How to Buy Physical Silver. The Pros & Cons of Each Option.

So now you’re probably wondering, how do I get my hands on some silver?

As with most purchased these days, you have two main options, online or in-person retail. The advantages of each are about the same as with choosing to buy a TV on Amazon or at Best Buy. Online is (almost) always cheaper and you will have a much bigger selection, but by buying something in person, you get the added benefit of taking your silver home with you that day and the comfort of knowing that if you have any questions (or issues) regarding your purchase you have someone to speak with (or confront).

Below is a list of places where I have personally purchased silver products in the past, and what I see as the benefits and drawbacks of each option.

Buying Silver on Craigslist: 

PROS:
With Craigslist you have a chance of getting the best deal. As with most things on Craigslist the price you pay is determined by the ‘value’ the seller gives the product (sometimes not knowing the true market value) and the ‘need’ that they have for cash, which can also work in your favor.
CONS:
Craigslist is also probably the riskiest of all the options, for obvious reasons. You are dealing with people, and not all people share the same moral compass, so awareness is key. On Craigslist I’ll typically will only buy ‘junk silver’ coins. I feel like these are impractical to fake, due to their lower price points and unpredictable wear due to thier circulation. I’ll conduct the transaction in a public place, such as a mall or fast food restaurant, though I have never had any issues with dozens of my Craigslist encounters. Actually, one of my first silver purchases, was buying 50 1964 Kennedy half dollars from a 15 year old who wanted money for baseball gear, more than the coins his grandpa gave him. Don’t worry, his mom was there too to make sure everything went smooth. 

Craigslist.com

Buying Silver at a Pawn Shop: 

PROS:
Pawn shops are great for picking up unique silver pieces. Though typically you can get a better deal on silver jewelry and collectibles than you can on bullion. Most places will only pay a seller spot price for any silver products, no matter the if its coin or chain. Therefore they sell the product close to current spot price as well, potentially without taking into account the ‘collectible premium’ the item might hold on an open market. Also many shops will have silver/gold “test kits” on hand so you can feel confident you’re not buying a knock-off. 
CONS:
As any retail business, pawn shops need to make money to pay for overhead costs, and make up for the generally lower volumes of sales by having healthier margins. Therefore they are usually a bit more expensive than the other options (though you can always bargain) and the selection of silver product will usually the most limited, but it never hurts to pop into your local place and see what they have, maybe you’ll get lucky. 

Buying Silver at a Local Silver Bullion/Coin Shop:

PROS:
These stores ( if you have them in your area) are probably the best places to buy silver in person. This is due to the fact that the sellers (typically the store owners) are very knowledgeable and trustworthy, silver and/or precious metals is thier business and passion. Also they typically have a very large selection of silver products to choose from.

CONS:
It’s very difficult to find a ‘deal’ at a silver bullion store or local metals dealer. These sellers know their merchandise and they know its  ‘market value’. They also have higher overhead cost than thier online counterparts, and pass those on to you. In addition these types of stores are becoming more and more rare, primarily due to the rise in eCommerce. But if you do have one around, it might be worth checking out from an educational perspective, plus it is always good  to support a local business.

silverbaycoins.commomssilvershop.com/

Buying Silver from Online Bullion Metals Dealers

PROS:
Overall I’ve found online Bullion Deals to be the best place to buy silver. Selection for general silver products is impressive and the pricing is typically much lower than retail, due to the lower overhead and higher volumes these companies have. The three places I listed are all very reputable and have been in business for many years (if you decide to use another one make sure to do your due diligence).  Another big advantage of using online retailers, at least SD Bullion and JM Billion, is that they accept Bitcoin, yes that’s right, Bitcoin! The future is here, you can go from Cryptocurrency to physical metals, without the need for fiat. Plus most places accept Credit Cards (for an extra fee of course). 

CONS:
The biggest disadvantage of buying from any online retailer (other than I guess Amazon with their same day delivery) is that you will have to wait. If you pay with CC or BTC, most places usually ship your silver out that day, and offer next day air. But if you pay by check, which is usually the least expensive option, you’ll have to wait for them to receive and clear your check prior to sending your silver. But for those that plan to hold thier silver for the long haul (or at least till the next top), what’s an extra couple weeks going to change.

SDBullion.com, JMBullion.com, APMEX.com

Buying Silver Directly from Private Mints Online

PROS:
If you’re looking to pick up some unique (limited mintage) silver pieces at the best price, online storefronts of private mints are a worth checking out. GSM has new designs every couple of months, variety makes silver stacking more fun, though some designs are more controversial than others. There are other mints like Monarch or Scottsdale, which offer silver bars shaped like Legos or ‘Tombstones’ (to be honest I have not yet made purchased from Monarch or  Scottsdale, but thought their products were too cool not to share).

goldenstatemint.com, monarchpreciousmetals.com, scottsdalesilver.com

CONS:
Privet Mints usually have a very limited selection as they typically don’t carry 3rd party products. Plus shipping and higher overheads must also be accounted for./one_half_last]

Buying Silver on Ebay

PROS:
There are few things you can’t buy on EBay, and the same holds true for silver. If you are looking for rare or unique pieces EBay is definitely a great place to check. Pricing is usually pretty fair due to the ‘market’ forces that are at play, and the sellers typically have zero overhead.

