Junk Silver Coins: a Good Investment?
Friday, January 20th, 2012 at 10:02 am
When you hear the term “junk silver coins” your mind probably isn’t thinking, “Fantastic investment opportunity!” But we’re happy to tell you that junk silver coins may be just the investment you’re looking for to round out your portfolio. Being one of the most popular and possibly most profitable ways to invest in silver bullion, 90% “junk silver coins” are becoming more and more popular as their worth continues to rise.
What Are Junk Silver Coins?
The term “junk silver coins” originated in the 1970s and was originally used to describe a bag of normal, circulated silver coins (no rare coins were included). These bags would contain silver coins that were struck in the year 1964 or earlier, as these silver coins had 90% silver purity. Each bag of junk silver coins contains all half dollars, all quarters, or all dimes.
Before 1965, all of the dimes, quarters and half dollars in the United States were composed of 90% pure silver, and 10% copper. However, the melted value of the silver soon exceeded the worth of the coins themselves, so these coins were then taken out of circulation, with a lot of those silver coins being melted. The coins that outlasted the melting process, however, are the junk silver coins that are now a fantastic investment opportunity.
Why Invest in Junk Silver Coins?
There are a lot of reasons why investing in junk silver coins has become increasingly popular. For one, the silver comes in bags and in denominations, making it quite easy to divide up a bag and determine the worth of each coin. You can easily count your coins and check just what your junk silver coins are worth.
Secondly, junk silver coins are just that – coins. Though they are worth more due to their high silver content, they still do have legal tender face value. You could easily use your silver coins as money in a store as normal currency, if ever necessary. This makes it particularly more appealing than, say, buying a gold bar or a certificate for an investment in silver stocks.
Lastly, this type of investment is considered to be one of the lowest premium methods of investing. Silver is a precious metal, and its worth is continuing to rise despite the recession that most countries are currently in. It’s easier to obtain and more affordable than all other precious metals.
Different Coins have a Different Worth
As mentioned earlier, each back of junk silver coins is separated into denominations. Each bag of junk silver coins generally tallies up to have a face value of $1000 (or approximately 715 ounces of silver), but the coins all contain all dimes, all quarters, or all half dollars.
Here’s where it can get a bit more tricky. Different coins contain a different amount of silver per ounce, meaning that it has a different worth. Here are some of the different types of coins you’ll find when checking out junk silver coins and their silver content:
Junk Silver Coins: Dimes
- Dimes Seated Liberty (1837 to 1852): 0.07726
- Seated Liberty (1853 to 1873): 0.07205
- Seated Liberty (1873 to 1891): 0.7234
- Barber Dime (1892 to 1916): 0.07234
- Roosevelt Dime (1946 to 1964): 0.07234
Junk Silver Coins: Quarters
- Barber Quarters (1892 to 1916): 0.18084
- Standing Liberty Quarters (1916 to 1930): 0.18084
- Washington Quarters (1932 to 1964): 0.18084
Junk Silver Coins: Half Dollars
- Barber Half Dollar (1892 to 1915): 0.36169
- Walking Liberty Half (1916 to 1947): 0.36169
- Franklin Half Dollar (1948 to 1963): 0.36169
- Kennedy Half Dollar (1965 to 1969): 0.14789
Junk Silver Coins: Dollars
- Silver Dollars (Trade Dollar) (1873 to 1885): 0.78761
- Morgan Dollar (1878 to 1921): 0.77343
- Peace Dollar (1921 to 1935): 0.77343
How Do You Calculate the Value of Each Coin?
In order to calculate the value of each of your junk silver coins, you will need to start by finding out what the current silver price is. Let’s say, for example, the current silver price is $40. Let’s also say that you are interested in finding out the value of your Morgan Dollars. You take the sale price, and then multiply it by the amount of silver per ounce. In this case it would be:
$40 (current silver price) x 0.77343 (quantity of silver per ounce) = 30.9372
For junk silver coins, this value ($30.9372) represents the “spot” value, which is very different from the “face” value, which we will get into in just a moment.
How Do You Buy Junk Silver Coins?
If you’re in the market for silver coins, two of the easiest ways to acquire them is to either visit your local coin shop, or you can go online and find legitimate silver sellers on sites like eBay.
When it comes to the price, you may hear two different ways in which the pricing is described. There is the “spot” value, as mentioned above, or there s the “face” value. The “face” value is referring to the actual denomination of the coin, which is then multiplied by 15. So the Kennedy Half dollar (worth 0.50) would then be multiplied by 15 and this would give us a “face” value of $7.50 per Kennedy Half Dollar. This will tell us that you should not be spending more than 15% (or $7.50 per coin) above the spot value in order to make a good investment with your junk silver coins.
The only exception to pricing comes with half dollars. You can always expect to pay just a little bit more for half dollars as fewer half dollars were minted than dimes or quarters. They also, as you have probably noted, have a far higher silver content than dimes and quarters (with exception of the Kennedy half dollar, which only has about 40% silver content).
Why You Should Invest in Junk Silver Coins
If you are looking to invest in coins rather than bullion, here are some final thoughts to take into consideration:
- Junk silver coins sell at a premium or below premiums on 1 ounce silver rounds and 100 ounce bars
- Coins hold a far higher upside price than any .999 silver bullion products
- During a rise in the precious metal markets (like we’re experiencing now) United States junk silver coins pick up premiums
As you can see, junk silver coins are an investment that can reap dividends.