How To Buy Silver: Complete Guide

coin and clock

The use of silver for different things is great. You need to know about the different types of silver and how to get the best price. Silver trading is a game that many people want to play, but they don’t know where to start. But, here are the things to look for when you want to buy silver as a beginner. 

First Steps

  • Look at the kind of silver you want to buy.

You can buy physical silver, silver coins, paper silver, and silver futures if you’re going to bet in the long run.

  • If you want to avoid scams and other problems, look for a good dealer.

In the United States, the US Mint has a list of preferred dealers on its site. The US Mint’s website has a page called “coin dealer database US Mint.” You can search here for reputable national and local dealers.

  • Find silver’s market value.

A troy ounce reflects the price of a precious metal per raw ounce in the financial markets. Check the current worth to ensure a seller isn’t costing you more than market value. But, if you look hard enough, you should be able to find silver at market value.

  • Negotiate the terms

   1. Seller and buyer need to agree on certain things when they sell silver. 

If you don’t think about these things  when you buy physical silver, you might be giving yourself away. 

   2. If you are buying “paper” silver, find out how the seller will store the real silver that the paper represents. 
   3. Discuss silver coins and raw silver value.
   4. Silver coins sold as actual silver. Buyers should be aware of how numismatic coin values can affect a sale.

You may overpay for silver if you miss this key fact. 

   5. Ask about the premium charged fees

Some sellers, like banks, charge extra fees when they sell silver, and these extra fees can add up. They may lose ground the moment they buy something, which is not good for them. Ask your seller to give you a fair price for silver so that you can make money right away if the price of silver goes up.

    6. Check for buybacks

Some merchants will buy back the silver they sell you, while others will not. Look for buy-backs.

Some merchants may buy back the silver they sell you, while others may not! If you don’t have a buyback agreement, you may lose money while selling your silver.

It’s possible to lose money if you can’t locate a buyer willing to give you fair market value.

    7. Get cost-basis info for taxes

Buying silver requires documentation of the sale and its value.  The federal IRS may object to your sale if you do not provide a declared cost basis declared.

Buying Scrap Silver

Know how to tell real silver from fake

magnifying glass

Marked with the number 800 or 925, or it will say that the silver is sterling (e.g., “Ster,” “Sterling” or “Stg”). Here are three ways to tell real silver from fake silver if you can’t find a mark on your silver.

  • The real thing melts ice.

The ice cube will melt faster if you put it on a silver block or a silver coin. Because silver has a lot of thermal conductivity, it melts ice because it moves a lot of heat. Ice “sucks” the heat out of silver.

  • There’s no real silver that is magnetic, and there isn’t.

A rare-earth neodymium magnet is what you need to do this job well. Slide the neodymium magnet down a silver bar with a 45° slope. It will take the magnet a long time to move down the bar of silver on real silver.

  • Silver rings that are real.

Take two coins, one silver, and one gold, and shake them together to make a sound. Silver should make a high-pitched, bell-like sound.

  • Ask your friends and family if they have any scrap silver that they want to sell.

The silver jewelry of many people is in bad condition and would be happy to sell it for a fair price. People might even give you things for free.

  • Watch for a good deal.

Ask around in your neighborhood before you accept the first deal you see. Take online reviews with a grain of salt. If a deal is too good to be true, it is not worth it. Use the US Mint’s list of recommended dealers as an excellent place to start.

  • Find out who owns the pawn shops in your area and get to know them.

If you’re lucky, you’ll be able to get in touch with people who might be willing to buy your silver.

Buying Silver Coins, Bars, or Rounds

  • People should think about buying silver coins as a way to make money. Coins made of silver are worth more because of their silver content and because of the value of the coins.

Most of the time, numismatic value is the most important thing. Many investors say not to invest in silver coins if you are not interested in coins at all.

Because silver coins are so valuable, their prices can change a lot. In fact, their prices can change a lot because of market demand, even if the price of silver does not change.

If you plan to invest in silver coins, be aware of this before you start your journey.

  • Silver bars are almost made of silver. Because of this, they often sell for more than they should.

silver bars

It is possible to buy silver bars from big banks or people who sell bullion. Try your hand at investing in silver bars, and see how well you do. 

Silver bullion and silver bars are almost the same thing. This type of coin is a “bullion coin.”

It’s made of precious metals and is not meant for business use. Because of this, if you do not want to keep silver bars in your house, you can buy coins made of silver.