CONS:
Similar to Craigslist, you need to be extra careful of who you are buying from and how prone to forgery what you’re buying is. For example I would never buy a “new” bar or coin from a seller that has only a few dozen reviews, it’s just not worth the risk. Though I know people that regularly buy on EBay, my purchase have been limited to a collection of commemorative Soviet coins from the 1980 Olympics and a few vintage 1 oz bars. 

Ebay.com

I hope this information has been educational, and I hope it will be helpful in your future silver purchases. If you have any other suggestions or want to share your silver purchasing experiences, please comment below.

Thanks

Artem

The Basics of Physical Silver Investments

If you want to invest in physical silver, In my opinion, you have three major categories of silver to choose from; Nationally Minted Silver (NMS), Privately MintedSilver (PMS) or Manufactured Silver Goods, such as jewelry and Silverware. In this post I’ll discuss what I see as the benefits and drawbacks of each one of these options, and which you should put your paper money in.

The first, and probably the most popular form of silver for investment, is Nationally Minted Silver, it can be in the shape of Coins or Bars and is produced by a government or sovereign nation state. While silver used to be used in everyday change, today governments typically mint them only for resale and not for actual circulation. This is made obvious by the large difference in the coins printed value and it’s metal value. For Example, This Silver Eagle has One Dollar Printed on it, but it’s worth at least $16 due to it’s silver content.

Like many countries, the US actually used silver in their regular circulated coins, up until 1964. So If you have some old change lying around, grab it and Check out this website Coinflation.com. There you can find out how much those coins are actually worth, you might be pleasantly surprised For instance this 1964 quarter is worth $3 in silver alone.


These coins are also sometimes referred to as ‘Junk Silver’, because they only have 50-90% silver, therefore would require melting to get to ‘Investment Grade .999 pure. But keep in mind that most modern NMS such as US $1 American Eagles are now made using .999 silver, and are considered investment grade.

The Second Type of physical silver you can invest in is called Privately Minted Silver, also sometimes referred to as Silver Bullion. It can come in the in the form of Coins or Bars and is manufactured and stamped by a privately owned mint. These silver pieces can be minted as Commemorative or as Blanks, and as with NMS they must stamped .999 to be considered Investment Grade.

The Third and Final way to invest in physical silver is to buy Silver Goods, Like Jewelry or Silverware. They vary in quality and silver composition, though most are usually marked with a 925 (meaning 92.5% silver content) or they might be stamped “Sterling Silver”.

So now your probably asking yourself, what’s the best one to buy? What are the benefits of each?

While Jewelry & Silverware are beautiful & actually useful. They are the least efficient way to invest due to range in silver content and it’s irregularity in size. Though you might not realize, size plays a significant role when it comes to silver investing as large objects makes it difficult to invest significant sums of money, without having to buy a huge treasure chest, that is.Though many times the artistic value of a piece may out-weight the silver value. So if you’re an art collector this might be a good path, but for most this will not be the most effective method to take advantage of the potential market upside for silver.

If asset portability is something that is critical for you, you might want to consider gold. At the time of this writing 1 oz of Gold cost the same as 83 oz of Silver (as shown in the photo above), therefore takes up 83 times less space (actually even less as gold is a more dense material). But keep in mind the historic Gold:Silver ratio has been ~20X, even in the last 50 years its’ averaged ~55X, that’s why I believe silver is 35-75% undervalued. More on that in future posts.

Between Nationally & Privately minted Silver, its a bit more difficult to tell which is the better option, and is more of a personal choice.
When making your decision, you want to consider two main factors ‘Liquidity’ (How fast can you sell something) and ‘Profitability’ (How much can you make on when you sell it).
From a liquidity perspective NMS is the clear winner, as country or government that minted the coin, guarantees it’s silver content and quality. (Though of course there are fakes out there, as with anything). PMS while also typically stamped, is usually more heavily scrutinized by buyers due to the lack of the manufacturers credibility, though there are some mints that are considered more reputable than others, but still not as reputable as national mints. So if you want to be able to sell your silver quickly I recommend that you stick to well established nationally minted coins from the US or Commonwealth countries (basically all the coins that have the queen on the backside).

But from a profitability perspective, it’s a bit tougher to tell. When you’re buying, NMS typically sells for $1-3 over spot and PMS is usually only $0.25-1 over spot. But when you are selling you can usually get $1-2 over spot for you NMS, while you might only be able to sell you PMS for Spot price or below. So with NMS you pay more upfront but get payed more when you sell and usually the opposite with PMS. Profitability on silver goods is always circumstantial, but sometimes the only places that will buy it immediately will offer you spot price (or lower, as melting it down to .999 bars does carry a cost).

Silver Investment Comparison Chart

Live Historical Silver Price Chart

Silver Quotes by TradingView


Another thing to keep in mind is that many silver coins and bars actually have collectible or numismatic value which will impact/increase the price outside of the spot price, assuming you can find the right buyer.
Similar to silver jewelry I typically try to stay away from collectible silver due to it’s lack of clear future resale value.

On the other hand I do enjoy purchasing collectible silver peaces that I really like and that bring me pleasure, like this Commemorative round with Vladimir Putin, holding a burning $100 bill, with the tile “Winter is Here”. Well maybe not yet, but more on the worthlessness of fiat currency a bit later.

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