We’ve seen in recent years the collapse and near collapse of financial giants and companies considered too big to fail. Many of those same financial behemoths are even more leveraged today and the next financial crisis could bring them all down. For this reason, many people are looking for alternative ways to preserve and increase their wealth. Quite a number have considered silver coin collecting.
If you want to begin collecting silver coins for profit, there are several things to consider ensuring your efforts will pay off.
Silver Bullion Coins
If you are seriously considering silver coins, you need to first of all decide if you want to collect silver bullion coins or if you want to buy silver coins that were minted and circulated as legal tender.
Silver bullion coins are generally made of 99.9 percent silver except for the British silver Britannia which has a silver content of 95.8 per cent. Normally, the face value of a silver bullion coin is lower than its actual market value. For example, the Canadian Silver Leaf is a one Troy once silver bullion coin with a face value of five dollars and a market value of over thirty dollars based on the market price of silver.
Silver bullion coins provide good protection against any economic meltdown, but if you are expecting spectacular profits from investing in this coin, you will be disappointed. Financial gains with this particular investment only happen over the course of time, when the bullion coins in your safety deposit box rise in value with the price of silver.
I like to dollar cost average my silver purchases using a program called OWNx.
Apart from silver bullion coins, you can also go for the other type of silver coins which are sometimes referred to as investment coins. Generally, these are coins are made of at least 90 per cent silver and are, or have been, a legal tender in their country of origin.
In the past five to ten years, increasing silver prices have made these coins a popular choice for collectors. On one hand, there is always a chance to one day sell currency coins for a big margin of profit, but on the other hand, there are bigger risks in this direction because factors such as demand and popularity enter the picture.
On the plus side, silver is cheaper than gold so it is possible to begin acquiring a silver coin collection without breaking the bank.
What to Keep in Mind
There are certain things to keep in mind to keep your money safe as you go about silver coin collecting.
- Always do your research before you make a purchase. If a coin is worth a lot of money, look for official authentication. Find out if the coin has maintained good value over time.
- Go for high quality coins which are more certain to appreciate in value than oddities. Double check quality and grade by using reliable resources like the official Red Book.
- Keep clear of TV or internet bargains. Remember that if anything sounds too good to be true, it usually is.
- Provide good storage for your collection. Good storage does not mean a shoe-box hidden away in your closet or in your file cabinet. Get a safety deposit box.
- If you want to go about silver coin collecting as an investment, be ready to sell when the price is right.
Many resources say that the outlook for silver is good and that the annual demand for this metal exceeds the supply, Moreover with the current economic situation, more and more people are becoming interested in using this metal as a way of keeping their money safe. The side effect of this increased demand would be to further drive prices of silver up, making it a good investment today. However, even with these rosy predictions, it is good to practice due diligence and caution. This way, although you may not make a killing in your investments, you will be better assured of both profit and protection in silver coin collecting.