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Starting out and confused already

rkd80

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#1
Hey folks!

For almost one year I have been telling myself that I need to diversify, move cash to PM and stop being complacent. Have not done so. Barrier to entry seems so high, but recently I lit a fit under my but and committed to buying at least 1000 oz of silver and 10oz of gold.

But the more I research, read the forums, understand the difference between the various types and their privacy/tax/IRS implications the more confused I get.

My original plan as of a few days ago was to go with Maples and Eagles, but I am not sure anymore.

Here is my objective: Convert fiat into precious metal in such a way that if I need to convert it back to fiat I can do so easily. I am happy to hold metal as long as I need to, but liquidity is important.

To that end I settled on the coins because they appear to be highly popular, however paying 5% and up over spot seems like a lot? As I understand it the premiums themselves fluctuate tremendously and if prices ever move up the premiums may get squashed. However moving around 100oz of blocks also seems unwieldy and there may be implications on reporting.

For a beginner, there is a TON of info to sink into, but I am now stuck in analysis paralysis. Would appreciate any links to similar forum topics, etc.

Thank you much!
 

Bottom Feeder

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#2
Welcome to the site, rk, hope you enjoy the view.

As to your question there, the only thing I can suggest is to take it slowly, not purchase the 1000 and ten ozs all at one time. And visit your local coin stores (if you're in an area that has a few) and look at their offerings. And, ah yes, the premium... its something ya gotta live with. Most like you'll never get the premium back when you sell - but remember, all of us are in the same boat.

Happy hunting
BF
 

rkd80

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I don't have a ton of local options, but what is the advantage over visiting local shops versus the reputable online dealers like JMB, etc?

I suppose the question about the premium is as follows: If we are buying it for the value, why not go with a private mint? As long as we can be sure it is real, metal is metal, no?
 

andial

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Irons

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I don't have a ton of local options, but what is the advantage over visiting local shops versus the reputable online dealers like JMB, etc?

I suppose the question about the premium is as follows: If we are buying it for the value, why not go with a private mint? As long as we can be sure it is real, metal is metal, no?
Welcome aboard!

Having a good relationship with 1 or more local coin shops is worth paying their premium price from time to time. They are the ones you will sell to for quick cash and you want to be on good terms with them. Not all the time though because hunting for deals online and at coin shows is fun too.

Private mint stuff like Sunshine or Engelhard is fine just avoid the bars and rounds that have other dealers logo's stamped into them. My local guy HATES rounds and bars that advertise large online dealer websites. If he has enough stock he plain won't buy them.

.
 

ttazzman

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there is a expense associated with owning physical metal.....spot is based on paper and large bars in a vault...

i try to keep my physical metal premium i pay under 5% ...and i try to buy items that are recognizable and easy to sell if needed .....i have NEVER had anyone question ASE..or AGE's..or 90%...next in line seems to be Maples and Englehard products...
 

Duckworth

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#9
How you handle these things depends on what your goals are. I can't offer anything about the best ways to buy and sell because for me it is not for investment, but more for insurance. I put it away and forget about it. If TSHTF, the premiums will be irrelevant. It will be something you have and hold rather than a blank balance sheet piece of paper.
 

rkd80

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let us stipulate that primarily people buy PMs because of a buy and hold strategy. Then why are the semi-numismatics so popular? I am figuring at the end of the day when we want to show value, who care what the pretty design on the front looks like? How much valuable metal in weight, should realistically be the only question. Yet the Maples/AGEs, etc are so insanely popular it feels I am missing something.

Right now my default position is just to grab a mix due to the overwhelming nature of it all.

What are your opinions regarding privately minted coins that have reasonable premiums?
 

ttazzman

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let us stipulate that primarily people buy PMs because of a buy and hold strategy. Then why are the semi-numismatics so popular? I am figuring at the end of the day when we want to show value, who care what the pretty design on the front looks like? How much valuable metal in weight, should realistically be the only question. Yet the Maples/AGEs, etc are so insanely popular it feels I am missing something.

Right now my default position is just to grab a mix due to the overwhelming nature of it all.

What are your opinions regarding privately minted coins that have reasonable premiums?
Getting away from opinions and going directly to reality.....go to sites like jmb..apmex etc and look at buy back prices on different items.....and become enlightened
 

Usury

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#13
IMO, if you want liquidity and ability to retain as much of the premium as possible, go with ASE's for Ag. Either that or the cheapest per toz generic you can get (which really has the lowest buy/sell spread). Having tried selling some one time, I found dealers paid the same for anything they're buying, except ASE's.

