steveoc
26th May 2010, 12:05 AM
Anecdotal twiddle from today ....
I generally keep my cash reserves low. I used to spend a ridiculous amount of each paycheck on stupid things, and eventually I worked out that the best way to manage things is to invest a certain amount of each paycheck first, pay my bills next, and then leave a little bit left over to live off each week.
Investing - in the form of sticking cash away, never worked, because it was too easy to crack open the piggy bank if the night was going well, and enjoy the proceeds. PM's on the other hand, well you cant easily raid the PM stash at 2am and trade it in for something worthless or consumable.
That has gone well since I took up stashing PMs. My little nest egg has grown ridiculously well, and I have put away far more than I have ever been able to in the past with other forms of investment. They are beautiful and shiny, and they make you feel a real sense of achievement. Not something you can easily cash in without serious forethought.
Anyway .... this week, a whole lot of things have come up, Ive put down for some big new purchases that are coming in soon, paid out some unexpected bills, and also reached into my wallet to help out a friend in dire need.
And then some more bills hit ... and now, I find that I have something less than $20 actual cash to get me through to next week. Whilst I CAN live on $20 for a week, its not ideal. Just means I have to crawl into the corner and not eat much for a week !
Well, thats silly I thought - I have enough PM's in my stash to afford a trip to the fricken moon, so why should I go without food for 5 days ?
Reluctantly, I went through my stash and picked out the worst 10 oz of silver rounds that I could muster, and went for a pensive stroll down to the coin shop / exchange jeweller. Ive NEVER sold any PM's before, so I felt like a complete dag going in there to trade in some dirty old ounces of silver, rather than walk in as a buyer. Was expecting half of them to be rejected, or undergo the third degree about where I got them, or fill in 10 pages of paperwork explaining why I was holding fine silver. In the best case, I was expecting a huge haggling session as they might offer half of spot for the ounces. Sort of like going into a pawnbroker and trying desperately to trade in your old guitar for a fair price.
No problems - friendly staff, she looked at the coins quickly carefully, filled in a small form, and then reached into the cash draw with a smile and counted out the money "There you go Sir .. spot price today is $21.8 (AUD), we are buying at $21.5, so we are happy to offer you $215 for these ... is that OK ?"
That equates to a USD spot price of around $18 - so yeah, of course Im happy with that.
They didn't even weigh them or test them in any way - she held each one for feel and read the label.If it says "one troy ounce .999 fine silver" on the label, then its good enough. Honest money for honest people ! I love it.
Didnt have to queue up, didnt have to sign any form, didnt have to show ID ... so much better than going to a bank. Not to mention I made profit on those 10 over what I paid for them. And I love the way that when selling PM's - as the holder of the PM, you are the one with the negotiating power, not the buyer. "we are happy to offer you $215 for these .. is that OK?". Imagine a Bank asking you if their offer on your paper investment you are cashing in is OK by you ? .. bah, that will never happen.
So there you go. Moral of the story for me - is that having never actually sold any PMs ever, I have always had a fear in the back of my mind somewhere that trading ounces of PMs in "times of need" may not be that simple. Whilst I HATE being in this situation, albeit temporarily for a few days .... I am really glad that I did it, because now I know for a fact that these little shiny things have a real power and value of their own.
If you have always hoarded, and never want to sell - at least go through the exersize of selling a small amount at least once, so you can feel super comfortable with the process should you ever need to do it in the future.
In fact, I cannot think of a single thing in this world that you can sell easily quickly for cash without any hassle for a fair non negotiable price that you expect up front, except for PMs.
I generally keep my cash reserves low. I used to spend a ridiculous amount of each paycheck on stupid things, and eventually I worked out that the best way to manage things is to invest a certain amount of each paycheck first, pay my bills next, and then leave a little bit left over to live off each week.
Investing - in the form of sticking cash away, never worked, because it was too easy to crack open the piggy bank if the night was going well, and enjoy the proceeds. PM's on the other hand, well you cant easily raid the PM stash at 2am and trade it in for something worthless or consumable.
That has gone well since I took up stashing PMs. My little nest egg has grown ridiculously well, and I have put away far more than I have ever been able to in the past with other forms of investment. They are beautiful and shiny, and they make you feel a real sense of achievement. Not something you can easily cash in without serious forethought.
Anyway .... this week, a whole lot of things have come up, Ive put down for some big new purchases that are coming in soon, paid out some unexpected bills, and also reached into my wallet to help out a friend in dire need.
And then some more bills hit ... and now, I find that I have something less than $20 actual cash to get me through to next week. Whilst I CAN live on $20 for a week, its not ideal. Just means I have to crawl into the corner and not eat much for a week !
Well, thats silly I thought - I have enough PM's in my stash to afford a trip to the fricken moon, so why should I go without food for 5 days ?
Reluctantly, I went through my stash and picked out the worst 10 oz of silver rounds that I could muster, and went for a pensive stroll down to the coin shop / exchange jeweller. Ive NEVER sold any PM's before, so I felt like a complete dag going in there to trade in some dirty old ounces of silver, rather than walk in as a buyer. Was expecting half of them to be rejected, or undergo the third degree about where I got them, or fill in 10 pages of paperwork explaining why I was holding fine silver. In the best case, I was expecting a huge haggling session as they might offer half of spot for the ounces. Sort of like going into a pawnbroker and trying desperately to trade in your old guitar for a fair price.
No problems - friendly staff, she looked at the coins quickly carefully, filled in a small form, and then reached into the cash draw with a smile and counted out the money "There you go Sir .. spot price today is $21.8 (AUD), we are buying at $21.5, so we are happy to offer you $215 for these ... is that OK ?"
That equates to a USD spot price of around $18 - so yeah, of course Im happy with that.
They didn't even weigh them or test them in any way - she held each one for feel and read the label.If it says "one troy ounce .999 fine silver" on the label, then its good enough. Honest money for honest people ! I love it.
Didnt have to queue up, didnt have to sign any form, didnt have to show ID ... so much better than going to a bank. Not to mention I made profit on those 10 over what I paid for them. And I love the way that when selling PM's - as the holder of the PM, you are the one with the negotiating power, not the buyer. "we are happy to offer you $215 for these .. is that OK?". Imagine a Bank asking you if their offer on your paper investment you are cashing in is OK by you ? .. bah, that will never happen.
So there you go. Moral of the story for me - is that having never actually sold any PMs ever, I have always had a fear in the back of my mind somewhere that trading ounces of PMs in "times of need" may not be that simple. Whilst I HATE being in this situation, albeit temporarily for a few days .... I am really glad that I did it, because now I know for a fact that these little shiny things have a real power and value of their own.
If you have always hoarded, and never want to sell - at least go through the exersize of selling a small amount at least once, so you can feel super comfortable with the process should you ever need to do it in the future.
In fact, I cannot think of a single thing in this world that you can sell easily quickly for cash without any hassle for a fair non negotiable price that you expect up front, except for PMs.