Personal Debt & Silver Bullion

[TwoBobRob]

Hi everyone.

First post, please have a virtual drink on me and I'll take this opportunity to apologise now for stupid questions....

So I'm an ordinary working bloke who's had a bad 3-4 years like so many others. I'm now drowning in personal debt and work is patchy at best. I'm struggling currently to see a way forwards - to see the wood from the trees as the saying goes.

I was chatting to a friend of mine recently who told me he was about to start buying silver bars as an investment for his future. He felt they would appreciate better than traditional savings (ISAs, bonds etc) and, perhaps more importantly they were unlikely to loose money in the long term. Better to have something than nothing, he argues.

It got me thinking. I'm in no position to save or buy anything with a view to keeping it long term. I'm firefighting on a monthly basis and am fully trapped in what I refer to as a 'credit trap' - any money I might make each month is swallowed in minimums and overdraft charges. All my traditional instincts and beliefs tell me to keep grafting and one day I'll pay that credit card off, that loan off etc.

Deep down I know this is unlikely.

Now, my (hypothetical) question to the forum is this; If I were able to scavenge £500-1000 aside by some twist of good fortune, what should I do with it? My traditional gut instinct would be to reduce the balance of my most expensive card.

My friend however, in my position, would buy silver and continue to struggle on with his personal debt as normal. This goes against my traditional (and often blinkered) view of things, but who's to say he's not right? He feels his silver may well increase in value faster than the card debt over the forthcoming years and overall, he'll do better.

I fully understand someone who is debt free having a nice little range of investments, but for someone like me this seems a little bit maverick, frivolous even....

Your opinions please.

Cheers

Rob.

[long time lurking]

If you do not own your home (no mortgage) even better if you rent ,knock the credit cards ,refuse any communication with them especially by phone , providing your debt is not massive with any single card company ( don't really mater if it is large when multiple cards are added together)

They will normally sell the debt on to a debt collection agency after a period of time ,at that point you have won as your debt (contract) was with the card company not the debt collection agency ( you did not borrow of the latter) the IMPORTANT bit is you say noting to any of them and by nothing that means not even confirming your name especially over the phone as there aim is to get a verbal agreement/contract from you stating you owe them money without that they do not have a leg to stand on.

And don`t sing for any recorded delivery`s of the post man

[Stay Beautiful]

Hi everyone.

First post, please have a virtual drink on me and I'll take this opportunity to apologise now for stupid questions....

So I'm an ordinary working bloke who's had a bad 3-4 years like so many others. I'm now drowning in personal debt and work is patchy at best. I'm struggling currently to see a way forwards - to see the wood from the trees as the saying goes.

I was chatting to a friend of mine recently who told me he was about to start buying silver bars as an investment for his future. He felt they would appreciate better than traditional savings (ISAs, bonds etc) and, perhaps more importantly they were unlikely to loose money in the long term. Better to have something than nothing, he argues.

It got me thinking. I'm in no position to save or buy anything with a view to keeping it long term. I'm firefighting on a monthly basis and am fully trapped in what I refer to as a 'credit trap' - any money I might make each month is swallowed in minimums and overdraft charges. All my traditional instincts and beliefs tell me to keep grafting and one day I'll pay that credit card off, that loan off etc.

Deep down I know this is unlikely.

Now, my (hypothetical) question to the forum is this; If I were able to scavenge £500-1000 aside by some twist of good fortune, what should I do with it? My traditional gut instinct would be to reduce the balance of my most expensive card.

My friend however, in my position, would buy silver and continue to struggle on with his personal debt as normal. This goes against my traditional (and often blinkered) view of things, but who's to say he's not right? He feels his silver may well increase in value faster than the card debt over the forthcoming years and overall, he'll do better.

I fully understand someone who is debt free having a nice little range of investments, but for someone like me this seems a little bit maverick, frivolous even....

Your opinions please.

Cheers

Rob.

Go with your own instinct and pay down your cc.

Buying physical silver is a very long term investment. The buy and sell spreads on physical silver bullion bars are huge and if you needed to sell in the not too distant future you would most likely be in for a loss.

Disclaimer:

All imho, not to be taken as investment advice.

[Asheron]

Here is what I would do..... consolidate debts into one.

Pay the interest every month like a good little debt slave.

Buy Gold and Silver bullion or coins each month from coinsinvestdirect.com

I believe the economy is going to get much worse, they will probably de-value the Euro, Dollar, and Pound eventually around 30 or 40%

So you could potentially pay of your debts in the future with the increasing value of real Money, Gold and Silver.

You need to start listening to a guy called Bob Chapman, write to him, he will respond to you.

http://theinternationalforecaster.com/Bob_Chapman

The bankers helped you get into debt, so play the game. Beat the system.

