Monday, 23 April 2018

A grain versus a gram of Silver

If you have bought Silver on Ebay then there is no doubt that you would have seen the glint of Silver, stopped and looked, astounded by its price. Then realised that it was for 5 grains of Silver rather than 5 grams. But it sill costs as much as 5 grams! Frustrating yes.

A grain of Silver is a very small amount of the metal. There is 15.43 grains in a gram. So a typical 5 grain bar is a little more than 3 grams of Silver. 500 grains or 500gr is the equivalent of 1.04 troy ounces of Silver. There are 480 grains per troy ounce (31.1g).

One Troy Ounce of Silver Grains
But what is a grain of Silver anyway?

Silver grains are also known as Silver shot. They are little balls of Silver typically about 6mm across that are made from various grades and purity of Silver, each ball weighing exactly one grain or 64.79891mg. They are favoured by Jewellers and such like because it is much easier to take a few grains to make a piece of jewelry rather than have to break down a bar. Typically you would buy a troy ounce of grains.

The term 'grain' is believed to have come from the Bronze age where the weight of wheat and barley grains where used to determine mass. A barley grain for example weighs 65mg, which is pretty accurate to the more exacting, modern day figure. As previously mentioned one grain of Silver, Gold or any precious metal weighs exactly 64.798.81 milligrammes.

There are lots of other theories as to the name 'grain' or its use as a means of measurement. However, the Barley grain theory is largely regarded as the most likely means of explanation.

Grains and grams also have a very similar abbreviations too – not to be mixed up when you are buying Silver! Grams being signified by a (g), grains being identified by a (gr) like so. 

Abbreviation or prefix, unit symbol, for gram is: g
Abbreviation or prefix, unit symbol for grain is: gr

Buying Silver by the grain.

5 grain ingot of 0.99 fine Silver
Should you buy Silver by the grain? Probably not. As you know, the smaller the amount of Silver, the larger the premium, so buying say a 5gr ingot of Silver will probably come with a very large premium. You can buy Silver shot (grains) that as previously mentioned are used by jewellers. You can buy these in bags fall of these little Silver beads. But is this any good as a means of investing? Again, probably not. Although (if buying in volume) there is no or a very small premium for the manufacture of these grains, there is also no identifying marks to prove that it is Silver, so making it very difficult to sell should you want to. In my opinion you should stick to coins, rounds and bars as they have a well-established demand and market and are less able to be tampered with. Buying grain weights also carries a lofty premium (when buying small ingots or bars) so stick to the larger pieces of metal.

Oh, one final thought on grains of Silver. It's very hard to stack 'BB' shaped grains too - leave them for the industrialists and manufacturers!  ;-)

Thursday, 19 April 2018

Buying Silver coins overseas to avoid 20% VAT

With Silver prices getting lively I wanted to get some quickly in case the markets get a little bullish. Until now I had been an Ebay, local coin shop kind of guy. You can get deals via both, second hand Silver doesn't attract VAT. However, I wanted to buy 20oz and as I say, Silver prices have been volatile over the last few days so I wanted to fix my price and get some before the price gets too high!

Purchasing Silver Overseas to avoid 20% VAT
I had done a lot of research prior to this, looking for bullion dealers overseas that beat the UK VAT trap. I just couldn't warrant paying 20% on top of the premium to buy 1oz coins. Belgium and Estonia do not charge VAT and there are a number of dealers in both countries. The dealer with the lowest prices (and the best reviews) that I could find was

The process was pretty simple but, a little bit fiddly. Firstly you visit and pick what you want. Select coins (not bars) as bars are taxable. Coins are not because they are currency (as they have a face value). I selected coins, then 1oz / 30gr. Then I sorted by price lowest to highest.

Here's how  I select my coins. I want the lowest price for my Silver. But I want a tradeable, therefore recognisable coin. I don't care which country it comes from as long as the coin is one of the more common coins. Coins such as British Britannias, Austrian Philharmonics or US Silver Eagles.  In this instance, and prices go up and down for all coins at, Australian Kangaroos and Canadian Maple Leafs were second and third in terms of price. There was one cheaper coin, the 1oz Silver Niue Athenian Owl. I had seen the odd Athenian Owl come up in Ebay, they weren't common (or famous) and didn't seem to command the premiums that other coins were carrying, especially the Australian ones. My favourite coin is the Canadian Maple Leaf. I loves its detail, especially the radial security marks that make it seem to glow. I bought 10 of each and proceeded to checkout.
Buying Silver Overseas to avoid 20% VAT
1oz Silver Niue Athenian Owl

Checkout was a little bumpy. If you are from the UK you would probably have had the sites prices set to UK£. At checkout they ask you to convert this over to Euros. Not so bad, except you have to pay in Euros as well. In short, you have to confirm the order with and then wire them Euros from a separate account, you can't simply set up an account and pay on a debit card. Fortunately there is a nifty little site called TransferWise for this. Knowing what I do now, I would have set up an account here first.

Here's a link to Transferwise.  Set up your account first and make the process easier.

Transferwise is a nifty little site that allows you to exchange and transfer money from one currency to another. On the confirmation page from they tell you their bank account details. You then login to your Transferwise account and exchange the funds into Euros and then transfer them. There is a small cost but the bonus here is that they exchange at the actual exchange rate. They make their money from the fee that they charge. I opted for a bank transfer / wire which cost £1.83, however you can also wire cash from a debit or credit card, this costs £2.41. I added the bank details and the transfer went through in two hours. Not bad. process the order when they receive the funds. Delivering (or you have the option to store it and bundle deliveries later) within four days. I'll tell you how they get on with delivery in another post.

