Buy gold pay down mortgage.
Discussion
I'm looking for ideas of what do do with the very small amount of surplus money I have. I generally save. This is obviously a rubbish investment at the moment so started thinking about paying down the mortgage. The problem is as it's a small mortgage and I can only pay down 10% per year, the amount I can throw at it is minimal.
I started thinking about buying gold as a vehicle to pay off the mortgage at some point. Again obviously over the last few years this would have been great. Has anyone done similar, or is it always better to pay down debts first before speculating on comodities.
rufusgti said:
I'm looking for ideas of what do do with the very small amount of surplus money I have. I generally save. This is obviously a rubbish investment at the moment so started thinking about paying down the mortgage. The problem is as it's a small mortgage and I can only pay down 10% per year, the amount I can throw at it is minimal.
I started thinking about buying gold as a vehicle to pay off the mortgage at some point. Again obviously over the last few years this would have been great. Has anyone done similar, or is it always better to pay down debts first before speculating on comodities.
My advice would be to check this out. There's a pretty useful tool that shows you how much money you'd save by paying the mortgage off...I started thinking about buying gold as a vehicle to pay off the mortgage at some point. Again obviously over the last few years this would have been great. Has anyone done similar, or is it always better to pay down debts first before speculating on comodities.
http://www.moneysavingexpert.com/mortgages/mortgag...
Not all metals move for the same reason.
Before you speculate on any commodity you need a sound reason.
Gold is often used as protection against inflation.
We do not have raging inflation at present.
When inflation does rear it's ugly head the powers that be will increase interest rates.
If your mortgage is variable it might be wiser to shed some debt or find something that will increase under the current economic climate. (Europe and the Euro currently improving)
Before you speculate on any commodity you need a sound reason.
Gold is often used as protection against inflation.
We do not have raging inflation at present.
When inflation does rear it's ugly head the powers that be will increase interest rates.
If your mortgage is variable it might be wiser to shed some debt or find something that will increase under the current economic climate. (Europe and the Euro currently improving)
Can you get money out of you mortgage as well as put money in? If not, I'd be wary about paying-down your debt unless you can afford to not need the cash. As my Dad used to say "you can't spend bricks and mortar when you need to buy bread".
If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
pingu393 said:
Can you get money out of you mortgage as well as put money in? If not, I'd be wary about paying-down your debt unless you can afford to not need the cash. As my Dad used to say "you can't spend bricks and mortar when you need to buy bread".
If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
This is why I use an offset, it also means I'm far happier putting all my spare money into the mortgage. I'm even thinking of putting the kids savings into the offset, and paying them the offset value I get.If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
anonymous said:
[redacted]
Your investment would have increased by around 15% as the price was $850 an ounce in 1980 and then crashed. If you had put the money in property in 1980, it would have increased by 700%.IMO the mortgage is the way to go. If you have an offset mortgage then it's a complete no-brainer, but even without, a couple of grand off the mortgage early in the term does make a very significant difference to the repayments over the life of the mortgage, especially since interest rates will rise at some point within the next decade.
98elise said:
pingu393 said:
Can you get money out of you mortgage as well as put money in? If not, I'd be wary about paying-down your debt unless you can afford to not need the cash. As my Dad used to say "you can't spend bricks and mortar when you need to buy bread".
If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
This is why I use an offset, it also means I'm far happier putting all my spare money into the mortgage. I'm even thinking of putting the kids savings into the offset, and paying them the offset value I get.If you can afford it, though, do it. The savings are considerable, especially as RPI is low and Future Value is high.
. Everyone should get £60pa from Halifax for free just for circulating £1,000 per month. Easy money at no risk.davepoth said:
anonymous said:
[redacted]
Your investment would have increased by around 15% as the price was $850 an ounce in 1980 and then crashed. If you had put the money in property in 1980, it would have increased by 700%.IMO the mortgage is the way to go. If you have an offset mortgage then it's a complete no-brainer, but even without, a couple of grand off the mortgage early in the term does make a very significant difference to the repayments over the life of the mortgage, especially since interest rates will rise at some point within the next decade.
PMs get a bad rep because most don't understand them and quote those with an agenda. If the OP has the time, read around the subject and he may be very surprised. If I was he, I'd buy silver today.
I was long silver and gold mid 2000s, just when everyone said they'll never go up.
davepoth said:
longone said:
The point with investments is to understand where you are in a cycle. Why would owning gold in 1980 be a bad idea?
Owning gold, not so bad. Buying gold in 1980, as was asked, and holding it until today would not have been a good investment.Suggesting someone had bought at $850 and held until today is similar to imagining someone had bought a house to let in 2007 and still had it today, or bought dotcoms in 2001 and didnt sell.
We can all find time periods where any sector was good or bad because they move in cycles, not always of equal period but lows eventually become highs and vice versa.
