June 25, 2023

Stacking Silver: What is Silver Stacking and how to know where to start. Beginners and advanced stackers all start out with 1 silver coin purchase.

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Who is a Silver Stacker?

Silver stacking can be done by individuals who are interested in collector coins, junk silver, and numismatics or investors looking to put their cash into silver as an investment to hold and value in the future.

The term "Stacker" for Silver products refers to a person who purchases coins, rounds, or bars and collects them over time. They are a stacker because they value their collection and while many may choose to buy and sell from their collection, they use Silver Stacking as a form of wealth preservation and investment. 

A good way to look at silver stacking is dollar-cost-averaging your silver investment. When you purchase your stack over time your median price paid and premiums can average out. Purchasing during the silver market cycles will average out your purchases and therefore you can be more profitable in the end. 

For investors, Silver stacking is a popular strategy that involves accumulating physical silver as a means of preserving wealth and diversifying one's portfolio. They can do this by purchasing individual rounds and coins with cash or they can choose to use their retirement savings through a Silver IRA and dollar-cost-average purchases. These "Silver Stackers" are not typically the ones who are visiting the local coin shops every week looking for new products and good deals. Investors, will typically track the spot price of silver and buy large quantities of sovereign silver when the price is low, or they'll choose to purchase a set amount every month, six months, or yearly. 

For collectors, Silver stacking is a fun way to collect specific coins or rounds. Maybe a collector is looking for a collectible series or limited mintage coins.  You could be looking for Kennedy Half Dollar or Washington Quarters. But, just because you are a collector doesn't mean buying 1 oz American Silver Eagles isn't the right choice for you. Collectors enjoy the hunt for their "Stacking" strategy. A good collector will know the current spot price of silver and be able to calculate the premiums being paid for silver.

Can a Collector also be an Investor using Silver Stacking? Of course, once you start accumulating silver you are an investor. You don't need to only open a SDIRA to be an investor, your coins or bars of choice are your investment. 

Whether you are a collector or an investor Silver Stacking is a strategy to get ahead. You might start off being intrigued by the individual coins or bars, but in time you should have a strategy for your purchases. But there are cautions here with buying silver and we will cover some later in this article. 

A silver stack typically consists of various forms of silver, such as coins, bars, or rounds, acquired over time. Silver stackers believe in the intrinsic value of silver as a tangible asset that can act as a hedge against economic uncertainties. 

Common Silver to Start Stacking
Common silver to stack when starting out - silver bars .9999 pure

Common Silver to Stack When Getting Started

When starting on your stacking journey you will need to do your due diligence and research a product line to get started. We'll cover the does and don'ts of silver stacking shortly, but right here we want to make sure of one thing. Don't just walk into a coin store or find a deal online and buy silver. Put a plan in place for your investment and stick to that plan. You can add additional products later once you better understand the Silver market.

What Silver Products are Available to Start Stacking:

  • 90% Silver - a.k.a. "junk silver" to some. 90% silver is found in coins minted by the U.S. Mint before 1965. These coins have 90% silver and 10% copper. 
  • 40% Silver - a.k.a. "junk silver" to some. 40% silver is found in coins minted by the U.S. Mint between 1966 and 1970. These coins have 40% silver. 
  • Bullion .9999 Pure - bullion refers to any coin, round, or bar that is not minted in a spectacular minting process. An example would be an American Silver Eagle. 
  • Proof .9999 Pure - A proof coin is minted in the highest quality by the U.S. Mint and these coins are typically packaged in a display case and sold originally by the U.S. Mint. Proof coins have the highest premiums for silver. An example would be the Proof American Silver Eagle coins. 
  • Silver Coins - a silver coin was minted by a sovereign country or a private mint with the full backing of the country's government. Coins have a face value and are legal tender. These are a safer investment than a private mint round which has no face value as these Coins will also be worth, at minimum, the face value if the price of silver goes to zero. 
  • Silver Rounds - a silver round looks like a coin, but it is bullion with no face value and no legal tender. These are made by private mints and are valued based on their silver content and have a closer to spot price retail sales price than a coin (typically).
  • Silver Bars - silver bars come in all forms. You can have poured bars that are very rough looking with .9999 pure silver or you can find silver bars more polished and refined like the Silver Valcambi CombiBar