Here's the sum total of my order and my buying rates:

10 x 1oz Silver Kangaroos - €15.91 each. Total €159.10
10 x 1oz Maple Leafs - €16.00 each. Total €160.00
Shipping and handling (tax incl) - €18.00
Total cost - €337.10 or £295.04
 Add the cost of the wire transfer which was £1.83 and my per coin rate or cost per oz is (/20) £14.84 per 1oz silver.

Spot price right at the time of buying was £12.12 per oz (19th April '18). So I bought at a premium of 22.44%.

22.44% is still a little high, my target is to buy around 15% over spot. But when you consider UK sold Silver starts with 20% VAT - before the premium - then it is a bargain!

At the time of writing I have seen Australian Kangaroos selling on Ebay for £22 each. Sometimes higher. Maple leafs are too. But if this is the start of a bull market then I am glad I fixed the cost where it is. I can't wait to receive my shipment.

What premiums are you paying on your Silver coins? Do you know of any other VAT free websites that deliver Silver?  Let me know in the comments below.

Tuesday, 17 April 2018

What is Silver Stacking?

So I named the blog 'Silver Investor', which is a little bit of a contradiction in terms to what 'Silver Stacking' is for one very simple reason. 'Silver Stackers' do not consider themselves 'Silver Investors' because their plan is not to ever sell, unless they have to. The term 'Silver Investing' or 'Silver Investor' implies that the metal will be traded in at some point. I see myself as a stacker. But likewise I want to leave my options open. Should the price of Silver sky rocket or the Gold to Silver ratio be in the favour of Silver then perhaps I would cash in. Who knows, but until that day happens I am happily stacking, investing.. You know what I mean.

What is Silver Stacking
Silver Bars stacked in a Vault
'Silver Stacking' is an American term that has made it over here to the UK along with this investment strategy. The word 'stacking' comes from the way that Silver bars or coins are stored, that is stacked on top of one another. I really like the term, it instantly conjures up those mental images of silver bars stacked up in a vault somewhere.

To 'stack' also means to have physical Silver or precious metals in your possession. A lot of Silver Stackers have very little faith in the banking systems or their governments with some historical interventions whereby governments in particular prevented the ownership of Gold and Silver. Reclaiming it and preventing ownership. This has happened in both the UK and the US in the past. To 'stack' Silver is to have it squirreled away somewhere, either in your home or in a secure vault but somewhere where you can get access to it.

Whether you call yourself a 'Silver Stacker' or a 'Silver Investor' the goal is the same. Stack or buy Silver, that is the real thing not an ETF or suchlike, with a view to holding onto it for the long term. If you are just getting into Silver Stacking then don't think that this is some sort of get rich quick scheme. Its a long term strategy and the bet is that Silver, being real money not currency, will out value paper currency in the long term. We'll get into why Silver is such a good long term investment in other posts.

To complicate things there is a third term that often gets thrown into the Silver investing mix. That term is a 'collector'. Collectors are hobbyist looking for rare, unusual or collections of pieces. Sometimes Silver, sometimes not. You'll often run into 'Collectors' when you are trying to buy Junk Silver. Junk Silver being old coins that contain a percentage of Silver or even Gold. There is a little bit of a collector in all of us and if you are going to be serious about 'Silver Investing' or 'Silver Stacking', you'll have to do your best to set aside any collecting mentality and focus on a disciplined buyer mentality... Even if you haven't got that Victorian Silver Crown yet.

So, in this brief summary of 'What is Silver Stacking' hopefully I have communicated well that Silver Stacking and Silver Investing are kindred spirits. The objective is to stack, stash or set aside Silver as part of a long term investment strategy. The only differences between a 'Silver investor' and a 'Stacker' is that an investor may choose to sell his Silver Stack at some point and Silver Stackers prefer to take possession of the majority if not all of their stack and keep hold of it.

Are you a Silver Stacker or Investor? Leave a comment in the field below.

Welcome to Silver Investor

This is a blog about my new obsession. That is investing in Silver predominantly, but also in other precious metals including gold. I have always speculated and even gambled, sometimes quite successfully. But after a little inward thinking and now with children to provide for my mind has turned to long term investment and leaving a financial legacy that will support my family when I am gone. Enough of the morbid stuff already.. Here's what this blog is going to be about.

I started to look at Silver investing, quite literally stumbled upon it on the internet. I have always had an interest in investing, followed the stock market and I always felt that I was drawn to real things. When I say real things, I mean commodities, companies that produce real things. I was always drawn to mining stocks, keen to follow the history and performance of miners and their mines. Was it the speculation? Maybe. Was it precious metals? Perhaps. I had always had an interest in precious metals, minerals and such like. I digress.

I stumbled upon a book on Amazon Audible called Buy Gold, Stack Silver. I remember playing it in my car whilst on my way to a meeting. The drive was some three hours and by the time I had got to that meeting I was hooked. All I wanted to do was to get home and buy some Silver. The book was American, I later found out that the laws were different over in the US. No surprise I here you say, but as I delved into the differences and recommendations from that author and others I started to find myself obsessively learning about the subject of precious metals, predominantly focusing on Silver. 

I felt like I have learned a lot on my journey so far, my stack is starting to well.. Stack. And to continue my obsession I thought I should start a blog to pass on what I have learned (and stop me obsessively searching the web for new shiny things to buy).

On this blog I am going to share what I have learned. Using my skills as a buyer (professionally, not a commodities trader) I will share some of the disciplines that I am using to maintain title as investor (and not collector). I will also tell you about how I am protecting myself from fakes, frauds and those on the internet keen to cash in on the wood-be investor. 

Thanks for reading and again welcome to my Silver Investor blog. Be sure to sign up for regular updates. Thanks!