1st year of stacking

[Mark10110]

Hello fellas and gals,

I started stacking this year with my first purchase of 11oz of silver, my first purchase was a 5oz Scottsdale  Silver Round Stacker  6th June and came here and learned about VAT free silver and started buying the lowest premium silver coins, This month I decided to buy another 12oz of the  Britannia  Silver Coin 2018. I put all my coins in capsules and I am only really looking to stack and flip at hopefully a profit (spot price) in the future. My question I am struggling with is why does Silver Bullion generally cost more than a coin? 

 

Are there any tips anyone may have who is stacking with the same methodology of just stacking to flip if there is ever a price bump?

[Nick]

I stack as a store of wealth. In the longer term your silver should increase in value as the currency decreases in value. Your buying power should substantially remain the same.

This is more true of gold than silver as silver is pretty volatile but it does generally prove to store wealth.

Bullion bars tend to be more expensive as they are heavily sort after for collections. People collect certain bullion bars and seek changes of design.

There are often some excellent value bars available on this forum at excellent premiums. @arshimo2012 generally sells bullion bars at fantastic prices.

Britannia coins are a good way to go, especially in the UK as they are CGT free and very easy to sell on when the time comes. There are lower premium coins available however they are more difficult to sell.

You may want to consider the group order that @BackyardBullion organizes a few times a year, it'll cut your postage rate and allow you to get very competitively priced silver from mainland Europe.

[Mark10110]

16 minutes ago, Nick said:

I stack as a store of wealth. In the longer term your silver should increase in value as the currency decreases in value. Your buying power should substantially remain the same.

This is more true of gold than silver as silver is pretty volatile but it does generally prove to store wealth.

Bullion bars tend to be more expensive as they are heavily sort after for collections. People collect certain bullion bars and seek changes of design.

There are often some excellent value bars available on this forum at excellent premiums. @arshimo2012 generally sells bullion bars at fantastic prices.

Britannia coins are a good way to go, especially in the UK as they are CGT free and very easy to sell on when the time comes. There are lower premium coins available however they are more difficult to sell.

You may want to consider the group order that @BackyardBullion organizes a few times a year, it'll cut your postage rate and allow you to get very competitively priced silver from mainland Europe.

 

Thanks Nick,

I am torn as I want to save up 10k for a mortgage and I don't know if risking buying silver at say 10oz per month or putting thjat money into a savings account, then theres the issues of offloading 10k of silver and the issues about using that money to obtain a mortgage. 

[Nick]

I'm not a financial adviser but this is how I would do it If I were saving for a deposit on a house. I would buy some gold and put the rest into a hard to touch bank account.

If I have available cash in my day to day bank account I spend it. I am awful at holding onto cash and gold mixed with other investments works very well for me. I have a share account which takes an age to get money from, I have a silver and gold stack for long term wealth preservation (which also satisfies the collector in me) and I have easier to access savings account for the occasional shortfall/unexpected bill.

That strategy allows me to purchase property which I either renovate and sell or renovate and rent.

I buy almost entirely bullion coins - sovereigns and Britannias. I tend to purchase at a rate of 85-90% gold with remainder in silver.

Silver is very volatile and for the term you are looking at investing I personally would look at all gold instead. Gold is much easier to sell on in the quantities you're looking at and takes less space/easier to hide.

EDIT: With regard to the bank asking where the cash came from when you do sell your stack. Its easy to explain if you keep a record of your purchases. Either hold onto receipts or keep a record of the paypal/bank transfer records. If you purchase through paypal put a note on the transfer stating 2x Sovereigns etc. If through bank transfer again use reference field. Ask people for a receipt. A simple email or a screenshot of the post you bought from will suffice. Banks are only checking its not money laundering or undeclared income. They aren't too fussy if you can show a trail.

Please remember all of that is said as a personal opinion. I have absolutely no financial qualifications and I could be doing it entirely wrong!

[C12]

In this scenario I'd be leaning towards silver rather than gold (and not investing the full £10k). You only need just enough to have some insurance. Gold is more ideal if you've got a lot of wealth to preserve and not if you're stretched for cash.

At current rates you could either purchase 100 x 1oz silver Britannia's or 6 gold Sovereigns (if you invested £1500 right now). Then you can focus on building a decent cash reserve for your deposit. 

As for property I think the market is primed for a multi year bear market and potentially a serious crash.

 

 

[Bimetallic]

In America, bars and rounds are consistently cheaper than coins. Scottsdale stackers might be unrepresentative because they're a bit of a novelty. Bars by Sunshine Mint, RMC, Asahi, Silvertowne, etc. are always cheaper than coins. Even PAMP bars are usually cheaper. Is there a British online dealer with a good selection and low prices? I took a quick look at BullionByPost and they had a very limited selection of bars compared to dealers like APMEX, Gainesville Coins, and JM Bullion. There might also be an issue with Scottsdale stackers in the UK given that they have to be shipped from the US, even worse Arizona. That's going to add cost compared to home-grown bullion like the Britannias. Note also that Britannias are among the cheapest silver coins in the world for some reason, so you're comparing one of the most expensive bars to one of the cheapest coins.

How do you get VAT-free silver in the UK? I thought only gold was exempt. That 20% VAT would destroy the value proposition of silver for me. Silver is actually double-taxed in that case because it's being purchased with income that has already been taxed – a tax on wages is economically equivalent to a consumption tax / VAT / sales tax, so having an income tax and a VAT is a double whammy. It would be far more optimal to have only a VAT (which exempted all investments and currency-like goods, meaning all bullion would have to be exempt), or a consumed income tax that exempted all investment, which would mean all bullion purchases, stocks, savings, etc. would be tax-deductible / pre-tax outlays.

[Mark10110]

12 hours ago, Bimetallic said:

In America, bars and rounds are consistently cheaper than coins. Scottsdale stackers might be unrepresentative because they're a bit of a novelty. Bars by Sunshine Mint, RMC, Asahi, Silvertowne, etc. are always cheaper than coins. Even PAMP bars are usually cheaper. Is there a British online dealer with a good selection and low prices? I took a quick look at BullionByPost and they had a very limited selection of bars compared to dealers like APMEX, Gainesville Coins, and JM Bullion. There might also be an issue with Scottsdale stackers in the UK given that they have to be shipped from the US, even worse Arizona. That's going to add cost compared to home-grown bullion like the Britannias. Note also that Britannias are among the cheapest silver coins in the world for some reason, so you're comparing one of the most expensive bars to one of the cheapest coins.

How do you get VAT-free silver in the UK? I thought only gold was exempt. That 20% VAT would destroy the value proposition of silver for me. Silver is actually double-taxed in that case because it's being purchased with income that has already been taxed – a tax on wages is economically equivalent to a consumption tax / VAT / sales tax, so having an income tax and a VAT is a double whammy. It would be far more optimal to have only a VAT (which exempted all investments and currency-like goods, meaning all bullion would have to be exempt), or a consumed income tax that exempted all investment, which would mean all bullion purchases, stocks, savings, etc. would be tax-deductible / pre-tax outlays.

Silver coins are tax free if you buy them from Germany and have them sent to you, for this reason i only buy coins, I just purchased 2 bars from someone on this forum because I really wanted 2 bars in my stack and they was selling them not too much over spot price compared to online dealers to the UK.