All right. Welcome back to the deep dive. We're
diving into something, uh, you know, pretty interesting
today. I think we'll be talking about silver
IRAs. Okay. So if you're out there and you're
thinking about, okay, you know, I've got my,
you know, 401k, maybe you've got a Roth IRA,
you know, some of the usual retirement vehicles,
you might be thinking, Hey, what else, what else
is out there? Right. And, you know, we've been
digging into this article. It's called top reasons
to invest in silver IRA. benefits, written by
Doug Young. Yeah, Doug Young. And we're going
to be looking at what are the real advantages?
Are there any downsides? Are there considerations
to a silver IRA? Sure. And just to get started,
one of the things that I find interesting about
this whole concept is just the idea that you
can actually hold the asset. You know, it's something
you can actually physically have. It's funny,
you know, because I think about this a lot because
we're so, you know, we're in this digital world.
We see numbers on a screen, but, you know, to
actually be able to hold something, you know,
like a silver coin or a silver bar, you know,
it does give you a different feeling of security.
Yeah, I mean, it's kind of like that bedrock,
you know, feeling. Right. You know, one of the
things that the article talks about that I think
is really important is that, you know, with a
stock, for example, you know, a company can go
under and that stock can be worthless. Worthless,
gone, poof, happens all the time. But with silver,
it's like there's always going to be a value
to that silver because there's always a demand
for it. Right. It has that intrinsic value just
because of what it is. Right. And they were talking
about you know, all the different uses, you know,
in dust freely, you know, in jewelry, you know,
even in the medical field, you know, silver is
used. Electronics. I mean, it's in everything.
Yeah. So there's just this, you know, constant
underlying demand for it that gives it a baseline.
And it's a real thing. You know, it's not just,
you know, numbers on a computer. Yeah. It's a
physical thing that has real world applications
that you can hold. OK. So another big topic that
we need to dig into here. Doug Young talks about
this a lot. It's this whole idea of silver as
a hedge against inflation. Inflation hedge. As
a silent wealth killer. Silent wealth killer.
Exactly. Can you explain that a little bit? What
is it about silver that makes it a good hedge
against inflation? Well inflation is essentially,
you know the the decreasing value of your dollars
over time Okay, you know a dollar today is not
worth the same thing as a dollar was 20 years
ago And so what precious metals like silver?
Have done is that they've historically moved
in the opposite direction of paper money during
inflationary periods Okay, when the value of
your currency decreases something with intrinsic
worth, like silver, becomes more valuable in
comparison. They move kind of inverse to each
other. I see, I see. You know, you see your currency
going down, but silver's going up. OK. It's a
good hedge. Yeah, against that. OK, so the article
gives this great example. OK. And they say, OK,
so let's say inflation is running at 3%. 3 %
a year. 3 % a year. So your money that you have
in cash. Right. is losing 3 % of its buying power
every single year. Exactly. And that's a huge
problem a lot of people don't realize. You know,
inflation is sneaky. It's a silent killer. That's
what they call it. A silent killer. But they
said, OK, well, during that same period, let's
say silver goes up by 5%. Oh, OK. So you're not
only keeping pace with inflation, you're actually
getting ahead. You're actually making money.
So I mean it's a great way to protect your wealth
Yeah, I mean that that sounds that sounds pretty
good and it's not just about protecting wealth.
I think that's an important point Yeah, it's
about actually potentially growing your wealth.
Okay, because we've seen times when precious
metals have outpaced inflation Yeah, you know
by a significant margin, you know think about
the 1970s, you know, you had a really inflationary
period. Yeah silver did very very well during
that time. Okay, so Let's kind of shift gears
a little bit and talk about you know, just a
core principle of investing. Okay. You know,
and that's diversification. Diversification.
