WEBVTT 00:00:00.000 --> 00:00:03.520 Welcome to the Deep Dive. Today we're tackling 00:00:03.520 --> 00:00:05.299 something lots of you might be looking at for 00:00:05.299 --> 00:00:08.259 long term planning. The potential risks, you 00:00:08.259 --> 00:00:11.119 know, the downsides of investing in a silver 00:00:11.119 --> 00:00:13.359 IRA. Right. You're maybe considering a silver 00:00:13.359 --> 00:00:16.379 IRA perhaps to add a bit of diversification to 00:00:16.379 --> 00:00:19.160 your retirement funds. Exactly. And our aim here 00:00:19.160 --> 00:00:21.539 is to give you a really clear view of what you 00:00:21.539 --> 00:00:23.260 need to watch out for. Yeah. We're drawing on 00:00:23.260 --> 00:00:25.719 an article. What are the risks associated with 00:00:25.719 --> 00:00:28.980 investing in a silver IRA? by Doug Young. He's 00:00:28.980 --> 00:00:31.300 got a lot of background in finance, commodities, 00:00:31.539 --> 00:00:34.780 precious metals. A solid source. Definitely. 00:00:35.320 --> 00:00:38.100 And our mission really is just to pull out the 00:00:38.100 --> 00:00:40.439 key things to think about, the potential pitfalls, 00:00:40.899 --> 00:00:43.000 if you're seriously considering a silver IRA. 00:00:43.439 --> 00:00:45.600 Okay, let's jump straight in then. The first 00:00:45.600 --> 00:00:48.679 big one when you talk metals is volatility, right? 00:00:49.079 --> 00:00:51.780 Those price charts can look pretty wild. That's 00:00:51.780 --> 00:00:53.960 a good way to put it. The article really stresses 00:00:53.960 --> 00:00:57.799 that silver prices aren't stable. They can swing 00:00:57.799 --> 00:00:59.920 quite significantly. And what drives that? What 00:00:59.920 --> 00:01:02.359 makes the price move so much? Well, several things. 00:01:02.460 --> 00:01:04.239 You've got basic supply and demand, of course. 00:01:04.680 --> 00:01:07.000 A lot of silver gets used in industry, electronics, 00:01:07.140 --> 00:01:10.480 solar power. Oh, right. Industrial demand. Huge 00:01:10.480 --> 00:01:13.000 factor. Then there are the wider economic conditions, 00:01:13.180 --> 00:01:15.799 things like inflation, currency values, you know. 00:01:15.799 --> 00:01:21.680 OK. And geopolitical stuff, trade wars, political 00:01:21.680 --> 00:01:24.379 uncertainty. That can all shake things up, too. 00:01:24.489 --> 00:01:26.870 It's not just about what investors think. It's 00:01:26.870 --> 00:01:29.010 tied to real -world events. Right, so it's complex. 00:01:29.049 --> 00:01:31.609 It's not just sentiment driving it. Did the article 00:01:31.609 --> 00:01:34.049 give examples, like historical ones? It did, 00:01:34.090 --> 00:01:36.469 yeah. Looking back helps put it in perspective. 00:01:37.250 --> 00:01:39.969 Like, during the 2008 financial crisis, silver 00:01:39.969 --> 00:01:42.069 prices actually shot up. Really? Well, everything 00:01:42.069 --> 00:01:44.269 else was tanking. Yeah, investors saw it as a 00:01:44.269 --> 00:01:46.930 kind of safe haven asset then. But, and this 00:01:46.930 --> 00:01:49.189 is important, it doesn't always react that way 00:01:49.189 --> 00:01:51.049 in every downturn. OK, so it's not a guarantee, 00:01:51.129 --> 00:01:53.909 a specific reaction to that crisis. Precisely. 00:01:54.379 --> 00:01:57.579 Then fast forward to 2011. Silver hit almost 00:01:57.579 --> 00:02:01.519 $50 an ounce. Huge spike. Wow. $50. Why then? 00:02:01.780 --> 00:02:04.459 A mix of things. Economic uncertainty was high, 00:02:04.799 --> 00:02:07.219 plus strong demand, both from industry and investors. 