Newbie - strategy advice please

[Blueged1]

Just started on the PM journey. I’ve been dipping my toe in for last couple of years but now want to start accumulating.  For pure interest sake I’ve got

Gold - 2 x 1oz gold coins, 2 full sovs.

Silver -  the 7 main silver 1oz coins plus 3 perth lunar 2 silver coins. 
 

Not particularly interested in collecting although I might try finish the lunar series in slow time. Watched loads of YouTube vids on silver stacking and looks tempting to get as many silver brits as I can. I want to remove the emotions and just want to go cheapest route - secondary market to avoid the 20% vat .  I want to regularly spend around £300-£400 per month. So question is one vat free sov per month ( easy to source ) or loads of silver brits ( hassle to get them cheaper) per month.  Any advice appreciated. 

[greektony]

It is probably an unpopular opinion around here, but I'm of the opinion that the ship has sailed for buying silver in the UK unless perhaps if you buy it vaulted. Second hand prices even on here still seem to include a massive premium over spot that to me makes it not worth the while.

If you had started your silver journey before Brexit then it would have been worthwhile to stack silver, you're better off buying gold now as the premiums aren't as insane and there is no VAT

[HawkHybrid]

I vote sovereigns

 

HH

[stefffana]

My advice for your budget is to buy one sovereign every two month and one 500g Baird bar every two month. In this case, you will have your eggs in two baskets. Also, both of these two are very easy to sell and for silver bar is lower premium than Britannia.

At today prices one sovereign at Atkinson is £328.35 and one silver bar 500g at Baird is £425.26 VAT and shipping included. Will be an average per month of £376.80, affordable for your monthly budget.

Happy stacking!🤗

Stefan.

Edited May 11, 2021 by stefffana

[Bigmarc]

I have kind of given up on physical silver. Mainly thanks to the hundreds of YouTube vids and the mob culture of wall Street silver. I have a revolute account which has a commodity section. I can buy paper silver there, there is no vat or premium's and I just pay 1.5% over spot. I am using this to keep my toe in the silver market and can cash up in seconds to buy physical gold. I do still like to stack physical but i don't find it a must have anymore (I've never been one to follow a crowd). 

So it's definitely sovereigns for me. 

 

Edited May 12, 2021 by Bigmarc

[GoldDiggerDave]

People buy silver because it's perceived to be cheaper it's far far more expensive than gold to buy and own.  

TAX  Silver 20% tax to buy and hold it Gold 0% tax to buy and hold

Dealer premiums  (the price over spot) Bullion by post 12th May 2021   Silver 39%  Gold 13% (you can buy cheaper than this for both but its a far example of the ratio difference) 

Silver cost far more to physically hold, just how much would a decent safe cost to hold a monster box of silver £1-2K?  So if you bought a monster box you would need the price of spot to double just to cover the cost of the safe and return a small profit for your hard work!!!!!!!!! 

Shipping once you try and sell it how are you going to off load it?  500 sales of 1 oz rounds on eBay (that's a lot of stamps to lick)?  Or post and insure the monster box to your LCS at more expense reducing profits further, most of us don't have a LCS around the corner. 

Shipping is an important one, as for most small "stacker" the postage they end up paying for buying in small amounts over the years will wipe out any profits they make over time, once you include every single cost.  

I could be wrong the wallstreets bets lot could bump spot to 500%.................Who would buy silver in that scenario? the dealers?  I very much doubt they would offer anything close to spot value.  You get your monster box out of your 1-2k safe, fly down the motorway to your closest LCS only to find the longest queue in history with people trying to collectively sell hundreds of tons of silver to the dealer.

All for fun folks! 

 

 

 

 

 

[Bigmarc]

10 hours ago, Bigmarc said:

I have kind of given up on physical silver. Mainly thanks to the hundreds of YouTube vids and the mob culture of wall Street silver. I have a revolute account which has a commodity section. I can buy paper silver there, there is no vat or premium's and I just pay 1.5% over spot. I am using this to keep my toe in the silver market and can cash up in seconds to buy physical gold. I do still like to stack physical but i don't find it a must have anymore (I've never been one to follow a crowd). 

So it's definitely sovereigns for me. 

 

In reflection of my post last night, I think my views may not help a new starter as I am coming from the corner of someone that already has their goal in physical silver. Many people stack (accumulate) for all sorts of different reasons and it may help for you to decide why you are doing it and what is your goal. Please try not to be lead by faceless individuals when investing quiet a hefty budget. I personally have stopped buying silver as in comparison it is the most expensive it has been since starting. You may not have that option, I have also just started getting in to gold (to try and add a little balance). I currently have about 15 sovereigns so I am no expert.

