How much is too much

[Lewbear]

Hi All,

Just wondering as to all your opinions...

So I'm mainly stacking as a hedge against inflation and to put aside my own pension pot for old age and as long term savings as I dont feel like relying on the one I'm currently supposedly working on by, well working! 

I'm not in a position where I'm currently picking up loads say a sovereign every other month or some 1/10 a month where possible. 

So with all this in mind and with the current price high it just got me to thinking if gold would ever get high enough in price to not warrant purchasing for the above goals, or if it would just become a matter of say purchasing smaller amounts again or saving for a bit longer with the price being relative.

Just interested in all your opinions really and if there a point or price where youd call it quits whether your goals are the same as mine or not!

[Killerzen]

I've set a personal goal for how much I'd like to accumulate over the next couple decades. Along with a regular old 401k account. I'm not the most wealthy individual and I have loads of kids. But I try for around an ounce of gold a year. If I can manage about a kilo of gold while prices aren't outrageous I think I'd be satisfied lol. Happy stacking!

[Lewbear]

49 minutes ago, Killerzen said:

I've set a personal goal for how much I'd like to accumulate over the next couple decades. Along with a regular old 401k account. I'm not the most wealthy individual and I have loads of kids. But I try for around an ounce of gold a year. If I can manage about a kilo of gold while prices aren't outrageous I think I'd be satisfied lol. Happy stacking!

Thanks for your input! Yeh maybe setting a goal is a way to go as hasn't really given myself a target amount! And I suppose that's part of the idea, what do we count as outrageous! Just buy until it's time to sell I guess!

[Prophecy]

You could say that about any investment. I remember when gold went to 360 from around 250. I remember when Apple stock went from $60 to $90. That was NUTS. Way way too high I thought after many years low.

That being said, you could set a few goals. Inbound and outbound ones. Just off the top of my head:

Are you going to set purchase goals per month or year based on weight or fiat or just when money comes free? Little and often whether price is up or down is ideal, don't chase the rises or try to catch falling knives and don't go 'all in'.

How much is too much? This is the emotional one and it's down to you knowing and trusting yourself. i.e. you might be able to afford a Sov a month, but can you? Gold/Silver will never go to zero but what if PMs massively reduced in price for a few years? (Like after 2011 i think) I'm going to chew up the saying but 'every man has a plan for what he will do in a fight, until he gets hit in the face'. Sadly, that's only one you can really learn by getting hit in the face a few times.

 

[TheMidnightGardener]

43 minutes ago, Prophecy said:

You could say that about any investment. I remember when gold went to 360 from around 250. I remember when Apple stock went from $60 to $90. That was NUTS. Way way too high I thought after many years low.

That being said, you could set a few goals. Inbound and outbound ones. Just off the top of my head:

Are you going to set purchase goals per month or year based on weight or fiat or just when money comes free? Little and often whether price is up or down is ideal, don't chase the rises or try to catch falling knives and don't go 'all in'.

How much is too much? This is the emotional one and it's down to you knowing and trusting yourself. i.e. you might be able to afford a Sov a month, but can you? Gold/Silver will never go to zero but what if PMs massively reduced in price for a few years? (Like after 2011 i think) I'm going to chew up the saying but 'every man has a plan for what he will do in a fight, until he gets hit in the face'. Sadly, that's only one you can really learn by getting hit in the face a few times.

 

Spot on info. I bought Gold at under $300/oz and it was tough to pay the $350-$400/oz a few months later. One thing I’ve learned over the years, the dollar price of Gold goes up and it goes down. I’ve stopped worrying about it many years ago. I buy when I can. Ultimately, the dollar price of Gold will be 2-3 times what it is now as the dollar continues to devalue. We just think it’s the Gold going up......