00:02:07.780 --> 00:02:10.840 But here's the kicker. Uh -oh. By 2014, just 00:02:10.840 --> 00:02:13.379 a few years later, the price had dropped back 00:02:13.379 --> 00:02:17.719 down to around $20. $20 from almost $50? That's 00:02:17.719 --> 00:02:20.460 quite a drop. It really highlights how fast and 00:02:20.460 --> 00:02:22.800 how far the price can fall. It's a stark reminder, 00:02:23.000 --> 00:02:25.180 really. So for you, the listener, understanding 00:02:25.180 --> 00:02:28.860 that kind of potential swing is absolutely vital 00:02:28.860 --> 00:02:31.219 before you even think about putting retirement 00:02:31.219 --> 00:02:33.900 money into it. Doesn't sound like a set it and 00:02:33.900 --> 00:02:36.979 forget it kind of deal. Not really, no. Which 00:02:36.979 --> 00:02:39.240 leads us to the next risk the article flags. 00:02:40.259 --> 00:02:43.800 Counter party risk, maybe less obvious, but just 00:02:43.800 --> 00:02:46.020 as critical. Counter party risk. OK, break that 00:02:46.020 --> 00:02:47.659 down for us. What does that mean for a silver 00:02:47.659 --> 00:02:50.180 IRA? Basically, it's the risk that someone else 00:02:50.180 --> 00:02:52.500 involved doesn't hold up their end of the bargain. 00:02:52.879 --> 00:02:55.580 So maybe the silver IRA company you use, or crucially 00:02:55.580 --> 00:02:58.379 the custodian who holds the actual silver. Ah, 00:02:58.560 --> 00:03:00.439 the people actually handling your metal. Exactly. 00:03:00.699 --> 00:03:02.719 The risk they might feel to meet their obligations. 00:03:03.080 --> 00:03:05.300 The article really emphasizes checking out your 00:03:05.300 --> 00:03:07.460 custodian very carefully. And what do these custodians 00:03:07.460 --> 00:03:09.960 actually do? They're responsible for physically 00:03:09.960 --> 00:03:12.240 safekeeping your silver. Yeah. And making sure 00:03:12.240 --> 00:03:14.840 everything's compliant with IRS rules. Secure 00:03:14.840 --> 00:03:17.400 storage, handling the admin, the record keeping, 00:03:17.400 --> 00:03:20.500 reporting, all that. Right. And I bet that costs 00:03:20.500 --> 00:03:24.139 money. Fees. Oh, definitely. And storage fees 00:03:24.139 --> 00:03:26.560 can vary quite a bit between different custodians 00:03:26.560 --> 00:03:29.139 and the depositories they use. It's something 00:03:29.139 --> 00:03:31.039 the article points out. You need to compare these, 00:03:31.240 --> 00:03:33.599 understand them, because they eat into your returns. 00:03:34.400 --> 00:03:38.139 So transparency on fees is key. No nasty surprises 00:03:38.139 --> 00:03:40.639 later. Absolutely. You need to know exactly what 00:03:40.639 --> 00:03:43.159 you're paying for. When you're picking a custodian, 00:03:43.560 --> 00:03:45.879 then, what should you look for besides just, 00:03:45.879 --> 00:03:48.539 you know, being around for a while? Any specific 00:03:48.539 --> 00:03:52.520 credentials for precious metals IRAs? Well, reputation 00:03:52.520 --> 00:03:54.280 and experience specifically with these kinds 00:03:54.280 --> 00:03:56.900 of IRAs are big ones. Look for a solid track 00:03:56.900 --> 00:03:59.900 record, good reviews, and crucially, make sure 00:03:59.900 --> 00:04:02.060 they're fully up on IRS rules and have really 00:04:02.060 --> 00:04:03.800 strong security measures. Makes sense. You want 00:04:03.800 --> 00:04:06.199 your actual metal safe and you want the paperwork 00:04:06.199 --> 00:04:09.050 done right. The article mentioned IRS approved 00:04:09.050 --> 00:04:13.189 depositories, too. Yes, that's a must The IRS 00:04:13.189 --> 00:04:15.110 says the physical silver has to be stored in 00:04:15.110 --> 00:04:17.250 one of these approved places. You can't like 00:04:17.250 --> 00:04:20.250 keep it in a safe at home Okay, these are specialized 00:04:20.250 --> 00:04:23.250 secure facilities that meet very strict IRS standards 00:04:23.250 --> 00:04:26.490 