Mr. Money Pants
The Silver Lining in Silver Investments
Silver is like gold’s little brother. No one pays much attention to him. Gold is attractive, desirable, and much more expensive. The price of gold can be volatile, and it makes for an exciting investment.
Aside from use in jewelry and a few electrical components, though, gold has minimal industrial use. In fact, gold’s only true value is that people like it. There’s already far more gold sitting in vaults than could ever be used.
Silver has much more practical use. Over 40% of the demand for silver is for industrial applications. Silver is used in electrical applications because it’s the industrial metal with the lowest electrical resistance. Silver also has anti-bacterial properties and is used in the medical field.
Silver can be a good investment, too. Silver has been used as a form of money and wealth storage for over 4,000 years.
The price of silver is a function of supply and demand, as well as speculation. This is true for most commodities. Silver also serves as an excellent hedge against inflation.
Consider these options for investing in silver:
- Silver bars. Silver bars can be purchased in several sizes. They are sold in troy ounces and the common weights are 1 ounce, 5 ounces, 10 ounces, 100 ounces, and 1000 ounces. The larger the bar, the lower the cost per ounce. Bars can be purchased online and at retail outlets.
- Silver doesn’t have as many storage limitations as gold. This form of investment also doesn’t yield any interest.
- In some European countries, silver bars can even be bought and sold at most large banks.
- Exchange traded funds (ETFs). This permits the investor to own shares in a trust that actually buys and holds silver. You can avoid worrying about storage or insurance. The largest silver ETF is iShares Silver Trust.
- Silver stocks. Stocks can be purchased in related activities. Mining stocks are one such example. While most investments related to silver rely entirely on the current price, silver stocks are more independent of prices. This is a relatively conservative investment.
- Keep in mind that silver mining companies also mine other metals found along with silver. These commonly include zinc, copper, and lead.
- Options and futures. If you have an interest in derivatives, you can use them with silver to obtain greater leverage. It isn’t necessary to worry about storage. The risk is high, but the potential payoff is high, too.
- Silver mutual funds. There are mutual funds that invest in silver, silver stocks, and other investments. Some specialize in multiple precious metals. These mutual funds can vary dramatically with regards to risk and volatility, depending on the types of investments.
- Silver medallions and coins. Coins are inexpensive in most cases and can be converted into cash quite easily. The cost per unit of weight is greater than that of silver bars. Medallions can range greatly in price and aren’t as easily converted to cash.
If you’d like to invest in precious metals, silver is one of your most lucrative options. The price of gold is almost entirely dependent on the desire of investors to own it, whereas silver has actual industrial applications. When companies need more silver, the price tends to rise.
Silver is much less expensive than gold, permitting small investors to make purchases of the actual metal more feasible. Like gold, there are also numerous other options for investing in silver.
The average investor is familiar with stocks and mutual funds. Exchange traded funds are simply a way to own silver without the burden of acquisition, storage, insurance, and disposal.
Investing in silver can be fun and profitable! With so many applications, you should be able to see some nice long-term growth.
The Emergency Fund Re-examined
Practically every financial planning and personal finance book you’ll ever read advises you to start an emergency savings fund, or rainy day fund as some call it, to meet unexpected financial emergencies, as one of the first steps you should take to build wealth.
Some advise a fixed dollar amount, such as $500 or $1,000, be set aside for financial emergencies. I’ve seen recommendations ranging from $500 to $12,000.
Others recommend saving a certain number of month’s income for financial emergencies, such as three month’s income, six month’s income, or as much as twelve month’s income.
Still others suggest setting aside a certain number of month’s living expenses, such as three month’s living expenses, six month’s living expenses, or even twelve month’s living expenses, to meet unexpected financial emergencies.
So…
With all this conflicting financial advice…
How much money should you save for financial emergencies?
Well…
According to Wallace D. Wattles, author of “The Science of Getting Rich”…
If you truly want to be wealthy…
That’s right…
Absolutely none!
In an article titled “The Constructive Attitude”, Wallace D. Wattles wrote:
“… do not lay up for a rainy day. If you live right, think right, and work right, there will never be a rainy day for you. If you lay up for a rainy day, you will impress the sub-conscious with the fear of a rainy day; with the idea of weakness and incompetence, and so you will cause the rainy day to come.”
If you stop and think about it…
He’s absolutely right!
I don’t know about you, but every single time in my life I attempted to build up an emergency savings fund, guess what happened?
That’s right…
A financial emergency would pop up out of nowhere and wipe out my emergency savings fund leaving me right back where I started…
Broke!
Sound familiar?
Until I read those words by Wallace D. Wattles, it never dawned on me that, by my own thoughts and actions, I might be creating the very thing I was most trying to avoid.
Now…
Does this mean you shouldn’t keep any extra money at all?
Not at all…
In the same article, Wallace D. Wattles wrote:
“… provide a surplus, so that you may take advantage of any new opportunity…”
Once I began to build up a surplus to take advantage of new financial opportunities, instead of saving for financial emergencies, guess what happened then?
That’s right…
Lo and behold…
New financial opportunities started popping up all over the place…
And…
Interestingly enough…
The financial emergencies disappeared!
You see…
There’s a Creative Power within you that makes your life into the exact image of that to which you focus your attention.
If you focus your attention on financial emergencies, by thinking about them, by preparing for them, by saving for them, that’s exactly what you’ll have in your life…
Financial emergencies.
