My plan to stack PMs

[Iamdeadboy]

I want to have it for every 100oz of silver I have I would like 1 oz of gold and I believe I should have my first part done by mid October. I plan to go pretty hard at this at the start giving myself a budget of around 1100 CDN (650 Pounds).

Most advice I have seen is I should mainly stack one coin and very rarely diversify...how would you do it? I'm stacking Maples mostly and I am thinking say for every 5 tubes of that should I get a tube of Something else more collectable? Say a queens beast or kookabura or koala? 

How would you break down your purchases with my budget?

 

[Steviesteve]

It's all personal choice, so no one on here can tell you what the right thing to do is. However i believe I'm in a similar situation to yorself as I just started collecting around a month ago.

I've no interest in collecting coins per se, and so wouldn't pay the high premium for proof coins or special collectors editions etc. But then again I wouldn't want my collection to be boring by having all the same coins. I therefore buy various cheaper end coins to give me something to look at, including Britannias, Owls, Philharmonikas, Kangaroos, Maples, Noahs Ark, Dragon bars etc. Oh, and just a few bars of various weight & some 2 oz, 5 oz and 10 oz coins.

I also buy a little gold too, for more interest in the collection. Just the same as with silver, I have Britannias, Soverigns, and a Queens Beast.

Don't give any credibility to anyone who gives you advice to only stack one kind of coin.

[Thelonerangershorse]

45 minutes ago, Iamdeadboy said:

How would you break down your purchases with my budget?

Don't know about Canada, but in the UK there is a tax advantage to stacking UK legal tender coins.

[Iamdeadboy]

20 minutes ago, Thelonerangershorse said:

Don't know about Canada, but in the UK there is a tax advantage to stacking UK legal tender coins.

I believe in Canada anything with four 9s is tax free...gold eagles are taxed

[AppleZippoandMetronome]

48 minutes ago, Thelonerangershorse said:

Don't know about Canada, but in the UK there is a tax advantage to stacking UK legal tender coins.

Last I looked in Canada when you sell (at profit) the CGT is the same for bullion, bars and coins. There isn't an advantage to the coin being in Canadian $ or any other legal tender

[Martlet]

I think the advise to not diversify applies best to those that are interested in pure stacking, or have large stacks they may need to move in bulk to dealers.  Its not wrong, just limits one from enjoying the many designs and interest there is in silver.  So mix it up a little, not to the other extreme of 1 of 20 different coins, focus on a few and look out for those coins others collect so you can gain from appreciation of both value and aesthetics.

[Iamdeadboy]

Yes there so much out there want to mix it up a little.

Are Kookaburas considered collector coins?

[vand]

On 12/09/2018 at 07:39, Iamdeadboy said:

I want to have it for every 100oz of silver I have I would like 1 oz of gold and I believe I should have my first part done by mid October. I plan to go pretty hard at this at the start giving myself a budget of around 1100 CDN (650 Pounds).

Most advice I have seen is I should mainly stack one coin and very rarely diversify...how would you do it? I'm stacking Maples mostly and I am thinking say for every 5 tubes of that should I get a tube of Something else more collectable? Say a queens beast or kookabura or koala? 

How would you break down your purchases with my budget?

 

 

There is no right or wrong way to do it, but I think your approach is a sensible one.  

Some people might disagree (they are wrong) but spreading your buys out - cost average approach - is the best way to accumulate most assets, not just silver. More than anything it teaches good discipline for monthly budgeting too, which most people are lacking.. this alone is a very worthy reason for doing it this way.

[Lowlow]

I disagree with some of the others - I think there definitely is a right way to do it, and it depends on your answer to the question of what exactly your goal is.  If you're in it for collecting and want to have pretty coins, like to keep them in sealed containers, admire them for their numismatic value, etc, then you're basically a collector and you can focus on coins that have resale value, have distinctive attributes, rarity, etc, focus on displaying them, and all the other things that collectors do.  If you are more of a bullion stacker, then you aren't going to care as much about that and will probably be very unwilling to pay premium over spot, so you're going to be focused more on rounds, bars, and maybe bullion coins, but even then you probably aren't going to care as much what shape they are in, what their dates are, etc, the government seal isn't as much for the collectible value as much as for a assurance of quality.  Then a third kind of silver/gold buyer is more the prepper type, anti-fiat money, etc, and they tend to like more 90% silver coins, etc, because they're often thinking in terms of what if the world goes to &^%$ and they have to use silver as an actual currency, and there are advantages for 90% U.S. silver coins (in the U.S. obviously) because they are widely recognized as being valuable, have silver in them, come in small denominations, and you don't have to pay a high premium for those small denominations.  For example, if you were to try to buy 1/10th ounce silver rounds you'd pay a bad load of premium for them because the mint has to stamp them and they are no easier to stamp than larger rounds, but 90% silver dimes were minted long ago by the U.S. government, so they ate the cost of minting them and did so in quantity, so the premium on those coins is much lower (for dimes as an example) than a comparable 1/10oz silver round.  There are other kinds of silver/gold bugs and stackers, but I think those three 1) collector, 2) stacker, 3) prepper takes care of the vast majority of people who are in precious metal bullion.

