How to Invest in Silver - 90 Percent Junk Coins, Eagles, Or Bars?

There are various common forms of silver bullion to invest in. All of them can be great investments if acquired at the right price, however there are particular advantages to each form. In order to start investing in silver, the first thing you should learn is the different types of silver to buy.

Junk Silver

It's called junk, but it's anything but that. This term refers to commonly used dimes or quarters and half dollars that were minted prior to 1965 in the United States. Before that time, money contained 90% silver. These silver coins are in good condition, making the term "junk" as misnomer, but they have no numismatic or collectible value except that of the silver it contains. However, since they haven't been minted since 1964, and most of the junk silver has already been melted down, there is speculation that some day junk silver will have its own premium above silver.

Junk silver is used mainly used by people who want to invest in silver, although usually in small amounts. People often have the wrong notion that investing in precious metals would require a prohibitive amount of investment. With junk silver coins this is not the case, because you can easily find dealers who are willing to sell you junk silver coins for small amounts - literally the change in your pockets.

Junk silver is usually sold in bags, not by weight, but the face value of the coins. For example you could buy $100 face value, $500 face value or $1000 face value.

One problem with junk silver is that some have decimal values, such as the mercury dime which contains 0.07234 ounces.

Silver Eagle

The silver eagle is the official United States silver bullion coin. The good thing about Silver Eagle bullion coins is that they each have a face value of one dollar, and are highly recognized throughout the world. However, silver eagles tend to have a larger premium above the silver spot price because they are only produced by the US mint.

Silver Bars

The standard for Silver Bar is that it is made up of 99.9 percent pure silver or 0.999 fine. They vary in sizes, ranging from less than one ounce to up to one thousand ounces. Common sizes are one kilogram, one ounce, ten ounces, and five grams. They are sold from specialized traders and even over bank counters. They tend to have the lowest premium over spot, but aren't as beautiful or recognized as a silver eagle.

So the question is this: which one is the best one to trade? It depends on your overall plan and also the amount you have available for investment.

Do you only have a small investment to start with? Then investing in silver coins, particularly junk silver coins, is your best bet. You can purchase them from dealers in small amounts. Also, coins are easily recognized by people. You also have the possibility of encountering rare or historically valuable silver coins which has much higher value.

In terms of silver bars, they may give you the best bang for the buck, but they are usually better for larger investors. They also have the disadvantage of possibly needing to be assayed for their purity content.   

Top 5 Places to Buy Silver Online

When buying silver as a hedge against inflation, it's important to know the top gold and silver dealers online. In order to avoid getting ripped off, take my advice on these gold and silver dealers because I have dealt with most of them.

It is extremely important to note that when buying gold and silver as an investment, you only buy for the metal content. You do not want to purchase numismatic or rare coins because many of them carry a high premium over the spot price.

Since you are an investor of gold and silver, you will want to get as much metal as possible for the lowest price. A good thing to remember is to only buy bullion or gold and silver bullion coins.

Many coin dealers will try to sell you the rare and graded coins because they make huge premiums over the spot price. To avoid getting ripped off like I have been, buy only bullion coins and bars.

Now let's talk about the top places to buy gold and silver online.

Monex

Monex has one of the nicest and user friendliest websites for gold and silver. They have very descriptive videos of each metal you may be investing in. Monex really goes out of their way to be informational about the products you are buying. Monex has a good selection of metals to pick from, but their inventory of bullion is a little lacking. Monex does give a list price of each item they sell.

The prices at Monex are a little higher than other places, but they score a 10 on their website design. Overall, Monex is worth the time to check out, at least if it's only to take a look at the videos. You will learn a lot from the website alone, and you might just decide to go with Monex as your gold and silver dealer online.

eBay

eBay.com is a great place to buy your precious metals from. eBay has a huge marketplace for not only gold and silver, but practically anything you want to buy. The best thing about buying gold and silver coins on eBay is the gigantic selection.

