June 29, 2023

Silver Stacking Mistakes for Beginners

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Precious Metals Stacking Mistakes or Beginner Learning Experiences

The pitfalls of every stacker start with these mistakes. But don't worry if you've already accomplished some of these mistakes, you have a good chance of getting yourself right and making good choices going forward.

Learning something new starts with education and experience. You will never be good at something sitting on the sidelines and never getting into the game. Over-education and thinking you don't know enough could keep you from changing your future.

But just a second, The Plug is not an investment advisor, we are only providing information for our readers to make informed decisions. While Stacking is a way to preserve cash and possibly produce wealth down the road (way down the road) we are not saying you should get into stacking silver or gold.  Every investment has the inherent possibility of losing value and when you buy silver that is not legal tender, you could lose all your money. But, gold and silver have never been worth zero.

Education is the key to being the best silver stacker without getting yourself into a hole. Taking the time to learn and then build upon that knowledge will make you an informed stacker. 

As a silver stacker, I've gathered valuable insights and learned from my mistakes and others along the way. If you're a beginner seeking information on the common pitfalls encountered when stacking silver or gold, you've come to the right place. 

Precious metals like silver and gold have long been trusted as reliable assets, offering a sense of stability and diversification in uncertain times. However, navigating this intriguing world requires a certain level of caution and awareness.

In this article, we'll explore the mistakes often made by individuals embarking on their silver stacking journey. By shedding light on these missteps, we aim to provide you with the knowledge and foresight necessary to make informed decisions, optimize your investments, and avoid potential setbacks. 

Why Are You a Silver Stacker?

Before we begin with the pitfalls and mistakes of silver stackers, I want to approach the topic of why you are stacking. If you are new to coins and are interested in their look and for collecting, that is one reason to start stacking. But we caution any stacker into just buying up metals because they look nice. 

Have a why, are you buying as a collector looking for particular coins and to make a collection? Are you buying designer rounds in unique series as a collection? Or, are you going to use silver stacking as a means of savings? Replacing cash or bullion looking for future value appreciation and a means of not spending your cash. 

You have to have a reason for your silver stacking. It can start with a few coins for "fun" but you should have an end intent. If you find you're not as interested as you'd thought, consider moving away from precious metals stacking and choosing a new investment strategy. 

Stacking for Retirement or In Retirement

Stacking for retirement refers to a buying strategy that safeguards your savings for your retirement years. You can use stacking throughout your lifetime as an alternative to holding cash in savings. Use it while you are investing in your employer's 401(k) or your personal IRAs. Buying silver or gold over time gives you the opportunity to see tremendous growth in value for your stack while dollar-cost-averaging your purchases. Most stackers are less likely to sell their metals when times are tough, but it's nice to know your coins and bars have value and can be sold later in your retirement.

Understand how to Silver Stack using a Self-Directed IRA. It is a viable way to purchase IRA Approved coins and bars while keeping your retirement savings in an IRA Account. 

Silver stacking in retirement can keep you busy and engaged during those retirement years. Many of my friends say they don't want to retire because then they will have nothing to do. Finding things to keep you engaged and focused is what most retirees fear. 

Is there a better way to keep yourself engaged in your retirement than being focused on a goal? Stacking should never be looked at as a hobby, but that might be how you get started. Remember you are trading dollars for silver or gold. Silver has value; when you buy and sell your stack, you are trading dollars for the precious metals.

Buy Gold and Silver

What Do I Need to Know About Silver Stacking?

There are thousands of hours of information you will gather while you start stacking. There is no way I can provide you with all the knowledge you need to know or get started with. But here are three keys to getting started stacking silver or gold:

  1. Coins or Rounds - coins have a face value and were produced by a sovereign government mint. Not all coins have silver and not all coins have .999 pure silver. Rounds look like coins but have no face value. Therefore, if the value of silver goes to zero a round is worth nothing (unless it has a collector value). Rounds are made of private mints and come in all sorts of designs. Many rounds are collector items, rounds should be stamped by the mint along with a purity stamp for how much gold or silver is in the round. 
  2. Premiums - there is a premium attached to every coin, round, or bar made. Originally, the premium was the melt value or spot price of the metal + any cost to produce the coin, round, or bar. Then as the bullion starts circulating the premium becomes what the seller makes off the item. As a buyer, you don't know what they paid for the item so you don't know what they will be making on the sale. If the premium is high, based on your research, then walk away.
  3. One-of-a-Kind or Limited Minted - These terms sound good, but if they are so unique, why is it available to you and not scooped up by other silver stackers already? Be cautious of local coin shops or online coin sellers offering these types of products. Stackers stick with what they know and don't typically start off buying these types of products. Walk away!

This information is just to get you started, check out our article on Silver Stacking for more information on this subject. 

