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Wednesday, April 3, 2019

Getting Started with Silver and Gold Accumulation

Poor Man Survival

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Getting Started with Silver and Gold Accumulation

   Many years ago upon divorcing my previous spouse, she grabbed all of the marital assets, the house, bank accounts, stocks, etc.  I didn’t care, I just wanted OUT!  The one thing that saved my bacon, the one asset she and her blasted lawyer did not know about was my stash of junk silver and gold Krugerrand coins.  Thankfully, this and a barter account I had in my name is what allowed me to survive, paying for my apartment, its new furniture and other items I needed.  Earlier, I had sold my business –and thus, my primary source of income- that year the buyer never paid me!

To this day I buy and sell coins, mainly pre-1964 “junk U.S. silver” which I find locally at flea markets and from what sellers bring to me at my local office.  Here’s a short version of what you need to know to get started to buy silver and gold. 

For most of human history, money was metal-- primarily gold and silver. And people knew that storing large quantities of gold and silver in their homes made their wealth prone to theft.

Goldsmiths already had tight security in their shops due to their significant inventories of precious metals.

So it was commonplace for other residents in town to store their own gold with the local smith, piggybacking on his security, in exchange for a nominal fee…

For most of human history, money was metal-- primarily gold and silver. And people knew that storing large quantities of gold and silver in their homes made their wealth prone to theft.

Back in 1965, Pres. Lyndon Johnson took the silver out our coinage, partly because he no longer wanted the discipline of any precious metal to stop his ‘Great Society’ big spending plans.  His economic advisors were Keynesian economists [a British economist, John Maynard Keynes] who seemed to advise that large deficit spending was advisable for stimulating the economy and that it would not harm the economy…this created our current fiat currency which has en eroded spending power [buys 95% less than the dollar of 1910] and why we always stress the importance of adding gold and silver to your portfolio, preferably physical…and I personally suggest mainly ‘junk’ or US circulated coins vs. investment grade coins.

Central banks spent 2018 accumulating precious metals in a monumental way, increasing their holdings by the most in one year since 1967 while the rest of the world was asleep at the wheel.  REMEMBER, that with the depreciation of the dollar, your money buys more gold and silver now than it will in the future.  The purchasing power of our dollar continues to erode.

Getting Started: Bullion (Stored Locally)

The primary reason for buying precious metals is Armageddon insurance; to own a form of money that will still have purchasing power should our paper-based currency suddenly become valueless.

Don't think that's a risk in modern society? Just talk to someone in Venezuela or Argentina today. They'd gladly trade you millions of bolivars or tens of thousands of pesos for a single gold coin.

Which is why many believe it wise to have a stash (or "stack" in PM-parlance) of gold and silver, in physical form, that you can quickly get hold of in your hot little hands should a currency crisis arise.

Physical gold and silver is referred to as "bullion". It's most common form factors are coins and bars.

When buying gold bullion for your emergency stack, most experts recommend restricting your purchases to 1-ounce sovereign coins. These are coins currently minted each year by select governments around the world; most notably the Eagle (U.S.), Buffalo (U.S.), Maple Leaf (Canada), Krugerrand (So. Africa), Philharmonic (Austria), Panda (China), Kangaroo (Australia), and Sovereign (U.K.).

Why stick to the sovereign coins?

First off, they have a low premium to the "spot" price of gold. So you're buying your gold at a good value versus most other options.

Wait. What's the spot price? And how does that differ from the price I pay at the store?

The futures market sets the price of an ounce of gold (called the "spot" price) at any given minute of the trading day. Because it takes cost and effort to convert a lump of gold into a specific shape and then ship it to a dealer, the mints tack on an extra fee when they sell their products to precious metals dealers. Those dealers in turn add their own mark-up. The total price above the spot value that you pay at the store is referred to as the "premium". 

OK, got it. So my goal is to try to buy my gold for the lowest premium per ounce?

Yes, in general. And that's why experts recommend sticking to the 1oz sovereign coins. If you purchase gold in increments smaller than 1oz, the premium per unit of gold increases sharply the smaller you get in size. And if you buy numismatic coins, the collectable value often results in large premiums over spot price.

You lost me again. What are "numismatic" coins?

Numismatic coins are coins that have collectible value. Generally, they are no longer minted today and exist in a secondary market where they're traded between collectors. Those building their emergency gold stack should steer clear of numismatics -- in a crisis, coins are likely going to be valued primarily for their gold content. Any collectible value could be easily discounted or disregarded altogether. Also, unless you have years of experience trading them, it's easy to lose money or get plain ripped off buying numismatics.

