Photo of a human molarThe last time I sold any of my gold and silver assets, I was happy to do so. Don’t get me wrong, I would much rather put gold Canadian Maple Leafs and ten ounce silver bars into my safe rather than take them out, but there is definitely a comforting feeling knowing that you have wealth on hand when you need it, and gold coins and silver bars are definitely wealth. Perhaps the reason I found more gold coins and silver bars in my safe than I was expecting, is exactly the reason saving in gold and silver happens to work so well for my wife and me.

More Than I Thought
My wife’s tooth was hurting. I knew that the pain would translate it’s way into a dentist bill, and I was right. My wife doesn’t like dentists, but she needed to go. I had prepared myself for the worst case scenario, and was expecting a $2000 to $3000 bill. Perhaps I should have been a dentist instead of a writer, because after her initial consultation we were presented with a two-part treatment plan that had a price tag of $5000 – per treatment! The situation surrounding here dentist visit made timing imperative. She was in pain, and her dentist could get her in early next week. There wasn’t time to save up a few thousand dollars, and putting of the treatment to find a less expensive dentist was not an option, either. I had promised my wife that whenever she wanted to go see the dentist, there would be enough in the safe to pay for it, and fortunately, I was right.

We Had The Savings Because We Didn’t Spend The Savings
Because I work in the precious metals arena, I have some unique opportunities. Sometimes a client will liquidate an interesting piece, and I’ll buy it. Sometimes I see silver or gold dip substantially in price, and my wife and I will seize the opportunity to add some silver American Eagles or silver Morgan Dollars or fractional gold Canadian Maple Leafs to our modest little stash. Somehow, taking delivery of gold and silver coins and bars, and then opening up the vault to find some room for the new treasure seems to be a lot more satisfying for me and my wife than depositing a check into a savings account does. Also, since it takes a series of efforts to both buy gold and silver coins and then liquidate them for cash when you need to make a purchase in cash, these transactions get a lot of scrutiny. For instance, when there is a few extra dollars left over after paying the months bills, I can go shopping for some silver bars or small gold coins, and then tuck them quietly away and forget about them. It’s kind of like getting to shop for savings, rather than just deposit savings, and for some reason I like this option better.

A credit card being swiped through a terminalPart one of “The Last Time I Sold Gold And Silver” left off with my wife and me sitting in the dentist’s office mulling over a two-part $10,000 plan of treatment proposal. $10,000 is a lot of money. $5000.00 is a lot money. If I had to write a check for the bill, or much worse yet, swipe a credit card to pay for the treatment, it would take only moments to check the account balances to see what I could or couldn’t cover. When you save in metals such as silver Peace Dollars, or Morgan Dollars, or Canadian Maple Leaf gold coins, things are a little different. For instance, I remember specifically some of my $20 Liberty gold coins and what I paid for them. I can picture the $20 Saint-Gaudens coins I have purchased, and I can kind of remember what we paid for those. All in all I knew there was more than enough in the safe to have my wife taken care of, but as far as knowing how much is in the safe dollar-wise on a day to day basis, I have no idea. And that is a good thing.

If You Don’t Spend It, You Still Have It
I remember as a child hearing my parents talk about money. They were a responsible pair. They always seemed to be stashing a dollar away here, two away there. They would look at their statements together. They would celebrate a little when the savings account hit $5000. They would plan and budget on now to make that $5000 grow to $6000. I remember when my parents bought a conversion van to haul me and my brothers and sisters around in. The budget was $10,000. Because $10,000 was what they had in the bank. When they bought the van, they wrote a check. Overnight, the money had left the savings account, and the van was now in the driveway. My wife and I, as I said, do things a little differently, I won’t say it is right or wrong, just that it works for us. The last time we bought a vehicle, we didn’t buy it for cash. We didn’t get a loan. We didn’t get the nicest vehicle that we could comfortably afford. What we did do, was sell a vehicle we owned outright, added two weeks worth of paychecks to that amount, and then went shopping. We could have pulled gold coins or silver bars out of the safe and bought something a little newer or a little flashier, but we both agreed we would rather have gold Canadian Maple Leaf coins and Silver American Eagles in our possession that were headed up in value, rather than a nice SUV in the driveway that was losing value. We ended up with a very nice SUV that my wife says is her favorite vehicle ever. Perhaps if we had cash in the bank, it would no longer be there. It can be too easy to look at a $10,000 savings account and justify taking a couple thousand dollars to put towards a new vehicle. Once you take it out for one thing, it can become too easy to go back again and again to the account for things you “need” until there is very little left.