As far as gold, that's trickier, but again probably 1 oz AGE's are the best bang for your buck. I also like GML's as they have much lower premiums...probably lose the diff plus some if ever had to sell though. I honestly would know. My plan for AU is to take a Warren Buffet approach and plan for a holding period of forever. Who knows though....

Many recommend buying based on AU/AG ratios, trading Ag for AU and vice verses when it makes sense. At those times, get whichever metals are lowest premium IMO when doing this to trade up.

Finally if you really think you'll end up trading in/out a lot then you might as well just buy GLD ETF and be done with it.
 

rkd80

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Usury, thanks for the detailed response. I do not plan to trade a lot, in fact I imagine only once if/when a situation arises where I need fiat to convert to real estate or something. Otherwise it is a long term hold, but just want the option to convert back to cash if need be.

So I suppose the question remains then, if dealers pay spot anyway other than maybe AGE/ASE, why not just buy privately minted bullion rounds? I can see in APMEX the buyback price is always 5% below that which they are selling it for, but the current price is a good 10%+ above spot. So if prices rise and premiums collapse the loss could be rather substantial.
 

Usury

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#15
If prices rise a lot the premium and buy/sell spread won't matter.

Generic rounds (buffalo for example) are perfectly fine. Again if I were you I'd go with lowest premium per oz. 10 or 100 oz bars may be better. If there's not much difference though, I'd get the smaller sizes.
 

nickndfl

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#16
Wait for a nice sale or find places where you can buy for spot with cash. I would also buy more gold and less silver simply because it's a lot easier to transport a larger value of gold than silver.
 

Scorpio

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#17
It is one thing to worry about premiums, but quite another to negate dealer inventory/profit/delivery/etc.

You are getting all hung up on premiums and missing the big picture. You travel off to the car dealer and buy a brand new car, the second you drive off the lot with it, the price is immediately shaved big. That is dealer profit and employee benefits ie not part of the cost of the actual vehicle to someone else.

Regardless, it would be better to develop a plan and get more focused on the type/weight/metal.

For instance, we have threads on here that prove over time that paying anything over $2.00 per ounce over for AGE's is premium risk. Whereas with generics, there will always be a premium over spot unless you have some type of 'in', local purchase, someone dumping, etc. Yet in those cases, they come up rarely and you have to pounce when it is avail not according to spot price.

Let's say that happens just for the heck of it. Spot has risen $1 an ounce in silver, and you stumble on some Joe who is dumping at spot so you buy it. How did you do? Well, if you would have bought earlier before the rise, you would be ahead, even with the premium as many premiums can be found for silver under a buck a round.

The first thing you need to do is to get some metal in your hands and keep reading. Don't make a play all at once and pray that you as a novice know it all and can both 'time the market' and also 'get the exact right metal' to make oodles of dough. That isn't happening.

As I stated, focus on metal and size right now. For instance, I do not agree with large bars, as the ownership trail is too murky to guarantee it shows up at your door as 100% silver. With gold, there have been counterfeits out there in small 1 oz bars. So you need to stay with only rock solid dealers.

Your local dealer may be such a putz, that he may in fact be selling counterfeit garbage and never know, or be complicit.

Any of the large players sample their metals when they come in and verify its authenticity. We have thread after thread of dealer ratings. The stories are endless, but it is incumbent on you to find the intel. We have already laid it out for you all over this forum.

If I or anyone else answers you in this thread, it is our personal opinions only and each of us has our own preferences. For instance, we have guys who play numismatics, and that is a whole different animal and certainly not for someone starting out. Numi's are not readily liquid unless you take massive haircuts.

Point is, let the dealers make their dough, just as with anything else, do your best job on the front to get the best value possible ie best price from a quality dealer.
 

rkd80

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#20
Scorpio, understood and noted. You are right insofar that more and more opinions only muddy up waters further, hence I am here actually.

I will start buying it up, will go with large dealers, will absorb the premium. Will hang around here and see if any deals come up.

Thank you all.

Btw, if anyone has a link to an especially useful thread with nuggets of information then feel free to share!

Thanks again for the warm welcome.
 

Usury

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#21
One more thing....gold doesn't tarnish. Not like silver at least.
 

Silver

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#24
Depending on how much you are buying, I would go with only sealed boxes of Eagles and be done with it.
 

rkd80

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#25
Does anyone remember what premiums looked like back when silver was $4-5 and when silver was $35-$40?
 

Uglytruth

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#26
Depending on "why" you are buying this...... it is hard to barter with 100 oz bars if TSHTF. While bars have lower premiums they are less liquid.
Some like 1 oz rounds. "IF" silver or gold go where we all hope they do it will be hard to barter even with a 1oz round unless hamburger is $100 a lb.
That's why some like fractional 1/4 oz or even smaller but yep it costs ya...... Some like pre 1964 90% silver coinage because it is easily recognized and
will be accepted. If you think society won't melt down and you want it because of other reasons you have to think them through for yourself like we all did.
Some think of it as insurance. There is a thread about how much is enough........ that's interesting in itself as you can't eat it either.
 