OK, stick with the sovereign coins. Any other reasons why?

Coin dealers -- the folks you're going to sell your gold back to someday -- are by far the most familiar with these coins over all other forms. They can spot fakes more easily. So, if you're buying from a reputable dealer, you can have confidence you're getting a pure product. And, when the time comes to sell your gold, if you're holding it as sovereign coins, a dealer will be most likely to accept them.

What about silver?

Government mints also make sovereign silver coins. Those are fine to buy. 

There are private mints that also make coins, which are referred to as "rounds". These tend to have a lower premium to spot that the sovereign silver coins. But you need to be careful here. If you buy rounds, make sure to buy a brand that your local dealer recognizes and agrees to accept. Otherwise, when it comes time to sell, you might find he's only willing to buy them from you at a discount to spot (or perhaps, not at all).

By far the cheapest way to buy silver is by purchasing bags of pre-1964 US coins (quarters, dimes, etc), aka "junk silver". Prior to 1964, these coins were comprised of 90% silver. Today, dealers sell pre-weighed bags of these coins at very small premia over spot. Bags of junk silver also give you the option value that, should a crisis ever force us back to transacting in silver, you've now got small-increment coins with which to buy low-cost everyday items (bread, milk, etc).

But as every silver investor learns quickly, silver is heavy! And beyond a certain amount, it becomes challenging to store and transport stacks of coins/rounds.

Which is why those looking to own hundreds or more ounces of silver typically purchase silver bars. As with rounds, there are many mints that issue bars, but there are two brands that have been around for a very long time that dealers prefer to deal with: Johnson Matthey and Engelhard

Where can I buy gold & silver bullion?

You can purchase sovereign gold coins from your local coin dealer or from an online dealer.

In both cases, deal with a firm that has been in business for years -- ideally a decade or more -- and has a well-respected brand. These firms have a reputation to protect and thus will be less likely to gouge you, sell you inferior product, or do anything shady/illegal. If possible, choose a firm recommended by a longtime gold buyer who's opinion you respect.

There should be no product quality difference whether you buy sovereign coins from a local or an online store. But there is an important advantage to buying from a local dealer: the relationship.

It's highly valuable to have a local dealer who knows who you are, values your patronage, and knows that he sold you good product. In a time of panic, bullion supply can quickly dry up -- as it did in supreme fashion in 1980, when coin shops had lines around the block of people desperate to exchange their dollars for gold. In that kind of limited inventory environment, being on a dealer's "preferred customer" list  -- getting first access to restricted supply if you want to buy more, or receiving discrete VIP treatment should you want to sell -- will be a tremendous advantage.

And a local dealer can be a font of useful intelligence and advice. Good dealers have their finger on the pulse of the PM market: are people net buyers or sellers? Are inventories tightening/expanding? Are premiums rising/falling?

Also, they can advise you on your purchases. For example, if you buy less than $1,000 worth of bullion in certain states, the transaction is subject to sales tax. Similarly, transactions over $10,000 are required to collect personal information from you to protect against money-laundering. An informed dealer can guide you to a purchase amount where you avoid both.

A quick Google or Yelp search should be able to identify the nearby coin dealers in your local area. But as mentioned earlier, if possible, it's better to select one based on a recommendation from an experienced bullion buyer who's opinion you respect.

If instead you prefer to purchase online, there are many good merchants out there. As a data point, the audience has reported good experiences with and with APMEX

How much gold and silver should I buy for my Emergency stack?

This is one of those uniquely personal decisions that a general article like this can't give you a specific dollar amount for.

The right answer is: Consult with your professional financial advisor to determine the amount that best suits your risk tolerance and goals.

But time and experience has proven that an effective rule of thumb is: Whatever amount lets you sleep well at night.

Buy enough that you no longer worry about having no Plan B should a currency crisis suddenly hit. But don't buy so much that you'll worry about getting robbed, or that you'll panic every time the gold price drops in the market (which will be often, as gold is very volatile.)

For most people, this will be a few $thousand worth, or a low 5-figure $amount. Remember that 99.9% of US households own less than 1oz of gold (if any). If we suddenly reverted to using gold and silver as currency again, with only a few ounces of gold and a little more of silver, you're going to have WAY more than most other people.