Graph Showing The Market Crash Of 1987
The Market Crash Of 1987 Decimated Retirement Plans

I veered a little off of the topic as I digressed into the time my parents bought a van, and how they would save in cash deposited in a banking account. The fact of the matter is that not everyone is a “saver”, and some people are savers, but they have never found a way to save that works for them. To be quite upfront with you, I was not great at saving money on my own. If the money was taken out of my paychecks, I could amass a balance in an investment account, and then it seemed that every five years or so some financial calamity would come along and and all of the sudden the bonds and mutual funds I had been directed into would take a nasty hit and my investments didn’t look so smart. Worse yet, because these investment / retirement accounts could not be accessed easily, quickly, or without penalties, when I needed an unexpected large amount of money for an emergency (medical, etc) I would have to turn to a credit card which would only compound the costs I was facing with interest or charges of some sort. On the other hand, my silver bars and silver Peace Dollars and Morgan Silver Dollars are always on hand to easily be turned into cash or a cashiers check in order to pay the bills. I also very much like the fact that once I liquidate Silver American Eagles or Gold Canadian Maple Leafs to pay a bill, the bill is paid in full and can be forgotten, very unlike paying bills with a credit card.

Spend To Save, Instead Of Save To Spend
People love to spend money, and in our society, spending is openly encouraged while saving is somewhat frowned upon. Being frugal is no longer popular, being a conspicuous consumer is now the norm. Our society revolves around immediate gratification and possessions, big houses, fancy cars, and flashy clothes. The days of not wanting to appear flashy or ostentatious have been replaced by the social need to appear successful and self gratified. For example, when I sold cars several years ago, it was not uncommon to watch people finance a $30,000 vehicle, and then finance another $3000 worth of wheels and tires for their new car for the “look at me” factor. Oftentimes, the new wheels and tires compromised the performance and safety of the vehicle because the vehicle was just not engineered for larger wheels and wider tires. Sometimes customers would come in with an insurance check to replace a crashed vehicle, and by the time the customer chose a new vehicle and added accessories to it, they ended up owing much more on the new vehicle than they did the old one, compounding the car accident with poor financial choices. Perhaps spending some of the insurance check to purchase silver bars or silver Peace Dollars makes more sense than buying a rear spoiler for your trunk or a $600 roof rack… I have never seen a roof rack or trunk spoiler double in value.

I’m not a natural born saver. It was also hard for me to save money because every time I amassed a tidy sum, I wanted to spend it. Also, it seems that when you have money in the bank, things that aren’t really important somehow become important. For instance, if you have $5000 in the bank in the air conditioning your car breaks fixing the air conditioning somehow becomes an emergency. However, if you only have $50.00 in the bank then having air conditioning in your car for the 5 mile drive to work doesn’t seem so important. See what I mean? To take this a little further, imagine having to open up a safe and take out silver Peace Dollars and Morgan silver dollars and gold Canadian Maple Leafs and liquidate them for cash in order to pay you have the air conditioning fixed. Somehow, when you have to choose between gold and silver and air conditioning the summer doesn’t seem so long.

Gerald Celente Knows
I remember listening to radio interview with Gerald Celente, Founder of Trends Research, and he was describing a time in his life where he had financial difficulty. He did have gold however. In the interview he talked about a deal he made with some of his friends. He went to his friends and asked to borrow the funds he needed. He offered his gold as collateral and told his friends that if he could not pay them back they could keep the gold, if the gold turned out to be worth less than the loan he would pay the difference. If the gold turned out to be worth more than the loan, they could keep it. All of his friends accepted his proposition. In time Gerald was able to go back and repurchase all of his gold coins and gold bars from his friends.  As you can imagine Gerald would have had a much harder time convincing his friends to loan him money using difficult to access funds like a 401 K or IRA for collateral. Think about it. Would you rather have silver American Eagle’s and gold bars as collateral, or would you rather have someone’s 401 K statement? I will take gold coin and Morgan Silver Dollars any day over someone else’s paper statement. Wouldn’t you?

I know we have strayed along way from my wife and her dentist appointment, but in part five of “The Last Time I Sold Gold” available here, I will rejoin the story about paying the dentist and I will tell you exactly how I turned silver American Eagle’s and Morgan Silver Dollars into cold hard cash for the dentist.