(At your own risk)

[TwoBobRob]

Interesting....

Of course this is all pie in the sky at the moment as there is no spare money of any description.

"good little debt slave" haha.... I can see I'm going to like this place.

[SuperChimp]

Interesting....

Of course this is all pie in the sky at the moment as there is no spare money of any description.

"good little debt slave" haha.... I can see I'm going to like this place.

Welcome to the site TwoBobRob

If you do want to buy silver or gold coins I would really recommend looking for a local coin/medal dealer. Try Yell.com, phone any local ones and just ask if they sell 1oz silver/gold coins. You will save a lot of money in posting and packaging. Plus, when you buy regulary from a dealer you may find he/she will give you discounts.

I believe the economy is going to get much worse, they will probably de-value the Euro, Dollar, and Pound eventually around 30 or 40%

+1 I agree completely, athough I believe this will be a slow process over 3-5 years. However, the fundamental question here is your faith in fiat currency. If, like many of the posters here, you distrust governments and fiat money then try and invest in a broad range of solid assests that would not become worthless if sterling continues to devalue.

I was chatting to a friend of mine recently who told me he was about to start buying silver bars as an investment for his future. He felt they would appreciate better than traditional savings (ISAs, bonds etc) and, perhaps more importantly they were unlikely to loose money in the long term.

They are called precious metals for a very good reason. They are finite, beautiful, valuable and the known deposits are becoming more and more difficult to obtain.

Hope this helps.

[TwoBobRob]

I would at some point like to hold some coins/bars. It makes sense to me to do so.

I own a property in France and I'm considering what to do there too. The exchange rate is in my favour if I sell now, but the prospect of that scares me as that little flat is my only asset in the whole wide world...

[Monkey]

I thought I created my own thread when I got my debts under control, but I found this post of my story

http://www.housepricecrash.co.uk/forum/index.php?showtopic=151388&st=0&p=2717314entry2717314

Over 1 year later I have 10k in my account, I live with my g/f and am enjoying having a disposible income I can enjoy, I've just booked a mini break away.

Do the hard way, you'll feel better after and you will actually learn the value of money

[paulthepunk]

+1 on the pay off more of the debt and reduce costs. Even though you could possibly gain by holding silver, it's a long term game and how much would servicing your debt swallow of those gains over whatever timescale?

The flat, do you need to own it, is it a useful commodity to you personally? If yes keep it, if not sell up and buy something else you may think will increase in value.

I think for the next few years I would only sell property for gold investment, silver is still a risk.

Good luck,

Paul.

[TwoBobRob]

Do I need to own the flat..... A very good question.

It's in Val D'Isere. I'm a snowboarder amongst other things. So on the one hand, yes it's useful to me personally, on the other it's a financial burden I could live without and just take regular package snow holidays like everyone else.

But,

It's affordable as properties go. The mortgage is reasonable and it's supplemented by income from tenants. Selling up at this point would show a loss overall but the reduction in stress for me carries a value of course.

I'm truly torn when it comes to the flat. When I bought it my plan was to keep it for the rest of my life figuring it would provide income when I'm retired and the mortgage is paid off.

With regards to soldiering on and settling my debts the hard way, that's what I've been doing for the last 20 years. I'm no stranger to going hungry and walking around in rags in order to honour my commitments. It's harder now than ever with no regular monthly income however. I've started a new business recently and if it takes off things will be ok - I am an excellent budgeter. In this short term though, it's nothing other than bloody hard.

Regarding my original question, it was slightly loaded; If I'm lucky enough to win the work I've recently quoted, then there might be £500 spare once the dust has settled.

[Stay Beautiful]

I'm now drowning in personal debt

there might be £500 spare once the dust has settled.

Your giving out mixed messages, which one is it, are you being a tad melodramatic?

[TwoBobRob]

I'm 45 years old. My melodramatic years are long behind me.

I'm sorry if I've confused the issue.

In my initial post I said "if by some twist of good fortune".

That twist of good fortune would be winning all the work I've recently quoted.

[GinAndPlatonic]

I'm 45 years old. My melodramatic years are long behind me.

I'm sorry if I've confused the issue.

In my initial post I said "if by some twist of good fortune".

That twist of good fortune would be winning all the work I've recently quoted.

Sounds like you live life on a wing and a prayer. Cannot really see anything changing for you. You say you are excellent at budgeting but the flat business is being controlled by your emotions so I really do not think that cold hard rational budgeting is your talent ...talking about silver as if it could be your salvation financially is the last thing you should be working on..

[TwoBobRob]

An interesting turn of attitude in the last couple of posts.