>Coins considered junk Silver coins today, like the 90% Silver Washington Quarters that circulated from 1932-1964, are also a great way to increase your Silver holdings. Canvas bags of 400 Silver Washington quarters contain 71.5 oz of 90% Silver, making the Silver coin perfect for investment portfolios. And of course, Silver dollars are favorites thanks to their iconic designs, including Lady Liberty and American eagles. 

>35% Silver war nickels give you the opportunity to own Silver at a low-premium cost. Produced by the United States from mid-1942 to 1945, these "War Nickels" were made from 56% copper, 35% Silver, and 9% manganese. 

>The standard weight for a gold coin is one Troy ounce (31.1 grams, a little heavier than the standard ounce). There are coins that weigh less than one Troy ounce (1ozt), but they trade less frequently, and you will pay a bigger percentage premium to buy them from dealers.

So, once I've bought my Emergency stack, where do I keep it?

The first rule of owning bullion is to convince the world you don't own any. DON'T TELL ANYONE ABOUT IT! 

Greed and crisis do weird things to people. Don't make yourself a target unnecessarily by revealing your holdings or where you've stashed them.

Except perhaps to your spouse, or key family members you trust. You don't want the gold disappearing forever should you suddenly kick the bucket (from natural causes?....)

The point of having an emergency stack is to be able to get your hands on it quickly should you need to. Some people put it in a home safe, some in a bank safety deposit box, some hide it in the walls or bury it outside. There are pros and cons to each. You'll need to decide for yourself which is the best option for your unique situation.

The main risks to holding precious metals on your own property are personal safety and loss. If you decide to keep bullion in your home, in a safe or elsewhere, the smart thing to do is to TELL NO ONE. The fewer people who suspect you have any gold, the lower your risk of robbery. As for loss, many insurance companies will not cover more than a small sum if your bullion is lost due to theft or disaster. Be sure you've reviewed your homeowners policy to know what your limit is.

Holding your metal in a bank reduces the theft/loss risks, but introduces others. For example, your access is more limited as it depends on the bank being open (it might not be during a financial crisis).

In the end, you'll need to decide for yourself which option (or combination) best fits your personal risk tolerance level.

Increasing Your Core Position: Bullion (Stored Remotely)

As mentioned, most households' Emergency stash will range between a few $thousand to a low 5-figure $sum.

Among those households, a number will want to own more precious metals beyond the Emergency stash -- for increased protection against monetary devaluation/economic crisis/asset price bubbles. But they don't want exposure to the increased risk of storing greater amounts of bullion.

For investors like this, who are likely the majority of those reading this article, bullion storage companies can be an excellent solution.

In this space, has, for years, endorsed solutions like the Hard Assets Alliance, which is representative of the benefits these storage companies can offer.

The Hard Assets Alliance (HAA) is commercial-grade platform that allows you to purchase gold and silver at very competitive prices, and then have that metal stored in your name in a high-security vault of your choice.

The HAA offers such good pricing because it uses Gold Bullion International's industrial-grade platform (the same used by major financial institutions like Merrill Lynch) which ensures that a minimum of 4 dealers are competing to fulfill your order. 


In terms of storage options, the HAA holds any precious metals you buy in your name. This is "allocated" storage -- no one else has claim to that same bullion. This differs from "unallocated" solutions where buyers have a fractional claim on a pool of bullion. When using a storage compan, definitely choose allocated solutions over unallocated.


The HAA gives  you the choice of storing your bullion in any of six ultra-secure non-bank vaults around the world, which are audited several times each year. These vaults are owned and operated by world-renown security companies (Brinks, Loomis, Malca Amit) and are in US (New York), US (Salt Lake City), Switzerland, Australia, Singapore and the UK. So you can diversify your country risk, should you wish to.

And should an act-of-god impact the vault, the contents are insured at full replacement value in bullion -- meaning if anything were to happen to your bullion, you'd get back the same amount of metal, as opposed to compensation in cash. 

They also offer a "worry-free" automated purchasing program that lets you create a set-it-and-forget it plan for accumulating bullion over time. This lets you tap the power of dollar-cost-averaging without having to actively manage the process

And should you decide at any point you want your vaulted bullion sent to you, the HAA will ship it upon demand to wherever you specify.

For most investors, a reputable industrial-grade vaulting service offering these benefits is an excellent solution for expanding your gold and silver holdings beyond your initial Emergency stash.

