SILVER

INVESTING

101

By Silver Investor

Disclaimer

All information contained on or available through this book is for general information purposes only and does not constitute any investment advice.

The book disclaims any responsibility for the accuracy of the content of this book. Visitors assume the all risk of viewing, reading, using, or relying upon this information. Unless you have otherwise formed an express contract to the contrary with the book, you have no right to rely on any information contained herein as accurate. The book makes no such warranty.

Table of Contents

Introduction

PART 1 – History and the Many Uses of Silver

History of Silver

Fun Facts About Silver

Silver as Money

Silver's Many Uses

Silver in Industry

Silver in Electronics

Silver in Computers

Silver in Textiles

Silver in Photography

Silver in Mirrors and Optics

Silver in Alternative Energy

Silver in Medicine

Silver in Jewelry

Supply and Demand

PART 2 – Investment Strategies and Tactics

Buy and Hold (Long Term)

The Richest Man in Babylon

Different Ways to Invest in Silver

What is Bullion?

Silver Goods

What to Look For

What to Avoid

Junk Silver

Collector's Coins

Small Denominations

Know What You're Buying

The Three Rules of Silver Bullion Investing

Markups

Resources to Buy Silver

Online Shops

Ebay

Coin Shops

Flea Market

Private Owners

Where to Store it?

Hands Off Bullion

Liquid But Not Too Liquid

ETF's

List of ETF's

Short Term, Advanced Leverage and Short Opportunities

Silver Mining Stocks

List of Silver Mining Stocks

Where is Silver Going?

Silver Investing in 123

Bonus Report: The New Junk Silver?

Introduction

Silver Investing 101 is all about giving you the know-how to properly invest in silver and do so in a variety of ways to best meet your goals and needs. We’ll be covering a bunch of information from history to industrial uses first, to the differences and methods of investing in silver coins, ETF’s, junk silver and more. There is lots of basic information found in this book as well as some advanced tips.

PART 1

History and

the Many Uses of Silver

History of Silver

Silver's commonly held value as a precious metal has never been surpassed except by gold and the rarer platinum. Its value can be traced back to the era of pre-history when communities used it for ornaments, utensils, jewelry and trade. Ancient Greece used silver for medicinal purposes and to disinfect stored foods and water. The Greeks named it apyupoc argyros because it is white with shiny properties when polished. During the Roman era, the Roman currency was largely backed by silver bullions.

The name silver is first traced in the Anglo-Saxon era when merchants referred to the metal as sealfor. The Romans had previously named the metal Argentums and it is from this Latin word that silver receives the atomic symbol Ag. During the gothic European era, merchants trading with India and China used the metal for exchange and it was popularly known as Arg, to signify its shining properties.

During the middle ages, the value of silver was greatly influenced by sailors who used silver coins as a preservative for wine, food, and water. The metal was also used to produce mirrors, coins and other ornaments required during batter trade with the Far East. They also used the precious metal for dressing wounds until the 19th century.

Compared to gold, the price for silver is scandalously unpredictable. In ancient times, the value of silver fluctuated according to the demand and supply curve.

Silver was used as money by the Lydian in the year 700 B.C. They would mix it with small quantities of Gold to make a metal alloy known as electrum. The Roman era saw the highest demand for the metal with hundreds of tons of silver mined every year to serve the Roman economy. It is estimated that tens of thousands of metric tons of silver were in circulation as a means of exchange. Most of the times that the Roman Empire existed, gold to silver ratio was set at 1:12. One troy ounce of gold traded for 12 troy ounces of silver. This lower ratio number signified that silver was expensive compared to gold prices of today.

But this was before the Middle Ages when intra-continental trade and the desire to discover new sailing routes were on the increase. Unfortunately, the gold to silver ratio is not clearly documented at the time. This can be largely explained by the emergency of strong regional powers which determined individual exchange values. Almost everywhere emerging empires took control of the silver mines and would trade the commodity according to availability and demand. But the commodity continued to dominate as a unit value of exchange.

By that time, the silver commodity monetary standard was used. Under this arrangement, the value of silver in the coin is reflected on the face value of the coin. Whenever the value of silver rose, people would take their monies to minters who would melt the coins and produce new coins of a raised value. When the value of the silver lowered, coins would be collected and melted after proper calculation of the amount of silver in them.

