Thursday, April 26, 2012

Selling other stuff #2: Silver Coins and Bullion

In the ongoing hunt for books, you will inevitably come across other, non-book materials that might be worth your while to pick up.  Some of these are quite obvious overlaps, such as CDs, DVDs, comics and posters, but one you might not think of is silver.  I have found silver for sale in antique shops, flea markets and even, on one occasion, a pet groomers/trading card shop.  If you have a good, rough estimate on the current value of silver, you can sometimes pick up good deals that are excellent long term investments.

The primary advantages to purchasing silver are the fact that it has over the decades slowly increased in price.  It is thus safe and easily traded most anywhere.  The second is that it can be purchased in small dollar values that fit any budget.

There are two types of silver easily available: bullion and coins.  Bullion is the term for privately produced silver rounds (they look like coins but can't be called them for legal purposes) and bars.  Coins are produced by governments and include both fancy, large ones produced by modern mints and the smaller dimes, quarters, 1/2 and 1 dollars minted before 1965, when the US coinage still operated on a precious metal basis.  These are some of the easiest since they are universally recognized and have a set, easily compared weight (so a quarter has 2.5 times as much silver as a dime and a dollar has 4 times the silver of the quarter).

So, how to know what a fair price is?  Start off by checking the "spot price" for silver, either in your newspaper or on a site like CNN Money.  This will give you the price of a Troy Ounce, or $1.40 face value of pre-1965 coinage.  I have constructed a spreadsheet on OpenOffice Calc (you can use the same formulas in Microsoft Excel) where I can put in the bullion price (cell C4) and it automatically tells me the spot prices for various other values as well as what they would cost with markups of 10%, 20%, 30% and 50%.  Smart sellers always have a markup, so don't expect to get spot price most of the time.
Click for larger image
I have included the needed formulas for reproducing the spreadsheet on your home computer in red.  Column A is simply written in, as have cells B4 and B5.  The leftmost formula [ =(B5/4) ] is to calculate 25% of $1.00's face value of coinage.  Other cells would divide B5 by other rations (such as B5/10 for B9 which is $0.10 face value).  In Column C, C4 is written in as it's the bullion price, the remainder of the column is based upon a calculation [ =(C4*B5) ] this is a simple one to convert, for the next row it would be =C4*B6, and the next one =C4*B7.  The remainder of the chart helps you estimate the current markup.  The only alteration is that in Row 3 it reads =SUM(C3/10;C3) and in Row 2 its =SUM(C2/10;C2).  For other columns the alteration is in the divisor.  So for 20% the formula is =SUM(C4/5;C4) and for 30% its =SUM(C4/3;C4) [NOTE: Yes I know it's really 33%, I am rounding] and for 50% its =SUM(C4/2;C4).

If you have any questions don't hesitate to ask!

1 comment:

  1. Wow !! I m surely sharing this Pre-1965 US Coins with my friends! Had fun reading it indeed .

    ReplyDelete