So how does a silver IRA fit into that whole
concept of spreading your investments around
to, you know, reduce risk? Well, diversification
is kinda like, you know, imagine your portfolios
like a table. and all the legs are made out of
the same material. So let's say it's all stocks
and bonds. If that material weakens, the whole
table could collapse. So with diversification,
you want to have different materials for your
table legs. So you want to have stocks, you want
to have bonds, you might want to have real estate,
and you might want to have precious metals like
silver. Because silver often moves inversely
to the stock market. So it's kind of like that
seesaw effect. Yeah, it's like a seesaw. And
the market goes down. Silver goes up. Silver
might go up. So it kind of provides that. It
gives you that balance. That balance. To your
portfolio. Yeah. And it helps to cushion against
those big swings that you can see in the market.
So especially for people who are heavily invested
in stocks. Yeah. Or bonds. Or bonds. This could
really be a good way to diversify and balance
out that portfolio. You kind of give yourself
that extra protection. Yeah, to kind of give
yourself a little bit of a cushion against those
market swings. OK, great. Let's talk about taxes,
because everybody wants to know about the tax
advantages. Oh, yeah. So the article talks about
how silver IRAs offer similar tax advantages
to traditional and Roth IRAs. Right. So can you
walk us through what the differences are and
what the benefits are of each? Sure. So with
a traditional silver IRA, you contribute pre
-tax dollars. OK. And the advantage there is
that those contributions could be tax deductible,
which would lower your taxable income. So that's
a great benefit. But the trade -off is that when
you withdraw the money in retirement, you'll
be taxed on it as income. OK. So you're basically
Kicking the can down the road. You're deferring
your taxes deferring your taxes until later Okay,
but it makes sense for people who think they'll
be in a lower tax bracket in retirement Okay,
so if you think you're gonna be making less money
when you're retired Yeah, then it might make
sense to go ahead and pay the taxes later the
taxes later The article gives an example You
know if you're contributing say seven thousand
dollars a year seven thousand a year and that's
tax deductible That could be some pretty significant
tax savings. It could be, depending on your tax
bracket, obviously. Right, right. But yeah, it's
a significant amount of money that you could
be saving. Yeah, and then you could reinvest
that money or whatever. Exactly. OK. So then
the flip side of that is the Roth Silver IRA.
The Roth, yeah. And that's where the tax treatment's
reversed. Exactly. So with the Roth, you contribute
money that you've already paid taxes on. OK.
It's post -tax income. The big advantage there
is that your investments grow tax -free. And
when you withdraw them in retirement, you don't
pay any taxes. So it's all tax -free. So you
know if you think you're going to be in a higher
tax bracket in retirement. Yeah, if you think
you're going to be making more money, then the
Roth makes more sense. That makes more sense.
Because you're paying the taxes now while you're
in that lower bracket, and then you're getting
all that growth tax -free. OK, so it's a decision
you have to make. based on whether you think
you're going to be making more money. More money
later or more money now? Later or now. Yeah.
OK, cool. Let's talk about the industrial applications.
OK. Because silver is not just a pretty metal,
you know. It's not just something to look at.
It actually has. It's used in all sorts of things.
Real industrial uses. Real world uses. So what
are some of those? Well, I mean, you think about
the electronics we use every day. Silver's in
there, solar panels, medical devices. It's a
critical component in so many different industries.
And the technology is just, you know, advancing
so rapidly. Yeah. And it seems like it's only
going to use more silver, you know? Yeah, the
demand's only going up. They talk about electric
vehicles. They're electric vehicles. How much
silver is going into, you know, these new types
of... Way more than a regular car. Really? Oh,
yeah. Electric vehicles use a ton of silver.
Huh. I didn't realize that. Yeah, because of
the batteries and all the electronics. So yeah,
so I mean, if that's the case, then it seems
like the demand is only going to increase. Exactly.
And that's a good thing for investors. And that
should drive the price up. It should. OK. So
that's good news. Potentially. Potentially, yeah.
We always have to say potentially right. Right,
right, of course, of course. So the article also
has a link to a video that talks about some of
the new technological developments. Yeah, I saw
that. That was a good video. Yeah, and how they're
impacting silver prices. It really highlights
the point that silver is not just, you know...
a shiny thing to look at. It's actually being
used in the real world. Yeah, it's got practical
applications. Real, practical applications, and
that's driving demand. Okay, so we've looked
at the good stuff. The good stuff. The upside.
