What If I Don’t Have A Lot Of Money – Can I Still Build Wealth?

Many people are under the mistaken assumption that if they don’t have a lot of money to invest, that they can’t build wealth. Sometimes that’s true, but not today.

The way I teach people to invest is by first identifying the cycle we’re in. Cycle refers to repeating patterns with investments that occur at regular time intervals. There are two main cycles: stocks and commodities. Each cycle lasts roughly 15 – 20 years. Currently, we are in the commodity cycle which began in 2001. We can see this is true, because commodities have led in performance for the last 11 years. Gold has appreciated about 17% per year and silver about 24% per year (except last year, silver was slightly negative due to a normal pullback, not the end of the trend).

So we know we’re in the commodity cycle and roughly 11 years into a 15 or 20 year trend.

There is still plenty of time to build wealth. Cycles end when it becomes obvious to everyone, even the non-investor, that this is a good place to build wealth. Then seemingly everyone jumps to invest, or go “all in”, and we see tremendous appreciation at the very end of the cycle, usually climaxing in a “bubble.” By definition, bubbles are invisible while they are building, and only can be recognized by everyone in hindsight.

Since this bubble has not only to do with commodities, but also gold and silver being treated as currencies (yes, it’s happening. Countries are now paying for oil with gold, the Comex is accepting gold for payment, and so is the State of Utah). It’s just the beginning. Gold and silver will gain more acceptance as currency as the Dollar, Euro, and other paper currencies continue to lose value over time.

This will cause demand for gold and silver to back paper currencies (like the Swiss Franc is proposing now to be backed with 20% gold). The bubble will likely be worldwide as Central Banks purchase the metal at any price to back their failing paper currencies.

All of this is why silver is a great investment now. Silver is not only in the commodity cycle and also is a currency, it is used also as an industrial metal in new energy inventions and technology. Don’t let the fact it’s only $34 an ounce fool you. It is very rare and in low supply. High demand and low supply = a great investment opportunity! You can buy it from a coin dealer, like an American Eagle coin for about $5 over the spot price, or about $39 today. You can also invest in billionaire Eric Sprott’s silver ETF, symbol PSLV (I prefer this and do NOT recommend the more popular, SLV). PSLV is at $14.55 a share today. Remember, you’re actually buying the physical silver, not mining company shares.

Leave a Reply

Your email address will not be published. Required fields are marked *