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9 Stacking Mistakes to Avoid

Whether you're just starting and haven't made your first purchase or you are a seasoned stacker, these mistakes should be avoided.

  1. No Plan - when you are using your hard-earned cash to start an investment strategy that involves stacking silver, you have to have a plan. 
  2. Silver Stacking Goals - to keep on track make goals for your first stack. Say you are looking for 90% silver coins circulated before 1964. 1/2 dollars specifically, set a goal of 10 coins or 100 ounces. Have a goal and stick to that one first, then make a new goal. 
  3. Never Ever Use a Credit or Debit Card - well sometimes you can't avoid this because you are buying online. But remember for every CC interest rate or fee you pay that will add to the premium you are paying for that bullion. So when you think you are paying $5 over the spot, with the fees you could be paying $10 and that needs to be added to your acquisition cost. When working with local coin shops remember "CASH is KING" You can bundle bullion and lower your premiums, and don't be afraid to negotiate prices.
  4. Understand Pricing - are you buying bullion and prices are spot + premium or are you buying rare coins, junk silver, numismatics, Proof, or brilliant uncirculated? Know and understand how items are priced. When you stick with one item to start you will gain knowledge and eventually become an expert. 
  5. Stick to 1 type of Coin, Round, or Bar to Start - this is where many people get sidetracked early on. You should stick with one item, something that you can easily understand and look for. Not a unique or rare coin that is more of a collector piece, but simple bullion like an American Eagle 1 oz minted by the U.S. Mint. This is not a rare piece, there are thousands of 1 oz American Eagles both in uncirculated and circulated status. These are also easy to understand as 1 oz coin is 1 troy ounce and you can find out daily what the current spot price is for silver and easily figure out what premium the seller has attached to the item.
  6. Cull or Damaged Coins - you could find a unique, one-of-a-kind, item and you pay $20 for a coin that is from the early 1900s or even the 1800s. But later you find out the condition of the coin is fair and nobody has an interest in paying you what you paid for the coin. Well, you just learned a Cull coin is worth the melt or silver value only. Don't buy extremely damaged coins off the cuff. Do some research and get back to the seller later if you find that the deal is good or bad. 
  7. Private Mint Rounds or Sovereign Mint Coins - the bottom line is what is the spot price of silver. If you are stacking silver, you should be considering the total amount of silver you are buying and the premium you are paying. Private Mint Rounds are likely to have lower premiums and that makes your silver worth more. Sovereign Mint will have higher premiums on their bullion. So Mistake #7 is don't think one is bad and the other is good. There is a place for each. But, going back to #5, find one type to start and go all in on that item in the beginning. 
  8. Overspending - budget your stacking money. This should not be the money you need to pay your bills. Once your family budget is met and you have a reserve built up in case of an emergency and you are 100% funded in your 401(k) or IRA, now you can use any extra cash to start stacking. Don't overspend and find yourself needing to sell your silver. When you have to sell to pay bills, you will most likely find yourself losing money on your stack. 
  9. Don't Show Off Your Stack - I know it looks cool showing off what you have "collected". But would you pull out your checkbook and show everyone how much cash you have in your saving account? No, you wouldn't! Showing off your stack is like showing off your cash. Remember silver is money and the more people know you have the higher the chance they will share that information with some person that wants what you have. So, don't show it off. Keep this one close to your chest just like you would about the value of your retirement funds or the cash in your savings account. 

Final Thoughts on the Mistakes Made While Stacking Silver

The Plug is all about alternative investments outside traditional retirement accounts and 401(k)'s. We believe alternative investments in precious metals can be a good place to hold retirement savings for the long term. Using both available cash savings or choosing to use a Self-Directed IRA and rolling over from a current retirement account is your choice. There are both pros and cons for both. 

Stacking mistakes are at time unavoidable. But having the right mindset that this is not for fun and games and is looked at as an investment, then you change your thinking. The final mistake most stackers make is not walking away. Be willing to walk away from a transaction. There are always more silver coins to stack being sold elsewhere. That is not the final deal and by having a plan in place, like I won't pay more than $5 over spot for an American Silver Eagle or whatever your plan is, it will keep you on the straight and narrow and you won't be making emotional decisions. There is no room for emotion when you are using your hard-earned money for stacking gold or silver. 

If you looking to move some retirement saving into physical gold or silver, then maybe a gold or silver IRA is a good option. But, if you don't know enough about the investment vehicles you should look at learning more. Our 5 Best Gold IRA Companies review talks about the best of the best gold IRA companies. Start your precious metals IRA research there. 

Here are a few more articles on our website that might interest you:

Silver Stacking

What is a Self-Directed IRA for Gold

Pros and Cons of a Physical Gold IRA

What Determines Gold and Silver Premiums

Why Buy Silver and Not Gold in 2023

There are just a few of the articles written here on our website. Stick around and click on the "blog" button at the top of the page to see all of our articles. 

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