Reading the headlines these days is almost like reading a horror story. Daily we hear of violence and political turmoil on unprecedented scales across the globe. Then we witness the banking bail-outs and bail-ins which set the stage for hyperinflation and possible theft of your bank and retirement accounts. As the world succumbs, it seems, to chaos, we need to plan ahead financially, if it's at all possible.
The lesson from Zimbabwe recently reminded us that paper currency is fundamentally worthless if not backed by a substantial commodity considered valuable locally, regionally or universally.
As trade and markets evolved over the millennia, gold and silver rose above all other commodities as the perfect medium of exchange across the planet. Inherently rare, easily portable and tangible — unlike Bitcoin and the like — silver and gold still make for good, sound money.
I foresee this value-as-money continuing into the distant future no matter the fate of the unbacked currencies of the world. If you aren't at least minimally aware of the skullduggery of fiat currency, you wouldn't be here reading this article. But since you are, you're probably looking to protect yourself with investments in silver and need a place to start.
Different Types Of Silver Bars
As near as I can tell, only three types exist in the world.
Physical silver is that which you can reach out and touch. It's at your dealer's shop or in your safe. When you possess the bar, it is real with all of its value intact and at your fingertips.
Closely related to contractual silver, theoretical bars "exist" when you buy silver from a private company on faith and, furthermore, pay them to store it for you. Many times an investor loses a lot of money buying bars or coins in this manner. Sure, there may be honest exchange and storage companies out there, but where money is involved but you aren't, the odds are much better that offers of this nature are a total rip off. I know people who learned their lesson purchasing silver in theory. Now they take possession of any silver they buy.
Okay, Those Aren't The Only Types. You Also Have:
- Bullion: Bullion silver, which is .999 percent pure (99.9 percent silver but referred to as .999), is that which is valued only for its silver content. These are your basic investment grade bars. They generally have no other honor or prestige and no numismatic value. It's very important that you only buy from reputable sellers such as SD Bullion (visit their site here), which offers great prices on silver bars and has an A+ rating with the Better Business Bureau (BBB).
- Collectible Art: Some mints make collectible bars, also .999 percent fine; usually poured in molds or machined with attractive designs. They tend to sell for a higher premium above spot than ordinary bullion. Their value above the metal content is subjective, meaning that its ultimate value to your buyer may not be above spot when you need to sell it back to a dealer or trade for goods and services. Because of the extra premium, these are not so hot for investment purposes.
Spot prices are the moment-by-moment prices at the COMEX. Some brick-and-mortar shops go by the end-of-day settlement price from the previous day. Dealers use this as their price point before adding their fees. Remember, dealers have to make a profit or they will be no more, so you will always have to pay dealer premiums when you buy silver bars or any bullion metals. The trick is finding the honest, reputable silver bar dealers with the lowest premiums for your purchases.
Silver Bar Sizes
They generally come in these recognizable weights:
These are quite popular among investors and collectors. Because they're minted in quantity and not as limited runs, they sell at the lowest price points. The Sunshine Mint offers a 1 oz. Silver Eagle bar. The new Silver Eagle bars are produced with anti-counterfeiting features, one of which is a special mint mark that can be seen only through a decoder lens that you buy separately. Even with the security features, these bars still sell for less than one dollar over spot when buying in bulk.
Provident Metals mints a striking 10 oz. bar which are eligible for IRA accounts and can go for as little as sixty-nine cents over spot per bar. Also available from Provident Metals for the lowest premiums and approved for IRAs is their own Prospector 10 oz. silver bar.
Working in partnership with Ohio Precious Metals (OPM), NTR Metals (Northern Texas Refining), Provident Metals brings to market the Elemental 100 oz. Silver Bar for incredibly low prices. If you're moving a large amount into silver, this bar should certainly become a foundation of your investment.
1000 ounce silver bar
These are the bars that are delivered when futures traders take delivery of their contract from the Commodity Futures Trading Exchange known as COMEX. The weights are approximate, but a trusty dealer will charge according to the exact weight. Because of their size, the 1000 oz. bars are best purchased by significant investors who aren't looking for liquidity. APMEX (American Precious Metals Exchange) is a great place to buy these types of bars.
The Sunshine Mint produces 5 oz. bars, as well, and some mints sell other odd sizes such as 1 kilogram (32.151 oz.) and 2 oz. bars. Plus, some outlets make available truly odd-sized bars. These are stamped with the weight of whatever the scale showed at the time of the pour. Mostly used as melt bullion, these are a less reliable investment bar because you may have difficulty finding a willing buyer when the time comes to cash out or trade your bar for goods. Their good point is that they tend to cost very little over spot. These bars are great for artisans to use in fabricating jewelry.
Silver Bar Brands
This is by no means an exhaustive list. Rather, the following are well-known brands which means anyone with knowledge of silver will accept these brands should you wish to cash out your investment.
Credit Suisse: The history and reputation of Credit Suisse is such that their bars are not only good, but sought after. Their main business is gold refining and minting, but they delve into a limited amount of silver bullion, too. Some dealers consider their one-ounce bar to be numismatic, that is, carrying value above the floating price of silver bullion. These bars fetch a relatively high premium, too. You'll pay more over spot price to acquire Credit Suisse bars than most other bullion bars.
Englehard: Englehard is considered one of the best producers of silver bars and their product is still pursued. They stopped making silver bars in the 1980s, but those bars still in the market can fetch a pretty price because of the Englehard name.