Do some research and figure out which avenue you want to start stacking. There is no right or wrong way, the key is to be knowledgeable of the product you choose. The Plug gives no financial or purchasing advice but individuals just starting should consider looking at silver coins from sovereign mints to start. Stay with an easy size like a 1oz coin that has .9999 purity. These types of coins will always be in demand and since they are bullion all you need to know is what the price for a troy ounce of silver is currently trading at. Once you know that, you can decide if the premium attached is too much and move on from that seller. 

Vault Silver

How is Silver Priced

Silver is priced on several factors depending on the type of silver being purchased.

Numismatic and Rare Coins:

The pricing of numismatic or rare coins, which are coins with historical significance or rarity, depends on several key factors. Rarity plays a crucial role, with coins with limited mintages or scarce commanding higher prices. A coin's condition, or grade, also influences its value, with better-condition coins being more desirable. Additionally, historical significance and associations with important events or figures can increase a numismatic coin's value. Popularity among collectors and overall market demand are important considerations as well, as they can drive up prices. It's worth noting that numismatic coin pricing can be subjective, and market conditions and trends can also impact prices.

Pricing numismatic coins involves a combination of objective and subjective factors. Assessing rarity, condition, historical significance, and collector demand helps determine a coin's value. Market conditions, such as economic stability and shifts in the numismatic market, also play a role. Consulting reputable dealers, numismatic experts, or reliable pricing guides can provide insights when evaluating numismatic coins. It's important to remember that pricing can vary, and individual preferences and specific coin characteristics may lead to price variations. Understanding these factors can assist collectors and investors in making informed decisions about numismatic coin acquisitions.

Bullion Coins and Bars:

The price of silver bullion coins and bars is primarily determined by the current spot price of silver in the global market. The spot price represents the current market price for one troy ounce of silver. Buyers can expect to pay a premium above the spot price when purchasing silver bullion. This premium includes costs associated with production, distribution, and the dealer's profit margin. The premium can vary depending on factors such as the brand, design, weight, and demand for a specific bullion product. Generally, larger bars tend to have lower premiums compared to smaller bars or coins due to economies of scale in production.

Market conditions, such as supply and demand dynamics, investor sentiment, and economic factors, can also impact the pricing of silver bullion coins and bars. During times of high demand or limited supply, premiums may increase, driving up the overall price. Additionally, changes in the spot price of silver can influence the pricing of bullion products. Fluctuations in the broader financial markets, geopolitical events, or economic uncertainties can lead to shifts in the spot price, thereby affecting the cost of silver bullion.

Overall, the pricing of silver bullion coins and bars is based on the spot price of silver, the associated premium reflecting production and distribution costs, and market conditions that can impact supply and demand dynamics. Buyers should consider these factors and compare prices from reputable dealers to make informed decisions when purchasing silver bullion.

Proof Coins:

Proof coins are a specialized category of numismatic coins that are produced with the highest level of craftsmanship and quality. They are struck using specially polished dies and planchets, resulting in coins with exceptionally sharp details and mirror-like finishes. The pricing of proof coins is influenced by several factors, including their limited mintage, superior quality, and collector demand, which collectively contribute to the higher premiums associated with these coins.

In essence, the Proof Coin is a mix between Bullion Coin and Numismatic Coin. They have a purity of silver that reflects the spot price, but a collectible desire which falls into the numismatic coins realm. 

Limited Mintage: Proof coins are often minted in limited quantities compared to their standard counterparts. The low mintage numbers create a sense of rarity and exclusivity, driving up their value among collectors. The limited supply relative to the demand for these coins can significantly impact their pricing.

