Survival Money

I remember when I was a kid, my grandmother told to take a twenty dollar bill, fold it up and hide it in my wallet, then forget about it. That way if I ever got stranded somewhere I could get something to eat or drink and get some change for the pay phone. This was her version of survival money. I always thought that this little piece of advice was funny. At that age, if I ever got a twenty, it was gone about as fast as I got it! However, now that I’m older, I find myself giving the same sage advice to my kids, except the part about the pay phone. This form of survival money can keep you from being hungry or thirsty during a long wait.

As a prepper, I find myself digging through change now days hoping to find some pre-1964 nickels, dimes and quarters for today’s version of survival money. We all would love to find a couple of pre-65 quarters while at the soda machine. But the odds of that happening are less and less every day. Now days it better to make a deal for survival money at a coin shop or over the internet. But how can you make sure you are getting the best deal you can?

First, there is no place that you can buy “junk silver” for the “spot price”. If you are going to buy from a coin shop you are going to pay a premium for the stores handling and processing the coins. This premium will differ from shop to shop and on the internet. However, if one silver dealer’s premium is a lot higher than the rest of the sliver dealers you have seen, you can do one of two things. Ask why their premium is higher and then decide whether to continue with the deal or simply walk away from the deal. The choice is yours.

There are several US coins that contain 90 percent silver, but there are some that contain only 40 percent or less silver also. All of the coins before 1965 (pre-65) contain 90 percent sliver except the 1942 – 1945 (partial) Jefferson Wartime (WW II) nickels. These nickels only contain 35 percent silver. Another of the US coin that contains less than 90 percent silver is the 1965-1970 Kennedy half dollars. These coins contain 40 percent silver. So, if you are still digging through you lose change, look for the pre-65 coins, those are the one you want to keep.

Currently as I write this, the spot price of silver is less than $16.56 a troy ounce.

Graph provided by JM Bullion 

That is down from the 2011 high of $48.00 a troy ounce. However, if you look at the 10 year performance of silver, you will find that the spot price was $6.44 a troy ounce.

Graph provided by JM Bullion 

Now the question is “Will silver fall below today’s price?” The simple answer is possibly. However, the bottom line is that anytime you are investing in any commodity you are taking a chance on the performance of that commodity. Sometimes you win and sometimes you loss.

However, you must ask yourself why you are investing. If you are going to invest, please seek the advice of a professional. If you are wanting to gather some junk silver to have on hand for a future time when you find that the paper or the electronic money now is a good time to do just that.

The bottom lines are this:

1. If you are going to buy junk silver, only deal with reliable dealers.
2. Beware of the spot price before you buy.
3. Shop around before you buy. Lowest price isn’t always the best.
4. Beware of handling prices, some charge per exchange some charge per troy ounce.
5. Know why you are buying.
6. Know what you are buying.

Terms:

Junk Silver: A term used to describe coinage which is in fair condition and has no numismatic or collectible value above the bullion value of the silver it contains.

Troy Ounce: The troy ounce (oz t) is a unit of imperial measure. In the present day it is most commonly used to gauge the mass of precious metals. One troy ounce is currently defined as exactly 0.0311034768 kg or 31.1034768 g.

Spot Price: The current price at which a particular security can be bought or sold at a specified time and place.