Buying silver for investment

Susan1942

I know a young person who is always looking for the best place to put his savings in
He is very much influenced by what people say to him without looking at things for himself He is always getting carried away with ideas and his latest someone he works with told him buying silver coins was a good idea
Anyone know what you do with silver if you need to sell it or the best place to buy coins from I personally would not consider this for myself
Advice would be appreciated Thanks Sue

EdGasket

Buying coins as an investment is an expensive way of trading silver. There are the costs involved of buying/selling and handling the coins plus insurance while you own them. A more efficient way to speculate on silver is through an Exchange Traded Fund (ETF) which you can buy and sell like a share through an online broker. Bear in mind though that there is no income from it so you are relying on the silver price improving to make any gain.

ChopperST

£23k and living at home while treating himself to new cars every 12 months. I know what my Mum would have done!

Susan1942

Thank you I agree totally with what you are saying I see no sense in him thinking that it will return more than he would gain from bank accounts etc Other than Cash Isa he does not have any investments He is obsessive about certain things and in this instance what money he has and trying to improve his returns on it
As you says costs in buying and selling will attract fees
Greatful for you advice Sue

Susan1942

Thanks for the information and advice

bowlhead99

Susan1942 wrote: »

only earns about £23,000 a year

He always buys new cars and will change sometimes even less than a year He will pay this in cash

but this particular man is always coming up with some hair brained idea and he is influenced by him This man is a bus driver like himself and he would not have money to save given that he has a wife and family

Don't worry, there is probably a reasonable explanation.

Probably he and the bus driving man are in the drugs business together and are looking to move their assets into precious metals to avoid a paper trail of cashflows.

Susan1942

I assume you are joking

puk999

People who buy silver coins exclusively (i.e. not as a small part of a well diversified portfolio) have often been convinced of an impending financial collapse. They think they'll be the rich ones after this event happens. I should know; I purchased around £10k of physical precious metals a couple of years ago.

Now I realise I was a bit obsessed with it and fell for the upcoming financial apocalypse narrative a bit too much. In reality, I paid too much for the metals because:

• silver coins are sold at a premium to the silver spot price
• silver coins attract VAT at 20%
• P+P costs
• storage and insurance costs

The coins would therefore need to increase in price by A LOT just to recover the initial trading/tax losses! If your nephew is purchasing from individuals then he might acquire fakes. I purchased 5 fake Canadian Silver Maple Leaf coins and it was a veritable PITA getting it corrected without me being out of pocket for return P+P costs, or worse.

Then what do you do when you want to sell them? In the US there's coin shops. In the UK you've pretty much got eBay or Craigslist. For the former, you'll need to cover the listing fees, final value fees, P+P, and compete with other sellers. Then you'll get buyers who claim you didn't send the coin, or you sent a fake and eBay/PayPal will possibly find in the buyer's favour. It's all too much hassle for my liking.

It sounds like a lot of people know about his silver coins. How long before some unsavoury character does and decides to break in and rob them?

I still have my collection but have since ploughed money into S&S ISAs and pensions since so the precious metals are now quite a small (and therefore more balanced) part of my portfolio.

EDIT: Silver coins do not generate a stream of dividends. They just sit there doing nothing. They're not even edible

IronWolf

Tell him he'll pay 20% VAT when he buys so he'll be immediately 20% down.

Susan1942

Thank you for the very interesting and informative advice I know little about the subject I like you consider that my S&S ISA does well for me I have purchased bonds over the years and as I very seldon need to take any monies from them they have done pretty well for medium risk I have Santander as my current account and I keep it at just below the £20,000 to get the benitif of their 3% interest and the cash back Thank you once again for all the information I didn't realise the costs involved ie VAT postage insurance etc
Many thanks Sue