[DarkChameleon]

Imagine ic you retired today what youdneed money for, is it to add to your retirment income to have slightly better lifestyle?, i see people sell gold and silver at a set amount and rate to help take a poor pension into a fair pension...ok. soi youhave the a erage pension today what wouod it be?, now how mu h goldor silver at todays rate would make a difference?, i see the same guy every month bring in 10 krugerands, im thinking thats his pension or pension add on...so today thatwould be $20,000 a month, whichis a nice income for anyone, i dont know how muchhe used to earn or what it takes to keep his lifestyle at the present rate....but think of what it takes today to keep your home maintained, car maintained and replaced every a ount of yearsyou have before. Perhaps slightly longer as youre retired so maybe not driving to work and back every day...but if you figure out your expenses are today and your pension if it started today...and the amount you need to spend in one month at todays rate of gold and silver....buy for that amount of spending...my pension is enough by itself, which is why i dont need tosell gold or silver at a set amount..but i know things can change and so creating a buffer that is not needed todays or forseeable at my present situation, things can change i sisnt forsee, think covid andstuff when imight not be able to add to my pension but may have to withdraw some, so a bit like a 6 month saving thats not for fun money, vacations, spoil myself stuff but that severe moment or year...the great recessions of the early 20th century shouldbe taught to show you what can happen and how to get through it the best way and even have a life after....this is the amount you should save for and if you can add more is better to add more to your future self and family and not create a lifestyle so highthat your previous saving plan can no longer cover.

[KDave]

There are two ways I can think of doing it

1 - buy gold to save towards a goal - be it a new car, house, retirement, whatever you want. It has to be long term for this to work. 

2 - buy gold as part of an allocation in portfolio - personally 30% gold to 70% stock in the SIPP. 

Method 1 saving in gold to meet an end - work out how much you need for the goal measured in GBP.  Save routinely, ideally monthly cost averaging using a decided amount of savings. You are now physically prevented from buying too much gold at high prices. Instead of saying buy a sovereign or 1/10, just buy as much gold as possible with the money you save each month. When gold is low you get more gold, when price is high you get less. On average this means you avoid buying too much gold at the 'too much' point. Over time, you will also notice that you are reaching your target faster than expected, as you have been accumulating more at the lows.

Method 2 saving gold as part of an allocation in a portfolio, lets say 30% to 70% stock measured in GBP, as per my SIPP. When gold gets above 30%, I am supposed to stop buying gold and allocate to stocks until the balance is returned and vice versa. When gold falls below 30% I buy more gold etc. If both gold and stocks rise together over time, I keep buying both to maintain the ratio. There is now no point when gold is 'too much', the price does not matter only the ratio matters. This method will stop you buying too much at the highs, and will make you buy the undervalued allocation (stocks or gold) when the opportunities arise. In theory. Who knows. 

[Lewbear]

Lots of very good info and interesting points, thank you all, certainly looks like goal setting for me may be the way too go! Was worried I was going to get bit too hung up on trying to get to that fixed figure and not enjoy the fun part if the hobby but goal and amount setting seems to be a pretty key element!

[KDave]

Seems like a good shout but remember what I said is just an opinion I have no idea. What if gold crashes tomorrow and stays down for 20 years, unless you can wait that long then gold might be the wrong savings vehicle. Gold is a long term savings vehicle, it is ultimately money (for now) and not really an investment as such. 

[Roy]

8 hours ago, DarkChameleon said:

so today thatwould be $20,000 a month, whichis a nice income for anyone, i dont know how muchhe used to earn or what it takes to keep his lifestyle at the present rate....but think of what it takes today to keep your home maintained, car maintained and replaced every a ount of yearsyou have before.

Holy moly! That's why I would never retire in the States. As lovely as it is, it's too expensive.

I could, and probably will at this rate, retire comfortably on $20,000 a year in the PH.

(That's a government executive's salary)

[Pete]

If you have adequate wealth then expect the government to grab some and if you haven't got enough then the government will give you some from those that have some.

The problem is where is this crossover ?

The uber-wealthy don't worry because they have their main assets well hidden.

[Prophecy]

46 minutes ago, Roy said:

Holy moly! That's why I would never retire in the States. As lovely as it is, it's too expensive.

I could, and probably will at this rate, retire comfortably on $20,000 a year in the PH.

(That's a government executive's salary)

Well, it's not THAT expensive unless you have expensive tastes, expensive dependents and expensive health issues. Median US retirement income is around $40,000 (p/y)... 

[Roy]

3 minutes ago, Prophecy said:

Well, it's not THAT expensive unless you have expensive tastes, expensive dependents and expensive health issues. Median US retirement income is around $40,000 (p/y)... 

Really?

[Prophecy]

3 minutes ago, Roy said:

Really?