for handling precious metals and retirement accounts 00:04:26.490 --> 00:04:28.990 Understanding their storage options adds another 00:04:28.990 --> 00:04:32.350 layer of security check for you, right? So we've 00:04:32.350 --> 00:04:34.670 got the price swings and the need for a trustworthy 00:04:34.670 --> 00:04:38.279 custodian What's next on the risk list from the 00:04:38.279 --> 00:04:41.160 article? Regulatory risk. The IRS, well, they 00:04:41.160 --> 00:04:43.939 have very specific rules for silver IRAs. Getting 00:04:43.939 --> 00:04:46.759 those wrong can be costly. Yeah, I can imagine. 00:04:47.060 --> 00:04:49.420 Dealing with the IRS is already complex. Adding 00:04:49.420 --> 00:04:51.839 physical metal probably doesn't simplify things. 00:04:52.060 --> 00:04:53.779 What kind of rules are we talking about? Key 00:04:53.779 --> 00:04:56.220 things include the type of silver you can hold. 00:04:56.319 --> 00:04:58.959 It's not just any old silver bar. Oh, yeah, there 00:04:58.959 --> 00:05:01.420 are strict purity standards, usually point nine 00:05:01.420 --> 00:05:04.560 nine nine fine and only certain coins like American 00:05:04.560 --> 00:05:07.459 Eagles or specific bars qualify. So investment 00:05:07.459 --> 00:05:10.040 grade stuff only. Exactly. And then there are 00:05:10.040 --> 00:05:12.339 rules about how distributions are taxed when 00:05:12.339 --> 00:05:14.660 you eventually take the silver or its cash value 00:05:14.660 --> 00:05:18.519 out in retirement. And if you mess up, if you 00:05:18.519 --> 00:05:21.279 don't follow these rules, penalties, potentially 00:05:21.279 --> 00:05:23.779 significant ones. The article gives a clear example. 00:05:24.060 --> 00:05:26.660 Say you take your silver out before you're 59 00:05:26.660 --> 00:05:29.439 and a half, you're likely looking at a 10 % early 00:05:29.439 --> 00:05:32.019 withdrawal penalty. Ouch. Plus, you'd still owe 00:05:32.019 --> 00:05:35.259 regular income tax on it. That 10 % hit could 00:05:35.259 --> 00:05:37.500 really matter, especially if you unexpectedly 00:05:37.500 --> 00:05:40.120 need those funds. Yeah, that's a double whammy. 00:05:40.579 --> 00:05:43.259 So the message is, know the rules inside out. 00:05:43.399 --> 00:05:45.439 or get help from someone who does. Definitely. 00:05:45.699 --> 00:05:48.040 The article strongly recommends staying informed, 00:05:48.300 --> 00:05:50.660 maybe talking to your silver IRA company, the 00:05:50.660 --> 00:05:53.579 custodian, or ideally a tax professional who 00:05:53.579 --> 00:05:56.259 understands this stuff. OK, so market risk, counterparty 00:05:56.259 --> 00:05:58.459 risk, regulatory risk. Got it. Is there more? 00:05:58.639 --> 00:06:00.639 Well, more main one, liquidity risk. Basically, 00:06:01.100 --> 00:06:03.199 how easy is it to turn your silver back into 00:06:03.199 --> 00:06:06.199 cash when you need or want to? Right, liquidity, 00:06:06.660 --> 00:06:08.480 always important, especially for retirement funds 00:06:08.480 --> 00:06:10.959 you might need to access eventually. How does 00:06:10.959 --> 00:06:13.060 silver stack up there? Well, the article points 00:06:13.060 --> 00:06:15.899 out that market conditions play a big role. If 00:06:15.899 --> 00:06:17.959 the economy is shaky and people are tightening 00:06:17.959 --> 00:06:21.019 belts, demand might dip, making it harder to 00:06:21.019 --> 00:06:23.500 sell quickly at the price you want. OK. On the 00:06:23.500 --> 00:06:26.199 flip side, if the economy is booming, demand 00:06:26.199 --> 00:06:28.899 might be higher, making it easier to sell. So 00:06:28.899 --> 00:06:32.339 it flows with the economy again. But selling 00:06:32.339 --> 00:06:35.860 physical metal, that sounds different