I feel that everyone should have some exposure to real assets to protect themselves from the ravages of inflation due to fiat currency.  Unfortunately, investing in real assets such as gold or real estate can require quite a bit of capital.  In the information that follows, I plan on sharing why you can and should be investing in silver.  I also want to point out that it can be extremely affordable.

To get an idea of silver’s ability to store value, consider the Morgan Silver Dollar. The Morgan Silver Dollar contains about 0.77 ounces of silver which at today’s prices would be worth about $10 but are offered on Amazon beginning about $15 because of the added numismatic value. Of course for those rare specimens in exceptional condition, the value could be in the hundreds of dollars. This is a minimum of 15 times the original value.

From a survey of prices in Morris County, NJ in 1900, you could purchase beef rib roast for $0.10 per pound, coffee for $0.35 per pound. You could get a man’s shirt for $1 to $2 each and a suit from $7 to $16. So, the question you need to ask is could you get a pound of beef for $1.50, a pound of coffee for $5.25, a man’s shirt for $15 to $30 or a suit for $105 to $240? The answer is a resounding YES! Silver is a store of value.

Silver has several industrial applications including its use in batteries, electronics, and as a catalyst.  As the worldwide recession has evolved, the industrial demand for silver has declined making now the perfect time to invest in silver.  When the demand begins to pick up again over the next several years along with the economy, the price of silver will increase.  If inflation begins to heat up, then the silver you own will help protect you from that inflation serving as a store of value.

Silver has also been used in traditional photographic film; however, that application is on the decline.  Nonetheless, additional applications in electronics have more than made up for that decline in demand.  Silver also has new applications in medicine since it has antibacterial properties.  Silver has long been seen as a vehicle for precious metal investment along with gold and platinum and will continue to be valued as money for years to come.

Historically, throughout the centuries silver has been valued at a ratio of 1/16^th that of gold.  Put another way, the silver to gold ratio has been 16 to 1.  When silver was removed from US coins in 1964, the ratio began to climb, and the industrial uses for silver began to influence the price more than the investment demand.  At current prices that ratio is around 70 to 1, reflecting the decreased demand for silver because of the sagging worldwide economy.  Even a small move back toward the average ratio in 2007 and 2008 of 55 would lead to a 25% increase in the price of silver relative to gold.

If you buy more than one Starbucks per week, you could easily cut back and buy some silver at $13 an ounce. Smokers could cut back (although it would be healthier to quit altogether) and use the savings for investing in silver. Teens could use their baby-sitting money to invest in silver and save for the future. Investing in silver is certainly within reach for many, many individuals due to its affordability.

There is no doubt that the dollar, euro, pound, yen or any other paper currency will continue to lose value over time. Investing in something that will retain its value over the years and decades to come is certainly a sound idea. While investing in gold may seem cost prohibitive, silver can serve the same function and for the reasons mentioned above may turn out to be a better investment than gold at certain times.