With inflation booming, many people are question whether “investing vs. saving” is the right use of excess cash. The investment interest in precious metals like silver has recently exploded. In the past, buying silver bars were considered “boomer investing,” but it is experiencing a serious resurgence in popularity in recent years. One of the reasons people are looking to park assets in silver bars is that the economic and global instability has recently started to grow. With interest expanding at some of the fastest rates in recent history, it only makes sense.
In times like these, saving money isn’t enough. Even if you save money and put it into a savings account, that money will sit there and become less valuable until the time comes that you need it. This is the damage that inflation does to your money. One of the safest ways to protect your money against inflationary decay is to put it into precious metals. We’re going to look at some of the reasons why owning physical silver is a wise use of your money. Certainly better than letting it sit and rot in a savings account with nearly zero percent interest.
Physical silver is money, it might not be American legal tender, but it is still one of the ultimate forms of currency. Like gold, silver has a finite supply and cannot be created out of thin air like national currency, which helps tremendously protect it from depreciation.
Silver has no counter-party risk. Unlike many other investments, you own the asset. It retains long-term use as money. Silver is still the main component in most other currencies worldwide and is more common in coinage than gold.
Buying silver bars lets you keep your assets under your control and in your hands. Unlike putting your money in a bank, which removes the assets from your physical possession. This is a rare benefit in a world increasingly run by digital profits. Physical silver allows you to carry significant value in a physical form. This also hardens your investment against fraud and theft since digital assets like cryptocurrency can be stolen. Even bank accounts can be hacked and drained, but someone would need physical access to your silver to steal it.
Most people are dismayed from investing in gold because it is so precious that an ounce can cost several thousand dollars depending on the market. At the time of writing, an ounce of silver is trading at just under $22 per ounce. This makes it far more accessible to anyone who wants to invest in bite-sized pieces. For example, buying a 1-ounce silver bar is much easier for the average person to afford than a 1-ounce bar of gold.
While being able to buy silver for less money is excellent, it also becomes much more practical to sell when the time comes. Buying an ounce of silver here and there means that you only need to find buyers for smaller amounts when you sell it. If you have a small financial need that arises, you can quickly sell small quantities of silver. Every investor should have some small size silver on hand! Liquidity alone makes it a worthwhile place to park your money.
Savings accounts give you essentially zero interest, even for relatively large balances. Still, when savings are put into silver bars, the value can be leveraged with the silver market. While you usually would be happy to simply put your money somewhere that inflation doesn’t nibble away at it, sometimes there are significant market gains during bull runs with silver. In just three years, from the 2008 low to the 2011 high, silver saw increases of more than 440%! Silver it one of the safest places for wealth long-term.
It used to be common for national governments and other entities to keep large stores of silver. That has changed over the decades. The only countries in the world that continue to warehouse physical silver are the US, Mexico, and India. While this initially happened because coinage no longer needed significant amounts of silver. Should the supply continue to evaporate, prices would spike if there were a surge in silver demand.
The most significant users of silver are industrial applications like batteries, electronics, solar panels, and more. It is used in nearly every industry in every sector, and not a day goes by that you don’t use a product with silver content. It is indispensable for modern technology. Putting your money into physical silver means you own a piece of that valuable metal that industrial sources will consistently drive up the price of. Since it is unlikely that a substitute material will be developed anytime soon, this trend will continue, making silver a beacon of consistency in investing.
There are indications that we may have already seen the best year of silver mining and production in our lifetime. Consequently, the supply will become increasingly limited as mining efforts can pull less silver out of the earth’s crust. Mining output from the ten largest silver-producing countries has been falling since 2016. Industrial and global demand is growing while production is falling, making the asset more valuable overall.
Any way you look at it, putting your money into a few small silver bars today will do far more to help protect that money’s value than putting it in any savings or checking account. It is far more likely to beat the rate of inflation many times over, but it retains the potential for a rally, where the value could spike in a shorter time.