than just 00:06:35.860 --> 00:06:37.939 clicking sell on the stock. Exactly. It's not 00:06:37.939 --> 00:06:40.680 like stocks or bonds. You need to find an actual 00:06:40.680 --> 00:06:43.750 buyer. who's willing to pay your price. That 00:06:43.750 --> 00:06:47.170 process can take time, especially if the market's 00:06:47.170 --> 00:06:49.790 slow. So the article really stresses you need 00:06:49.790 --> 00:06:52.310 to factor that in. Be comfortable that getting 00:06:52.310 --> 00:06:54.949 your cash out might not be instantaneous. Plan 00:06:54.949 --> 00:06:57.149 for that potential delay. OK, that's a really 00:06:57.149 --> 00:06:59.769 practical point. So we've laid out the main challenges. 00:07:00.189 --> 00:07:02.750 the price volatility, finding a good custodian, 00:07:02.790 --> 00:07:05.850 navigating IRS rules, and this liquidity issue. 00:07:06.209 --> 00:07:09.269 Does the article offer ways to, you know, manage 00:07:09.269 --> 00:07:11.410 these risks? Yes, thankfully it does. It talks 00:07:11.410 --> 00:07:13.509 about several strategies to help mitigate these 00:07:13.509 --> 00:07:15.550 potential problems. Good. Let's hear them. What 00:07:15.550 --> 00:07:18.529 can investors actually do? Okay, first up is 00:07:18.529 --> 00:07:21.430 something called dollar cost averaging. Ah, I've 00:07:21.430 --> 00:07:24.290 heard of that. Right. Instead of investing a 00:07:24.290 --> 00:07:27.050 lump sum, you invest a fixed amount of money 00:07:27.050 --> 00:07:30.850 regularly, say, every month. It doesn't matter 00:07:30.850 --> 00:07:33.430 if the price is high or low. How does that help? 00:07:33.569 --> 00:07:36.290 It smooths things out. You buy more silver when 00:07:36.290 --> 00:07:39.189 the price is low and less when it's high. Over 00:07:39.189 --> 00:07:41.829 time, it averages out your purchase price and 00:07:41.829 --> 00:07:45.069 reduce the impact of those big swings. Though, 00:07:45.470 --> 00:07:48.050 it's worth noting, if prices are generally rising, 00:07:48.430 --> 00:07:50.670 you might end up with slightly lower returns 00:07:50.670 --> 00:07:52.990 than if you'd invested at all at the start. It's 00:07:52.990 --> 00:07:55.329 a trade -off. Okay. Managing volatility. What 00:07:55.329 --> 00:07:59.209 else? Insurance. The depository where your silver 00:07:59.209 --> 00:08:01.509 is stored will usually have insurance included 00:08:01.509 --> 00:08:04.149 in their fees. Right. But the article suggests 00:08:04.149 --> 00:08:06.170 you should really check the details of that coverage. 00:08:06.410 --> 00:08:08.730 How much is covered? Yeah. Against what? You 00:08:08.730 --> 00:08:10.870 might decide you want extra insurance just for 00:08:10.870 --> 00:08:13.029 peace of mind. Especially with a physical asset. 00:08:13.350 --> 00:08:15.670 Makes sense. Definitely. Then there's a really 00:08:15.670 --> 00:08:17.649 fundamental one, diversification. Don't put all 00:08:17.649 --> 00:08:21.230 your eggs in one basket. Exactly that. The article 00:08:21.230 --> 00:08:23.769 reinforces spreading your investments across 00:08:23.769 --> 00:08:27.500 different types of assets, stocks, bonds. maybe 00:08:27.500 --> 00:08:30.019 real estate, and potentially precious metals 00:08:30.019 --> 00:08:33.480 like silver. So the silver IRA is just one piece 00:08:33.480 --> 00:08:35.919 of the puzzle. It should be, yes. If one part 00:08:35.919 --> 00:08:38.000 of your portfolio isn't doing well, the others 00:08:38.000 --> 00:08:40.620 can help balance it out. Understanding how silver 00:08:40.620 --> 00:08:44.580 tends to move relative to, say, stocks can help 00:08:44.580 --> 00:08:46.539 you see why it might diversify your holdings. 