[KDave]

Another advantage of buying just the same bullion coin for years, cost averaging in, keep your receipts, is when you sell you can use a receipt from a recent time to demonstrate you have had no capital gains on coins that you may well have bought years ago. Random year purchases are good for this. That is why some people only stack one type of coin.

Nothing wrong with getting a few odd coins for speculative purposes, say you think one coin series will do well and you want to take a punt on it. Worst case you lose a bit of premium if they sell for spot in the future with no premium, and you also miss out on silver price rise on the additional ounces you could have bought with the premium you paid. Best case you make money on the increase in premiums, perhaps meaning you can sell and buy even more ounces than before. 

Or just buy stuff you like if its a hobby. You can get lucky sometimes and do all at once. For example, some have been buying the one ounce queens beasts on release, they are CGT free, they are well liked, and offer an opportunity to 'collect' a series as well as invest in gold, as they cost no more than bullion 1 oz gold Britannia on release, yet the early ones have increased in premium.

[Iamdeadboy]

Got my second tube of Maples yesterday...so far having fun.

Would say I am a stacker for sure but will be slight collector as well...i picked up 5oz of dragon restrike coin from the Shanghai mint. 

I'll wait until I have a few hundred maples right now until to look at other coins though...does anyone get a mix between bars and coins? 

 

 

 

[KDave]

I reckon most people do a bit of everything, collecting stacking, whatever, just keep it simple remember why you are spending your money on it in the first place, doesn't matter what you buy so long as you have a plan to sell. 

[Iamdeadboy]

I don't exactly have a plan to sell yet...just planning to accumulate for awhile can't see myself selling anytime soon unless huge jump in spot

[vand]

The purist in me hates the whole "have an endgame/plan to sell" thing. It betrays the primary aim of PMs, and and comes from the mindset of wanting to exchange your PMs for paper because you still think of wealth in terms of computer digits. 

Sure, I can't say that there will never be a time when I won't want to sell my PMs, but imo it will be to transform it into some other type of wealth which I deem is ridiculously undervalued. It won't be just because I want to bump up the digits in my bank account.

[Lowlow]

22 hours ago, vand said:

The purist in me hates the whole "have an endgame/plan to sell" thing. It betrays the primary aim of PMs, and and comes from the mindset of wanting to exchange your PMs for paper because you still think of wealth in terms of computer digits. 

Sure, I can't say that there will never be a time when I won't want to sell my PMs, but imo it will be to transform it into some other type of wealth which I deem is ridiculously undervalued. It won't be just because I want to bump up the digits in my bank account.

I agree that thinking about money in terms of silver is the smart way to go, but ... it is still money, and I think it's reasonable to consider how you would use it to make a purchase, and that involves "selling" it when you need it.  I think you are arguing two things ... 1) silver is money, and 2) that you only have the option of hoarding it endlessly without any concern for actually using it to make purchases.

[vand]

5 hours ago, Lowlow said:

I agree that thinking about money in terms of silver is the smart way to go, but ... it is still money, and I think it's reasonable to consider how you would use it to make a purchase, and that involves "selling" it when you need it.  I think you are arguing two things ... 1) silver is money, and 2) that you only have the option of hoarding it endlessly without any concern for actually using it to make purchases.

The endgame, or rather the ongoing game, is simply increasing your wealth. Of course that will likely involve some reallocation at some stages, moving out from what is over-valued and into what is undervalued.. 

[Lowlow]

13 hours ago, vand said:

The endgame, or rather the ongoing game, is simply increasing your wealth. Of course that will likely involve some reallocation at some stages, moving out from what is over-valued and into what is undervalued.. 

Agreed.

 

I think of silver/gold as money, but it's also money that has a pretty high transaction fee for use, certainly higher than credit cards.  It's akin to using forex, really, where if you are in Europe and only had $us and had to convert $us every time you wanted to make a purchase.