Whilst I don't enjoy being judged by others, especially those who don't know me, it does raise points for discussion. Exactly what internet forums are for in my opinion.

I would ask that you perhaps read my posts again. I have not said, nor expect silver to by my salvation. The little reading I've done brought me to this forum where I've asked a question based upon something a friend of mine mentioned he was going to experiment with. No more, no less.

I'm genuinely interested in the subject and would like to know more.

Gin, explain to me please your statement "the fiat business is being controlled by your emotions".

[GinAndPlatonic]

Gin, explain to me please your statement "the fiat business is being controlled by your emotions".

FLAT business..not fiat business

I own a property in France and I'm considering what to do there too. The exchange rate is in my favour if I sell now, but the prospect of that scares me as that little flat is my only asset in the whole wide world... Do you own it or have a mortgage on it..( I think someone has already asked you this)If you owe money on it, then it isnt so much an asset as maybe a liability

You go on to say you are drowning in personal debt...if so it may be wise to sell the flat, as long as you realise it may only sell at a REALISTIC price and live without any debts and start from square one and a clean sheet....it can feel very liberating to be debt free.

Edited February 22, 2012 by GinAndPlatonic

[Old Nis]

I would not sell your flat unless I was forced to do so by circumstances. I went through pretty hard times a while ago, and (fortunately) could not sell my second home. I had tenants in it, sometimes not good payers. However, now that the bad days are behind me, the house (even in this property market) is worth about £120K. I paid £37K for it. If I had put the £37000 in a building society, it would have made almost nothing. The return on capital by way of the rent is 12% p.a. There is absolutely no monetary investment which comes close. Apart from gold and silver.

As far as silver and gold is concerned, get some. A little. Don't get so much that you may be tempted to sell it. Keep it for ever. (That means, sell when you can't resist the offer price any longer, don't sell it just because it has made some money). Someone much better at investing than me, said everyone should have an ounce of gold and a pound of silver. Get a few silver coins as and when you can afford it. Just holding it in your hand will be a better motivator to get out of debt that anything else you own. It will never become worthless and if fiat money eventually does become valueless, your silver will still have real value.

Remember that TPTB are deliberately getting rid of this country's debt by inflating it away, stealing from us all. Make it work for you by trying to pay your debts back at a low rate that you can afford, while trying to make money to live comfortably. In the years to come, those debts almost certainly will seem smaller and smaller as inflation gets worse and worse. My father bought his first home for £2000, like everyone else in his generation did. The mortgage payments were very high and difficult to afford at first, and he struggled, but I remember sitting down and discussing the mortgage with him as a young teenager as he decided whether to pay off the last few payments or let the mortgage "run out" to the very end. We were discussing a total remaining debt of £125. He paid it off with money that had lost a vast amount of it's purchasing power, but which had become a trifling sum. I saw a house in the same street advertised for £1.25 million recently. The same will happen to your debts. If fiat currency's value is hyperinflated, your debts will disappear like morning mist.

One day, when we have hanged the politicians who have so thoroughly destroyed the finances of the Western world, and our children are all learning Chinese at school, gold and silver will become useless investments and can perhaps be sold. Those days are a long way ahead, and we are due for a very bumpy ride in the meantime.

(DYOD, I am not a financial adviser any more, but best of luck).

[Sheik Yabutti]

A quality post Old Nis and an interesting read.

I am in a similar situation to your father was, in that I am fast approaching having the savings to clear the remaining mortgage, but can't decide whether to do that or hang onto the savings earning negligable interest. Any views anyone?

My understaing though with hyperinflation is that your debts don't dissapear as borrowing rates are increased in line with the inflation to protect the banks from losing out.

Thanks

Sheik Yabutti

[SuperChimp]

A quality post Old Nis and an interesting read.

I am in a similar situation to your father was, in that I am fast approaching having the savings to clear the remaining mortgage, but can't decide whether to do that or hang onto the savings earning negligable interest. Any views anyone?

My understaing though with hyperinflation is that your debts don't dissapear as borrowing rates are increased in line with the inflation to protect the banks from losing out.

Thanks

Sheik Yabutti

I would not recommend paying off your mortgage if the payments are affordable as you cannot predict the future and may need the funds some time soon.

I have read about the hyperinflation periods in Weimar Germany and recently Zimbabwe and found that debts such as mortgages disappear overnight as basically the currency becomes worthless.

Fantstic post OldNis, you have summed up what I think in better ways than I could

[Old Nis]

My understaing though with hyperinflation is that your debts don't dissapear as borrowing rates are increased in line with the inflation to protect the banks from losing out.

