By Dr. David Eifrig, Editor, Retirement Millionaire
Almost every day, we’re bombarded with the same advice…
Buy gold. Buy silver. They’re cheap right now. And every smart investor needs some precious metals in his portfolio as a disaster hedge.
What you rarely hear about is the simplest, easiest, and lowest-cost way to own silver… And the right way to think about your silver holdings. I figure maybe one silver owner out of 100 knows this stuff. And you won’t hear about it from your broker or financial advisor.
I believe silver is an "insurance" asset that could soar if a major crisis in the world’s paper money system occurs.
My favorite vehicle for owning silver allows you to maximize the "insurance" silver offers. It allows you to take physical possession of silver… without paying huge markups to spot prices… and without getting ripped off by dealers who charge huge markups on special "commemorative" coins.
I’m talking about dimes, quarters, and half-dollars that were minted before 1965. Unlike most of the coins we mint today, these coins have real silver in them.
People in the industry call these coins "junk silver." They get tagged as "junk" because they have no value to collectors. Collectors are only interested in uncirculated silver coins. These coins on the other hand are circulated widely in pockets and purses, and show a lot of wear.
But what’s bad for collectors is great for us as investors. Here’s why:
Why pay more for silver?
Collectible and uncirculated silver coins often have premiums of 25%-50% or more than the spot price of silver. But you can get the pre-1965 junk silver coins from dealers for less than that.
Junk silver comes in $1,000 face-value bags of either dimes, quarters, or half-dollars. So the breakdown of a bag could be 10,000 dimes, 4,000 quarters, or 2,000 half-dollars.
Regardless of which denomination you choose, the amount of silver you are buying is the same… about 715-720 ounces.
Dealers often charge premiums on these bags though. Last year, they were only 1%-2% above the spot price of silver. Unfortunately, since then premiums have gone up to 18%-25% with dealers.
This could be because junk silver coins have three advantages over ETFs, mining stocks, or collectible coins:
First, these coins are already well-known and don’t require verification. You don’t need to certify the authenticity and value. Again, there’s no collectible value, and everyone understands they’re 90% silver.
Second, they’re easily "divisible." Unlike a silver bar or gold coin, junk silver coins are already portioned in smaller amounts should you ever need to use them in everyday transactions.
Finally, they’re liquid. There has always been a demand for these types of coins. Thanks to a dealer network and places like eBay, plenty of buyers are available should you ever want to cash in your gains.
How to collect real “hold-in-your-hand” silver at a huge discount
To buy these coins through dealers, you want to look for premiums of less than 3% above the current spot-market price. It may not be easy with many dealers inflating their premium prices over the past year.
Fortunately, there’s another way to get some of these pre-1965 coins at their face value, without paying for the silver content at all. If you’d like to find out how, you can get the full details here.
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