In the U.S. I have literally used gold as money before when I was young.  I found it very easy to use as money, but with some caveats.

Once I was away from home and I had carried a gold coin as a kind of good luck token/ emergency money and I got into a situation where I actually had to use it as money for a very long taxi ride, this was back in the days before everyone had credit cards.  I found a gold dealer, one exists in pretty much every town, and they gave me spot for it which means I lost the premium on the "gold eagle" coin value, but that was only like 20$us, small price to pay in an emergency.

Second time that comes to mind I was a young person in a similar situation, I had taken a long bus ride just for fun and was a few states away from where I lived and ran out of money.  I mean I had some money, and a bus ticket home, I wasn't dumb, but I didn't have enough money to have fun and stay longer.  I called around and found a broker that said they would give me spot, and that did not go as smoothly, I went down to the dealer and when I got there they suddenly had a whole different idea after "examining" the coin, and as pawn brokers so often do they tried to rip me off.  I told them in a very loud voice that they could go &^%$ themselves, and gave them bad for making me waste money coming down there, and basically humiliated them in their own shop, which worked wonders because they knew they were trying to screw me over and that they had agreed to pay spot over the phone, so they were properly embarrassed and I didn't spare them at all.  Finally they asked me to leave, which I did, and I found another broker who gave me spot with no issues.

So ... yeah, you can literally use gold and silver as money, as long as you know where to find a dealer who is honest, which is pretty easy as long as you have a way to get to where the dealer is and don't mind paying a transaction fee.  Smaller coin shops .. not so much, they are usually too small to have a spread, but larger dealers know they can buy at spot and sell at a small premium before the spot price moves against them, so they're usually happy to make a market for you.

Things are, I would imagine, completely different for collectibles - when selling collectibles you're essentially in the coin business as a dealer.  Of course you can get spot for that brilliant uncirculated masterpiece, but you're going to lose the premium you paid unless you can find someone who actually appreciates its "real" value.  When you go to a small coin shop to do business, someone has to pay the rent and keep the lights on ... and ultimately that someone is you.

[Iamdeadboy]

Hmmm interesting.

 

Probably going to have my 100oz of silver a couple weeks ahead of schedule

[vanderPoot]

On 18/09/2018 at 14:12, Lowlow said:

you can literally use gold and silver as money, as long as you know where to find a dealer

But that is just trading metal for fiat. 
Although, you can always catch a ride with me for a gold coin, I recognize it as money.

I also take silver, bottle of whiskey, box of cigars... well, you catch my drift
 

[Lowlow]

3 minutes ago, vanderPoot said:

But that is just trading metal for fiat. 
Although, you can always catch a ride with me for a gold coin, I recognize it as money.

I also take silver, bottle of whiskey, box of cigars... well, you catch my drift
 

Of course ...

I would also accept silver and gold at spot, but the reality is that most people won't.

[vanderPoot]

True, for now, hehe

 

[HawkHybrid]

On 18/09/2018 at 13:12, Lowlow said:

So ... yeah, you can literally use gold and silver as money, as long as you know where to find a dealer who is honest,

 

if it's not accepted as payment then does that show that it's not

money?

I'm now seeing gold and silver as an asset that you can carry around

with you. it was money in the past but is no longer accepted as

payment. you need to find an asset dealer to change it for currency.

 

HH

[Lowlow]

1 minute ago, HawkHybrid said:

if it's not accepted as payment then does that show that it's not money?

I'm now seeing gold and silver as an asset that you can carry around with you. it was money in the past but is no longer accepted as payment. you need to find an asset dealer to change it for currency.

HH

I'm in the United States, and I can't walk into a shop here and drop a 10£ note to buy some soda pop, but does that mean it isn't money ?

[HawkHybrid]

£10 note is local currency used in the uk. whether or not

shops outside of the uk take it as payment is not important.

(many non uk shops won't take it as payment)

I think only the copper 1p's and 2p's can be classed as money in

the uk.

 

HH

[Lowlow]

1 minute ago, HawkHybrid said:

£10 note is local currency used in the uk. whether or not

shops outside of the uk take it as payment is not important.

(many non uk shops won't take it as payment)

 

HH

You are changing your argument.  Your argument was that if you can't use it for payment, it isn't money, and you used the example of having to go to a broker.

For gold and silver, I have to go to a broker to get local currency the same as I do for a £uk note, except in this case I go to a bullion dealer instead of a forex desk.