Found this. Roughly confirms. https://www.newretirement.com/retirement/average-retirement-income-2020-how-do-you-compare/

[Roy]

Ok, wow.

But: Half of all Americans age 65 or older have incomes of less than $24,224 a year

[Prophecy]

1 minute ago, Roy said:

Ok, wow.

But: Half of all Americans age 65 or older have incomes of less than $24,224 a year

Yeah, they're struggling.

[Roy]

We're all struggling, but I thought the US was the land of milk and honey?

Any US guys want to turn this around? 🤨

[Prophecy]

1 minute ago, Roy said:

We're all struggling, but I thought the US was the land of milk and honey?

Any US guys want to turn this around? 🤨

There are people who genuinely are struggling but there are A LOT of people who never learned how to manage money and blew their cash on junk to keep up with the Joneses by living paycheck to paycheck buying landfill.

[Roy]

I guess they thought the  party would never stop?

7 minutes ago, Roy said:

the land of milk and honey?

They forgot to screw the lid on tightly and it leaked away?

[Roy]

6 minutes ago, Prophecy said:

buying landfill.

great phrase! 'investing in landfill'

😄

[HGr]

I worry about how I'm going to be able to maintain my coin habit when I'm retired. 

Guess I will need to sell, so I can buy. Food and stuff will figure itself out. Probably. Ideas? 

[DarkChameleon]

2 hours ago, KDave said:

There are two ways I can think of doing it

1 - buy gold to save towards a goal - be it a new car, house, retirement, whatever you want. It has to be long term for this to work. 

2 - buy gold as part of an allocation in portfolio - personally 30% gold to 70% stock in the SIPP. 

Method 1 saving in gold to meet an end - work out how much you need for the goal measured in GBP.  Save routinely, ideally monthly cost averaging using a decided amount of savings. You are now physically prevented from buying too much gold at high prices. Instead of saying buy a sovereign or 1/10, just buy as much gold as possible with the money you save each month. When gold is low you get more gold, when price is high you get less. On average this means you avoid buying too much gold at the 'too much' point. Over time, you will also notice that you are reaching your target faster than expected, as you have been accumulating more at the lows.

Method 2 saving gold as part of an allocation in a portfolio, lets say 30% to 70% stock measured in GBP, as per my SIPP. When gold gets above 30%, I am supposed to stop buying gold and allocate to stocks until the balance is returned and vice versa. When gold falls below 30% I buy more gold etc. If both gold and stocks rise together over time, I keep buying both to maintain the ratio. There is now no point when gold is 'too much', the price does not matter only the ratio matters. This method will stop you buying too much at the highs, and will make you buy the undervalued allocation (stocks or gold) when the opportunities arise. In theory. Who knows. 

I think 30% is way too much, id say 15% comfortably and 20% high..30% is way to deep into metals.

[DarkChameleon]

2 hours ago, Lewbear said:

Lots of very good info and interesting points, thank you all, certainly looks like goal setting for me may be the way too go! Was worried I was going to get bit too hung up on trying to get to that fixed figure and not enjoy the fun part if the hobby but goal and amount setting seems to be a pretty key element!

You can enjoy collecting as well as stacking, i do, sometimes deals to buy stackables come along and so do collectable coinsand pieces...only the other week there was a silver statue of 1006 ozs, a remington 'mountain man' and sold for $23,500 and $300 shipping....figure that out for melt alone, today it would be worth $27,000 but its also a work of art.

[DarkChameleon]

1 hour ago, Roy said:

Holy moly! That's why I would never retire in the States. As lovely as it is, it's too expensive.

I could, and probably will at this rate, retire comfortably on $20,000 a year in the PH.

(That's a government executive's salary)

Its ablot of income but he lives in florida, a cheap state to live in...you dont have to live in ny city.

[DarkChameleon]

38 minutes ago, Roy said:

I guess they thought the  party would never stop?

They forgot to screw the lid on tightly and it leaked away?

The average pension is bad but doable if you move to a cheap state but theaverage50 year old in america has lessthen $50,000 put aside for their pension and a large chunk of people wheb asked how they expect to pay for their pension reply that theyll win the lottery and so many honestly believe that..like the old brits thinking they win spot the ball.