The upsides. But you know, like with any investment,
there's also potential downsides. Of course.
There's always risks. So what are some of those
considerations that people need to be thinking
about? Well, I mean, the first one that the article
mentions is volatility. Volatility. You know,
silver prices can fluctuate quite a bit. And
that can be a little scary for some people. It
can be. It's not for the faint of heart. So what
are some of the things that can cause those fluctuations?
I mean, a lot of things. Market sentiment. You
know, if people are feeling bullish or bearish
on silver, industrial demand. If demand goes
up, prices go up. Geopolitical events, wars and
things like that, can affect silver prices. So
there's a lot of different factors that can move
the needle. So you're saying you shouldn't put
all your eggs in the silver basket. Exactly.
Don't put all your eggs in one basket. Diversify.
Diversify. That's the key to investing. And the
article mentions that beyond just the price of
silver itself, there's also the bigger market
volatility. Right, the economy as a whole. The
economy as a whole. If we go into a recession,
that's gonna affect silver prices. So even though
it's a hedge against inflation, it's still subject
to those... To the overall market forces. To
the overall market conditions. Let's talk about
something that might seem a little bit daunting
to some people. Okay, and that's the IRS rules
and regulations the IRS Everybody's favorite,
you know and compliance. Yeah and Potential penalties
right because you know, it's a retirement account,
right? So there's certain rules that you have
to follow. Yes Uncle Sam wants his cut. Yeah
So what what are some of the things that people
need to be aware of? Well, the biggest one is
the type and purity of silver. Okay that you
can hold in these accounts The IRS is very specific
about that. So I can't just go to a pawn shop
and buy some silver? You can't just go to a coin
shop and buy any old silver coin. It has to meet
certain standards. OK, so what are those standards?
Well, typically it has to be 99 .9 % pure, which
is often called fine silver. So you have to make
sure that the silver you're buying meets those
IRS requirements. And if it doesn't, what happens?
Well, you could face penalties. You could have
to pay taxes on early withdrawals. You could
even have your entire IRA disqualified. Oh, wow.
OK, so. It's important to work with a reputable
custodian. A custodian. Yeah. A custodian. A
custodian is basically a financial institution
that specializes in holding these types of assets.
And they'll make sure that you're in compliance
with all the IRS rules. So they're kind of like
the the middle man They're the middle man between
you and the IRS between you and the IRS and they'll
make sure that everything's done correctly Okay,
that makes sense Another thing that the article
mentions is the the cost of storage and insurance.
Yeah Because you know, it's physical silver physical
silver got to keep it somewhere It's got to go
somewhere safe, right? You got to keep it in
a vault, right? I ensure it So those are additional
costs. Those are additional costs that you have
to factor in. That you have to factor into your
return. Exactly. So it's not just the cost of
the silver itself. Yeah. It's the cost of storing
it and insuring it. So that can eat into your
profits. It can. It's a cost of doing business.
OK. And then the last thing I think that we need
to touch on is the liquidity. Liquidity. You
know, the article talks about how selling physical
silver. Yeah. Might not be as easy. It's not
as easy as selling stocks. As selling Stocks
or bonds? Yeah, because you have to find a buyer.
Uh -huh. You have to make sure that the silver
is authentic. Yeah. You have to make sure it's
the right purity. Right. Right. It's a little
bit more complicated. So it takes more time and
effort. It can. It can take more time and effort.
They did give a solution for that. They did.
What was that? They said you should work with
a company that has a buyback program. Okay, so
that can help. to simplify things? It can. It
can make it a lot easier. If you need to sell
your silver. Exactly. OK, great. So the article
has this really helpful section at the end where
they answer some frequently asked questions.
Yeah, I thought that was a good section. Yeah,
so I think it would be good to kind of go through
those and just, you know. Yeah, let's hit some
of the highlights. Hit some of the highlights.
