Modern Day Alchemy: Turning Food Into Silver (SLV)

Modern Day Alchemy Silver
Modern Day Alchemy Silver

I watched a video of a crazy hill billy literally turning 90% junk silver and sterling silver into .999 refined silver bullion. The process was mind blowing and involved a lot of chemicals. I would never try it, I mean it literally looks like you are making meth. Is it okay to be around this chemical reaction? You have to get this crystallized silver and then process it again, it’s like an hour long series.

Maybe instead of using a bunch of chemicals, I could just buy the bullion from someone else who does all the dangerous work. At around $17/ounce, silver is on my radar. Although I prefer to invest via SLV (ETF that holds silver), I wouldn’t mind having a little physical silver as a reminder of frugality, saving, and investing.

So what is this modern day Alchemy? The formula goes like this, less food spending equals more silver (and thereby more wealth).

As most Americans already know,  most of us spend too much on food and food entertainment. It’s often very hard to visualize how much damage is actually happening by this “food-tainment”, but I can tell you one simple trick to help the visualization of wealth loss when you mindlessly eat out every night.

When you reach for that $34 plus tip bill for your night out, imagine dropping two one ounce silver bullion coins on the tab. Now whether or not you are bullish or not on silver, that’s not the point here, it’s about wealth (if it helps, replace silver coins with shares of a company perhaps).

Go out for $17 of beers at a bar with friends, that’s another ounce silver bullion coin.
Go out to a fancy $85 meal, that’s five more silver bullion coins.
You go for your $2.50 coffee each day, that’s roughly four and a half silver bullion coins per month.

You’re eating habits might literally be the way for you to start investing, mainly because it will help you visualize through seeing and feeling the coins. If you avoid $170 a month of needless expense, you would have ten one-ounce coins per month, or 120 coins per year. Although you would likely want to switch to 10 or 100 oz bars as your savings get bigger. I personally wouldn’t like physically storing that much “food money,” but I guess it beats the alternative (flushing down the toilet).

So how many ounce bullion coins are you “eating” a month that you could avoid?

For the Options Traders —-

Let’s take it a step further and say that you end up saving $170 a month as previously discussed, and you acquire 20 silver coins and 100 shares of SLV. With that 100 shares of SLV, you could start to write cover calls.

Each 100 shares, could easily produce 1+% a month. Right now SLV is trading for $16.32 and the cover call 1 month out for $17.00 is going for $.29 per contract. That means you could get $29 a month (minus fees) potentially forever on you $1,632 investment.

Multiple all of this by 10, you would have $16,320 invested and would receive $290 a month. Now of course with cover calls, you could get struck out, but you would have made $.68 a share (written for $17)+ $.29 for the premium, meaning you would have gotten $.97 a share (about 6% gain).

 

 

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