Buying Gold And Silver With A $500 Budget

This post started with a question a reader asked wondering if $500 was enough to start trading dollars for gold or silver.  As with most questions, if one person is asking more are thinking it so here we go.  Off the bat we should realize it’s not the amount of money but the way it’s spent on gold or silver.  Many of us picture the typical precious metal investor as this wealthy investor buying huge amounts of gold and silver but this isn’t the case.   The average reader of The Prospector Site is one of many Middle Americans no longer buying “everything is fine so just keep borrowing money and voting for me” crowd.  Nurses, teachers, truck drivers, pastors, are all trading dying dollars for gold and silver most a few hundred dollars at a time.

THE $500 START:

If you are asking the same $500 question as the reader mentioned above congrats on making the first step to financial independence.  Every physical gold or silver holder started with a small purchase with only a few exceptions, I certainly started out small.  Too many Middle Class and down fail to realize the true magnitude of today’s economic situation.  I will keep this post simple by showing several $500 options not recommending one over the other.  The Prospector Site doesn’t offer pinpoint recommendations but simple provides an unbiased information source that assists you in all aspects of gold and silver.  Here are the options I use when limited to under $500.

OPTION ONE:

Physical silver is in a holding pattern because of the great spike/drop early this year.  When silver corrected this scared many new buyers away but added fuel to the fire of investors that understood the power of future silver values.  I continue to buy new silver every chance I get without hesitation. If you want to keep your $500 dollar option simple follow the plan below.

1. Twelve one ounce American Silver Eagles. ($500.00)

OPTION TWO:

I personally like option two because it divides your purchase with both gold and silver.  Many don’t realize new gold can be bought by the 1/10 ounce making it an easy investment for those on a tight budget.  The only downside is an additional premium for the fractional coin of gold.  Here is an option.

1. One 1/10 ounce Gold American Eagle coin. ($178.00)
2. Seven one ounce Silver American Eagle coins. ( $283.00)
3. One ounce silver round of your choice.   ( $38.00)

OPTION THREE:

Option three mixes a little secret most metal investors know nothing about.  Little nontraditional but well worth it.

1. One 1/10 ounce Gold American Eagle coin. ($178.00)
2. Four one ounce Silver American Eagle coins. ($162.00)
3. 3200 nickels.  ($160.00) *

*  Nickel coins now have around $.08 value of copper and nickel per coin.  Great secret for metal investors.

WHERE TO BUY:

One of my new favorite websites is Gold Shark.  Gold Shark takes all the hard work out of buying precious metals for both new and old investors.  Here is how it works.  Simple register, it’s free, then fill in the number and coin type and Gold Shark will compare something like six reputable precious metal brokers for you, that simple.

NEWS WORTHY:

MARKET WATCH:  U.S. economy’s rough patch: Here to stay?

The industry continues to suffer through its worst slump in modern times amid a wave of foreclosures, a high jobless rate and greater difficulty for home buyers to obtain loans. Economists say it could take several years for the housing market to recover.

The Federal Reserve is expected to acknowledge this week that the U.S. economy has stumbled once again, though Chairman Ben Bernanke insists it will be a short-lived condition.  Read it here.

NEWS WORTHY:

BEFORE IT’S NEWS:  The New California Gold Rush

They were no doubt inspired by the chance discovery of an 8.7 ounce nugget in May near Bakersfield, worth an impressive $10,000. Local folklore says that the Sierra’s have given up only 20% of their gold, and the remaining 80% is still up there awaiting discovery. Out of work construction workers are taking their heavy equipment up to the mountains and using it to reopen mines that have been abandoned since the 19th century.  Read it here.

Read more at The Prospector Site