So the first one is, how is the value of silver
determined? Well, it's determined by supply and
demand. OK. Just like anything else. Just like
anything else. But there's a lot of factors that
go into that. You know, industrial usage. Yeah.
Investor sentiment. Yeah. Geopolitical events.
You know, the trading activity on commodity exchanges.
OK. All of those things can affect the price
of silver. OK. And then another question that
they answer is, can I transfer funds from an
existing IRA into a silver IRA? Yes, you can.
You can do what's called a rollover or a transfer.
OK. And that allows you to move funds from your
current retirement accounts into a silver IRA
without triggering any taxes. OK, that's good.
Yeah. You don't have to pay taxes just to move
the money. Right. But it's important to work
with a silver IRA company and a custodian to
make sure that everything's done correctly. OK,
so you need professional help. You need professional
help. Don't try to do this yourself. OK, good
advice. Then they talk about the specific types
of silver bullion that are allowed. Yeah. What
are those? So the IRS has these purity requirements.
Yeah. Typically it has to be 99 .9 % pure. And
some popular examples are American silver eagles,
Canadian silver maple leafs, silver bars from
accredited refiners. OK. So there are a lot of
different options out there, but you just have
to make sure that they meet the IRS standards.
Right, right. OK. Then they have a question.
Can I hold other precious metals besides silver
in a silver IRA? You can, so the name silver
IRA is kind of misleading because you can actually
hold other precious metals as well. You can hold
gold, you can hold platinum, you can hold palladium.
Wow, okay, so you can have a mixed bag. You can
have a diversified precious metals portfolio.
Within that IRA. Within that IRA. Okay, that's
good to know. Then they talk about early withdrawals.
Early withdrawals, yeah. You know, are there
penalties for taking money out? Yes, sir are
before retirement age just like with a regular
IRA Okay, if you take money out before you're
59 and a half, you're gonna pay a 10 % penalty.
Okay Plus you're gonna have to pay taxes on the
money. So it's not a good idea to take money
out early. But there are some exceptions, right?
There are some exceptions, like for a first -time
home purchase, or for certain medical expenses.
So there are some reasons why you might be able
to take money out early without penalty. Okay,
so you need to know the rules. Know the rules.
Yeah, okay, and then the last question that they
answer is what's the difference between a silver
IRA and a gold IRA? Well, the obvious difference
is the metal. One holds gold, but they both offer
similar tax benefits, and they both provide diversification,
but the market dynamics are different. Silver
and gold, they tend to move in the same direction,
but they don't always move in the same way. So
you know you have to decide which one is right
for you based on your investment goals and your
risk tolerance. OK, so to kind of sum it all
up, What are the key takeaways from this article?
So I think the main takeaway is that silver IRAs
can be a great way to diversify your portfolio
and hedge against inflation. They offer tax benefits
and they give you exposure to a tangible asset
that has real -world applications. But you have
to be aware of the risks. The volatility, the
IRS rules. The storage costs. Storage costs,
liquidity issues. So it's not a slam dunk. It's
something that you have to carefully consider
and do your research on. And I think one thing
to keep in mind is that Doug Young, who wrote
this article. He's got over 20 years of experience.
He's been around the block. In the financial
market. He's not just some guy who just started
investing yesterday. Right. He's got a lot of
credibility. Yeah. So I think that lends some
credibility to the information that he's providing.
Absolutely. So as you're out there listening,
thinking about your financial future. Thinking
about all the different options that are available.
Yeah. You know, we just want to leave you with
this thought, you know, given all of the economic
uncertainty. The uncertainty in the world right
now. And, you know, the rapid changes in technology.
Right. You know, how might the long -term value
of something like silver? Something tangible.
A tangible asset. Right. How might that fit into
your financial plan? It's a question worth asking.
It's a question worth asking. It's something
to think about. And that's what we do here on
The Deep Dive. Yeah. We get you thinking. Get
you thinking. So thanks for joining us and we'll
see you next time. See ya. Bye.