Silver

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#27
Does anyone remember what premiums looked like back when silver was $4-5 and when silver was $35-$40?
I recall paying $1.60 over spot for Eagles and as little as 50 cents over for generics (in 2003). In 2011, Apmex offered $6 over spot for sealed boxes of Eagles (2003's).
 
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Silver

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#28
Depending on "why" you are buying this...... it is hard to barter with 100 oz bars if TSHTF. While bars have lower premiums they are less liquid.
100oz Engelhard extruded bars are the only silver that a dealer has refused to buy from me - he had bought a fake and the only way he would buy them was if he paid me after they were sent to the refiner. I got rid of all my 100 ozers shortly thereafter.
 

rkd80

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Interesting. Looking through archives and old charts, premiums are not tracked carefully, but over the past 4-5 years silver premiums ranged from 15 to 20+%. Right now across most online dealers, average Eagle premium is around 17%. Guess I'll bite the bullet and grab some, along with some gold leafs.
 

Silver

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#31
Comparing prices all day long, this looks very attractive.

http://www.silver.com/1-oz-gold-canadian-maple-leafs/

Also, decided to forego safes and just buy some diversion safes. Like fake pillows, etc - plan is coming together!
Maples are ok - they are cheaper to buy, but also sell for less on the resale. Then there are the reporting requirement for larger quantities when selling. No reporting on AGE's or SAE's on any quantity.
 

stonedywankanobe

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#35
Welcome to the board 80. Good to see someone new interested in real money.

I dipped my toes in November of 2012 when silver was around 32. My first purchase was 2 Canadian maples from jmb which costs me 77.11, still have the receipt.

Will prices go lower? Its possible but having purchased at much higher prices it would seem to me the last few years have presented us with pretty decent buying opportunities. Sub 16 silver has only showed its face a few times since I've been collecting and I say your timing is impeccable... could be wrong.

A few things I've learned. 1. Spot will always fall when your in a pickle and need cash. 2. Most local coin dealers pay a bit more for American coins such as Age's and Ase's. 3. If you hang out long enough here your bound to meet some great folks and make a few friends, who like yourself, get it!

My advise, buy what you like. I've dabbled in scarce coins with only a novice eye and made money. I've cherry picked from the generic bin at my local coin peddler and made money flipping.

Have made some great trades using silver as money with friends and neighbors. The size and make of my stack is always changing, for me that's been the only constant.

Go with the flow, one day we we're all gonna look like geniuses.

...Except for Irons because he won't have any swellver.
 

Usury

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#36
Depending on "why" you are buying this...... it is hard to barter with 100 oz bars if TSHTF. While bars have lower premiums they are less liquid.
Some like 1 oz rounds. "IF" silver or gold go where we all hope they do it will be hard to barter even with a 1oz round unless hamburger is $100 a lb.
That's why some like fractional 1/4 oz or even smaller but yep it costs ya...... Some like pre 1964 90% silver coinage because it is easily recognized and
will be accepted. If you think society won't melt down and you want it because of other reasons you have to think them through for yourself like we all did.
Some think of it as insurance. There is a thread about how much is enough........ that's interesting in itself as you can't eat it either.
I'm not sure I buy into the notion of everyone recognizing pre-65 silver coins. I'm thinking more and more folks would just think that 1950 quarter is a quarter...worth 25 cents. At least with silver eagles it says on it that it's silver.
 

Usury

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#37
Buy some of everything when it's on sale. Over the years I've seen about everything available close to spot if you buy at the right time. If demand for junk is high then don't buy it. If ASE's buy generic and so on.
 

Usury

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#38
Well, silver is a waste of time. Nasty crap metal.

.
D'oh!!! Forgot about that. Never mind my prior posts...just spend it all at the dog track.
 

smooth

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#40
Dont stress too much on what type to purchase. Your ideas will change as you go along. Have some fun with it at times. Different sizes, mints, foreign or domestic.. it's all good, just watch the spread. I have ended up with all kinds of shit. Stuffs I avoid.... Large anything and Numismatics (a lot of smart people make money on these, I just tend to keep it simple). Save all of your receipts, write more info on the back of them if need be. Silver is much more speculative than gold, I buy it with hopes of trading for gold at the right time..... Loose lips sink ships, tell no one. Buy lots of firearms, they're fun..... Sounds like yer on the right track.
Best of luck, smooth