So when I say sovereign's, it's just where I am and the market is at the moment. 

Cheers

[SilverStorm]

On 11/05/2021 at 12:41, Blueged1 said:

Just started on the PM journey. I’ve been dipping my toe in for last couple of years but now want to start accumulating.  For pure interest sake I’ve got

Gold - 2 x 1oz gold coins, 2 full sovs.

Silver -  the 7 main silver 1oz coins plus 3 perth lunar 2 silver coins. 
 

Not particularly interested in collecting although I might try finish the lunar series in slow time. Watched loads of YouTube vids on silver stacking and looks tempting to get as many silver brits as I can. I want to remove the emotions and just want to go cheapest route - secondary market to avoid the 20% vat .  I want to regularly spend around £300-£400 per month. So question is one vat free sov per month ( easy to source ) or loads of silver brits ( hassle to get them cheaper) per month.  Any advice appreciated. 

The only other advice I can offer is make sure your real life outside of collecting precious metals does not get neglected.   You know, like paying down debt, having enough emergency money in case you lose your job, medical emergency, etc.   There are several valid reasons to stack, but you only need one real life reason to force you to liquidate your PM holdings (and potentially at a loss).

[Nugget]

My opinion is similar to those above.

Silver is too expensive currently and the taxes just kill it for me.  Even secondary market prices are high, so I have stopped buying silver currently.

I am currently just purchasing gold.

[HillWalkerDundee]

As Bigmarc said, decide why you are stacking. There are many different reasons.

I am still buying silver as and when pennies allow (it has been one of those years so far). I am building up two stacks, one each for the grandkids as part of their inheritance. The money i use for this is spare and is out of mind as soon as it is spent.

As I get older, I see that one strategy is to divest as many assets as possible. My ISA is in the name of my younger, fitter, healthier partner as is the house etc. My aim is to be legally assetless should I need to go into a home for whatever reason and for however long. Those homes or any third party care service will destroy any wealth very quickly.

It isn't death that concerns me, it is sub standard life that bothers me. Always plan your finances to make sure that your family retains them.

[27carrots]

Another problem with silver is that many coins will get milk spots and lose £2 without you even mishandling them. A cheap 1911 sovereign can pass through your digestive system and will probably also lose only £2 in value.

[GoldDiggerDave]

6 hours ago, HillWalkerDundee said:

As Bigmarc said, decide why you are stacking. There are many different reasons.

I am still buying silver as and when pennies allow (it has been one of those years so far). I am building up two stacks, one each for the grandkids as part of their inheritance. The money i use for this is spare and is out of mind as soon as it is spent.

As I get older, I see that one strategy is to divest as many assets as possible. My ISA is in the name of my younger, fitter, healthier partner as is the house etc. My aim is to be legally assetless should I need to go into a home for whatever reason and for however long. Those homes or any third party care service will destroy any wealth very quickly.

It isn't death that concerns me, it is sub standard life that bothers me. Always plan your finances to make sure that your family retains them.

I salute that strategy sir!

I have a very similar one.  I have zero aspirations of being a millionaire I have just put all my effort in to not being poor.  

I remember when Peter Postlethwaite died and the papers were slating him for only leaving his wife and children a very modest amount, and the public comments were all negative towards him and questioning he should have been richer.   I was the only one saying someone needs to buy his accountant a beer!  The guy was a legend in life and in death.  

It's a sickening prospect where you're well earned assests that have already been taxed all your life can be effectively stolen from you and your family, I fear the system is now set up for people to have longer than life debt so they have noting to pass on.  I'm seeing young people getting onto the housing market in their very late 20's early 30's with 35 year stitch up mortgage deals.  Just what is the point of paying a mortgage well into your mid 60's some are longer (and that's without remortgaging in the lifetime of the term), they are effectively just renting a house from the bank all their lifespan but responsible for the maintenance of the property.....One hell of a sweet deal for the banks.  

Genuine good luck with your strategy......Aim to make the last cheque you write bounce!

[HillWalkerDundee]

@GoldDiggerDave Thank you for those kind words. Sometimes I think I am mad as I am very much the contrarian by nature. I liquidated most of my assets some twenty years ago and gave the kids their inheritance early. I don't think people realise the stress and strain of holding and developing assets as you get older and frailer - you see the sharks circling.

I agree with you entirely about Peter Postlethwaite, a great actor, who lived HIS life. Although he died of pancreatic cancer he had previously had testicular cancer. Gentleman, if you have enough balls to hold precious metals then have enough guts to hold your balls and check them. It takes no time and is one of the more pleasant of life's chores :-).