Superior Quality: Proof coins are meticulously produced using advanced minting techniques and quality control measures. The high degree of craftsmanship results in coins with impeccable details, frosted designs, and mirror-like backgrounds. The superior quality and visual appeal of proof coins makes them highly desirable to collectors, justifying the premium attached to them.

Collector Demand: Proof coins enjoy a strong demand from coin collectors and enthusiasts who appreciate their beauty, rarity, and historical significance. The collector market for proof coins drives up their prices, as individuals are willing to pay a premium to add these special coins to their collections.

The combination of limited mintage, superior quality, and collector demand leads to higher premiums for proof coins. These coins are often packaged in protective cases, accompanied by certificates of authenticity, and may be part of special sets or series, further enhancing their value. It's important to note that the premium associated with proof coins can vary based on factors such as the specific coin, its historical significance, condition, and market conditions at the time of purchase.

Collectors and investors interested in proof coins should carefully evaluate their personal preferences, budget, and long-term goals. Consulting with reputable dealers and staying informed about market trends and pricing guides can help make informed decisions when acquiring these unique and sought-after numismatic treasures.

Scottsdale Mint Silver Stacker. A Bullion Round with 100 grams of .999 Fine Silver

Silver Coins vs Silver Rounds for Stacking

Silver coins and silver rounds are both popular forms of physical silver investment to stack, but they do have some key differences despite their similar appearance.

Silver coins are typically produced by government mints and are considered legal tender in their respective countries of origin. They often feature intricate designs, carry a face value, and are backed by the government's guarantee of weight and purity. Examples of silver coins include the American Silver Eagle, Canadian Silver Maple Leaf, and Austrian Silver Philharmonic. Due to their government backing, recognizable brand, and collectible appeal, silver coins generally have a higher premium compared to silver rounds.

Silver rounds, on the other hand, are privately minted and do not hold legal tender status. They are produced by private mints and feature various designs, including generic or themed motifs. Silver rounds are typically produced in larger quantities and may have simpler designs compared to coins. As they lack government backing, silver rounds generally have a lower premium compared to silver coins. However, the exact premium for both coins and rounds can vary depending on factors such as the design, condition, popularity, and overall market demand.

When it comes to choosing between silver coins and silver rounds, it often depends on individual preferences and investment goals. Silver coins may be favored by collectors and those seeking recognizable, government-backed products. They can potentially offer additional numismatic value and may be easier to sell in the future due to their brand recognition. Silver rounds, on the other hand, can be a more cost-effective way to acquire silver for its intrinsic metal value, especially when the premium over the spot price is a primary consideration.

Ultimately, the decision between silver coins and silver rounds depends on factors such as personal preference, budget, collectability, and investment objectives. It's advisable to research and compare different options, evaluate premiums, and consider long-term investment strategies when deciding which option is the best fit.

Silver Bar Scottsdale Mint by The Plug
Suisse 1 Kilo 999.0 fine silver

Are Gold Bars the Best Stacking Option?

When it comes to stacking gold as an investment, bullion gold bars can be a compelling option with several advantages over bullion coins or rounds. Here are a few reasons why bullion gold bars might be a better choice for stacking:

  1. Lower Premiums: Bullion gold bars often have lower premiums compared to gold coins or rounds. This means that when purchasing gold bars, a larger portion of your investment goes directly into the metal itself rather than paying for the additional costs associated with a numismatic value or intricate designs. Lower premiums can allow investors to acquire a higher weight of gold for their investment budget.

  2. Ease of Storage: Gold bars generally come in larger sizes and are uniform in shape, making them easier to stack and store. The compact shape and standardized dimensions of gold bars maximize storage efficiency, whether it's in a safe, bank vault, or a secure storage facility. This convenience can be particularly advantageous for those looking to accumulate a significant amount of gold over time.

  3. Efficient Purchasing: Gold bars are often available in larger weights, such as 1 oz, 10 oz, or 1 kg, which can provide cost efficiencies for bulk purchases. Buying larger bars means dealing with fewer individual pieces, potentially reducing transaction costs and simplifying the buying process. Additionally, some mints or refiners offer discounted premiums for larger bar sizes, further enhancing the cost-effectiveness of gold bar stacking.

