With the development of the economy, investing has become an important way for people to preserve and increase wealth. Among the many investment targets, investing in junk silver has attracted the attention of many investors due to its high return and low risk. Junk silver refers to old US silver coins that have been circulated and worn. Although they have low collection value, they contain a fixed amount of silver and their bullion value is guaranteed, making them a stable and profitable investment target. In the following article, I will elaborate on the advantages, methods and precautions of investing in junk silver.
Junk silver has intrinsic value and hedge against inflation
Junk silver coins contain a fixed amount of pure silver, giving them an intrinsic value as bullion that moves parallel to the price of silver. With rampant inflation recently, silver has significant upside potential as an inflation hedge. Investing in junk silver can protect the purchasing power of investment capital. The silver content gives junk silver coins intrinsic value that government-issued fiat currency lacks.
Junk silver has small denomination good for bartering
Junk silver coins have low face values like 5, 10, 25 or 50 cents, making them useful for small transactions and bartering, especially in times of economic instability. This differs from bullion coins and bars that have very high values not suitable for small everyday purchases. So junk silver provides transaction convenience in addition to intrinsic value.
Junk silver is exempt from VAT and capital gains tax
In many countries, trading bullion is exempt from VAT. Furthermore, capital gains from trading silver are either taxed at a low flat rate or even tax-exempt. This favourable tax treatment enhances the investment value of junk silver. Investors do not need to pay taxes like they would when investing in assets like stocks or real estate.
Junk silver has high liquidity and easy to sell
Junk silver enjoys high liquidity because of its recognition as an investment asset. There are many coin dealers that readily buy and sell junk silver. Investors can easily liquidate a junk silver position. This contrasts with some exotic investment assets that have poor liquidity and are difficult to sell. The liquidity of junk silver ensures investors can get their money back efficiently.
Key precautions when investing in junk silver
While junk silver has many advantages, investors should also pay attention to several factors. First, know how to identify fakes. Learn to examine wear patterns, weight, dimensions, sound when dropped, etc. Only deal with reputable sellers. Next, recognize dealer premiums above silver value when buying and below when selling. Finally, segregate silver from ordinary coins to avoid accidental spending.
In summary, investing in junk silver provides investors with an asset that has intrinsic value, inflation hedging ability, transaction convenience, favourable tax treatment and high liquidity. By following key precautions, investors can capture the upside of junk silver as an investment target.