A $1,000 Emergency Fund Using Precious Metals

Often, a key first step towards financial independence, choice and fulfillment is being prepared to avoid unplanned financial pitfalls and "emergencies". These often can set us back financially such as replacing a blown car alternator, a sudden out-of-pocket medical expense, hiring a plumber to fix a leaky toilet. These legitimate small emergencies need to be paid, and not by credit card, and are not frivolous expenses. A recent study showed that 40% of Americans don't have $400 in savings. Yikes.

Having at least a $1,000 set aside certainly won't provide a safety net for the bigger emergencies such as replacing a transmission or losing your job but will help you navigate the little ones which often seem to occur more often. Also, having at least $1,000 set aside can help instil and reinforce sound financial practices and discipline while providing some emotional calm during rough financial seas.

"We want to avoid the little things (seemingly endless) from knocking us off our financial goals."

Now, if you already have a large investment portfolio or access other liquid assets, then having a separate emergency fund isn't all that necessary as you could always sell off enough assets to cover your expense(s).

Getting started with an emergency fund could be as easy as putting cash in an envelope at home (but even that could be easily spent at a moments notice of other things), in a bank account (but I'm not a fan of banks) as returns are lower than inflation (so your purchasing power declines) then there's taxes (if outside of a registered account) and on and on. Another option could be to have an emergency fund using gold and silver.

Silver and gold have been money for thousands of years and are tangible assets that can be bought and sold. Unlike fiat currency, which is designed to lose its value over time, gold and silver have a proven track record of holding their value. Plus, as you can hold it you own it thus there's no fear of losing it (unless you actually lose it!) which can't always be said for digital "assets".

How to create a $1,000 emergency fund which includes silver and gold?

1. Determine how much to be allocated between gold and silver

You may wish a 50/50 split between the metals, or more in gold than silver. Remember, an emergency fund is intended to be an investment fund as its purpose is a safety net if/when needed. Plus, you should expect that the full $1,000 be there if/when needed, not less. If you decided on 100% silver, at today's prices you would need to buy 26ozs; and, if 100% gold it could be a 10g bar, or a 1/4oz gold coin plus a 2.5g bar. However as the price of silver is more volatile than gold, I myself would not put 100% in silver.

Myself, I would consider something like a 80/20 ratio between gold and silver. This could mean a 10g gold bar ($888) or 1/4 oz gold coin ($750); plus six 6 1oz silver coins (~$38 each) or one 5oz bar (~$180) plus two 1oz silver coins (~$38 each). You can adjust your split based on what's best for you. If storage is an issue, as you can see gold would take up considerably less space than silver - you can almost have your entire $1,000 emergency fund in one 10g bar!

2. Trade in your fiat currency for gold and/or silver.

Once you've decided on your allocation, visit your local coin shop or trusted online dealer to acquire your metals. Make sure to store it in a safe place and not to discuss with anyone other than your spouse/partner so it stays safe and is there for when if/when you need. If that unexpected expense pops up, you could return to the local coin shop or send it back to the online dealer to swap it back to cash.

Having a $1,000 emergency fund using precious metals can be a great and simple way to protect yourself from unplanned "little" financial emergencies and expenses. You'll have peace of mind knowing that you have a tangible asset that will be there and which could always be swapped for fiat currency if needed.

✨ Questions or comments? Share below!