[27carrots]

7 hours ago, GoldDiggerDave said:

I'm seeing young people getting onto the housing market in their very late 20's early 30's with 35 year stitch up mortgage deals.  Just what is the point of paying a mortgage well into your mid 60's some are longer (and that's without remortgaging in the lifetime of the term), they are effectively just renting a house from the bank all their lifespan but responsible for the maintenance of the property.....One hell of a sweet deal for the banks.

This describes me but it's better than you think in the current climate of very low interest rates. In the last 50 years gold has gone gone up by an average of 9% a year. If I was able to keep my current payment plan I would pay 20% interest on the remainder over the next 26 years (renewable 5 year deals are sweet). My plan is to stack gold and hope rates stay low but if they go back up above 10% before I retire, I will easily be able to sell the gold and pay off what's left. They won't be going up that high any time soon.

[BYK]

On 11/05/2021 at 20:47, greektony said:

It is probably an unpopular opinion around here, but I'm of the opinion that the ship has sailed for buying silver in the UK unless perhaps if you buy it vaulted. Second hand prices even on here still seem to include a massive premium over spot that to me makes it not worth the while.

If you had started your silver journey before Brexit then it would have been worthwhile to stack silver, you're better off buying gold now as the premiums aren't as insane and there is no VAT

Hi 

You mentioned the massive premiums over spot for silver in the UK. Compared to gold. 

And I was wondering why this is? 

I was looking at 1oz and 10oz silver bars today online and noticed most bars are priced 100% over spot price. 

Silver is roughly £20 per ounce. So a 10oz bar should be £200 or a little more. But they the cheapest was £380 etc. 

Madness 

[Pete]

I wouldn't discard silver because everyone is comparing market price to scrap i.e. spot price.
If spot is £20 and a 1 ounce coin sells for £35 then most buyers of silver, excluding the banks etc. will use the £35 value and ignore the spot price.
Okay there is a premium plus 20% VAT but that embeds itself to the coin when trading.
Only when you liquidate to a bullion dealer do you forfeit the markup and tax.

What is the value of a bitcoin ?
Probably zero but people will buy and sell at whatever the market decides so that sets the price.
Same with our silver coins and bars except silver has a spot value so isn't zero.

Gold is bought and sold more or less around spot plus / minus single digit percentages.
However there can also be big premiums on some coins between buyers and sellers but when selling back to a dealer this premium is lost also.
For example I saw today on our forum a Queens Beast advertised for just shy of £2,000 when gold spot is £1,320.
Maybe people will pay £2,000 for an ounce of gold but a dealer will only give you £1,295 if lucky, which is 35% less than its "trading" value.
So in conclusion silver is not necessarily that bad even with its VAT and margins and only falls flat selling back to dealers.

[Chrissyblards1]

Gold more than silver. Sovereigns and Britannia’s is the cheapest route. I still buy silver though. But accumulate more gold. 

[stefffana]

I totally agree with general opinion. At this moment, gold is better. But my advice is to try accumulate silver low premium in another shape and purity, as scrap. I am 100% sure that the spot price will continue going up in the future and you can be make a good return of your investment.

[Bruce06]

1 hour ago, stefffana said:

I totally agree with general opinion. At this moment, gold is better. But my advice is to try accumulate silver low premium in another shape and purity, as scrap. I am 100% sure that the spot price will continue going up in the future and you can be make a good return of your investment.

Agree, I am trying to do the same as well.  Silver accumulation or stacking is a long term strategy, as the premium charged kill any short-term chance.  Need to wait for one chance in many years to take the profit.  

[BYK]

5 hours ago, stefffana said:

I totally agree with general opinion. At this moment, gold is better. But my advice is to try accumulate silver low premium in another shape and purity, as scrap. I am 100% sure that the spot price will continue going up in the future and you can be make a good return of your investment.

I think the same. However what will you be buying? Considering I suppose you want to purchase any silver and its lowest premium over spot? 

I saw the Royal mint is selling with the lowest spot over premium? Any other places you can tell me ? 

 

Thanks 😊

[stefffana]

1 hour ago, BYK said:

I think the same. However what will you be buying? Considering I suppose you want to purchase any silver and its lowest premium over spot? 

I saw the Royal mint is selling with the lowest spot over premium? Any other places you can tell me ? 