I'd advise the OP to learn about the subject and consider silver today.
Newc said:
Silver's just not convincing. Ignoring the squeeze, there's only one compelling trade in the last two hundred years, which required pinpoint timing in 2009. Anything else, over time, after inflation - not so much.
USD / oz, 1792-2005
USD / oz, 1975-2012
Don't understand what you're saying. If you bought silver mid decade 2004/5/6 (take your pick) then look what you're sat on today. No trades or hassle, just buy it, store it and forget it.USD / oz, 1792-2005
USD / oz, 1975-2012
My expectation is a similar multiple to come again.
I understand the case doesn't survive going back 20+ years. The case for buying a long time ago was obviously wishfull but the world's changed. I'm responding to the OP's question about what to do now for tomorrow.
Before 2004/5 I wouldn't have considered buying PMs. I was in the stock market like most and was sat wondering when the UK housing bubble would pop.
My own view on precious metals is as a long term hold to preserve purchasing power. There's a reason it's called pound sterling after all. I hold some, but as a smallish part of a wider portfolio. I'm not sure I'd be looking at literally betting the house on them, or trying to dream up any get rich quick wheezes using them, as the markets are too small, too volatile and depending on who you believe, too open to manipulation. Just look at where silver has been in the last few years and ask yourself if you'd have enjoyed seeing your mortgage sat on that? There are sensible and foolish reasons for holding metals IMO. Given the amount of money being printed, I just don't see how that can't wash out into the inflation figures (official or otherwise) at some point, if indeed it hasn't already?
Really interesting replies so far, thanks very much. There's so many different ways of looking into it. But for now I've decided to concentrate on paying down the mortgage.
My reasons being.
For every pound I borrow on my mortgage I pay back an average of 2 pounds. Less at the moment, but I have 24 years left so... That would mean any gold I buy would have to at least double in value before I see benefits. I'm not saying it won't over 25 years, who knows. But when I make an over payment on my mortgage the savings are immediate.
It's been pointed out in the "make money with money" thread. It's a very very very good point that I've only really figured out now. The point that most people DON'T buy and sell at the right time. That looking at graphs is all well and good, but actually buying in falling market is very very ballsie and selling right at the top equally. That's why most don't. Most lose a chunk of profit at either end rendering the graphs a fantasy. I think this is an incredibly important bit of knowledge for any investor of any type.
And lastly. The sheer hassle of holding insuring and protecting the gold.
Thanks for the replies again.
My reasons being.
For every pound I borrow on my mortgage I pay back an average of 2 pounds. Less at the moment, but I have 24 years left so... That would mean any gold I buy would have to at least double in value before I see benefits. I'm not saying it won't over 25 years, who knows. But when I make an over payment on my mortgage the savings are immediate.
It's been pointed out in the "make money with money" thread. It's a very very very good point that I've only really figured out now. The point that most people DON'T buy and sell at the right time. That looking at graphs is all well and good, but actually buying in falling market is very very ballsie and selling right at the top equally. That's why most don't. Most lose a chunk of profit at either end rendering the graphs a fantasy. I think this is an incredibly important bit of knowledge for any investor of any type.
And lastly. The sheer hassle of holding insuring and protecting the gold.
Thanks for the replies again.
That's good that you feel you made the right choice and good to have a debate.
Let's all, either PM believers or not, keep an eye on the cash price for both gold and silver. Not the paper market, that will diverge as the mania hits, just the cash physical metal price.
I think this subject will be back on the thread list again and again, and the future role of the metals will gradually become more apparent.
Let's all, either PM believers or not, keep an eye on the cash price for both gold and silver. Not the paper market, that will diverge as the mania hits, just the cash physical metal price.
I think this subject will be back on the thread list again and again, and the future role of the metals will gradually become more apparent.
longone said:
Newc said:
Silver's just not convincing. Ignoring the squeeze, there's only one compelling trade in the last two hundred years, which required pinpoint timing in 2009. Anything else, over time, after inflation - not so much.
USD / oz, 1792-2005
USD / oz, 1975-2012
Don't understand what you're saying. If you bought silver mid decade 2004/5/6 (take your pick) then look what you're sat on today. No trades or hassle, just buy it, store it and forget it.USD / oz, 1792-2005
USD / oz, 1975-2012
My expectation is a similar multiple to come again.
I understand the case doesn't survive going back 20+ years. The case for buying a long time ago was obviously wishfull but the world's changed. I'm responding to the OP's question about what to do now for tomorrow.
Before 2004/5 I wouldn't have considered buying PMs. I was in the stock market like most and was sat wondering when the UK housing bubble would pop.
There have been no recent industrial breakthroughs that demand significant extra silver, it's not a big jewellery metal, extraction and recycling techniques become ever cheaper; there are no external factors which will lift the price.
I wish you luck and good fortune with your investment choice, but I just don't see the case at all.
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