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Years ago I began roll searching in conjunction with purchasing small lots of silver. My plan was to secure enough p.m.'s to have insurance against unexpected emergency and set aside savings to purchase a home. I stopped buying bank rolls last year and began recycling the unproductive coins into savings. With the return of a significant amount of borrowed bail money and converted coins I was able to close on a home.
Now that I'm in my new home I need to strike a balance. Save $$ for emergency fund (6 months mortgage payment ) Build a food storeage up. My challenge is with silver so low should I convert my emergency fund savings to silver to replenish what I sold off to buy house. I would have silver to sell again however the market could dip and I don't want to take another hit like I did to free up cash for closing.
Any thoughts???

This is not a direct answer to your question but here it goes......

I think part of the answer is determining how comfortable you feel with debt and being in debt and if you have a goal of being debt free. Unfortunately many people don't care how much the big ticket items of life are actually costing them but just want to know if they can afford to make the monthly payment. Likewise if you are carrying credit card debt for instance then you could be fooling yourself to think you are "making money" buying precious metals when you could take the money you might use to buy precious metals and pay off the high percentage interest rates you owe.

In my opinion there is no such thing as "good debt". You have never heard of anyone say their goal is to owe more money and pay more interest, except the federal government!

Only you can define what you think is a reasonable amount to have on hand in case of emergencies. Most folks tend to just think of medical emergencies but what about having money on hand to replace the shingles on your roof, the heating and air conditioning unit or hot water heater. How about if your car engine fails or you needs major car repairs. Stuff happens....

Also, while no one should be insurance poor, you need to make sure you are well protected with health, home, auto, regular liability as well as excess liability insurance and finally life insurance. A lot depends on if you are married and if you have kids.

Finally, owning silver and gold as a hedge is good ONLY if you use money that you honestly don't need to touch. So many folks over extend themselves buying precious metals only to find that they are forced to sell and in many cases the market is not in their favor. A long winded answer, but hopefully it helps.

I'm not a fan of keeping your emergency fund in the bank. Some is good, but there are better places to put it.

If you can, pre-pay entire mortgage payments (along with the interest), until you get six months ahead. Doing it that way saves you the interest you would normally pay on the principal, and knowing you could stop making house payments for 6 months will help you sleep at night.

When you're stocking the pantry, don't forget stuff like laundry soap, shampoo and TP.

As for silver...it's a crap shoot.

PS - Do yourself a favor and look at the amortization spreadsheet until you get disgusted with the percentage of your payment going to interest. At the start of a loan, it's pretty easy to double your principal payment, and IMHO you'd be a fool to buy $200 worth of silver if that same $200 could give you a guaranteed $400 savings in interest. Compound interest is a bitch when it's working against you.

Engineer wrote:I'm not a fan of keeping your emergency fund in the bank. Some is good, but there are better places to put it.

If you can, pre-pay entire mortgage payments (along with the interest), until you get six months ahead. Doing it that way saves you the interest you would normally pay on the principal, and knowing you could stop making house payments for 6 months will help you sleep at night.

When you're stocking the pantry, don't forget stuff like laundry soap, shampoo and TP.

As for silver...it's a crap shoot.

PS - Do yourself a favor and look at the amortization spreadsheet until you get disgusted with the percentage of your payment going to interest. At the start of a loan, it's pretty easy to double your principal payment, and IMHO you'd be a fool to buy $200 worth of silver if that same $200 could give you a guaranteed $400 savings in interest. Compound interest is a bitch when it's working against you.

Well Said!

Some great advice. I can't pre pay payments so I am looking to keep the emergency fund liquid yet invested. I am considering prepayment of taxes and homeowners insurance as a way to minimize keeping large amounts liquid cash in the bank. My loan is packaged as principal / interest only. Taxes and insurance are separate. I have began to buy daily necessity in bulk, when on sale. My thought is that non perishable necessities stored now will allow some peace of mind. Being single I only need so much. These items will be my home bank and suffice me in event of any potential period of income interruption.

wheeler_dealer wrote:I can't pre pay payments so I am looking to keep the emergency fund liquid yet invested.

There wasn't a specific option when I did it. Any time I made a payment, they sent out a new bill, rather than going by calendar month...so I paid every two weeks until the due date was six months out.

If you want to shave a few pennies off your everyday purchases then you might want to consider buying discounted gift cards.

http://www.giftcardgranny.com/
http://www.cardpool.com/buy-gift-cards
http://www.giftcards.com/discount-gift-cards

Depending on the places where you shop you can save generally between 3% to 9% off the regular retail price. The trick is not buying crap you don't need! The same can be said buying food and other items using free cents off coupons from places like http://www.coupons.com Buying anything "On Sale" is no sale at all if you don't really need it!

If you believe that every penny counts, you might want to choose his route. However like all things you have to consider the effort it takes versus the reward you receive. Do you want to hassle or is it worth it to you to save the money?

You can't eat silver and having some cash around for an emergency is always a good idea. 6 months worth of both (food and cash) is good 12 is better. Once you've a start on these you can begin to work on building the rest of the "what's needed for emergency preparation".

Priorities:

Firearms. Get a minimum to protect your family. Be able to arm two people.

Shelter. Get advice on _your_ mortgage about paying ahead. Some lenders do not allow this because it messes up the interest calculations.

Food. Do you live where you can get more, cheaply? Whole grains store well, can you have livestock? (echonet.org used to have instructions on small footprint animal hutches, see if you can find the plans.) Are you near good fishing? Hunting?

Then worry about silver.

I am one of those, like many who have posted here, that believe that debt is your enemy. Yes, compound interest is working against you. Paying down that mortgage as quickly as possible is like buying something tangible (your brick and mortar house), getting a return on your money (by saving [4% - whatever your interest rate is]) and taking money away from the banking system for them to create more debt in a fractional reserve system. I understand the itchiness to buy silver now while it's low, but like you say, strike a balance. Piece-meal your way back to some silver. Pick up a part-time job (if you don't have one already). etc. I am a little further down the line than you are and am pounding away at my mortgage. 4 years left, will have cut 15 years off my 30 year mortgage. Working 3 jobs now. And yes, still able to scrimp and save a little for a silver purchase every 2 months or so. Go check out the scrap metal portion of this fine site. I have taken up scrapping (slightly) and haven't met an aluminum can I didn't like. There are ways to generate income. You can do it.

I miss this web site. I bought my first house last fall, so I haven't been on here much or sorting coins for that matter. So many things to work on. I am still working on my mortgage buffer, still not at 3 months (first goal then 6 months). I am not planning on going more than 6 months living expenses. I figure once I get there I can start investing again.
I have noticed I am spending a lot more since I bought the house and it is harder to make my bank account grow at the same rate as before.

frugalcanuck wrote:I miss this web site. I bought my first house last fall, so I haven't been on here much or sorting coins for that matter. So many things to work on. I am still working on my mortgage buffer, still not at 3 months (first goal then 6 months). I am not planning on going more than 6 months living expenses. I figure once I get there I can start investing again.
I have noticed I am spending a lot more since I bought the house and it is harder to make my bank account grow at the same rate as before.

Just don't regress. Having your own place can eventually provide improved opportunity for prepping, eventually - just don't lose what you've done.