silver is a great way to hedge your bets against inflation, unstable political climates, and economic uncertainty. When events of turmoil come into play such as war, pandemics, unfit presidents, etc, those with a solid amount of paper money turn towards assets with intrinsic value that don’t rely on fiat currency in any form. Even Russia before they invaded Ukraine bought a ton of precious metals because most countries will no longer accept their worthless currency, the ruble. This is a great example to United States citizens of what is bound to happen in the future; it is not an If, but When. No other country will want to take their inflated dollar and trade it for their own, much less a commodity that has intrinsic value.
Silver Holds its Value
In the past 100 years, silver’s value has gone up over 10x, while the US dollar’s purchasing power has gone down 90%. Which would you rather have the value of your retirement placed in, a currency that just magically printed 80% of its supply in the last 2 years, or a precious metal with intrinsic value that’s been used for thousands of years with only a finite supply? Right now is the perfect time to take your money out of a baseless fiat currency and into something of real, actualized value.
If you’re looking to invest in silver and want to store it in your own home or have direct access to it, you’ll need to buy physical silver. Although silver IRAs are backed by physical metals, the IRS guidelines state they must be stored in a depository. The reason for this is that you get taxed, like a regular IRA, when you take the funds out of the IRA. If you had it stored in your own home, the IRS wouldn’t get their “fair” share!
If you’re looking to store your money in something with intrinsic value, look towards precious metals, and don’t forget about this shiny guy! Silver is underrated and still at a great price compared to what most are paying for shares in a fiat currency-backed economy. Whether it’s physical metals or an IRA backed by them, diversifying will save you in times of distress.