Now that you know you want to buy silver bars, how do you go about it? Believe me, it's not rocket science. Mostly, it's a matter of researching reputations, prices, and quality. I'll give you information on the following in this article:
- How to avoid scams/where to buy silver bars
- What to look for when buying/what not to buy
- Buying tips
- Liquidity and privacy
Starting from scratch, do a web search and see all the results. Visit several different sites, at least 10, and scan their home page to get a basic feel.
Flashy sites that feel "salesy," like those giant one-page adds in newspapers, will feel less reliable than the reputable sites. Go with your gut and weed those out.
Next, choose some of the sites that appeal to you and search them on the BBB. You'll actually get a lot of hits about many different dealers. Run from the dealers who aren't accredited and choose from those who have A+ ratings and are accredited.
Realize, however, that the more volume a business receives, the more likely it will have complaints on file. Customers get confused sometimes, and some are outright crooks who lodge complaints when their own scams fail. If the BBB report shows that the company makes sincere efforts to satisfy complaints and has the A+ rating, I tend to trust them.
Below are the best places to buy silver bars:
- JM Bullion
- Silver Gold Bull
- APMEX (American Precious Metals Exchange)
- Money Metals Exchange
- TPM (Texas Precious Metals)
What To Look For When Buying
Always buy .999 fine silver. You can even find bars that are .9999 pure. That's about as close as a refiner can get to full 100 percent pure, but really, three nines are plenty fine.
Choose bars that have the purity and weight stamped in it along with the refiner's name or logo. Artistic designs are great if they don't bump up the premiums.
The larger the bar, usually, the lower the premium, so if you aren't planning on using your silver as a trading medium for small transactions in the future, go with 10 and 100-ounce bars. You could even buy 1000 oz. bars from some dealers, but they're about 70 pounds so the shipping cost might kill you. Plus, dealers aren't as fond of them on buy-back as you might like them to be.
Avoid the old odd-size bars that were the end-of-run left overs and marked with whatever weight the scale showed. You want precision in the weights and standard sizes. Serial numbers are fine, but they won't necessarily add value. They might, though, increase mint and dealer premiums.
Tips For Buying Silver Bars
If you aren't going to buy from a local shop, then consider these tips:
- Compare the costs for like items from each online dealer with whom you feel comfortable. Spot price is probably going to be the baseline unless a dealer is offering a smoking deal to clear out excess stock. Compare each dealer's premiums for the bars you're considering. Remember that most dealers have bulk prices, so make sure you know what the prices are for the quantity of bars you want to buy.
- Determine how you are going to pay — check in the mail, money order electronic transfer from your bank, wire transfer or credit card. Checks, and money orders will require a waiting period for clearance before the dealer ships. Electronic payments, credit cards and wire transfers all have fees attached which you will pay, not the dealer, in most cases.
- Shipping costs must be calculated for the order you settle on. Dealers have different ways of incorporating shipping and handling, so make sure you fully understand what they are per dealer.
- Add up the all the costs to find the actual premium price you will pay for your bars. Mere spot-plus prices are just the beginning, so you can figure your best purchasing deal only after you add on the shipping and handling, credit card processing fees and whatever else the dealer charges. An honest dealer will hide none of these costs from you. If they surprise you with them at checkout, then bail out.
Liquidity And Privacy
Liquidity describes how easy it is to sell your bars back to a dealer or out in the local market. The more recognizable the bar the easier it is to find a willing buyer or accepting merchant, thus the more liquid it is. That's why buying bars from top-name mints works to your advantage. Dealers will recognize the bars and won't hesitate to make you an offer.
When you buy from a local shop, you'll pay all the shipping and handling costs in the dealer's premium. This way, it appears you pay more for your silver, and perhaps you do.
But if you would like to invest in silver with no paper trails, you can't beat finding, befriending and purchasing from a local dealer. This is my own personal preference.
Also, in this day and age of anything-can-happen-at-any-time, I like the immediacy of buying my bars and taking them home with me. No waiting for checks to clear or the delivery service. I put my money down and walk away with my investment. I'm willing to pay a bit more for the privacy of the transactions.
Paper trails alert other people to the fact that you own precious metals, and they have your address, as well. If you feel like trusting IRS employees, well, good luck with that. As long as you keep your purchases under the IRS reporting minimum, you can start "stacking" and nobody but you needs to know about it.
Buying silver bars takes some legwork to avoid scams or otherwise avail yourself of some good deals out there. But overall, it is rather simple. Once you decide what the purpose is for your silver supply, entering the market and initiating your investment should go smoothly for you.
But a lot of thinking should go into your investment plan based on your confidence, or lack thereof, in economic stability in the near and distant future. And to gain this know-how and confidence, I recommend checking out this webinar that teaches you some basic, tried-and-tested investing techniques.