For individuals looking to learn how to invest in silver bullion, coins are a great place to start. Using silver coins as bullion is very convenient because many major governments have issued nearly pure (99.9%+) silver coins to act as a standard. These coins typically weigh one ounce.
Investing in Silver Coins – Popular Coins
The most popular silver coins in North America are the American Silver Eagle (available since 1986) and the Canadian Silver Maple Leaf (available since 1988). Both of these coins weigh 1 troy ounce (31.1 grams) and are very common forms of silver bullion.
They are widely recognized as a form of silver bullion and as a result are easy to buy and sell.
There are other silver coins available for purchase that were initially issued by other governments, but the two mentioned above are by far the most popular and widely recognized in North America.
How to Buy Silver Coins – Where to Go
You have two places to go when buying physical silver coins – either a dealer or ordering through a company online. However, be sure you trust the source you are ordering from and do your research before buying into any silver.
There are authorized dealers and often dealers are listed on your country’s official website for the mint. Typically, these are called “gold exchanges” or something of the sort; these places usually will sell silver coins at a few percentage points above the spot (market) value of silver and will buy bullion for a few percentage points under the market value.
Note that due to the nature of markets and the fact that you often have to buy above market rates and sell below market rates means that buying silver coins to keep in a safe in your house is very expensive. Unless you really want the added security of physically owning your own silver, this is definitely not the most profitable method for investing in silver in my opinion.
Alternative, you can buy through companies online that may actually hold onto your silver. For example, you can buy through BullionVault (no affiliation), who will store your silver off-site at their facilities. They charge a fraction of a percentage point of the worth of the silver in order to purchase and store it safely.
This is much more economical for the average investor and lets you have a much better chance at profiting off of your silver coins.
How To Buy Silver Coins – Important Warning
Please note that many pawn shops, coin dealers, and other less-than-savory businesses will often try to sell “proofs” at a higher value (typically 10%-15% of market rate). A proof is a coin that has never been circulated and has been sealed in plastic, making it a perfect condition coni.
These proofs have collectible value, which makes them slightly more valuable than the market rate. The problem with proofs for the investor is that they are very hard to sell at the price you get them for. A coin dealer might hold onto a proof for months before they sell it.
As an investor, that lack of liquidity is extremely risky and in my opinion negates the whole purpose of investing in silver coins. As a result, you never want to pay too far over the
How to Buy Silver Coins – What is a Fair Price?
Typically, financial gurus like to try to buy silver and other types of bullion at no more than 4% mark-up over the spot price. So, if silver is marked on the London Exchange at being worth 50$ per troy ounce, you would not want to pay a dealer more than 52$ for the bullion.
However, depending on your locality, this may not be possible and you may have to pay more. However, if the rates get to 8% or higher for silver coins, it becomes a weak investment. You would be much better skipping out on buying silver coins and instead buying into an exchange-traded fund (such as NYSE: SLV) or buying into a virtual silver ownership (like BullionVault).
How to Buy Silver Coins – Conclusion
You can buy silver coins both at local merchants as well as on the internet. Just remember that if you are going to be investing in silver coins, you will need a safe place to keep them and an insurance policy in case someone steals them.
It is my recommendation for the small time investor to not buy silver coins but rather learn how to invest in virtual silver through the internet. This way, you will not have to pay the exorbitant insurance fees to keep your silver safe.