Ask Paul: My husband wants to invest in property, I want to buy silver


Dear Paul,

My husband and I are approaching 60.

We have a property in Como, Western Australia, valued at $1.2 million, with a mortgage of $520,000.

Ask Paul: My husband wants to invest in property, I want to buy silver

We do not have much super ($120,000 for me, $90,000 for my husband) as we started working in Australia in our mid-30s after migrating from Uganda. We both work full-time. 

I would like to invest in silver but am not sure if it is the right time.

My husband would like to invest in a property, preferably a duplex block, which will cost us more than investing in silver. However, he thinks the property might be able to pay off the mortgage quicker. 

I'm humbly requesting your good advice and direction. - Harriet

My goodness, Harriet, after about 40 years of answering questions on TV and radio and, of course, in Money magazine, you have got me. I cannot recall a question about silver as an investment over property or shares.

I do get quite a lot about gold - this I understand. Gold has been a store of value for thousands of years and at times has been a currency (I admit so has silver).

Gold and silver coins still exist. The best-known silver coin is arguably the US silver dollar - 1758 of these were first coined in 1794. They have a face value of $US1 ($1.52) but an uncirculated 1794 silver dollar will cost you about $1 million. This is, of course, not the silver value, which is negligible; it is the rarity.

In Australia, a silver holey dollar was one of our first currencies. It was a Spanish silver dollar and the middle was punched out as the 'dump', forming a small coin valued at 15 pence, and then the well-named holey dollar, valued at five shillings. I recently read an article saying that an 1813 holey dollar was worth around $500,000.

Your question, though, is not about coins, but about silver bullion. Here I am with your husband.

Please take a look at a long-term graph, but to me it looks as if it has been a terrible investment for the past century. It leapt to nearly $US50 an ounce when the Hunt brothers tried to corner the silver market in the late 1970s, but today sits around $US23.

It produces no income, which for me is an essential part of any investment. Also, I have no idea how much silver is being dug up and what the future demand will be. It is just not something I would invest in.

Property, however, I think we all know a bit about. Our ageing, wealthy population is growing. Providing you do your research, don't overgear and purchase in a population growth area, with time it is hard to see how you could not make money.

So, thank you for a different question.

I loved researching the history of silver. But my vote is with your hubby: property.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.