Don't get rid of your savings in their entirety; there will be very tough times ahead very soon with commodity inflation, so some cash is vital. In hyperinflation, the inflation will always slightly be ahead of the reactive markets, so the debts will lose their value in the same way that savings will. I know this sounds a little contradictory, but the cash is not for savings, YOUR CASH IS FOR THE CRASH. When the euro - or just Greece - finally goes bust, there will be a very unpredictable and turbulent end-game. You cannot know what will be worth buying much ahead of time, but when you see what is going to hold it's value, you can pounce if you have the savings.

Three examples from the micro to the macro:-

a ) The morning of the crash, while the clods on TV are debating the future price of Greek holidays and what the New Drachma will be valued at, empty the shelves of the nearest supermarket. You should already have two weeks' worth of food in the house, but you cannot stockpile milk, bread and petrol. (Petrol goes "off" in about three months, it lacquerizes in the jerrycans). You will also see opportunity purchases such as coffee and whisky that you may not be able to use very much of (for your own consumption) but make excellent alternative "stores of value", like gold and silver, which the ordinary people will be more able or likely to buy from you.

b ) This next one may not be kind, but it's fair. There will be opportunities in the coming years to buy "distressed sales" of assets where companies go broke and there will be fire-sales of good assets. A family may have to sell up in a market where no-one is buying, or a shop have a closing-down sale when you are passing. Be the buyer. The seller will be grateful, and you will have dirt-cheap investments. Especially if the goods are suitable for arbitrage. This works at any level from a corner shop to a car dealership. That's the time to buy your house for cash or at very low debt levels.

c ) The stock-markets will tank temporarily, while the idiots who run the pension-funds all buy US Treasuries. They should be in the nearest bullion merchant, buying gold and silver. They won't be. When the price of shares in basic, very mundane companies such as Johnson & Johnson, Tesco, Boots, Shell follow the markets down, there will be a moment when people can buy these solidly-based companies for far less than their real worth. This happened in the last crash, it will happen again.

I finally got this concept firmly into my head while I was in the Army. There was a friend of mine who always had the latest stereo gear. He never spent his money on booze or cheap tat. He just saved it, and preyed on the drunks who could not manage their money properly. When they were desperate, he would always be there to buy their stuff at a rock-bottom price. He wasn't a pawnbroker either, he never sold it back to them. All he did, was save and save, and watch for opportunities.

[TwoBobRob]

Gin - Thanks for the reply. I read your post and automatically read fiat instead of flat. Probably because 'fiat' is a term I've only very recently heard of so it was fresh in my mind...

Yes there is a mortgage on the flat, around 50% of the value.

I agree, living debt free is very liberating. I was able to experience this for a few years around 03-07.

Old Nis - Cheers. If I refer back to my friend, he intends to keep his silver basically, forever. 'Bury it in the garden' to quote the man.

I can see how actually holding some coins would be a good motivator. Something tangible, something real.

[TwoBobRob]

Thought I'd bump this thread as a few months have gone by.

I've been visiting the forum regularly and reading as much as possible and I have to say, notwithstanding the issues I've already discussed here, I've fully bought into the idea that "every man should own an ounce of gold and a pound of silver" - a phrase I've come across a fair few times.

I'd also like to say thanks to the people who responded originally as it opened my eyes a bit and allowed me to approach my problems with a more open mind, which has helped for sure.

So maybe not this year, but sometime for sure I'll be the proud owner of something shiny.

Don't know what, mind.....

[sleepwello'nights]

I finally got this concept firmly into my head while I was in the Army. There was a friend of mine who always had the latest stereo gear. He never spent his money on booze or cheap tat. He just saved it, and preyed on the drunks who could not manage their money properly. When they were desperate, he would always be there to buy their stuff at a rock-bottom price. He wasn't a pawnbroker either, he never sold it back to them. All he did, was save and save, and watch for opportunities.

There's always a vulture around.

[Crashman Begins]

Don't forget, it dosent have to be a big £900.00

Purchase in 1 go.

Silver coins can be bought for 25-35 quid roughly.

Check the blog link in my signature for easy to read updates on precious metals

[TwoBobRob]

Cheers Crashman

[TwoBobRob]

So........ Nearly two years later;

How time flies...

I read and re read this thread a few time and took some action partially based on comments received.

Personal debt is now under control. My little business, now in it's third year is looking healthy.

I kept the flat in France having stumbled across an extremely reliable tenant for the last two snow seasons. I'm keeping an open mind about the future. I had a second knee surgery last year and time will tell if I'll ever snowboard again. This in turn may assist in my decision to ultimately keep or sell the flat.

I have not yet bought any PMs.

I have continued to lurk here and have found this place to be entertaining and very enlightening, so thank you for that.

Perhaps now I should be looking to buy a couple of coins....