How to Invest in Physical Silver
Investing in raw materials is always a good option because they can protect you against inflation. Silver has many uses that contribute to its value such as its appeal for jewelry, industrial use, coins, medicine and many more applications of use. Owning physical silver gives you the gratification of possessing a tangible investment that you can handle and watch accumulate over time. Although this is very appealing, I advise anyone who wants to start investing in physical silver to get either a secure safe, or a safety deposit box at your bank so it can’t be stolen. Silver is weighed out in troy-ounces which are 31.1 grams as opposed to a regular ounce which is 28.35 grams; keep this in mind when weighing out your silver to estimate its value. There are three distinct ways to invest in silver, each has it’s advantages and disadvantages.
These ways to invest include.
Bullion is the most obvious way to invest in silver; it includes silver bars and rounds. These are the easiest to deal with because they usually have the weight and purity already stamped on them. Investing in bullion allows you to know exactly how much silver you have without weighing it out, and it is .999% pure silver. Depending on the brand of silver, you can usually get bullion for around just a bit over the market value of silver. It is important though to know where your bullion comes from, and to buy from a reputable dealer. While you may think you are getting a good deal on an auction website, there are many fake silver-plated bars coming out of China listed on these websites. I unfortunately fell into this trap when I first started collecting silver and I ended up buying some really expensive silver-plated copper bars.
Buying old U.S. currency can present an opportunity to invest in silver while also appealing to a collector’s value for old coinage. Coins before 1965 have a 90% silver composition, and half dollars from 1965 through 1970 have a 40% silver composition coinsite.com. When estimating the intrinsic value of the silver in these coins, take into account the percentage of silver according to the year it was produced.
Scrap silver is a way to get the most “bang for your buck” when investing in silver. Scrap silver can be collected from many different items, the most common including broken jewelry, flatware, and vintage decorative items. You can find scrap silver for good prices at garage sales, antique stores, flea markets, and this is probably a safe item to buy on auction websites if you’re familiar with the item you’re buying. When buying items at these places be sure to only buy items that are marked either Sterling, or stamped .925. Also when buying these items on auction websites, only purchase items with pictures that show these markings. Do not buy anything simply because it has silver in its description or listing if the pictures don’t show markings; it could be a silver-plated item using silver in their tags to get traffic to their item. Also take into consideration that some items although marked sterling can be weighted, common items like this include silver candlesticks, and flatware knife and serving utensil handles. The weights in weighted items can account for 70%-80% of the total items weight, so take this into consideration when buying. Also take into account when determining intrinsic value, these items are .925% silver and not pure silver.