Hi all,

I had to laugh at this Jason Hummel comentary. I am posting only part

of it for he realy does ramble on to make his point here but it truly is 

relevent for those who are in it for the long haul.

Deno

 

So here is my conclusion:

Look, if you are among those 82% of people who cannot do the compound interest problem, then you have no business buying stocks in companies.  Ever.  Not by my list, not from anyone.  Never buy stocks if you can't do basic math, OK?! 

It would be like trying to play solitaire without knowing the rules of the game!  It would be like trying to play chess with no knowledge of how the pieces move!   It would be like trying to run without legs!  (No offence to amputees.)

If you can't do basic math, your only investment should be physical silver, or gold.  Otherwise, people will just take advantage of you.  As for me, nearly 35% of my net worth is in physical silver.  My money in my IRA is in the mining stocks.

Here's some incentive for saving money:  Every time you spend any money, you should ask yourself whether it is something you want or absolutely need to live.  If it's a "need", then you must buy it. 

But if it's a "want", then you should ask yourself regarding the cost of the item, "Would I rather have 100 times that money later on in life?"  If your answer is yes, then don't spend, but rather, save the money, and use that same money to buy silver, instead.

That's the power of compound interest.  They say that if you save about $10,000 by the time you are 18, then you will have 100 times as much, about $1 million, by the time you retire, as long as you make 10% (more than inflation) per year.

If you don't understand compound interest, (or even if you do understand it very well, and especially if you are a wise investor) then I suggest that you bookmark a compound interest calculator, as I have, and play with it often, as I do.  See one of these:

http://www.smartmoney.com/compoundcalc/
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
http://math.about.com/library/blcompoundinterest.htm

But look.  Silver is moving up now, from 2003 to 2008, from $4.15/oz. to $21/oz. now.  Over that time span, what was the average annual percentage gain?  You don't have to do the math by hand, instead, use a compound interest calculator.  I'll wait.  In fact, I have to use one of those web sites myself.

The first link is the best for this problem.  I note that silver is up 406%, and is up an average of 38.3% over those last 5 years.  In 2005, I predicted that silver would probably go up by 30-60% per year for at least 15 years, and I listed many reasons for that estimate, and I've been right on target:

http://www.silverstockreport.com/email/Future_Gold_and_Silver_Prices.html

Do you know what would happen if silver goes up 30% per year for the next 15 years, and what that could mean for you?  Go ahead, calculate it.  I'll have to do it myself.

If you save $5000 in silver, at 30%, for 15 years, you will have $255,929!
$50,000 gives you $2.5 million.
$500,000 gives you $25 million!

If you can't do simple compound interest, you shouldn't be in stocks, you should only own silver.  

Can you imagine how much higher silver prices would be, if all the deceivers were not convincing people to own stocks that are going down?  Can you imagine what would happen to the silver market, if 80% of the money owned by CalPERS, the retirement plan for public employees in California, was kept in silver by the people who earned the money the first time, as it should be?

CalPERS has about $260 billion, last time I checked.  80% of that would be $208 billion.

The silver market is very tiny.  Only about 650 million ounces are produced each year by the mines, yet industry consumes about 950 million ounces, consuming all that is mined, and more.  How do they do that?  They also consume the silver that is recycled (250 million oz.), and the silver that is sold by nations (about 50 million oz.).  In 2006, only about 50 million oz. of silver, net, was purchased for investment, which, at $20/oz., is $1 billion.

Can you imagine what will happen to the price of silver, as people begin to put their retirement money back into silver, as it should be?  The state workers of California alone could move the silver market for decades to come! 

But imagine what will happen as $13.5 trillion (which is $13,500 billion) in money in the banks is sold to buy silver.  (As it must, since silver is rare, and going up in value, and paper money is plentiful, and going down in value.)

Here's another math problem:  How much money in the banks, expressed as a percent, is buying silver each year?  It's 1/13500.  Expressed as a percent, that's 0.007% if I'm not mistaken.

Silver will keep going up, if only because it is going up, which will attract world-wide investment interest and investment purchases. 

If the dummies don't understand that, at least the 18% who can do compound interest, will.

My God, do you realize what will happen when 18% of people buy silver, since only .007 percent of money in the banks is buying silver in recent years?

I mean, by the time 0.1% of $13,500 billion is invested in silver, which is $13.5 billion, I would expect the silver price to be about 5-10 times higher than it is today, at $20/oz, which would be?  I'll let you figure it out.  (Hint: I'd expect it'll be in the hundreds!)

And if you think bonds are the place to invest right now, then you must be more cynical than I am, because you must be betting that 99.992% of money is held by people who are too stupid to ever figure any of this out!