You can find cheap deals if you shop around, and sometimes you can get silver coins for under spot price on eBay. I do use eBay to buy gold and silver, but for the most part their prices are a little more than I like to pay, unless you find a rare deal. Many times you can get free shipping on gold and silver coins if you choose the right seller.

Overall, eBay rates as a safe and viable choice to buy your gold and silver coins and bullion.

Bullion Direct

I have heard some good feedback about Bullion Direct, but I have never bought from them personally. Bullion direct has a descent inventory of metals, but their website is not as user friendly as Apmex or Monex.

You can direct your money into a Bullion Direct self directed IRA, but their prices on coins like the American Silver Eagle don't hold up against the Apmex prices. If you have an IRA with an approved IRA custodian, you can invest your tax-deferred funds into gold and silver coins and bullion.

You will actually hold the physical metals, but they will be either stored in Bullion Direct's vault or a company of their choosing to store your metals. An IRA through Bullion Direct is not a bad idea. It's not a bad idea to buy physical metals from Bullion Direct, but there are other alternatives that might be more beneficial to your wallet.

Goldline

Goldline has a nice website and some good inventory to choose from. Goldline's shipping and customer service ranks high in my opinion so it's a good place to start. Goldline, like Bullion Direct, offers a precious metals IRA.

The only problem I see is that they do not quote the prices on their website. Unlike Apmex or Bullion direct, their prices are hidden and it says "call to order". Glenn Beck from Fox News is a Goldline proponent and he advertises for them on his commercials sometimes. I like the fact that a familiar face is promoting the business because it makes me feel good about buying from them.

I seem to have gotten a good deal when buying from Goldline, but I'm just not crazy about the hidden price. Overall, I think Goldline is a stand up company and a good place to do business. You may want to call and get some price quotes before you commit to buying though.

Apmex

Apmex.com is by far my favorite place to purchase gold coins, silver coins, silver bullion, gold bullion, American gold eagles, and American Silver Eagles. Apmex has a large inventory of gold, silver, platinum, palladium, rare currencies, and precious metals IRA's.

Apmex has great prices, the cheapest I have found, and they ship within a week usually. Apmex is constantly having sales and marked down items. Apmex also has great packaging of your product. They go over and above to make sure your items. Don't get banged around.

Overall, Apmex has great price, super shipping, great discounts, and good customer service. I give Apmex.com an A+++.

Where Can I Sell My Silver Bullion?

As more and more Americans are searching for ways to liquidate physical assets like precious metals, selling gold and silver bars, jewelry, and other pieces are practices getting more and more popular. Many conversations now include questions like, "Who buys gold and silver?" or "Who will buy my silver bullion?"

If you're one of the many individuals wondering "Where can I sell my silver bullion," there are a few things you should know about your alternatives. Some of the most popular ways to sell silver bars are outlined below.

Where Can I Sell My Silver Bullion: Local Shops
Oftentimes, silver bullions can be sold to local pawn shops or precious metals merchants, including jewelers. While this technique does save you from the trouble of shipping costs, it might not get you the best price. A sensible offer may be within 5 percent of the spot price, but there are sources that can offer you more.

Where Can I Sell My Silver Bullion: Online Auctions
Many people enjoy selling silver on eBay, as it occasionally results in a higher payout than what a local shop can offer. Nonetheless, the final price you will receive is largely unpredictable - and there's no guarantee that you'll be pleased with the amount. Plus, selling on eBay takes time; so, those who want fast cash for silver or gold should think twice before going this path.

Where Can I Sell My Silver Bullion: Other Resources
Selling your silver online is not a bad idea; it just takes some careful research to select the appropriate buyer for you. You may wish to look into online sources that are also metals refineries. A company that is a refinery is not a middleman; in other words, they have no need to pay a refiner, and therefore no need to take a cut out of the middle of your transaction in order to remain profitable.

