Investing in Junk Silver Coins: Add Junk Silver to Your Portfolio

Author: Focus on the User | 7 min read
Consider adding junk silver coins to your investment portfolio.
Diversifying your portfolio with junk silver has benefits.

Did you know that millions upon millions of silver coins are still present in the United States? That's right. Decades after the US government announced that it was no longer making silver coins, many Americans still had silver coins in their possession.

Either they have it as family heirlooms, or they have it lying around the house. Millions upon millions of Americans still have silver coins. You probably already know that silver is quite an expensive precious metal. Silver has been going up in value in the past decade.

Put two and two together, and it's understandable that people get excited about scooping up all this loose silver coinage in the United States so they can sell it for a very high price.

Well, don't get ahead of yourself. While these silver coins may have value, most have value only because they have silver. That's right. They only have value because of their precious metal content. They don't have value in terms of collector's value. Why? Most are junk silver coins.

Top Benefits of Investing in Junk Silver Coins

Keep the following discussions in mind to help you decide whether you should invest in junk silver coins or not.

Traditional Value of Coins

When money was invented, trust was the biggest problem governments had with establishing a form of money or currency. People would not trust a government that issued coinage or paper money with no real value. Back then, the government could not just put magical wording on a piece of paper and say, "this paper has value because we say so." People would think the government is bankrupt and would not use that paper money.

Similarly, with coins, they would not use any coin. The coin must have a certain amount of value, even if it's a copper coin. Since copper is an industrial metal that can be used to create other things, the coins have value.

People used money in the form of coins made of industrial or precious metals. The traditional value of coins, then, turned on how much metal it contained that had a specific value. The big deal about gold coins is that for the longest time, human beings from all corners agreed that gold has value.

Whether they use it for jewelry or to create art pieces or religious objects, they know that gold has value. Gold's value is why governments throughout history have made gold coins. There's a traditional value to these coins. The same goes for silver coins. The value it's understood is in the actual precious metal contained in those coins.

Worst comes to worst, and people would melt down these coins and get that precious metal. That's what made these coins valuable. That's what made these coins legal instruments in trade and commerce. The problem with junk silver coins is that they are too traditional. In other words, their only value is in the value of the metal they contain. They don't have any independent collector's value.

No Collectors Value

The main reason junk silver has no collector's value is its poor condition. Either it's worn down, it's heavily scratched, or its details have been blurred out. Coin collectors collect coins based on their quality or their grade. The higher the grade of a particular coin, the higher its collector's value. High-grade coins are coins that have apparent lines.

High-grade coins are coins that have a lot of detail. In other words, these coins are in mint condition. Mint condition means that they look exactly the way they looked when they got created by the mint that issued them. Unfortunately, junk silver coins are far from mint condition.

They are scuffed up, scratched, tarnished, or even have pieces cut out of them. These coins have no collector's value because they are in such bad shape. Their only value is in the metal that they contain.

Next read: Best Silver to Buy For Investment

Junk Silver Metal Value

The United States government has historically made silver coins with anywhere from thirty-five percent to ninety percent silver content. This silver content is the historical range put by the US government in their silver coins.

Of course, the amount of silver in the coins decreased with time as the years went by. There was a point in time when not only did the silver coins have ninety percent silver in them, gold coins had ninety percent gold as well. That's how rich the United States used to be.

Not anymore. Since 1933, the US has no longer issued gold coins. Since 1964, the United States has no longer issued silver coins. Now, when you look at the US dollar or US coin, it just says legal tender. In other words, it has value because the US government can borrow money to give value to that money you are holding. In a way, it's some giant financial Ponzi scheme. It should not be surprising to anybody who is paying attention to inflation.

The value of this currency decreases with time because there is nothing of value holding up or guaranteeing the paper money or current metal coins we use. Also called inflation. The more money the US government prints, the lower the value of the existing money in circulation. Eventually, it would take a huge amount of money to buy the same stuff that that money was able to buy twenty, thirty years ago.

That's how bad inflation is. This questions when silver will go up as it isn't affected by inflation the same way stocks and bonds may be. Junk silver can only protect you from inflation because it contains thirty-five percent to ninety percent silver content.

What Constitutes Junk Silver

If the silver coins you have are graded fair or lower, you have junk silver. In other words, the only value you would get from that silver collection is to have it melted down, and you go to a metals dealer with that chunk of pure silver in your hand. Otherwise, you're not going to get much value from your junk silver. Junk silver is still junk.

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