Investing in Silver: How to Invest in Silver


This is part 2 of my Investing in Silver Series. Before you begin investing there are a few terms your should be familiar with.

Spot: Spot is the current price of silver, this also applies to gold, palladium and platinum. When you buy silver from anyone or anywhere, you are generally expected to pay a premium over Spot. When you are looking for places to purchase silver bullion, you obviously want to look for the places that charge the lowest premiums over Spot.

Troy Ounce: This is the weight measurement used to weigh silver. One Troy Ounce is 31.1 grams.

Silver Bullion: generally bullion are government issued and demand higher premium

Silver Rounds: rounds are privately issued and demand a lower premium.

Junk Silver: These are silver coins that are not pure silver but contain about 40 -90% of silver in them. They are a cheaper way to get into silver investment. I don’t collect them but they are said to be better for a survival situation as they come in lower denominations and are easier to trade.

.999 Silver: This is the purity of the silver. All silver bullion is .999 Silver. If you are searching to buy silver online on elsewhere make sure it says .999, if it just says “Silver” it may actually end up being junk silver and you should not be paying spot for one troy ounce of junk silver.

Kitco: a website that many use for checking spot on silver and other precious metals. there are also forums for discussing investment in precious metals.

Stacking: collecting silver

LCS: Local Coin Shop

Silverbug: This is what you may become if the silver bug bites. It’s an endearing term for those have become obsessed with the collecting of silver whether for investment or for enjoyment or both.

There are a few ways you can choose to invest in silver:

eBay: This is how I took possession of my first silver rounds. There are many auctions on eBay offering silver in many different forms. You finds, rounds, bars, bullion, junk silver, just anything you can think of. I would try to purchase one ounce of silver a week using eBay but this quickly because difficult as I was trying to pay less premium over spot but it seemed as though the premiums kept going up. I think eBay ends up having the higher premiums over spot. Great if you’re a seller, not so great if you are a buyer.

Stocks: After my initial eBay investment, I moved to buy a large amount in stocks so as not to have to pay shipping. I invested in SLV stocks. There is also SILV that one can invest in. I found that stocks are a very restrictive system of investment, in my opinion anyway and for my purposes. Even though silver is generally considered a long term investment, it is difficult to get your money out of the stock market. There are fees for buying and selling and there are taxes for capital gains. There are taxes for all capital gains but when you have all your silver in stock and you are selling all it once, you’re going to end up paying quite a bit in taxes. As opposed to selling or trading silver bullion here and there. Survivalists would rather die than put there money in the stock market, especially when it comes to silver because for some, it is important to have physical possession.  That is another con of the stock market if you need to have silver in hand. However, it is very simple to get into by starting up an online brokerage account and start buying what you need. So it is appealing for many especially if you already trade in the stock market.

Precious Metal Sites: APMEX, Gainsville Coins, Provident Metals have some of the lowest premium over spot prices for silver. These sites are great if you are looking to buy 5 or more ounces at a time. You will of course have to pay shipping which should be added to your premium over spot to see if it is worthy investment but they are great for taking immediate possession of your silver. Some will give discounts if you pay in cash or bank wire. This require some set-up with the seller but they can save you money on your investment.

Local Coin Shop: Often abbreviated as LCS to all the silver bugs out there. This is, in my opinion, the best source for Silver of any type. If you have one of these in your town and you don’t have much money, it would be feasible to stop in once a week a buy an ounce or two. The premiums are generally pretty low compared to the other sources but it varies from shop to shop. As long as they are honest you should be getting value for your money. Unfortunately, I do not have a shop less than an hour from me. So I chose another option: Silver Saver. Go on to my Silver Saver Review.


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