Now, I don’t mean to come off as self-deprecating, but, as a millennial, I am genuinely interested in learning some investment advice from generations a bit more experienced than I.
The general consensus is that millennials are impatient, demanding instant gratification. We are skeptical of the stock market, while simultaneously overly optimistic about our ability to “strike it rich” someday in some whirlwind fashion.
These characteristics have a significant impact on the way we invest (or don’t invest). I wrote a blog a few months ago about millennial investing, but I wanted to delve deeper into the psyche of the group of individuals born between 1980-2000 and see what wisdom can be imparted from the seasoned investor (don’t worry; I’m not calling you old!).
When I think of investing in precious metals, I worry about market volatility. I’m not the most trusting of what I can’t predict, and the stock market and investing in commodities are tough reads for me at times. How do you, the experienced, weather the storm of uncertain market conditions? Do you have a concerns of your own? What would you say to someone like me who is skeptical of investing?
I have had an email address since I was 10. I basically grew up with the Internet, though it was dial up for many years. I am accustomed to the microwave life in many respects. If I want something (within reason), it typically can be readily obtained fairly quickly. When I think of investing in precious metals, however, the impatient millennial in me wants to see gains quickly. But, that isn’t the way it works in our industry.
How would you counsel me to stay in the market, knowing precious metals operate as a hedge and diversification method with the ability for gains when holding long? And, how would you explain the importance of investing in precious metals, knowing their value isn’t derived from the likelihood of a jackpot, lotto winning scenario?
Lastly, I’m curious what made you become an investor in precious metals. Obviously there was a catalyst which created in you the desire to turn your fiat currency to true money. What was it? Perhaps it will work for me! I’d love to hear your thoughts, this week!
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Happy Stacking!
-J
Leon says
You could break out the PM charts & graphs & read all the opinions . Let me tell you the 1 truth regarding PM. WHAT GOES DOWN WILL GO UP ! I personally am loving , loving did I mention loving the low price . I’m just pissed that I’m retired & can’t buy as much as I use to . I have tried to get my PM budget higher but my boss won’t let me . I’m bigger then her but she’s meaner ! Wish all a blessed Christmas ! Peace , Love & Happiness
Leon Tucker / Ky
Tim says
I agree, mostly, with Eric and with Bill. Take your free 401k money, start saving early, and save until it hurts. I think it was Dave Ramsey who said spend every dime. His point being to intentionally direct your money. This includes saving and investing. A less well known personal financial advisor said it this way, there is always someone who makes less than you. His point was that regardless of the size of your paycheck, your lifestyle choices can change to allow for you to save.
With respect to investing, diversity is the key. How you spread your money is based on your risk tolerance and your age. There are lots of web tools available to help you out. Early in your investing life stock picking is contrary to a diversified plan. Stay with mutual funds – low cost index funds (much research supports this).
Frankly, until you get your investing feet really wet, you shouldn’t worry about speculation in commodities (precious metals and such) unless you just enjoy collecting coins.
I’m just now, at 58, starting to stack. Probably a little late, but it just wasn’t high on my investment strategy list. Other bases are now covered, so silver (seeming to be a bargain at current prices) was next on the list.
MintErrors.org says
I tell everyone, take out what you can afford, and if you don’t immediately see it, you won’t think about it. There are a few different avenues to approach. You can buy stock that historically has the ability to split and give you more stocks. Some companies do that every once in a while, others never do it. The market is pretty strong but it does take some time to get a decent stockpile in revenue and socks in general. Cramer typically spits out some decent information on stock types to watch out for. he can at least can educate you on the trends, and signs to watch out for when it comes to investing in stocks that you pick. If it is through a company and they offer a stock investing plan, you will have to choose the best risk option. Typically I tell people if they want their money safe, go no higher than a medium style risk. Low risk is better, but money can move slower.
It takes a lot of research and time to try to figure out if start up companies are worth an investment. No one can predict the future. They could boom and bust. many older companies have shuttered their doors over the past few years, many of the stores closing simply state that retail sales in mall are dying. The rent is too high forcing product prices higher. Online sales like the big box vendors out there have a lower price, less overhead in personnel and square footage needed. Its a matter of time before retail giants lose ground to online marketing.
If I had a chance to do it all over again, I would have simply stocked silver and let it ride. It really depends on the amount you want to invest on a monthly basis. I think one roll of silver a month is pretty good, which nets 12 rolls (x20 rounds) for a year. Its a precious metal in hand, without risk of a crashing stock or company and the potential insider threat issues.
In most cases, I feel people who ask for advice pretty much know what they want to do with their investment money. Each has its pro’s and cons. In the end you need to trust your on “gut” and instinct and take that leap. I wish you all the best.
ProvidentMetals.com says
Wow! Thanks for the thoughtful advice!
