Collecting silver coins for fun and investment (IRA, fund, cash)
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I couldn't decide if this belonged in the personal finance forum or this one. I opted for this one. I am considering collecting silver coins for both fun and for an investment. I am posting here more for the investment side.
I am looking for a hobby and I used to collect coins as a child, so I figured why not as an adult as well. But I am also working on investing more and coins fits that as well. I thought it might be fun to focus on US silver coins for a couple of reasons 1) It gives me a focus for the hobby and a narrow range so I can develop expertise at it and 2) Unlike other hobbies, I think it's theoretically possible to cash this one it. In fact, I did it before. When I was a child, with the help of my dad, I sold all my silver coins for a profit around 1979-1980ish and invested the money in CDs in the early 80s when interest rates were high. I was very lucky. I spend all that money on college though
I am just looking for thoughts and opinions on the idea of collecting silver coins and the idea of collecting historic coins vs bullion. Historical coins are 90% silver coins (things like Morgan dollars, Peace dollars, Walking Liberty half dollars) and the like and bullion coins are 99.93% silver. The advantage of the historic silver coins are, it would be more fun (and hobby-like) hunting for the coins--but the coins are expensive (for a coin that's about a $15 value in silver, I am looking at a minimum of about $23 for a coin and some coins are hundreds of dollars for their numismatic value). I could eventually sell them, but it's a limited market and it's kind of a risky market because the collecting of coins is based on their value to other collectors. Plus there are forgeries out there. The advantage of the bullion coin collecting is that I think it would be more practical in terms of investing (there is a set value for silver) and you get more value for your dollar as you usually buy them just at about market price plus a couple of dollars (but it's kind of boring--there is no "hunting" for coins involved). I suppose I could combine the two as well. But is it really worth it to collect silver bullion coins?
For background. Yes, I am invested in other things. I have a 401k and an IRA and I save 10% of my income for retirement. I also have a college fund for my daughter and I save money monthly for my short term savings. In all, I save/invest about 20% of my take home pay. The only investment/personal finance "hole" I think I have is that I have a short term savings that needs to be built up and a missing "long term savings" (all my savings other than retirement and college was drained when I took hit with a divorce, the down housing market when I had to sell the marital home upside down, and then unemployment on top of that). I am currently still rebuilding that and would continue rebuilding that even when buying coins.
Thanks!
Last edited by jillabean; 01-03-2014 at 08:01 AM..
Reason: typo had to be fixed
I have ~1% of my savings invested in Precious Metals and all of that is in Silver coins. I may up this percentage as it is fun collecting the coins and looking for them.
I do have the older Morgans and Peace Dollars that you mentioned. However, don't disregard the modern Silver American Eagles. They are currently the most sought after silver coin on Earth. They are not rare, as the government makes a lot of them and they have been making them since 1986. You pay a premium for them, but you sell them with that same premium. also don't rule out Canadian coins.
It is possible that Silver could be up nicely in value 20 years from now or so as Silver has many uses in technology (most conductive metal on Earth) and medicinally (anti-bacterial qualities).
I would avoid generic rounds and bars, personally.
Here's just some random info I have on collecting silver and copper and other metals as well as buying silver coins.
You can look through change for coins pre 1964. They are silver. Canadian coins up til like 1968 are silver and I think swiss til the same time. POssibly Autralian as well.
Some people to go the bank buy a box of half dollars and sort for the pre 1964. This is fun and free but honestly the percentage of silver halves or coins period is so low its really not worth the effort.
For a hobby as well as investment or money maker you could buy unopened monster boxes of american eagle coins. this is 500 coins to a box. a bit pricey to get into about $12,000 a box but to get a good price you really have to buy in bulk like that. You can send the whole box to a grading company straight from the seller or you can get it sort through find coins you think are good quality and then send them in. once you get them graded as long as they grade to a certain quality you can resell them for 2-3 times the origional value.
