Precious Metals 101

How can I use silver and gold to grow my nest egg and become a passionate saver?

One of the first books on investing I read was “The Five Lessons A Millionaire Taught Me” by Richard Paul Evans. It is a wonderful book that goes through basic principles of acquiring wealth. When Evans is explaining the importance of saving, compound interest, and creating one's nest egg, he shares a story from his childhood about how he got started investing by buying silver coins. Evans explains how when you are beginning to save, most of the platforms we have to invest money in are hard to visualize and not always satisfying to invest in because they are online and you don’t have a product to hold in your hand. Precious metals are not like this. You can run to a coin store and purchase silver and gold as an investment and then keep it in a box in your room. It is a very visual way to start saving as you will see the coins pile up.



I loved the idea of being able to visual watch myself accumulate wealth so I decided to give investing in precious metals a try. There is a lot to consider when investing in precious metals like what metals to invest in, and how you want to get the metal. There are decorative coins, and plain bars, or various other vehicles. I decided to invest in silver because it is a very affordable precious metal compared to gold and platinum. Specifically, I decided to invest in junk silver.


Junk silver is the name for old coins that are composed of silver, but aren’t considered collectible. In the United States, all dimes, quarters, half dollars, and dollar coins that were created before 1965 were coined with 90% silver! Which means that the value of the silver is higher than the value of the coin. A quarter minted before 1965, has a value of $2.75! This is the lowest cost way to invest in silver, and I also find it super fun! For instance, if you bring your change to a penny counter and it spits out quarters or dimes for apparently no reason, there is a good chance they are pre-1965 coins so the machine can’t recognize their composition. I have found many forgotten coins at the bottom of coin counting machines that are a solid silver investment!


In high school, I was working at a frozen yogurt store, and I began walking to the coin store across town with each paycheck to buy silver. I put each coin in an old tin Pokemon lunch box (that I still use) and watched the coins pile up. Evans was right, seeing my money grow physically gave me great satisfaction and encouraged me to save more! I wanted to fill my box up all the way! I found myself saving more and more each week based on the satisfaction of seeing my silver pile up.


If you have tried saving before and have a hard time sticking to it, investing in junk silver might be the perfect place for you to start. It’s fun, it fulfills a desire to go shopping, and it helps you visualize money growth which leads to more motivation to save and grow your wealth.


Like bonds and savings accounts, it has a pretty low return. Over the past 20 years, silver has grown about 5% per year, but in the past 10 years it has actually decreased in value 1% per year. Gold has grown by 9% for the past 20 years, and 3% the past 10. Even with these low and negative rates, I still recommend starting by investing in precious metals as a way to learn about saving and get motivated to take control of your finances.


It’s also important to note that you can invest in silver and gold online and have your precious metals stores at a different location. This is extremely useful if you are acquiring large amounts of precious metals where storing them at your house would be insecure and cumbersome. It's a great option, but I really like the physical component for learning to save


I no longer actively invest in silver for myself. But I still have a lunch box full of silver in my bedroom that reminds me of how I got started saving, and when I buy gifts for my friends' kids it’s always silver so that I can help them to grow as savers and investors from the beginning.


Click Here to go back to Intro to Asset Allocation

Click Here to go to Real Estate 101