Heraeus: The Heraeus bars enjoy a top-name reputation for purity and consistent weight from bar to bar. They make their products available to banks and dealer, but do not sell directly to the public.
Johnson Matthey: Johnson Matthey is a recognized and respected name in silver investment circles. An old English company, their silver bars are quite popular and good for investment portfolios.
NTR Metals: Standing for Northern Texas Refining, NTR has offices and plants all over the world and headquarters in Dallas, Texas. Their fine bullion bars are pure and their weights accurate, giving them a reputable standing amongst the world's older, proven names in refining. They sell to dealers but not to the public.
OPM: Ohio Precious Metals was one of the largest metals refineries in the U.S. before they merged with NTR. The combination of the two companies allows for more products at better prices for the investor.
PAMP Suisse: PAMP is the French acronym for Artistic Products of Precious Metals. They are a leader in the finest quality gold, silver and platinum refining. While they offer bullion bars, these feature beautiful art which authenticates their brand and commands higher premiums.
RCM: The Royal Canadian Mint produces all the coins for Canadian circulation and also mint coins for other countries, as well. The RCM makes 100 oz. bars of .9999 purity which makes them one of the world's leaders in investment bars and are accepted for IRA accounts.
Scottsdale: Located in Scottsdale, Arizona, the company produces .999 fine bars for institutional sales and retail, which they market online only. Their unique process extracts scrap silver from industrial sources and refines it to .999 percent fine for their well-recognized bars. Their 10 oz. bars sport interlocking beveled edges for secure stacking.
SilverTowne: SilverTowne, in Winchester, Indiana, is one of the largest private mints in the U.S. They offer investment bullion and collectible art bars in 1, 5, 10 and 100 oz. sizes. With nearly 70 years of commitment to honest business practices, their products are known and carry the reputation of their proven integrity.
Sunshine: Planted in Coeur D'Alene, the heart of the active mining region in Idaho, the Sunshine Mint has easy access to raw silver ore. Desired for their pure silver and reputation, the Sunshine Mint bars, as beautiful as they are, still sell for low premiums over spot. This makes them one of the go-to bars for silver investing.
Silver Bars Vs Coins
A frequent question for beginning investors is whether they should opt for bars or coins. The answer is yes. Sooner or later, buy both.
However, bars have the advantages of lower premiums over spot than coins. Coins minted for circulation often carry the highest premiums per ounce, so you tend to spend less in acquisition with bullion bars.
Plus, their shapes allow you to stack more in your storage space (a good, anchored safe, we hope) than you can with coins. Coins require containers for neat and protected storage, and bulky containers take up almost as much space as the coins themselves.
Bars usually have nothing more than a sealed plastic sheath to retain their perfect finishes, taking up little room and allowing for compact stacking. So, If you plan to invest a substantial amount in silver, bars are the way to go for the bulk of your budget, and you may want to consider a 1000 ounce silver bar.
Silver Bars Vs Rounds
What about buying silver rounds instead to keep those premiums low? Rounds are not a bad way to go for small purchases, but keep in mind that maintaining order in your safe, the rounds will still need to be tubed. As noted above, you need more storage space for your silver in round form.
Also, before buying silver rounds, you should really know what you're doing to avoid investing in bullion silver that may not have the trade or re-sale value with another dealer. Even if they come from reputable mints, if they're not widely recognized, they may fetch a future price that could disappoint you.
Silver Bars Vs Junk Silver
I haven't touched on junk silver here, since this article focuses on silver bars and isn't a comprehensive treatment of all silver investment, but I'll mention it briefly.
The dime, quarter, half-dollar and dollar coins minted for circulation by the U.S. Mint prior to 1965 all contained 90 percent silver. They certainly have silver value and, because they are universally known, will have a trading value in the event of an economic collapse.
Plus, you pay considerably less for each coin than you will for straight bullion or pure silver coins. However, as a strict investment product, you would have to accumulate more of the junk silver to make up for the silver value of pure bullion bars.
What To Look For In Silver Bars
When sinking a chunk of change into investment in silver, you should:
Seek Out A Reputable Dealer
This is paramount. Whether you buy online or locally, perform due diligence before you exchange cash for silver. Once you find where to buy your silver bars, the rest will fall into place for you. If you encounter dealers who can't be bothered to answer your questions, move on.
Look For The Best Premiums
Compare premium prices across your potential dealers. Also, ask about buy-back prices which are what the dealer will give you if you were to turn around and sell the bars back to the dealer. If they buy back only for spot price on their silver bars, know you can do much better elsewhere.
Look For The Reputation Of The Mint
I'm sure many obscure mints also produce .999 fine silver bars, but I prefer to buy what I know others will recognize in anticipation of the day when I need to use that silver for exchange out in the big bad world.
You now have the basics on silver, and can now move forward on shifting investment funds into silver bars. Whether you plan to accumulate metals with each paycheck, augment your IRA by moving some of it into approved bullion, or have substantial savings you want to move out of the banks before interest rates go negative (bail-in), investing in silver makes very good sense.
To help you navigate some of the byways in this form of investment, you can check out Minesh Bhindi's wisdom on investing in precious metals. The knowledge he shares has been known to help a lot of new and veteran investors (including myself) get some sweet returns. Sign up for his free webinar here.