SILVER v USD

[peat]

shasta why did you quote me? your post has no relation to mine.
i was giving skid some information that I thought would be useful to him.

[delinky]

Hi guys

I have the same question and would really appreciate your advice. My son has some money saved from his paper run and I've talked him out of purchasing an "apple laptop" and gave him a lesson on what the laptop would be worth in three years time. I have encouraged him to invest his money into gold or silver. My question is would the silver (1kg) still available on trademe Peat be a good buy for him or should I wait until prices come back a bit (if they do). Alternatively, should he put his money into physical gold? and if gold is the better option, could someone point me into the right direction to purchase some for him. tia

[ENP]

Delinky, what is he going to learn if you buy a gold or silver coin?

On a side note, one gold coin is over $1000 and one silver coin is $30. How much does he have saved from the paper run? Silver ferns or silver eagles (USA) coins are available to buy on trade me, NZ mint or bullion NZ.

[peat]

Hi guys

I have the same question and would really appreciate your advice. My son has some money saved from his paper run and I've talked him out of purchasing an "apple laptop" and gave him a lesson on what the laptop would be worth in three years time. I have encouraged him to invest his money into gold or silver. My question is would the silver (1kg) still available on trademe Peat be a good buy for him or should I wait until prices come back a bit (if they do). Alternatively, should he put his money into physical gold? and if gold is the better option, could someone point me into the right direction to purchase some for him. tia

there are some arguments and people suggesting that this (rise in precious metal prices) is a bubble and will deflate soon
certainly prices are high and silver is very volatile
I tend to agree with ENP that there wont be much of a learning experience. Buying physical silver or gold is really an insurance against chaos or economic collapse and young people dont need insurance as they have time on their side and can recover from any losses.
Young folk need their computers these days - they just gotta be connected, but you can do that a lot cheaper than Apple gear. find a middle ground ???

[delinky]

Thanks ENP. He's 14. Saved over $3500. He is an academic and interested in world economics and is an academic himself. I was trying an example with him whereas I had a laptop for my business on a flexiplan 3 x years ago. It was a fairly good (not the best), laptop which was $3,000. After paying for the laptop for 3 x years it ended up being worth $50. I was trying to point out that perhaps if he put his money into gold or silver - there was a higher probability that it would be worth a lot more by the time he really needed the money. ie for uni or something more substantial rather than a laptop. I thought it was a great lesson but I am absolutely open to criticisim if you think I am "over the top" with my son at this age. Sometimes we need an outside unbiased opinion.

[ENP]

Say the apple computer is $1000. If he has $500 already. Give him $500 to total $1000. But the deal is, he can only spend that money on a computer if he can create another $500 from the original $1000 to make $1500 in total.

This will teach him the different avenues to make money from money. He may see that small stocks are the way to do it, maybe a small business idea. Perhaps buying in bulk and selling off at retail price of items he has some knowledge about (skate boards for example?)

That way he will learn much much more. I think I remember reading something like this in the back of a Rich Dad Poor Dad book...?

I had a few small time businesses through school and managed to make an extra $300 from my initial $200 investment in a month or so. That taught me much more than if I had bought a silver coin...

Be creative!

[delinky]

Good points Peat. Yes, I agree that computers and kids are joined at the hip. However, he has a computer that I have supplied him. It's perfectly fine (in mummiy's opinion of course), to achieve all that he needs a computer to do. As said he is only 14 and getting up at 5.30am each morning for crap pay and spending it all on an "Apple" that will be worthless in a few years just seemed crazy to me. I guess what you are saying is he needs to make his own mistakes perhaps.?

[peat]

from business spectator
Markets are increasingly anxious that the United States, the eurozone, and Japan are now pursuing the same strategy of trying to drive their currencies lower in a bid to generate growth by making their exports more competitive. With all the major countries actively seeking to debase their currencies, gold is seen as a superior store of value.
Still, there are sceptics who argue that the surge in the gold price is excessive. They note that the gold price overreacts to even small to medium increases in demand, because the supply of gold is relatively fixed in the short term, which makes it easy for speculators to manipulate the market.
They also note that Spain and Portugal will be forced to adopt painful austerity measures – along the lines of those imposed on Greece – in exchange for receiving the $1 trillion rescue package, and this will savage their economies. As a result, the eurozone now faces the prospect of a double dip recession, which will crimp the demand for all commodities, including gold. The gold sceptics argue that while there might be a short term flight to gold in response to the current market uncertainty, the fundamental problem that Europe faces is deflation. And that’s never a benign environment for gold.


My personal opinion is that Apple gear is so overrated. PC will do everything and much cheaper.

[ENP]

Ok just saw your next post as I was writing my one.

He's doing extremely well for himself having $3500 at 14 years old. At 14, you don't really need a laptop, it's a want. When he heads off to uni (if he wants to) then it's veru useful to own a laptop. I didn't all through uni and it wasn't a problem. It's helpful though.

If I was in your situation, I'd write down a list of all the possibilities to turn that $3500 into $4000. Then all the possibilities to turn it into $5000, maybe even double it to $7000. But the time he gets to uni at 17/18 years old turning the $3500 into $7000 is realistic but still quite a challenge. I'd explore all the different ways to make money out of the money he already has. That will teach lessons that he will never forget and make him a very financially aware young guy with ideas and capital at his fingertips. Invest in his education first. The money will follow I'm sure of it.

[delinky]

ENP - again thanks. Glad I asked the question as I "thought I was totally 100% right" on this one. But the lesson here - "I think I needed to think outside the square". I may have been a bit tunnel visioned on this one.