Although gold and silver have both exploded in popularity in recent years, only a small fraction of the U.S. population invests in physical metals.
So we’ve decided to try something new on the Provident Metals blog: customer stories.
Our goal for this exciting new series?
To answer questions and ease any concerns of those less familiar with precious metals , while highlighting the experiences of valued investors, who are everyday people saving for their futures.
Here is one of their stories. Florida resident Nate has been a loyal Provident Metals customer since 2010. His story highlights a common problem often encountered by novice investors.
A Cautionary Tale: Nate, Five-Year Precious Metals Investor
I first got interested in gold and silver back in 2008 when it seemed the financial system was on the verge of collapse.
My financial situation was pretty bleak. Like many Americans, I had overspent and taken on too much credit. By the middle of that year, my balances were close to exceeding my total annual salary.
Suffice it to say I was hanging on by a thread. I was faced with the prospect of bankruptcy and entered a credit counseling program sometime around the end of the year.
My first metals purchase was sometime in the middle of that year. I purchased several Peace Silver Dollars using funds from a tax refund. My next purchase was around a year later when I bought some British Sovereign coins.
This initial foray into metals investing was a brutal lesson. The dealer, who I won’t name, convinced me that I should buy collectors’ coins like the Sovereign to avoid seizure by the government. Provident Metals has some great resources on this gold confiscation myth.
Needless to say, I was pretty upset when I found out this is a myth used by shady dealers to get people to spend more on coins they’re not really interested in. My purposes were investing, not collecting. Yes, there was a confiscation back in the 1930s, but the likelihood of it occurring again is pretty low considering U.S. currency is no longer tied to gold in any way.
Anyway, following this, I discovered 90% junk silver quarters, dimes and nickels.
Again, my main purpose was investing and saving for a rainy day. As I was working through my credit issues, I wanted to better understand the underlying (external) reasons for my indebtedness. This is when I started realizing the basis of our economy, and how it relies so much on debt.
While I take personal and full responsibility for my credit issues, it was easy to see how super-low interest rates could entice someone to get in the hole.
This understanding also led me to conclude that if one person can get in that bad, just think about the impact when you start thinking about entire countries.
As we know from reading stories at Provident and elsewhere, sovereign debt issues plague many countries in the world, including the United States. The Fed, EU and other central banks have printed untold amounts of money to prop up their fragile economies.
Without the means to relocate to another country, it became apparent that a good way to shield myself from potential calamity was to own more physical gold and silver. I particularly like 90% junk quarters since they serve two purposes: one is investment of course, and the other reason is barter if the need arises.
Last but not least, buying silver and copper coins (I can rarely afford gold) has given me a sense of independence. One of the reasons my credit situation got so bad was because of a lack of savings. It can be very hard to save cash for a rainy day.
Silver coins on the other hand are easier to save — it’s harder to go spend them (right away that is), and you can be assured they will maintain and grow their value over time.
I think if more people understood silver in this respect, more would be interested.
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