 

Thanks 😊

Hi,

First, here on forum you can find very often cheap silver. An example is @Scaffstacker who sold today 1kg silver bar with £765, delivery included. This is £23.79/oz. Also, @arshimo2012 is coming sometimes with very good offers (see his quick sales from this week). Also, you can very often find silver near spot as old british coinage or scrap.

Second, you can find lower premium than Royal mint at Baird or another dealers. At today price, for example, Baird are selling 1kg silver bar at £830, VAT and shipping included. This is £25.81/oz. For smaller bars or rounds, for sure the price is higher.

Third, you can bid for silver flatware on auctions. Sometimes, with a drop of good luck, you can add to your stack nice pieces of silver.

Always you can find good opportunities, but you need patience. Stacking silver is a long term process.

Good luck and happy stacking!

[BYK]

15 hours ago, stefffana said:

Hi,

First, here on forum you can find very often cheap silver. An example is @Scaffstacker who sold today 1kg silver bar with £765, delivery included. This is £23.79/oz. Also, @arshimo2012 is coming sometimes with very good offers (see his quick sales from this week). Also, you can very often find silver near spot as old british coinage or scrap.

Second, you can find lower premium than Royal mint at Baird or another dealers. At today price, for example, Baird are selling 1kg silver bar at £830, VAT and shipping included. This is £25.81/oz. For smaller bars or rounds, for sure the price is higher.

Third, you can bid for silver flatware on auctions. Sometimes, with a drop of good luck, you can add to your stack nice pieces of silver.

Always you can find good opportunities, but you need patience. Stacking silver is a long term process.

Good luck and happy stacking!

Hi Steffano 

Thank you such a long and in depth reply. Really appreciate it. I have just looked up Bairds and I will be buying from them soon. 

Also when you calculate the price per ounce for silver. Is it common to incorporate the vat price into it? 

For example let's say silver is £20 per ounce and then with the vat it's £24. 

Is the ounce price £20 or £24?

And also do you include the vat when calculating the percentage over spot price you pay for silver? 

For example you may pay 20% over spot for silver but it may be more if you incorporate the vat?

I'm only asking because I'm building a spreadsheet and I want to know what the right way is.

Thanks 

[stefffana]

58 minutes ago, BYK said:

Hi Steffano 

Thank you such a long and in depth reply. Really appreciate it. I have just looked up Bairds and I will be buying from them soon. 

Also when you calculate the price per ounce for silver. Is it common to incorporate the vat price into it? 

For example let's say silver is £20 per ounce and then with the vat it's £24. 

Is the ounce price £20 or £24?

And also do you include the vat when calculating the percentage over spot price you pay for silver? 

For example you may pay 20% over spot for silver but it may be more if you incorporate the vat?

I'm only asking because I'm building a spreadsheet and I want to know what the right way is.

Thanks 

Hi,

always keep in mind spot price, premium, VAT and shipping.

I will give you few examples:

1. Sterling silver spoons set on Ebay, 89g, winning price £49.20 shipping £3.50. Total to pay is £52.70. Let's see if it is a good deal:

Spot price today is £19.497/oz = £0.6269/g. So, the value 0% premium for your acquisition is: 89g x 0.925(purity) x £0.6269/g = £51.61. You have paid £52.70. This is +2.1% final premium added to your equivalent pure silver accumulated. Not to bad, even can be less. Sometimes you can buy with a negative premium if is a good day.

2. 10 x 1oz Britannia on this forum, price £280 SD included. Let's calculate final premium paid:

Spot price per this lot is £194.97, but you paid £280. This is equivalent +43.62% premium added.

3. 1kg silver bar on Baird. Price is for one £680.53 + 20% VAT + £13 shipping = £829.36. But spot price is only £0.6269/g, so the bar's value should be £626.9. This means the dealer added already a +8.95 premium (absolutely normal, to cover all his costs). And the final premium will be with VAT and shipping included +39.3%.

4. 10g Pamp bar Year of the horse. Price for one is £27.72 at BBP, VAT and shipping included. Spot price is £6.269, so final premium is +442%.

So, always look at spot price and final price to pay. It is normal to be added a premium, but should be into your willing to pay limits. When you are selling your silver, it is possible to recover some premium you have paid if you are selling to private market. But if you are selling back to a dealer, they will pay to you only spot price or a tiny one for very rare items.

Of course, a collector will pay more premium for a stunning coin, because is his desire and a pure stacker will try to build his long term stack with a final cost how low is possible, closer to spot, having in mind the moment when will try to sell quick his stack.

I hope my explanation was helpful for you, my friend. I've started as a collector, now I am only stacker. You need to decide yourself where is going your heart.

Happy stacking/collecting!🤗

Stefan.

