This article was originally published by Jeremiah Johnson at Tess Pennington’s ReadyNutrition.com
Tess is the author of The Prepper’s Blueprint: How To Survive ANY Disaster
Investing in precious metals is a great way to diversify and preserve your wealth. You can even find it on eBay! While this article is by no means an exhaustive treatise on gold and silver buying, it is more of a “primer” to give you some basic information you need to get started (if you plan on going into this area) or to provide knowledge to arm you in your dealings with people. Some of this may be useful for you in purchases of precious metals, but the scope of this is mainly to cover things that you may find when out hunting in the flea markets, thrift stores, yard sales, or other areas of the “secondary shops.”
First, we’ll cover gold measured in terms of purity that is expressed in karats, symbolized by the letter “K” and “kt” with jewelers.
24 Karat: 100%, or pure gold
22 Karat: 91.7% gold
18 Karat: 75.0% gold
14 Karat: 58.3% gold
10 Karat: 41.7% gold
Now let’s cover silver, a metal marked with a purity mark. Here are the marks and their percentage of silver contents that correspond:
999: 99.9% silver
958: 95.8% silver
925: 92.5% silver (known as Sterling silver)
800: 80.0% silver
We are referring mostly to jewelry or decorative pieces and keepsakes here (such as silverware, candlestick holders, or other things that may bear a stamp to show their precious metal content). Coins are a little bit more involved and beyond the scope of this article, as there are too many to list here.
One of the problems that people run into with jewelry and their great-grandmother’s candlestick holders is that most businesses that buy them will usually pay according to their melt value. This is especially true with silver. Most of these dealers will estimate the silver content of your item by weight, and then will pay you roughly 15-25% under value to cover their handling and melting charges.
Learn how to test your junk gold and silver
For coins there can be a numismatic value attached to the coin…that is, its worth as a collector piece…that is greater than the melt value. There is also the little problem that although the coins are no longer in circulation, well…they are. All coins and currency are (technically) the property of the U.S. government…and to melt them down without proper authorization would be considered destruction of government property.
Jewelry doesn’t have that problem. The real problem is that you will receive a fraction of what it is worth when you take it to a dealer who will hand you nice, crisp, approved, Federal Reserve Notes in exchange for your silver or gold. Here’s how to figure out the “melt value” in silver:
Take your weight in silver (usually in grams) and convert to troy ounces, multiplying this weight by the percentage of silver in the silver content of your item. Then you will have the amount of silver in troy ounces. Then it’s a simple matter to look up the spot price of the silver (what silver is trading for that day on the commodities exchanges). Divide the weight of your silver by the spot price to find out the worth in dollars. Then multiply this figure by the percentage that the dealer will pay you minus his handling and melting fees.
Now, many people do this routinely as a business. Others hold onto their finds. Your actions will be determined by your purpose: to turn a “quick” Federal Reserve note out of some metals, or to garner a supply little by little as a hedge against either a currency collapse, or as a barter material in a future time. Either way, this piece will get you started on researching an area you may choose to enter or specialize within. Good luck and remember to lay your groundwork before you act. JJ out!
About the Author
Jeremiah Johnson is the Nom de plume of a retired Green Beret of the United States Army Special Forces (Airborne). Mr. Johnson was a Special Forces Medic, EMT and ACLS-certified, with comprehensive training in wilderness survival, rescue, and patient-extraction. He is a Certified Master Herbalist and a graduate of the Global College of Natural Medicine of Santa Ana, CA. A graduate of the U.S. Army’s survival course of SERE school (Survival Evasion Resistance Escape), Mr. Johnson also successfully completed the Montana Master Food Preserver Course for home-canning, smoking, and dehydrating foods.
Mr. Johnson dries and tinctures a wide variety of medicinal herbs taken by wild crafting and cultivation, in addition to preserving and canning his own food. An expert in land navigation, survival, mountaineering, and parachuting as trained by the United States Army, Mr. Johnson is an ardent advocate for preparedness, self-sufficiency, and long-term disaster sustainability for families. He and his wife survived Hurricane Katrina and its aftermath. Cross-trained as a Special Forces Engineer, he is an expert in supply, logistics, transport, and long-term storage of perishable materials, having incorporated many of these techniques plus some unique innovations in his own homestead.
