Silver coins? If you think I am a weird thirty-something high-tech professional, then I must be doing it right.
For a long time from 2002 to 2005, I couldn’t find any good silver investment vehicle back in Asia where I’m originally from. At that time, silver spot price was just below $5 an ounce. Last summer of 2005, I finally found a good place to purchase at http://www.kitco.com/. It was their perth mint silver certificate. Since I was cost-conscious, I shopped around for the commission that I would be paying. I later found just a handful of other places that sell perth mint. The next thing was how much spread I would be paying between bid/ask. It took a while to figure this out, but I finally got around my ways to calling Perth Mint Program in Australia. Talking to the representative, I found out that the spread is more than 3%, which seemed to be too much for me. One of the problem with investing in silver is that it is less liquid, and therefore has a bigger spread. Furthermore, since the minimum of $10000 US seemed to me to be more than what I wanted to put into silver, I decided to call off my purchase when it was just $7.25.
By the time when I finally found out about first-time special deals from online coin stores, the silver price has gone up to $10 in early 2006. I didn’t want to put too much money in, since the spread and premium over spot silver is even higher. At this point, I just wanted to have some small amount of silver to balance with my physical gold holding. Since I have never seen any silver eagles, I bought from two online internet stores: http://www.preciousmetals.com/, and http://www.universalcoin.com/. This way, I can compare the silver coins that were sent to me from the two stores. I paid almost $11 per coin, about some 10% premium over the silver spot price which however included some minting premium.
When the postman delivered my package, he keeps asking, “what’s in this small package? It’s kind of heavy for such a small package.” I simply smiled, knowing that he probably would not understand why (or at least in such a short time). Yup, I got total of eight rolls, 160 American Silver Eagles at home, paying no storage fee whatsoever. And in less than 3 months, silver zoomed up to $15, but has recently corrected to about $12. Me, not worried. (Boy, before I get the chance to publish this, it went backup up to $14 again.)
I can’t explain this feeling about silver coins to you unless you are also holding the coins. For the first time in my life, I was holding these silver coins in my hands, feeling its weight and brilliance, and it’s just about $10 a piece. Money used to be just a mathematical number in the bank or brokerage accounts to me. But by holding these silver coins, I realized that it’s real stuffs, real money. I would trade $10 paper bill for such a piece of coin ANYTIME. Don’t give me the face from Alexander Hamilton. Give me the Eagle.