  4. High Purity: Bullion gold bars typically have high purity levels, often ranging from 99.9% to 99.99% fine gold. The focus on purity ensures that investors are acquiring gold with minimal impurities, providing confidence in the value and authenticity of the metal. The purity of gold bars is often clearly indicated on the bar itself, reinforcing their credibility in the precious metals market.

While bullion coins and rounds can also serve as valuable investments, bullion gold bars offer distinct advantages for those focusing on efficient stacking. Lower premiums, ease of storage, efficient purchasing options, and high purity levels make gold bars an attractive choice for investors looking to accumulate a substantial quantity of gold cost-effectively and conveniently. As with any investment decision, it's essential to consider personal preferences, and investment goals, and consult with experts to determine the best approach for your specific needs.

Vault Silver

How To Choose Your Perfect Stacker

When it comes to building a silver stack, the right choice of stacker options depends on personal preference and investment goals. A recommended approach for beginners is to start with a specific type of coin or bar and set a goal to accumulate a specific amount before diversifying further. For example, one could focus on acquiring 100 ounces or 1000 ounces of silver bars or aim to collect 50 coins of a specific type, such as silver half dollars.

By sticking with a particular coin or bar, individuals can develop a deeper understanding of its market dynamics, pricing trends, and potential value. This focused approach allows for more targeted research and enables stackers to become knowledgeable about the specific product they are accumulating.

Setting a specific amount as a goal provides a clear objective and helps track progress. It can also instill discipline and prevent haphazard purchases, ensuring a consistent and deliberate stacking strategy. Whether the goal is based on weight or quantity, it provides a tangible target to work towards and a sense of accomplishment upon reaching it.

As stackers gain experience and confidence, they can expand their collection to include different types of silver stacker options, such as numismatic coins, rounds, junk silver, or collectibles. This gradual diversification can add variety and depth to the stack, catering to individual preferences and investment strategies.

Ultimately, the key is to find the stacker option that resonates with personal preferences, whether it's the aesthetic appeal of numismatic coins, the simplicity of silver bars, or the historical significance of junk silver. By starting with a specific coin or bar and setting a goal for accumulation, silver stackers can lay a strong foundation for their journey and gradually expand their stack according to their interests and objectives.

Mistakes Made by Beginner Stackers

We all make mistakes, but if you had someone experienced to give you a guideline and tell you never to do these things, wouldn't you be willing to listen? We have a blog on Beginner Bullion Stacker Blunders you can check out. Below are a few stacker mistakes.

Here are a few thoughts from experienced Silver Stacker:

  1. Walk Away - never think this is the only option. Be willing to walk away do some more research and come back if you find a good deal.
  2. Make a Plan - having a plan or a specific coin or round you are always looking for helps you become more knowledgeable and make better decisions. Start with 1 item and look for those, become an expert on that coin then move on to another. 
  3. Don't pay for shipping - don't cut into your profits. When you buy online and pay shipping you have to distribute that cost within the product being purchased. You may pay $1 over spot, which would be an excellent deal, but then when you add the shipping you are paying $5 or $10 over spot per troy ounce. There goes your profit potential when you sell. 
  4. Know your product - if it is bullion and you are paying spot + premium, know the current spot price before you enter the store. Also, know your conversions between a 1/2 ounce of silver or 1/4 ounce of silver to grams so you can value the bullion quickly. 
  5. Use Cash - when possible, use cash for your transactions. Only use your silver stacking cash and not your credit card or debit card. Like shipping cost, when you pay with a credit or debit card you will probably be charged a premium for the convenience. That additional cost will go against that item and increase the premium and potentially lower the profit. Local coin dealers prefer cash and will give discounts for cash transactions. Also, bundle coins can help when using cash to get lower premiums.
Stacking Silver in My IRA
Free Silver with Qualifying Account and Investment from Goldco

Silver Stacking in My Self-Directed IRA

Silver stacking can be accomplished through a self-directed Individual Retirement Account (IRA), which offers a unique avenue for diversifying and growing one's retirement savings with physical silver. Here's an overview of how silver stacking can be pursued within a self-directed IRA:

A self-directed IRA provides individuals with the flexibility to invest in a broader range of assets beyond traditional stocks, bonds, and mutual funds. This includes the opportunity to hold physical precious metals like silver. By establishing a self-directed IRA, investors can allocate a portion of their retirement funds to acquire silver bullion coins, bars, or other IRS-approved forms of silver.