You could hypotheticlaly do this on a smaller scale buying tubes instead of boxes but honestly if its been opened a coin shop or someone else has probably sorted them already and there's no way of knwing as boxes are sealed but not tubes individually.
some people sort pocket change and look for either silver or odl or historical coins. wheat pennies, buffalo nickels avb pennies, steel nickels, etc.
smae way the old silver coin was taken out of circulation many people are buying boxes of nickesl. they were always made with the same percentage so no need to sort, just buy a box of nickels throw them in your basement and let them sit. some people do the same with pennies but you have you sort, pre 82 is mostly copper post 82 is mostly zinc so you have to sort them. you can build a machine like the one below for like $15 or $20. its kind of a fun hobby, espcially if you have kids.
couple other tips. some coins which people really seek out which you can get premiums for once they are a year or two old but which are pretty cheap to get upfront are like liebertads, philharmonics, silver pandas, gold pandas, etc
I just really like silver dollars... I am thinking I might do three things: collect a complete set of Peace dollars (start simple basically), collect random silver coins (junk silver)from change (because it's fun to find it), and also buy at regular intervals a few of the modern bullion coins too as more of an investment part of the hobby.
couple other tips. some coins which people really seek out which you can get premiums for once they are a year or two old but which are pretty cheap to get upfront are like liebertads, philharmonics, silver pandas, gold pandas, etc
I buy some of these, I also do some of the privy marks.
Sometimes there are sales. I purchased a whole bunch of Canadian wildlife series during the wolf. Like 500oz worth and they were only $1.99 over spot when I did so. They are like $65/coin now?
I just purchased it for the metal content and it was cheap. somehow everyone wants them now. I also did this with some privy maple leafs.
I just really like silver dollars... I am thinking I might do three things: collect a complete set of Peace dollars (start simple basically), collect random silver coins (junk silver)from change (because it's fun to find it), and also buy at regular intervals a few of the modern bullion coins too as more of an investment part of the hobby.
silver eagles are deifnately the most sought after and most trusted but also most common. the deals your going to find are buying new philharmonics, libertabs, silver pandas and hanging onto them for like 2-3 years.
you can also start placing ads on cl saying you buy silver. its few and far between but alot of times youll find people selling big lots of coins for a few bucks below spot price
I collect silver coins. Ive never actually sold a silver coin, so I technically haven't made a dime doing so.
I've gotten very good at finding silver in change. Got two silver dimes this past month. I also pull out wheat cents and silver nickels as well.
I also metal detect, so I've found silver in the ground as well.
Most of my silver is junk, but I have some collectable graded stuff as well. It's more of a hobby, than investment for me.
I will say...a pocket full of silver does sound kinda nice when you walk
i used to actively look for silver in change by buying boxes of half dollars. i had a couple good boxes where id find like 7 or 8 coins, at the time silver was approaching $50 per ounce so a coin was like $30 and was worthwhile. now silver prices are low again and the number of coins i find are so miniscule its not worth the hassle, time or effort buying these from the bank, sorting finding nothing and having to return them to the bank which kinda annoys teh bank.
i think dimes are probably teh way to go. small coin less silver so less people will be actively looking and sorting, also silver quarters are pretty easy to spot and pick out, dimes not quite as easy so i think probably numbers wise better luck with dimes.
you can make sorting machines for silver coins just like i did with the copper coins, just need a coin comparator from a vending machine and put a silver coin in for comparison instead of a copper. i think its a page back but i posted a vid for thoe interested.
as far as sorting change, its not worthwhile enough to be a money maker but if you have kids who enjoy doing it or just doing it as a hobby then i guess its worthwhile. my grandpa did find an avb penny worth about $1800 in pocket change
as far as sorting change, its not worthwhile enough to be a money maker but if you have kids who enjoy doing it or just doing it as a hobby then i guess its worthwhile. my grandpa did find an avb penny worth about $1800 in pocket change
I pretty much sort as I get my change. Only takes a few seconds to scan and see if anything good is in my hand.
Best score was a couple years ago. Went to buy a coffee and paid with a $5 bill. When the cashier handed me the change, i heard the familiar jingle of silver. Looked at my change and saw two silver quarters. I immediately asked for some change in quarters and bought the entire roll from her. It was pretty much mostly silver.
Right after 2008/2009 is when i started finding way more silver in change. I think i've found more in change the last 2-3 years than i did the previous 10 that i've been looking. Sadly, people are probably hurting more and digging through old jars of change that has been sitting on a shelf or in a closet somewhere for 30-40+ years or so. Amazingly I find wheat cents from the teens, 20's and 30's in change all the time that barely look circulated. I pulled an bright red 1952 Wheat Cent that might pass for AU out of my change a couple weeks back. Now where would a coin sit for 62 years that it only now has begun to circulate?
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