Buying silver, where to start

Welcome,

This is my suggestion although there are many opinions out there.

Best place is to look for a local 'coin dealer' in your area. Not a cash for gold type place but an established dealer in coins and gold and silver.

Second best for me has been an online broker like APMEX. I've done quite a bit of business with them over the years and have always been dealt with professionally and honestly.

All oz (ounce) listings below are Troy ounces. These are not the same as the 16 oz that equal a pound. Never buy anything listed in pounds like on some ebay lots.

Coins would be old US coins that were in circulation until 1965. Also known as 90% Silver and "Junk Silver". Junk refers to the fact that it does not have numismatic or collector value. 1 silver dollar contains around .715 oz of silver (rounded for simplicity) 90% Silver coins include $1, $.50, $.25 and $.10 pre-1965.

Discs more commonly called rounds. These are full 1oz units that are almost always listed as .999 pure (Sterling silver is .925 pure). Rounds come in a few different forms. US Silver Eagles are put out by the US mint and are stamped $1, Canadian Maple Leafs are denominated at $5 and this can be confusing because they both contain 1 troy oz of silver. The last sort of Rounds are privately minted and can say anything from Englehard to Santa Claus. You may pay a little more for certain 'brands' but an oz is an oz is an oz to me.

BBs? don't know and would stay away from them as they are not recognizable as silver and the burden of proof as to the metal content would be on you should you decide to sell them.

I'd start off with some 90% Silver coins and add some 1 oz rounds after that.

Silver spot right at this moment is $16.36 an oz. That price is tracked and based off of paper metal trades, (much like a stock market) and will fluctuate wildly from week to week. It is however the baseline for a dealer to set a price to sell to you. 90% Silver trades the closest to that "spot" or "melt" price, (you'll hear both terms but they mean the same).

So, right now, the "spot" price for $1 of 90% Silver coins is $11.69 (16.36 x .715 = 11.69) That would make $10 of 90% = $116.90 and so on.

You won't find any for sale at that price as there is extra added to the spot price when trading Physical over Paper. You can find 90% for .50 to $1 over spot most of the time. There are also different premiums on the Rounds as well. US Eagles carry a premium that is close to $4 over spot.

The thing about that 'Premium' is that you can also expect to get that back when you sell.

Chew on this for awhile and get back if you want any specific advice. How much do you want to spend?

 

I would find a local coin dealer and start buying 90% dimes. I haven't been in a shop to price small lots of dimes lately as the better deals are in $1000 bags ($12,000+ right now), but I bet you can get mercury dimes for $1.25 to $1.50 a piece. Perfect for your perceived need.

You can build a relationship with a dealer and stop by every week with your $25 to $50 and walk out with a small bag of dimes.

Let me know if you have any other questions or want some price checks to see if someone is trying to rip you off. I know I threw a lot at you in the post above.

 

yep. more cents per dime every year...

 

Justin,

1. The coins are 90% Silver, and are only called "junk" because their only value is the silver itself...and it's a loose term used for odd bulk coins with no collector value.

2. I think your math is close enough. Apmex or any dealer always charge over spot, it's the way the business is done. Nobody is going to sell precious metals at bare market value, there is no profit in this.

3. The bulk coins are an advantage compared to the silver dollars you mentioned because they are not being marked up for collectors. It's all a state of mind, really. When the economy collapses, silver will all be worth pretty much the same depending on its purity and troy weight. A "rare" series of silver dollars (vs. .999 silver bar) mean nothing in barter to most people (chance may have it you find a collector, then so be it), and Ebay won't be in business during the next great depression...at least not in America.

4. Not all coins minted back before the 60's were silver, but I always keep a lookout for silver coins. I managed to collect quite a few buffalo nickels and dimes this way, even a couple of quarters.

Try looking into 1 oz. troy silver to round off your silver reserves if you are serious about it. I have even located means to start investing in 1 gram bars of .9999 gold with assayers certificates. Coins are great to invest, they cost little to start a collection, but not too many people may be willing to trade for them. Of course...nothing is certain. With a barter system and free market, the buyer (you) are 100% at the mercy of the person you trade with -and their perceptions.

 

What Brokor said.

You have to be careful with the term 'silver dollar' as a pre 65 silver dollar that was once meant for circulation is a different weight than the $1 Silver American Eagle. The Eagle is 1 oz .999 silver and the 'junk' $1 'silver dollar' is around .715 oz, (Not sure the exact amount but that's close enough).

I'd start with pre-65 if I were at your stage of the game as you can acumulate more silver for less premium with pre-65 US coins.

You'll see that the discounts in 'premiums' at APMEX are with the larger bags ($1,000 face value) and the percentage goes up as you shop for lessor amounts ($500 and $100). They used to also sell amll lots at #x per $1 face.

 

You can purchase smaller than bags from APMEX. Look for "Silver by the roll"
http://www.apmex.com/Category/966/90_Silver_Specific_Coins_By_The_Roll.aspx

$5.00 (50ct) Roll 90% Silver Coin - (Roosevelt Dimes)
Dates of our choice. Average Circulated! More

Sell Price $78.42
20 or more for $76.42 ea
Item #: 4018
Availability: 22

 

All in all, you are 11oz heavier in silver than you were this morning and I'd say that is an outstanding position to be in.

Nice thing about the Maple Leafs is that they say $5 on them and are .9999 fine and I'm never one to complain over a dollar or two premium when making a purchase like that; especially when the (paper) price just dropped and many dealers pulled their stock. Silver is worth more FRNS than 18 right now IMO.

Good job in seeking advice and then pulling the trigger on a deal. You just entered a small category of the mass population with that purchase. It took me a few years to begin to think in oz over dollars.

 

I still remember my first silver purchase. I had something Bear wanted and he offered to pay me in 90% Silver. I can still remember opening that package with my wife while sitting in a Denny's for lunch.

I'll never forget that clink, clink sound that is unique to 90% Silver.

Bear and I then went on to exchange in Silver as barter between ourselves, partner on a couple good silver buys (Silver at $6?? i think) and there may have been a few surprise gifts of Au/Ag back and forth as well. Holding your wealth in your hand is good for your soul!

Glad to see you post here Bear as i think you were the first to bring PMs to the monkey. I feel like the graduated grasshopper if you are suggesting my advice to other neophytes!