Why I Prefer Buying Silver Instead of Gold

Over the past few years, I have been purchasing amounts of silver bullion. Here is why I prefer buying silver instead of gold.

I am always hesitant to use the word “investing” when discussing precious metals. I really don’t consider precious metals an investment.

They are more of an insurance against hyperinflation, a collapsing dollar, or general economic catastrophe.

Another store of value to diversify into that may or may not go up in value at some future time or in times of crisis.

Nevertheless, most people tend to view precious metals as an investment. That is fine, if you want. To keep things simple, I will use the term here.

In a previous post, I talked about the pros and cons of investing in gold and silver.

Here are the two reasons why a prefer buying silver instead of gold.

1) Costs and Value

As of this post, gold is trading at a spot price of over $1,800 per ounce. Silver is more manageable at a spot price just above $22.00 per ounce (as of this post).

Gold is over 80 times more expensive than silver at the current time.

Silver is more affordable for those with a limited or lean budget.

It wouldn’t take much to save up $25.00 a month (or a week) and be able to purchase a 1-ounce silver round. For the average person, this is quite obtainable.

Gold, on the other hand, is more expensive for the average person. It could take months or a year for the average person to save up nearly $2,000 for a 1-ounce gold coin.

You could buy fractional ounces of gold, like 1/10-, 1/4-, or 1/2-ounce gold coins. The price would be less then a full ounce, however, the premiums tend to be higher for amounts less than one ounce.

For me, silver makes more sense here in that silver bullion is more affordable in my current budget.

2) Value and Divisibility

Imagine there is an economic collapse.

And let’s say the price of silver and gold rose 5x today’s price as a result of this collapse.

You have plenty of precious metals you could trade or barter with for goods and/or services.

Let’s say you need a week’s worth of groceries.

What is better to trade? A 1-ounce silver coin or a 1-ounce gold coin?

It is far better to trade a 1-ounce silver coin worth $100 for a week’s food then a 1-ounce gold coin worth over $8,000 for a week’s food.

Even today, say you wanted to cash in for a haircut. You could sell a 1-ounce silver coin for say $20 rather then a 1-ounce gold coin for $1,700.

Silver just makes more sense since it is easily divisible in relation to its value.

Conclusion

And that is why I prefer buying silver instead of gold.

Silver is more affordable with my current budget and has good divisibility relative to its value.

Gold definitely has value. It is just not practical for me right now. However, I would not discount myself purchasing factional gold at some future time.

Right now, my primary invest vehicle is dividend growth stocks.

I’ve built a six-figure portfolio of dividend growth stocks that generates a yearly average of over $1,000 per month in dividend income!

That is passive income that I earn while I sleep!

If you are interested in beginning your own journey into dividend growth investing, personal finance, and financial freedom, check out my Getting Started page.

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So, how about the rest of you? Do you buy gold and/or silver? Let me know in the comments below!