Investing in Silver: Silver Saver Review

This is Part 3 of my Investing in Silver Series. I’ve already mentioned why one would invest in silver and some of the ways how one could invest in silver. This last part is a review about my most current method of silver investment: Silver Saver.

Silver Saver is essentially a method of investing in silver, using a traditional bank account model. You open an account with them, then you can buy silver through the account by adding money to it. The best method of using Silver Saver is to schedule a set amount to come out of your checking account on a regular basis, say every week or every month. The money drawn from your checking account then goes to purchase real silver which is physically located in Wilmington, Delaware and stored under your name.

Now before I get to the benefits of using this method, let me just relay some of the negatives some people have mentioned about Silver Saver:

1. One of the biggest cons that many survivalists will mention is that you are purchasing silver which you do not have physical possession of. Some people would consider that worthless because in a catastrophic situation, you would have a hard time getting to that silver and it might be as good as gone.

2. Silver Saver has an odd method of counting your silver. You can schedule any amount of money to come out of your account to buy silver and usually that amount of money will not purchase an equal amount of silver at spot. So the amount you buy ends up being fractioned. If you buy $200 worth of silver at a spot of $35 you might end up with 5.7124xxx troy ounces of silver. Kind of a weird number and just to clarify they do also charge a premium so you do still pay a little over spot as with other silver dealers. Some people don’t trust those odd numbers because in reality, you can’t even buy that quantity of silver in the physical world but I feel that it’s just a side-effect of this method and allowing you to buy any amount of sliver you want instead of restricting you to whole troy ounces.

3. There is a storage fee for the silver you hold in your account. This is something I overlooked when I initially signed up. Silver Saver charges a storage fee of 0.05% of your assessed silver value.

4. The premium can be a little high if you are buying small amounts of silver but they become more competitive as your investment amount increases. A table of their current premiums (december 2012) is pasted below.

Range Premium
$25 – $149 7.49%
$150 – $299 6.49%
$300 – $999 5.99%
$1,000 – $9,999 4.69%
$10,000 – $24,999 3.99%
$25,000 – $99,999 3.49%
$100,000 + 2.99%

Now the benefits of Silver Saver and why it is my current preferred method to build up my silver investment.

1. For as little as $25 per week or $50 per month, one can slowly start building their investment. This works for me because I just don’t have hundreds of dollars to be able to spend on silver at once in order to take immediate physical position and there aren’t any other places that I know of that allow you to by silver in this cumulative fashion.

2. Every time my account reaches 21 troy ounces of silver, I can then take delivery of the silver so that it is in my possession. So while your silver is not in your possession when you first start, you can begin taking regular delivery of your silver once you read the 21 ounce threshold. To clarify, you need a minimum of 20 troy ounces to take delivery but there is a delivery fee of 1 troy ounce if your are taking Buffalo Rounds for delivery. The delivery fee is higher for other types of silver bullion. Delivery fees or shipping fees are common with all types of silver dealers. This is just one of the few that has you pay your delivery fee in silver.

3. Silver Saver has referral program that anyone can take part in and, full disclosure, I am taking part in it. Any time someone you refer to Silver Saver, opens an account there, you also get a portion of the premium of their investment. So an investment of <1000 yields the referrer 50% of the purchaser’s premium. An investment of over $1000 yields the referrer 25% of the purchaser’s premium. This is the only silver program I know of that benefits its investors in this way.

So as you can see Silver Saver has it’s pros and it’s cons. The best place to get your silver is probably your local coin shop but if you only have a little but of money to put towards your silver each month and it’s just not feasible to visit the coin shop every week or month, then Silver Saver may be the right choice for you. Check out their website for more info.

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.

Investing in Silver: Why Invest in Silver?

I had heard about silver as an investment for years but I only looked into it seriously about a year ago and that is when I started my initial investment in it. As with most of my research, it mostly consisted of internet research on silver investment sites and reading a few survivalist forums. Survivalists seem to be the most adamant group when it comes to silver investment and for good reason.

There are a few reasons why people choose to invest in silver:

Fragile Currency: The currency many countries is understood to have value and that value is backed by things i can’t even begin to explain because I don’t know enough about them. The most important thing to remember though is that the value of currency is always more than the value of the material it’s printed or stamped on. So there is nothing inherent in that currency that makes it valuable. Just the backing of that countries economy and the demand for their currency on a global scale. If something major were to happen, it is feasible that the value of the currency you use, would drop drastically or become useless. This is one of the things I gleaned from one of the many survivalist resources on the net. Now I don’t consider myself a survivalist but I can see where they are coming from. You would invest in silver in case a situation like this occurs so you have something for value to trade.

You can touch it: Sounds silly but silver is one of the few investments that you can actually see and touch other than say, a house. You can do this with money as well but most people keep that in banks so it just becomes electronic numbers. Nothing tangible there. You can invest in stocks but those are also all just numbers. People like the idea of having their investments liquid and easily accessible. I’m just going to keep referencing the survivalist mindset here but if something major were to happen and the banks crashed or your money and stocks were somehow deleted, where would you be? But if you had physical silver that you kept save in your own home, then you’d be able to trade that for food, goods and services. You can’t do that with investments that you don’t physically possess.

It’s a collectable: People love to collect things and silver is definitely a collectable item. Silver bullion comes in so many shapes, weights and sizes, it would be difficult to collect everything that is out there but one could try. Each country has its own designs for Silver Bullion. The United States of America has it’s American Silver Eagles and it Buffalo Rounds. Canada has it’s Silver Maple Leaf. Australia has its Silver Kookaburra. You pay less of a premium over spot for some of these than you will with others. Some have added  value do to their designs or if they are limited edition even though they are all generally made of <.9 Silver. The make the idea of making silver collecting fun while still saving for your or your children’s future.

Diversification: Maybe you already have a lot of money invested elsewhere. Maybe you have some in the bank in some high-yield savings accounts or just your regular checking accounts, some stocks, a 401k or IRA, CDs, etc. Most people wouldn’t put their entire savings in one place, so silver is a good option for diversifying your investment portfolio.

Go on to How to Invest in Silver.