“Silver Stacking” is called the act of stockpiling silver by collectors and investors. When it comes to silver stacking I believe that there is a right and wrong way. So I want to share some silver stacking tips for beginners so that you can stack the right way.
When you think of stockpiling you think of just buying a bunch of random stuff. There is no real sense of order or goal accomplishment. Everyone should have a goal when it comes to silver stacking. Hopefully, this post will prevent you from making the same mistakes that I made. Along with that, this should help you to develop a strategy so that you can meet your goals.
8 silver stacking tips for beginners
Put together a strategy
Everyone has different reasons and motives for silver stacking. Some people are stacking silver as a hedge against inflation. Others stack silver as a hobby. Very few people stack silver as a way to make money.
So when you begin stacking silver you need to fully understand your reason for stacking. This will help you then develop a strategy. Now, this strategy may not be set in stone. It can evolve over time. So this would be the first of eight silver stacking tips for beginners.
Begin with your end goal. If you are looking to have a hedge against inflation then how much do you want to have at the end of the day? If you are collecting as a hobby, how big of a collection do you want to ultimately have? What kind of collection do you want to have? Answering these questions will help you to develop that strategy. Begin with the end in mind then work backward.
Determine a budget
If you are stacking for wealth security you may be tempted to spend your whole paycheck on a stack. However, your purchases shouldn’t be motivated by fear. Like I say in The Strategic Prepper, your purchasing decisions should be determined by your strategic plan.
You don’t want to blow your check on a stack and then not be able to eat until the next paycheck. You should think of your silver stack as a savings account. When you budget you typically designate a certain portion of your check to put towards savings. This should be the same for silver stacking.
I’ve heard and read so many different recommendations on how to diversify your stack. Some people recommend stacking 70% silver and 30% gold. I don’t think there is one real correct answer.
You have to determine what is best for you according to your budget. Determining is the second most important suggestion of silver stacking tips for beginners. However, before developing a budget for silver stacking you should have some paper money saved first.
You should have at least 6 to 8 months’ of expenses saved. Then after that, you should begin your silver stacking. This is because silver isn’t currently as liquid as fiat currency. If you are in a crunch and need money fast then you won’t have time to cash out your stack. It would take too long to sell at a coin collector, finding a local buyer, or getting an online buyer.
The thing about the silver market is that the price is always changing. It doesn’t remain constant. You should periodically check goldprice.org to get updates in real time of silver pricing.
When you purchase silver bullion you will have to pay a premium above spot price. The spot price is ultimately the asking or melting price of silver. The kind of bullion that you purchase will determine the premium price.
Typically less recognizable silver bullion will have a lower premium. For example, you buy plain silver rounds with no designs or mint. The premium will typically only be around $.50 to $2 over spot.
This is in comparison to minted rounds like American Silver Eagles. They typically have a premium of $3 to $6 above spot.
You would think that the cheaper premium would be the way to go right? Wrong! Typically the more recognizable bullion like Silver Eagles will be easier to liquidate if you need to. The mint confirms the authenticity and value. Non-minted silver rounds are more challenging to verify authenticity or value. It is more challenging to determine if it is fake or not.
Find the best dealer
When considering silver stacking tips for beginners I had to include finding the best dealer. You will want to find one according to your budget. Where you buy silver will also determine the price that you pay.
If you go to local coins shops they are going to have high premium prices. This is because there aren’t as many dealers locally. So they can charge higher prices. A physical storefront also requires a larger overhead to run the business as compared to an online dealer.
At local stores, I have found premium prices to be anywhere from $5 to $8 above the spot price of Silver Eagles. However, online you can typically find premiums to be anywhere from $3 to $5. The downside is that some online dealers will require a minimum purchase of $100. Others will charge you for shipping as well.
I typically purchase silver through SDBullion.com. They have one of the lowest premium prices. They also don’t require a minimum purchase amount. Finally, they have a set shipping amount no matter how much you buy. So it doesn’t increase with the more that you purchase.
Now, the cheapest way to buy silver is through private dealers. You can typically find them online at silver stacking forums, Craigslist and even eBay. However, there are higher risks involved.
You can’t always verify the trustworthiness of these private dealers. Also, you could be risking your own personal security if you choose to meet privately.
Start with the core essentials
I don’t recommend starting your stack with numismatic coins. Instead, I would recommend buying junk silver first. Should a financial crisis happen and the dollar loses its value, then these recognizable coins will be accepted first.
From there, you should build a stack of nationally minted coins to build up your weight. Once that is complete then you can experiment with numismatics. That way you can quickly liquidate your stack if a financial emergency arises.
Find a secure place to store silver
Silver bullion is money. You wouldn’t just leave paper money lying around for the world to see. You typically keep it in a wallet or a safe place.
Now when storing your silver in your home you will want to consider the possibility of a home invasion or burglary. You don’t want the bad guys to grab your stack. This is why it is important to know where to hide valuables in your home.
I don’t recommend having a safe or at least one that is visible. That is one of the first things that bad guys look for. Instead, you should have decoys like this Pepsi can decoy.
You should also have distractions set around. For example, you could set out a small stack of money. Once they grab that they will believe that they have hit the jackpot and hopefully leave.
Another option is to store silver offsite in private vaults. I wouldn’t recommend storing silver in a bank. The bank can easily seize it in the case of a financial crisis.
With a private vault, you will have a little more security. However, I prefer to keep my stack on site. I’m a control freak. I like to have quick access to my stack.
Store silver appropriately
The sad thing about silver is that it can easily tarnish. Silver is initially very beautiful but if not stored correctly can become disgusting looking. Tarnish or blemishes will decrease the value of your stack
So some silver stacking tips for beginners would include keeping your stack in airtight containers. The open air can cause it to tarnish. Whenever I buy from SD Bullion I also purchase the airtight containers.
Know when to purchase silver
As you build your stack you should always stay up to date with what is going on. It’s not only important to know the price but also things that affect the global economy. So I suggest following sites that cover news on precious metals.
When the economy is doing well the price of silver decreases. But during a crisis or when bad economic news is released the price increases dramatically. This is because investors are dumping their fiat currency in exchange for precious metals.
Altogether, these would be my silver stacking tips for beginners. If you have any suggestions or feedback then please leave it in the comment section below. Your feedback helps the community prepare the smart way now so that we can thrive later.
Updated July 28, 2019