Mr. Johnson brings practical, tested experience firmly rooted in formal education to his writings and to our team. He and his wife live in a cabin in the mountains of Western Montana with their three cats.
Tess Pennington is the author of The Prepper’s Blueprint, a comprehensive guide that uses real-life scenarios to help you prepare for any disaster. Because a crisis rarely stops with a triggering event the aftermath can spiral, having the capacity to cripple our normal ways of life. The well-rounded, multi-layered approach outlined in the Blueprint helps you make sense of a wide array of preparedness concepts through easily digestible action items and supply lists.
Tess is also the author of the highly rated Prepper’s Cookbook, which helps you to create a plan for stocking, organizing and maintaining a proper emergency food supply and includes over 300 recipes for nutritious, delicious, life-saving meals.
Visit her website at ReadyNutrition.com for an extensive compilation of free information on preparedness, homesteading, and healthy living.
The melt value of silver and gold coins is easy to find here:
Coinflation dot comm has all the info on melt value of coins.
Actually the gubmint doesn’t own all pm’s, just the stuff they mint. But if you purchase it, then you own it. If they call it in, they will pay you but not nearly what it’s worth. 999 ag is best, nothing less than “pure”. If you wanna test ag for authenticity, put an ice cube on the metal, if it melts quickly, then yer good. I believe at some point even pm’s Won’t mean anything. Necessities will be the only items worth any value. I do believe that’s where we’re headed. But until an absolute collapse in the commerce system, it’s a good idea to have some metal and some cash stacked
Don’t see a lot in this article about what really matters when you’re buying gold or silver: what gold and silver are going to be capable of doing in terms of asset acquisition. Chart is useful, but scouring the rubbish heaps for gold and silver is not going to net you what you need to get the job done in terms of asset acquisition.
One of the first things people need to understand on gold and silver is that spot price is a complete fabrication, divorced from the actual physical market. Right now, gold spot is right around the cost to pull an ounce out of the ground, silver is actually below the cost to pull an ounce out of the ground. These are paper prices being driven into the ground by paper contracts for metal that does not, and will not, ever exist.
A recent Sgt Report podcast with Bill Holter broke down some interesting numbers. For 7 of the top 9 silver miners, their cost to get an ounce of silver out of the ground is above spot. One has a cost of $22.39 an ounce, another has a cost of $19.74 an ounce.
I wouldn’t even waste my time scouring the rubbish heaps when I can buy Canadian Maples (legit four 9’s fine, better divisibility than Eagles), silver Eagles, and silver bars at the prices I see today. You can get Eagles from a number of years, in any quantity you want, for less than the quoted $22.39. You can also find silver bars in any quantity you want for substantially less than the quoted $19.74.
My whole philosophy on buying gold and silver is that I’m buying for a specific purpose. The world economy is going to be reset. Everything is going to be reset against gold and silver. Banking is going to be tied directly to blockchain ledger. They’re going to need to keep $1 of liquidity on the ledger for every $1 in deposits, and they’re going to need to keep $1 of liquidity on ledger for every $1 of credit they create. There are only two assets out there which will allow banks to maintain this level of liquidity: gold and silver. The overwhelming majority of banks own neither, but they will be loaded down with foreclosed assets. In order for these banks to obtain the metal needed to not be shut down for good, asset prices will have to drop faster than Bill Clinton’s pants while metal prices simultaneously explode in price. It’s going to be like a Dutch auction in a Chinese whorehouse.
I want to be holding the assets that will allow me to take advantage of such an opportunity and shift the balance of wealth into my favor.
I noticed there was no talk about purchasing silver bars as opposed to coins. Is there any advantage/disadvantage to holding bars?
Amazing how an ounce of gold looks so much smaller than an ounce of silver.
The day will certainly come when you won’t care what you paid for that coin, you will just thank heaven that you had the foresight to acquire it. When you are burning your FRN’s to stay warm, you will find people willing to part with valuable commodities for your PM’s.