[BYK]

2 hours ago, stefffana said:

Hi,

always keep in mind spot price, premium, VAT and shipping.

I will give you few examples:

1. Sterling silver spoons set on Ebay, 89g, winning price £49.20 shipping £3.50. Total to pay is £52.70. Let's see if it is a good deal:

Spot price today is £19.497/oz = £0.6269/g. So, the value 0% premium for your acquisition is: 89g x 0.925(purity) x £0.6269/g = £51.61. You have paid £52.70. This is +2.1% final premium added to your equivalent pure silver accumulated. Not to bad, even can be less. Sometimes you can buy with a negative premium if is a good day.

2. 10 x 1oz Britannia on this forum, price £280 SD included. Let's calculate final premium paid:

Spot price per this lot is £194.97, but you paid £280. This is equivalent +43.62% premium added.

3. 1kg silver bar on Baird. Price is for one £680.53 + 20% VAT + £13 shipping = £829.36. But spot price is only £0.6269/g, so the bar's value should be £626.9. This means the dealer added already a +8.95 premium (absolutely normal, to cover all his costs). And the final premium will be with VAT and shipping included +39.3%.

4. 10g Pamp bar Year of the horse. Price for one is £27.72 at BBP, VAT and shipping included. Spot price is £6.269, so final premium is +442%.

So, always look at spot price and final price to pay. It is normal to be added a premium, but should be into your willing to pay limits. When you are selling your silver, it is possible to recover some premium you have paid if you are selling to private market. But if you are selling back to a dealer, they will pay to you only spot price or a tiny one for very rare items.

Of course, a collector will pay more premium for a stunning coin, because is his desire and a pure stacker will try to build his long term stack with a final cost how low is possible, closer to spot, having in mind the moment when will try to sell quick his stack.

I hope my explanation was helpful for you, my friend. I've started as a collector, now I am only stacker. You need to decide yourself where is going your heart.

Happy stacking/collecting!🤗

Stefan.

Hi Stefan, 

Wow I am speechless, the amount of detail in your reply is amazing. I hope this helps overs searching for the same answers I was. 

Just one question, In example 1. you factored in the purity of the silver.

1. But with the others are you assuming a 999.9 purity? 

2. Also how would this equation be different if we were doing it for gold, especially when the carots drop to 18 - 22 opposed to 24crt or 999.9 purity?

 

Thanks again. 

Hope you are having a great Sunday!

BYK

[stefffana]

1. Pure silver is 0.999/1000 or 0.9999/1000 used only for coins and bars as investment. Anything less than this purity is an alloy, made to increase the resistance of silver in daily use (coinage, medals, flatware, jewellery). Also in coinage sometimes the percentage of silver was reduced in coins to keep the value of coin against inflation. This is the reason can be found coins 0.100, 0.300, 0.400, 0.500, 0.600, 0.640, 0.720, 0.800, 0.900, 0.925 or 0.958.

There are more standards of purity used in different countries, varying from .800 to .0.958. For example, continental silver can be 0.800, 0.835, 0.850, 0.900.

If you want to calculate the equivalent of pure silver from a 215g made from continental silver 0.835 standard, you need to multiply 215g x 0.835 = 179.52 equivalent pure silver.

2. With gold is almost the same: 24ct = pure silver (999.9), but is too soft for daily use. So, needed to be mixed with another metals to produce harder alloys or another colours (copper, silver, zinc, platinium, in numerous percentages and variations)

22ct.  is 0.9167 gold ( in sovereigns and grandmother's wedding ring);

21.6ct is 0.900 gold (in almost all south american, spanish, portuguese coins and not only)

18ct    is 0.750 gold (in high quality jewellery);

14ct    is 0.583 gold (even in marks is 585);

10ct    is 0.417 gold (very popular in US );

9ct      is 0.375 gold (very popular in UK);

8ct      is 0.333 gold (still popular in Germany, even is the lowest purity accepted for gold)

To calculate the pure gold content from a 13.75g bracelet made from 14ct gold alloy, you need to multiply 13.75g x 0.583(gold purity) = 8.01 pure gold content. Today price for gold is £42.77, so the spot price for your bracelet is £342.85. Of course, this is a reference price. If is very good quality, a high premium is expected.

If you have a 20 pesos Mexico 1959, 16.666g, 0.900 gold, the melting value is:

16.666g x 0.900 purity x £42.77 = £641.52. But because is a beautiful coin, the real value is bigger, having a premium.

A bullion sovereign is 7.98g x 0.917 x £42.77 = £312.97 today melting value. Add around +5% and the real value is £328.