Category: American Silver Eagle

Silver is an asset. Silver has been used as a form of currency for thousands of years. Silver represents wealth. Why you should buy silver as part of your savings plan.

Buy Silver as an Investment

There are many better options to invest in besides silver. As an investment silver does not provide the rate of return that traditional investments in stocks, bonds and other securities can provide. When looking at the overall rate of return silver makes for a horrible investment.

Silver and other precious metals have always been a way to hedge against inflation. Historically, the value of silver and it’s purchasing power has remained roughly the same for decades.

Silver’s Purchasing Power

Silver has maintained it’s purchasing power over time in pace with inflation. The amount of goods or services that you can buy with one troy ounce of silver has stayed relatively the same throughout time. This has even held true over the last 100 years or so.

As an example, in 1964 one troy ounce of silver was worth around $1.29. The price of 1 gallon of regular gas was around 30 cents per gallon. That one troy ounce of silver could purchase roughly 4.3 gallons of gas.

In 2018, the price of silver has been hovering around $16.50 per troy ounce. The price of a 1 gallon of regular gas has been around $3.00 per gallon. Using the same methodology, one troy ounce of silver today can purchase roughly 5.5 gallons of gas.

Buy Silver, a good way to save for rainy day

Most financial experts agree that everyone should have an emergency fund that contains about six months worth of expenses. It’s no surprise that most people can’t do this for one reason or another.

Some people just don’t have the income to set aside in a savings account in this way. For others, it’s that they don’t have the self-discipline needed to not dip into their savings when things come up that would be normal expenses.

Buying silver is one way to set money aside in a rainy day fund like a savings account. However, it’s not a savings account you store in the bank. Nor is it a savings account that you can just pull cash from easily. It’s a savings account that you can hold onto. While it is liquid and easily convertible into cash, it does take some effort. This makes it harder to spend unless you really need to.

Silver is money but it’s not as easy to spend as fiat currency. When you buy American Silver Eagles by the tube each coin has a face value of $1 USD. However, the real value is in the intrinsic nature of the silver. A tube of Silver Eagles contains 20 troy ounces of silver. Since Silver Eagles are the most popular and widely recognized government bullion coins in North America, and one of the most recognized worldwide, it is very easy to trade Silver Eagles for fiat currency.

It’s important to think about and understand what your plan and strategy for dipping into your silver savings account will be. It helps you understand how liquid it will be for you. How you can get the most value when it comes time to sell or trade for fiat currency. Do you have a local coin shop that will buy at a good price when you need it? Will you be able to sell to an online dealer? What are your options to sell in a pinch?

When the dealers buy Silver Eagles from the mint they are charged a premium of $2.00 per coin. The US Mint charges this premium to cover the cost of manufacturing and distribution of the coins.

Most local coin shops will pay $1.00 or so over spot price for American Silver Eagle coins. They do this because they know they can easily sell them very quickly. When they buy silver eagles from individuals they are able to purchase them for a lower price than they can get them from the US Mint.

With generic silver bullion, most local coin shops will pay 50 cents to a dollar per ounce below spot price. Reselling generic bullion has lower margins than Silver Eagles. Oftentimes local coin shop buy generic bullion with the intent to ship it to a refinery to be melted back into something else. This is a common practice.

Buy Silver Eagles for your savings

It’s no secret that Silver Eagles hold their premium better than generic bullion. There are ways that you can buy silver eagles at a lower premium for your rainy day fund. Buying silver eagles allows you to recapture much of that premium when it comes times to dip into your rainy day fund and convert some back into fiat currency. You will find the best values when you buy silver eagles that are not from the current years mintage.

There are a number of different ways that online silver dealers will market Silver Eagle coins from previous mintages. They could be offered for sales simply as “Random Year” American Silver Eagles. Random Year Silver Eagles are sold and marketed as non-specified years because it may depend on what the dealer has in stock at the time you place your order. View Random Year Silver Eagles Pricing

Random Year Silver Eagles will be in Uncirculated condition (BU). If you are buying tubes of 20 Eagles at a time they will most likely be shipped in the original mint tube as well. These eagles will most likely be new old stock and could be 1, 2 or 3 years old. There’s nothing wrong with them except that they have likely been sitting in the dealer’s vault for a while. These will often be sold for as low as $1.50 or so over silver spot price. Sometimes deals can be found for even less.

An even better value when buying Silver Eagle coins is to look for those in cull condition. Cull condition American Silver Eagles will most likely have been handled at some point. The coins may contain some scratches, show signs of tarnish and wear and tear. Some may even have been painted. You can buy cull condition American Silver Eagle coins for less than buying Random Year Silver Eagles. View Cull Silver Eagles Pricing

Ultimately, the intrinsic value of the silver is what is most important. Being American Silver Eagles, even in cull condition, still bring a premium over spot price when it comes time to sell them.