Eric says
-J
I agree with Bill, you need to be in the stock market. Based solely on the principle of compounding money. Not only is it the only real game in town, at the tune of 50+ trillion dollars, it’s regulated and gives you the best opportunity to acquire wealth, short of starting your own business, which has much more risk.
Investing and saving are deeply personal things. Only you can decide what is appropriate for you, based on your comfort level and risk tolerance. Even if you hire a financial advisor, the final decision is always yours.
I’m a serial investor, I invest in everything, except bonds. I’m sure I have a risk tolerance, it’s just I haven’t reached it. That doesn’t mean I’m not cautious, which is why I’m currently in cash in my stock portfolio.
You invest in precious metals, but think the market is rigged. You’re concerned about market volatility… get used to it, or get out, it never goes away. It doesn’t matter what market you’re in, there’s volatility in every market.
Full disclosure: I have a daughter from a previous who’s smack dab in the middle of the Millennials… she was born in 1990. This is the advice I gave her.
I don’t care what you invest in or how you save… just do it and do it until it hurts. If you look at your pay stub or statement and you don’t cringe… you’re not investing or saving enough. Forget the stuff you’re taught in school, 15% is not enough… unless you cringe, you’re not investing or saving enough. If you’re not willing to sacrifice now and for the rest of your life, you can only look forward to Social Security, which my generation will probably use up, so you’ll have nothing but what you invest or save… sorry, it is what it is. If your employer has a 401k that has a matching amount you need to contribute… the match is free money. You’re certifiable stupid if you pass on free money, no one can argue that point! Whatever you do, please don’t count on an inheritance from me… I invested and saved my entire life and I intend to spend it all before I die! I wish you the best of luck and profitability!
Here’s a link to an article on CNBC that you may find helpful:
http://www.cnbc.com/2017/02/22/heres-how-much-money-you-should-have-saved-at-every-age.html
To your last question of why I invest in precious metals… I always have, just not at the volume I do now. It was last year that I told my wife everything we have is electronic… our bank accounts, savings, investments… everything was online. I wanted to buy a friend’s son a graduation present of a stock certificate… no one even offers that anymore. I told my wife enough is enough, I want to own something tangible that I can touch, feel, has weight… and of course is shiny. I bought my friend’s son a gold coin… from Provident Metals.
All the best,
Eric
Bill says
Dear J.
I started investing in 1991, the year I got married. I did it to save for a house and retirement. That’s the same with many people, I suspect. I also wanted to “own” some stock, some companies. So I personally bought a few shares of JNJ and Merck and a couple of other stocks way back then.
The go-go 1990s and even through the ups and downs of the 2000s to today, we have consistently put money into the stock market. We are much better off for it, having been able to get a mortgage at less than thirty-years duration (and with seven years of waiting before buying a house), and IRAs that should have us sitting well once we are in our sixties.
The reason I suggest the stock market is because companies produce something–dividends as well as whatever they make or service they supply. Precious metals and some other commodities do not produce anything. A buyer of precious metals is entirely dependent on price movement to make a gain. That buyer therefore has to watch the precious metals market (not hard for you as it’s your business), to know when to sell for a profit and when to buy so that later you can sell for a profit again.
The production (dividends) of stocks is what means you don’t have to worry as much about the price of your companies’ shares. And if you reinvest those dividends in the company, you will have more shares producing more dividends, and on it grows. You wish to pick wisely, whether buying individual stocks or mutual funds so that you get something that produces dividends, and hopefully companies with a history of growing their dividends. As an example, my $442 investment in 10 shares of JNJ in 1992 is now worth around $8,000 with an over-$200 spin-off (reinvested) of dividends last year.
I don’t aim to be condescending in this explanation as you may be aware of all this already. I use this to explain why precious metals are a hedge, as you say, and as such have to hedge AGAINST something. But I also say this to make the point about speculation and investment. Precious metals are a speculative buy–I would have thought, twenty-five years ago, that a $20 trillion US federal debt would have triggered inflation and a move to gold by now (and a much higher price for it in 1992 dollars than we see today). That was my speculation, though not acted upon. But investing means considering the value of your holding in terms of what it can produce and how long it can do that, as well as grow its business.
So precious metals, as the investment minds generally say, should be 5%-10% of your savings as “investment.” The rest should be divided as your tolerance sees fit into small-, mid- and large-cap stocks as well as established international and emerging market stocks. Depending on when you expect to retire and if you have a pension through work, something like 30%-40% should be in bonds. On bonds, consider corporate as well as US and international.
That should take up a long weekend to work out.
And I got into silver last year as it was our silver anniversary year. And as the coins were so pretty, I bought a few more and probably will again. If only the US Mint had a 2 ounce coin.
Best of luck.
Bill
ProvidentMetals.com says
Bill,
That is great advice, thanks!
ProvidentMetals.com says
This is also great advice. Thank you!