To get started, it's important to choose a reputable custodian or trustee who specializes in self-directed IRAs for precious metals. The custodian will handle the administrative tasks and ensure compliance with IRS rules and regulations. They will also assist in facilitating the purchase and storage of the silver within an approved depository or storage facility.

Once the self-directed IRA is established and funded, individuals can work with their chosen custodian to purchase silver bullion from authorized dealers. The purchased silver is then stored in a secure, IRS-approved storage facility on behalf of the IRA. It's important to note that the silver acquired through a self-directed IRA is held for investment purposes only and cannot be physically possessed or used personally until distribution or retirement age.

By incorporating silver stacking into a self-directed IRA, individuals can benefit from potential price appreciation in the silver market while enjoying the tax advantages and long-term growth potential of an IRA. The physical ownership of silver within an IRA allows investors to diversify their retirement portfolio and hedge against inflation or economic uncertainties.

Should I Stack Silver or Gold In My IRA

Both are good choices, when you roll over from an existing retirement IRA or prior employer's 401(k) you can have more funds to get you started. Stacking is a good plan for both silver and gold. However, stacking silver can get you larger quantities. Check out our Buy Silver and Not Gold in 2023 article for more information.  

When looking at the difference in spot price for gold and silver there is a significant difference. Today gold spot price per troy ounce is $1,93.65 per ounce and silver is $22.65 per ounce. Given this significant difference, you can acquire more silver than gold. 

Many believe the overall value of silver today is undervalued. With the increasing demand for silver in such areas as technology and jewelry, the price of silver is expected to rise over time. 

When investing in physical gold and silver you need to work with a qualified and knowledgeable dealer. Dealers that put the importance of your goals and retirement accounts first before their need to sell a product. Educating client is what Goldco and Augusta Precious Metals do first and foremost.

You cannot make a good decision investing in precious metals without understanding the investment. The reason investment advisors and stock brokers don't recommend physical precious metals is that they cannot make a commission. Using your retirement SDIRA you manage your investment. Choose to work with the best dealers. 

Final Thoughts on Silver Stacking

In conclusion, silver stacking offers individuals a tangible and valuable way to diversify their investment portfolio and protect their wealth. Whether it's for financial security, hedging against inflation, or long-term retirement planning, stacking silver can provide a sense of stability and potential growth over time.

However, it's essential to emphasize that as with any investment, it is the responsibility of the individual to stay informed and make educated decisions. Understanding the dynamics of the silver market, monitoring price trends, and staying up-to-date with relevant regulations is crucial. Engaging the services of reputable dealers and custodians, particularly when incorporating silver stacking into a self-directed IRA, is of utmost importance. Working with professionals who have experience in the field ensures compliance with IRS rules and safeguards the integrity of the investment.

Remember, silver stacking should align with your specific financial goals and risk tolerance. Take the time to research and evaluate different silver stacker options, whether it's coins, bars, numismatics, rounds, or collectibles, to find what resonates with your preferences and investment objectives.

As you embark on your silver stacking journey, seek guidance from trusted financial advisors or experts in the precious metals industry. They can provide valuable insights, help navigate the intricacies of the market, and offer personalized advice tailored to your needs.

By staying informed, exercising due diligence, and making informed decisions, you can make the most of your silver stacking endeavors and potentially reap the benefits of this timeless and enduring precious metal.

Now go out there and talk with your local coin store. They are an excellent source of education as you get started. 

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