00:08:46.580 --> 00:08:49.389 Good point. What else? Due diligence. We touched 00:08:49.389 --> 00:08:51.509 on it with custodians, but it applies across 00:08:51.509 --> 00:08:53.970 the board. Given your homework. Thoroughly. Research 00:08:53.970 --> 00:08:56.210 the Silver IRA companies, compare custodians, 00:08:56.409 --> 00:08:58.590 understand the storage options, make sure everything 00:08:58.590 --> 00:09:00.870 aligns with what you need, and meets all those 00:09:00.870 --> 00:09:02.870 regulatory requirements we talked about. Don't 00:09:02.870 --> 00:09:05.970 just rely on flashy ads. Solid advice. Anything 00:09:05.970 --> 00:09:09.139 else? One final recommendation. Talk to financial 00:09:09.139 --> 00:09:12.179 experts. A qualified financial advisor can really 00:09:12.179 --> 00:09:14.159 help. How so? They can give you personalized 00:09:14.159 --> 00:09:16.740 advice based on your situation, your goals, your 00:09:16.740 --> 00:09:19.179 risk tolerance, help you fit a silver IRA, if 00:09:19.179 --> 00:09:21.620 it's right for you, into your overall plan, navigate 00:09:21.620 --> 00:09:24.960 the rules, maybe optimize performance. So getting 00:09:24.960 --> 00:09:27.240 professional advice could be really valuable 00:09:27.240 --> 00:09:29.600 here. It often is, especially with something 00:09:29.600 --> 00:09:31.539 like this that has specific rules and risks. 00:09:31.740 --> 00:09:34.159 OK, this has been incredibly helpful. So just 00:09:34.159 --> 00:09:37.000 to recap quickly for everyone listening, we've 00:09:37.000 --> 00:09:39.750 looked at the risks. Silver's price can be very 00:09:39.750 --> 00:09:42.889 volatile. Uh -huh. Big swings are possible. There's 00:09:42.889 --> 00:09:45.470 counterparty risk, so choosing a trustworthy 00:09:45.470 --> 00:09:48.230 custodian is vital. Absolutely key. Check them 00:09:48.230 --> 00:09:50.769 out thoroughly. You've got to navigate the specific 00:09:50.769 --> 00:09:54.009 IRS rules carefully to avoid penalties. Yeah. 00:09:54.269 --> 00:09:56.429 Compliance is non -negotiable. And selling your 00:09:56.429 --> 00:09:59.409 physical silver might not be instant, so there's 00:09:59.409 --> 00:10:01.669 liquidity risk to consider. Right. It can take 00:10:01.669 --> 00:10:04.110 time to convert back to cash. But we also talked 00:10:04.110 --> 00:10:07.039 about ways to manage these. Things like dollar 00:10:07.039 --> 00:10:09.759 cost averaging. To smooth out prices. Checking 00:10:09.759 --> 00:10:11.879 your insurance coverage. And maybe getting extra. 00:10:12.139 --> 00:10:14.320 Diversifying your whole retirement portfolio. 00:10:14.360 --> 00:10:17.039 Don't rely solely on silver. Doing thorough due 00:10:17.039 --> 00:10:19.220 diligence on everyone involved. Research, research, 00:10:19.220 --> 00:10:21.600 research. And potentially getting advice from 00:10:21.600 --> 00:10:23.860 a financial professional. Which can really help 00:10:23.860 --> 00:10:26.259 tailor the strategy to you. So for you listening, 00:10:26.460 --> 00:10:29.139 if you are thinking about a silver IRA, the big 00:10:29.139 --> 00:10:32.399 takeaway is to go in with your eyes open, understand 00:10:32.399 --> 00:10:35.120 these risks, have a plan to manage them. Exactly. 00:10:35.289 --> 00:10:37.429 Which brings us to a final thought for you to 00:10:37.429 --> 00:10:39.529 ponder. We know precious metals like silver can 00:10:39.529 --> 00:10:43.110 be volatile. So the question is, how might fitting 00:10:43.110 --> 00:10:45.330 silver into your broader retirement strategy 00:10:45.330 --> 00:10:47.809 actually align with your personal tolerance for 00:10:47.809 --> 00:10:50.330 risk and what you want to achieve financially 00:10:50.330 --> 00:10:52.269 long -term? Something to think about.