There are several reputable sources you can look to, but it's best to find a silver purchaser that is upfront about the payouts it offers. For example, some cash for silver buyer divulge the current price of gold and silver on its website, as well as the payouts it is able to offer. A 100% satisfaction guarantee ensures that sellers can retain their items if they are dissatisfied with the money they got. "Who will purchase my silver bullion?" is a topic on the minds of many. Hopefully, the information presented here answered the question for you.

Silver Is Clearly A Better Investment In Our Economy

Most people would probably answer gold, but the precious metal with the greatest upside may be silver. Silver is more volatile than gold is, and with expected inflation and increase in demand, Silver has a potential to increase in value more than Gold.

Now the purpose of this article isn't to talk you out of investing in gold as it is a solid investment. Rather, the goal is to educate you on the history of silver, what influences it's price, and what it's future looks like so you can decide if investing in silver is better for your portfolio.

Before I attempt to predict the future, let me first discuss the past performance of silver compared to that of gold.

In 1970, the price of gold averaged $35.94/oz. By the end of the decade, its average was $306/oz, or an increase of about 1000%! Not a bad return. In 1970, the price of silver was only $1.63 per ounce. By the end of the decade, it had risen to almost $22 per ounce! This was an increase of around 1400%.

Would you rather invest a smaller amount and receive a higher return? These past results make the future of silver attractive.

Right now, silver prices are hovering in the range of $17 per ounce. Just imagine, silver prices skyrocketing to around $225 per ounce in the next year.

Why use examples from the 1970's in regards to gold and silver? Many people, including former Fed Chairman Paul Voelker, admit that the current economy is acting like it did in the 1970s, with higher food and energy prices, instability in the stock market, higher unemployment, and a lower performing dollar. Also Voelker, according to Forbes Magazine, recently told the Joint Economic Committee that while the economy obviously does not have the full-blown, double-digit inflation crisis that finally appeared in the 70s, 'there is an underlying tendency to inflation.' Given the similarities between now and the 1970's, the price of silver may be ready for a sharp increase again.

The second reason why silver may be a better investment than gold in this economy is that silver has many more industrial applications than in the past. And, like gold, silver is in a limited supply. So as demand increases and supply does not, the price of silver will go up!

What are some of the products that use silver? Batteries, flexible and solid plastics, and electronics are traditional uses for silver that keep demand alive for it. But the following are some newer uses for silver that will keep increasing demand:

•    Mirrors & Coatings - Silver can be polished to 95% reflectivity. While mirrors have been around for centuries, silver is being incorporated in different coatings to reduce sun exposure to the eyes with an eyeglass application. This usage is also being applied to glass buildings in order to help keep buildings cool in summertime and thus reduce energy dependence.

•    Medical - It has only recently been discovered as to how silver's anti-bacterial abilities work. One area of development includes using Nano-silver particles as a delivery mechanism for silver ions, which are being incorporated into many new antibacterial products. For example, silver ions are being incorporated into paints and coatings to inhibit surface germs and fungus.

•    Water Purification -Silver ions are now being used in all sorts of water purification processes. Example customers are hospitals, community water systems, pools, and spas.

•    Solar Energy - Silver paste not only increases the efficiency of solar energy collection as electricity, it can also be used in solar farms that use the collection of the sun's rays as heat to produce steam powered generators.

Finally, collecting silver coins is collecting massive popularity as well. The U.S. Mint sold more Silver Eagle Coins in March and in the first quarter of 2010 than ever before. A total of 9,023,500 American Silver Eagles were purchased in the first quarter of 2010, the highest amount since the coin made its debut in 1986! Many investors are starting to awaken to the benefits of investing in silver.

According to the London Bullion Market Association's Forecast 2008 report, the silver market looks bullish over the next couple of years. Silver's price gains can be attributed to solid demand-side investment, and that appetite looks set to continue in the future as the race between the old world and the emerging economies to corner the world's natural resources intensifies... be it a mine or simply physical metal. Given the economic factors, the historical surge due to these factors, the increase in industrial demand, and the increased popularity in coin collection, silver may be a safe investment for investors to bully their portfolio than other types of assets and investments.