On the other hand…
If you focus your attention on financial opportunities, by thinking about them, by preparing for them, by providing for them, that’s exactly what you’ll have in your life…
Financial opportunities!
Building an Emergency Fund Needs to Be Part of Your Financial Planning
None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. Building an emergency fund is healthy for your financial well-being, since you’re rarely given advance notice of a setback or an accident which will keep you out of work for an extended period. It is also a safety net that can save you from bankruptcy or severe financial hardships in the event of an unexpected change in your income or expenses.
Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit and end up with payments on groceries you bought two years back on credit, with a further 10-18% interest on it.
Saving your money in a savings account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments (yes, this includes a 401-K loan). If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.
Success at building an emergency fund depends on consistency of saving money on a regular basis, and resisting the urge to dip into this rainy day fund for non-emergencies. This money should be kept separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point. A substantial part of this emergency fund account should be invested in low risk funds. This ensures that your investment does not lose its value in case you need the money. Also, it should be extremely liquid, to give you access to the cash easily and quickly if you need it.
The size of the special savings account will depend on your personal situation. People often keep three to six months’ salary in the reserve. But you will have to decide on an appropriate amount based factors such as your dependents and fixed monthly expenses.
If you are single with no obligations, and have a reliable support system of friends or relatives during a financial crisis, you might not need a substantial amount stashed in this fund. This is opposed to someone who needs to pay nursing costs for his aging parents and supporting a young family. The more people you support, the more likely you are to have unexpected or unplanned costs.
While making a decision about an emergency fund, you should also take into account the degree of difficulty you’d have in finding a new job if you lost the present one. In case of a two-income household, the contribution of both parties should be weighed while calculating how much you should keep aside.
You may not be able to gather your emergency fund money together at once. Treat it as a financial goal and add to your piggy over time. If you get a tax refund, put it in your special rainy day account. Maybe a part of the bonus at work!
4 Money Saving Tips For Every Homeowner
Losing weight. Finding a new job. Spending more time with the family. Every year add new new goals to our plate. Why not make saving money one of them?
If you’re a homeowner, there are many ways you can cut costs and still live comfortably. The following tips will help lead you to financial success. Here a 4 money saving tips that could help you do just that.
First, set a budget. Figure out exactly how much you spend on the upkeep of your home. Compare each month’s expenses with the previous month’s to get a better idea of how much to budget for each necessity. Then, see what costs you can cut. Once you set a budget, stick to it.
Save energy. You might be losing a substantial amount of energy dollars during the winter and summer because of air leaks. By caulking, sealing and weather-stripping all cracks and openings, you can save 10 percent or more on your energy bill.
Also, look into replacing older appliances with newer, more energy-efficient alternatives. Your light bulbs can make a difference, too. Fluorescent bulbs are four times more energy efficient than incandescent bulbs.
Consider refinancing. Shop around to see if you can replace your existing home loan with one that has a lower interest rate. You can easily save hundreds of dollars each month by refinancing your home.
3 Ways to Save Money on Car Insurance
3 Ways to Save Money on Car Insurance
On the never ending quest to save more money this thought always creeps into the back of your mind twice a year. Is the gecko right. Could I possibly save anymore more on my car insurance? Yeah, I know you have already raised your deductible to $1,000 bucks, dropped your rental, and reduced your medical coverage. So could there be any discounts left? You can bet your bottom dollar there is (ok I may have let my southern alter ego out by accident…back in the cage he goes). The answer to the question is undoubtedly yes and yes this will most certainly take more than 15 minutes to accomplish no matter what talking lizards may say. I have 3 things that most people have yet to take advantage of to get top tier coverage at pauper’s rate. How much you ask? Let’ just say that if there is only one item in this article you are able to implement it should reduce your rate by 10% or more. I actually reduced our rate by 40% by implementing the 3 below. That’s right 40% (woot woot)! But wait there’s more, I actually added more coverage. Now, I know results may vary but try out the ideas below and feel free to comment below on your results. Come on…What you got to lose? A higher premium maybe.
- Take the National Safety Council’s Defensive Driving Course. This course can be as little as $20 bucks in most states and even if taken online is a very boring 4 hours of your life. However the payoff can be huge. Most people will see a 10% reduction on their insurance coverage that last for a minimum of 3 years. This discount is applied on top of any other discounts you may be eligible for.
- Combine your policies with your auto coverage. I personally dread shopping for insurance but endure the pain because the payoff can be huge. Multi-policy discounts can yield a whopping 30% discount. That’s right up to a 30% discount which is in addition to #1. You welcome. The catch is that it takes about an hour to get a full quote which includes you hammering away at the keyboard entering in policy data from your current policy or giving the data over the phone.
- Seek employer, school, or organization affiliation discount. Mostly everyone walks away from this one. Don’t make this mistake. Most insurance companies offer additional discounts for affiliations with colleges, professional organizations and for certain employers. It’s definitely worth the extra 3 minutes to find out which one you qualify for.
Before you begin shopping around here’s one last tip. Gather copies of your current coverage from each insurance policy you have before obtaining a quote. This will save you so a ton of time and will also ensure that you clearly understand what changes if any are going take effect with the new policies. The only question now is what areyou going to do with the savings!
Cheers to saving real money. Until next time. Mr. Money pants out (I just dropped a microphone and walked off stage)!