Useful site: http://coinapps.com/silver/coin/calculator/
THE INDIANS WERE TOTALLY INTO PEACE AND BROTHERLY LOVE AND LIVED IN PERFECT HARMONY WITH NATURE BEFORE THOSE EVIL WHITE PEOPLE CAME
NO ONE SHOULD EVER CELEBRATE THANKSGIVING BECAUSE STEALING LAND IS WRONG AND THE INDIANS WOULD NEVER EVER STEAL LAND FROM OTHER TRIBES
You obviously do not know your American Indian history. You better start reading the truth.
He’s being sarcastic.. .
People put a silver dollar in the milk to keep it fresh.
People ate off 100% pure silver because of silver’s ability to kill bacteria.
One way to invest in silver is to buy 100% pure silver tableware.
Hey JJ, Its listed as “.999 Fine Silver/ 1 Troy Ounce” Says that on every 1 Oz piece in my 12 Ft tall Stack. That’s a good thing right? ha..
Too bad the shorting turds have both feet on the brakes slamming silver. Load up the truck, JP Morgan did. Do what they do.
Silver could easily double in price right now and still be within the normal trading range of the Silver to Gold Price Ratio. Silver is vastly undervalued compared to Gold right now. Buy Low, Sell High, Stack the Silver, and there is way less silver than Gold out there, and Silver has a huge utilitarian value. Medical, and electrical devices like solar panels. Gold is mostly just intrinsic value.
True! Most all of the gold ever mined is still around. Silver is used up. At the historical ratio of 16-1 gold/silver, silver is extremely undervalued. I sold all my gold years ago and bought silver.
BfromCA, I have never heard of or seen 100% silver tableware. I don’t think anyone even makes such a thing. Perhaps you mean “sterling silver” which is .925 fine. I look for sterlingware stuff at yard sales and find it occasionally for a good deal. Even antique shops will have deals on it sometimes. Also some of those cash for gold/silver places will sell you silver coins at melt because that is more than they get by sending it off to be melted. I actually got a lot of coins that way.
Anyone that buys PM’s on EBay is nuts. Every local coin store I know has a collection of fake stuff sold on Ebay.
Ya thats why you look at feedback and how long they have been selling FIRST! I have sold a lot on ebay and all my stuff was REAL. But yes, you must beware. The advertisers on this site are very good (I have used both of them). Pawn shops ask a LOT for their crap. Coin dealers are usually fair or get a copy of Coin World magazine, the dealers there have good deals. I already have a base stash so I have been getting fractional cool coins from the ads here. They are quite a bit over spot but I just get them cause they are cool. Coin collecting can be addictive but at least you aren’t just throwing your fed notes away. Like I said above, see if cash for coins places will deal with you.
Coin collecting can be addictive,so can home made paint thinner!
If it was good enough for the founders, it’s good enough for me!
100% silver throughout as opposed to silver plated.
Ok I gotcha. Be sure and look for the .925 or the sterling stamp on it.
Ya but I have a .925 stamp cost me $11.
Then you can be an ebay millionaire!
“For coins there can be a numismatic value attached to the coin…that is, its worth as a collector piece…that is greater than the melt value. ”
I got a 1941 silver liberty half dollar back in my change the other day. Obviously the clerk had no idea about its value: $350 🙂
Ding Ding Ding The bullshit meter is going off!!!!!!!!!!!!!!!!!!!!!!!!!!!!
B,lets not forget colloidal silver,easy to make and a lot of videos/articles on how to do it!
A fun and maybe profitable venture is prospecting too. If you live near a gold area you can make a portable sluice box or get a decent metal detector. Gets you out of the house and some exercise and fun. I found a small piece of quartz with some gold in it sluicing/panning a local river once. If you live in the desert get a dry washer. Go to old mining areas and metal detect. You will find all kinds of cool stuff. Anything from old tools to old buttons etc. If you find some gold or coins all the better. My cousin does it a lot and has a bucket full of old coins and store tokens. Great way to spend a day or two and kids love it.
Even if you don’t live in an old mining area you can score good by getting the oldest map possible of your area and look for where old outhouses, bars, stores, etc. used to be and metal detect them. Back east is probably the best since it is the oldest. Or hit the beach or dry reservoirs. Just think about where people would likely lose things years ago. You might even find Jimmy Hoffa!