Silver bars come in many different shapes and sizes. 1 oz., 5 oz., 10 oz., 100 oz., and 1000 oz. Bars are the norm, but some manufacturers make even lighter bars.

When you think about weight, you need to know that the smaller the bar, the more you will pay for each ounce. So, the best thing to do is buy bigger bars.

Choose art or bullion bars. Both silver bars are 99.9% silver. Art bars are etched with artistic designs whereas bullion bars are plain silver.

While art bars are more appealing to the eye, you may have to pay a premium over their silver value.

  • Silver “rounds” might be a good investment. A silver round is like a bar and a coin.

silver roundsLike bars and bullion, Rounds have no value in money. Coins look like coins. They usually have one troy ounce of silver (1/12 of a pound) inside. When private companies make coins, they are often minted with a unique design.

Many people prefer to buy Silver Rounds because they have lower prices than government-issued silver coins.

Buying Silver without Physically Owning It

  • Investing in an ETF or exchange-traded fund might be a good idea, but you should think about it first. It’s a type of mutual fund that tracks an index or a commodity (like silver) that’s bought and sold like a share of stock.

ETFs are like index funds, but they do not usually charge a commission fee when you buy or sell them. This is different from some index funds.

When you invest in an ETF, you do not buy or even have the right to buy silver. You are not even acknowledging the right to redeem silver. As long as the price of silver goes up, you are making a bet on that.

ETFs have a very high level of liquidity, which means that they sell without having a big impact on their value.

  • Take a look at investing in a mining company. It is riskier, but it could be very profitable. But keep these things in mind:

People may not buy shares in a mining company even if the value of the commodity they are mining goes up. It does not matter if the price of silver is going up.

You could lose money in your investment if the mining company has bad management. To invest in mining companies, you have to be very careful.

With more risk comes the chance for more reward. If you can handle the extra risk or have a taste for it, you can make a lot of money by investing in mining operations.

  • The best thing to do is talk to a brokerage who can help with everything. Full-service brokers offer wide range of products, research, and advice on making money.

But, they also charge more for better service. Using a full-service broker, they get paid based on how often you trade. A full-service brokerage can be very useful if you need help with your money or do not know how to invest.

Check out discount brokerages. These brokerages do not tell about how to invest. They only do what you tell them to do.

Brokerages have a limited number of products and charge less money than full-service. Discount brokers get paid a set amount for making trades.

Make The Most Out Of Your Silver

  • Keep in mind that real silver is better than owning a security certificate that does not have any real silver. People use physical silver for money or in industrial manufacturing.

This makes physical silver more flexible than “paper” silver but not as liquid. You might want to start with the actual metal before moving on to more complicated ways of owning it. 

  • Use silver to protect yourself. Silver is an excellent thing to have when there is a lot of uncertainty in the economy and growth is slow.

It can protect you against the value of money going up. If the value of money goes down, precious metals like silver and gold stay about the same or even go up in value.

  • Do not buy or sell on hope or fear. Many people who buy silver and gold do not think about the investment in the right way.

You can not follow the first rule of investing if you do not buy low and sell high.

  • Think about things in a different way. You should buy when everyone else is nervous and the price of silver has dropped. The best time to sell is when prices are high, not when they are low.

There is a good reason not to sell when prices are low: That is the time to buy! Even though this is a hard thing to do, it is the best way to make money over time.

  • See how silver prices have changed over time. The price of silver over the last few decades has dropped to about $5 an ounce. Wait until silver is at that price again, then buy it.

Make money when the economy is uncertain and the price of silver goes up. If you have silver, sell it for a lot of money, or keep it as a way to protect yourself from a weakening currency.

  • Silver prices can change fast. For people who are not ready for an ups and downs ride when they invest in silver, it might not be the best choice for them.

It is also true that if you buy silver when it is at a low point, most of the volatility in the future will be to the upside. 

So, Is Investing In Silver Worth It?

Investors who want to get into the silver market can own both physical bullion and silver ETFs. Both have their advantages and disadvantages.

Most of the time, it comes down to what they want to buy. Silver is an easy and quick investment for someone who wants money now.

But, if a person believes that the financial system will fall apart, physical silver is the best way to protect yourself. 

If you want to get gold or silver or learn about investing in other precious metals, BullionBoxSubscriptions is here for you. Visit their site for more details and options on how to buy gold and silver coins online.