Buying Scrap

1 US ounce=28.349 grams

1 Troy ounce=31.103 grams

Metal             Melting Temperature
24k gold               1945° F
18k gold               1700° F
14k gold               1625° F
10k gold               1665° F
Pure silver            1761° F
Sterling silver       1640° F
Platinum               3224° F
Palladium             2831° F

Silver is measured in troy ounces. For reference when buying or selling, there are 12 troy ounces to 1 troy pound. There are approximately 31 grams to 1 troy ounce.

·         Real silver rings. Either flick the silver coin into the air or tap it with another coin to produce a sound. The sound you should hear in hear silver is a ringing sound, high-pitched and bell-like. If you flip a 1932-1964 quarter (90% silver) and a post 1965 quarter (90% copper), you should hear the difference immediately.[2]

·         Real silver melts ice. Place an ice cube on a block of silver or a silver coin and watch the ice cube melt faster than it would if it were merely left out at room temperature. Silver melts ice quickly because it has very high thermal conductivity.

·         Real silver isn't magnetic. Get a rare-earth neodymium magnet. Angle your silver bar at 45° and let the neodymium magnet slide down. On real silver, the magnet will make a slow descent down the bar. On non-silver materials, it will either stick to the top of the bar or slide down very quickly.

Preserve your labor, savings and retirement with gold and silver in your physical possession is my best advice. 

After a mega disaster, the dollar bills in your pocket will be as useless as a college degree. Unless that education is in a field that would be useful for a nineteenth-century existence.

Bartering and precious metals will once again become the accepted currency in the post-apocalyptic world. The wise prepper will figure out how to turn his or her self-reliance hobbies and skills into a lucrative “income” during the reconstruction stage that will emerge after a long-term disaster...

 NOTE: Finding a local dealer can be done via this special report from this source:

Directory of Dealers Specializing in Gold & Silver Coins & Bullion…send an email to & request the PDF version.

Other reliable sources I use include:

Brandon Farran @

800-217-2780 or 800-375-9006

First Fidelity [ask for Levi] @ 800-336-1630


Yours in Self Reliance,

Bruce ‘the Poor Man’


A Final Note…

Contributors and subscribers enable the Poor Man Survivor to post 150+ free essays annually. It is for this reason they are Heroes and Heroines of New Media. Without your financial support, the free content would disappear for the simple reason that I cannot keep body and soul together on my meager book sales & ecommerce alone.

Useful Resources

Do you know how many people are impacted by a natural disaster every year? One million? Ten million? Try over two hundred million.

And out of those 200 million people, did you know that over a hundred thousand are killed? That’s also not to count the enormous expense that disasters incur on the global economy, costing over 160 billion dollars a year.

Just a few of the effects of disaster--beyond the massive expense and the high risk of death--include severe injury, home displacement, family separation, traumatization, and losing almost everything, to name a few things...

“After the stock market crash in 2008, everyone started claiming an economic collapse was about to happen, but what they didn’t realize is that it DID happen… in 2008. Since then, the economy has slowly been recovering. But the systemic problems that led to the crash were never corrected, and the bubble has been re-inflating. It can’t re-inflate forever.”

Just like in the years leading up to the Great Recession, people have too much debt and not enough wealth. Meanwhile, the stock market has soared to new heights, as it always does before it comes crashing down...


Only 25% of Americans say they are comfortable with a presidential candidate who is a socialist.-NBC News

Start spreading the news: New Yorkers are coughing up the most cash in state income taxes. The Empire State collected $2,249 per capita in individual state income taxes during the 2017 fiscal year, according to data from the Tax Foundation.

If you’re wondering where to protect your nest egg in retirement, look no further than the Sunshine State. Florida is the best state for retirees, unsurprisingly, while Kentucky is the worst, according to a study by WalletHub.


Last Package!

Social Chaos Survival Guide: Savvy Precautions-Become Self-Reliant


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Larry said...

Terrific info guy! I still own some of the first silver stash I bought in the 90s when prices were dirt cheap-I look at it as my insurance policy!

Mike said...

I buy silver, the 'poor man's gold' as gold bullion is out of my reach for the most part & when the SHTF I think most folks will find it an easier medium to deal with, especially for everyday trade goods using mostly US or Canadian coins [which are 80% silver]...Good guide by the way but as we all know, the masses will ignore this advice.

Sam said...

Gold is the best precious metal to own during times of financial stress, silver does only moderately well, platinum does as well as gold but if we ever get to how Germany did after WWI and WWII, having both gold and silver plus useful items to barter with [ammo,food, fuel, cooking oil, toiletries, liquor,etc.] will be the currencies of choice.