Here is a used minelab (same as I have) for a great price. Just get the original multi-metal coil and your in business!
Or search for a deal on the dual pack (2 coils I have this package)
Out of college I got a job as an engineering lab tech. Not My first choice, but it was a start, and paid the rent. I did well, it wasn’t a bad decision. Months later I was able to trade up.
The guy whose job I got, moved out west. He was a scuba diver and used that plus suction gear to look for gold in river bottoms downstream of old gold mines. Seems he made a good living.
I tried that silver dollar in the milk thing (actually used an ounce .999 silver round).
Maybe it only works with coin silver, haven’t tried using an actual silver dollar yet.
The prices are set, arbitrarily, or I defy you to get a better rate than the market maker.
In artificially-depressed markets, people still do scrounge for it, like collecting bottles and cans.
Youtube -> Mark Dice silver coin -> pages of results
These social experiments accidentally make the case for some kind of natural elite, not that I am aligned with any, in particular.
Trying To Sell Silver Dollars For .99 Cents Outside a Coin Dealer
Free Gold Coin or Free Candy Bar? – (Social Experiment)
Selling a 100 oz Silver Bar for $25 Dollars (When It’s Worth $1500) Almost 7 POUNDS of Bullion
Doing business with the low-energy general public, like you are implying, is so costly, in terms of maintenance, service, and liabilities, that brick-and-mortars have sought all kinds of alternative arrangements, including charging people, just to enter the premises.
If you put up with enough of these futile, demoralized people, when trying to get a business off the ground, you will eventually start looking to make transactions, as from businessman to businessman.
Now, imagine that it’s a crisis situation.
I respect the value of the dollar, as well as the author’s premise. 99% of people won’t. I’m sorry for my experiences, at times.
American silver eagles for stacking. Silver wire for colloidal silver. I keep both.
You’re not investing in it. You’re trading currency for real money.
Make sure you can tell the difference between counterfeit and real. If you are buying PM you might want to stick with coins.
Get a descent dial caliper so you can verify the coins dimensions accurately to within a 0.001 of an inch. A small digital scale is also a must to verify weight. For a prepper consider a scale that reads both Troy ounces and grains, so you can also use it for reloading.
Consider building a magnetic slide, a wood or plastic ramp about 12 to 16 inches long with a neodymium magnet about every inch with the poles alternating. The rate at which the coin falls past the magnets is a function of its magnetic properties and conductivity. Both gold and silver are not magnetic, so they won’t stick to the slide, unless they have fake cores or bad alloy. The extreme conductivity of silver means it will fall in slow motion as the induced magnetic field of the metal passing magnets. You should be able the see the difference between .999% silver and 80% silver, pure gold and diluted gold in the rate the coin falls.
Gold is hardest for counterfeiters to fake. Tungsten has almost an identical density as gold, but if used as a fake core in a coin the conductivity will be obvious on a slide test. The cost of making fake coins almost matches the cost of the real coin, tungsten is really hard to work.
Silver is easier to dilute and counterfeit, but the low cost of silver makes this only economical for an industrial operation, luckily China as a nation has no qualms about using its industrial prowess to be thieves. Again messing with the alloy will fail the magnetic slide test.
There is protection in buying US coins, the secret service and police will try to hunt down counterfeiters. US authorities don’t care so much about foreign coin counterfeiting, Canadian coins are often quite reliable, thus the premium for buying US coins.
Taxes, buying and selling precious metals may be reportable to the IRS depending on the types of coins. There are certain coins that you are not required report to the IRS, the list changes, so google the subject for the latest info before buying. Avoid deals that seem too good to be true. There are people who buy bargains on EBay etc because they do get the real deal a percent of the time, they also have a collection of mostly Chinese made counterfeits.
There are some guys there that do the same thing as bigger refiners like Ohio Precious Metals.
Buy sterling or 14K, then refine it to .999 or better.
Sometimes in husband & wife teams. The wife buys the scrap & knows how to test it, the husband does the refining.
It’s not easy. Refining gold electrolytically in heated sulfuric acid – something I will leave to others for the time being.
My chickens and goats taste better than silver and gold
And there was no mention of “JUNK SILVER”????