In 1792, the United States fixed the gold to silver ratio at 1: 15. The French fixed the ratio at 1:15.5 in the year 1803. By the 19th Century, there was a shock in the financial markets when large deposits of silver were discovered in the United States. Speculations and panic brought the value of  silver to gold ratio down, as most traders feared a big supply. Much of the fear is believed to have had political inclinations than economic interests. England as one of the world powers had lost control over the United States. The US was not a major player on the world political scene but there was a growing fear that it would use the resource to pull ropes with European powers such as France, Austria-Hungary, Portugal, England and Italy. This new country had a stable democracy with a rising economy. Despite success in the discovery of large deposits, the United States did not benefit much from the export of Silver due to falling world prices.

In 1873, the United States Congress enacted the coinage act believed by many people as the origin of demonetizing silver as a unit of exchange. However, silver coins continued in circulation for another century, though through a series of changes. During the same year, coins were minted in almost pure silver in forms of quarters, halves and dimes. The coins were minted under the silver commodity monetary standards.  The value of the silver in the coin was indicated on the face of the coin.

In 1878 the silver dollar was replaced by a symbolic silver coin that remained into circulation until 1900. This was the beginning of transformation of silver coins from commodity money to fiat money or symbolic money. The value of the silver metal contained in the coin was far much lower than the face value of the coin. The amount of the new silver dollars in circulation would be determined by the US Congress.

Historically judging, the United States had succeeded in dismantling the myths surrounding Silver. The success of the fiat money in the US helped other countries to redesign their monetary policies.

In past, the silver was used as a hedge to control the economic situations. Silver was used by many countries to control the government deficits. This factor also contributed in significant increase in silver prices. Large amounts of trading and investing have also contributed to the increase in the price of silver. In last few centuries, it can be seen that many of the large investors and traders influence on the prices of silver in both negative and positive manner. A recent example of this case can be seen in the commitments of Traders Report 2007. According to this report some traders had acquired over 90% of the short futures contract from the market. In this the situation of low supply and increase in demand was created. Due to this all the prices of silver is increased in material manner.

For 173 years, until 1965, United States coins contained 90 percent silver and 10 percent copper. In 1965 a law was passed that prohibited the future use of silver in making quarters and dimes. The law also reduced the amount of silver in half-dollars from 90 to 40 percent. Many countries produce special silver coins in honor of an important person or event. These coins are eagerly sought by collectors and investors.

Having been taken off of the gold standard, the value of fiat money has gone down. And all this time silver has increased greatly in price. From about $5 per ounce for much of the 1900's, silver has steadily gained in price over the last 10 years.

In 1980 with high fuel prices and terrible inflation people sought to change their paper money in something real, i.e. silver. This caused the prices to go up ten-fold in a relatively short time. In fact, that all time high remains in standing today, though in recent years silver again approached the $50 level. But as always happens after a huge run on March 27, 1980, known as “Silver Thursday” the price of silver fell by half and continued to fall after that. Many people believe another run on silver like this could happen today. Are you poised to benefit?

In 1900 the gold prices was only 15 times higher than silver prices. But today the gold prices is higher approximately 55 times higher than silver prices.

Silver has steadily gone up in recent years and fluctuates around the $25 to $40 level. It recently went as high as $48.59 om 2011 but has since retraced its steps.

Fun Facts about Silver

The Chinese word for “Bank” is literally translated as “Silver House”

In 14 languages the words for silver and for money were the same.

Peru and Mexico are the largest producers of silver.

In ancient Egypt and Medieval Europe silver was regarded as more valuable then gold.

The expression “born with a silver spoon in their mouth” had to do with health and not wealth as silver has anti-bacterial properties.

Sterling silver is an alloy of 92.5% silver with 7.5% other metals, usually copper or germanium.

Silver as Money

There is about 700 million ounces of silver mined each year (that‘s roughly 235 tons). Even before this has actually occurred the vast majority of that silver is already claimed and spoken for. It is estimated that the total amount of silver produced in the entire history of the world is only 45 billion ounces, though there are some who believe there are huge amounts of silver and gold in hidden stockpiles, not included in these numbers. Regardless, when you look at these numbers you’ll realize that silver is not nearly as abundant as most people would believe.

Silver is money. Throughout all of recorded history up until recently it has been one of the main forms of currency, after moving away from other physical goods in a barter system. Silver was used for every day trade, whereas gold with its higher price was not, or was used among the wealthy as a store of wealth. And the truth is silver is much more then money and has many industrial uses, which we’ll be getting to in this book.

Although paper money became popular as it was easier to handle then hard coins, for many years it was always backed by real gold or silver. You could walk up to your bank and exchange the bills you had for their current value in precious metals. But in the U.S. Nixon took us off of the gold standard once and for all in 1971. Now all the money supply is known as fiat money. Fiat money is back by the government but by itself has no real value. With a fiat money system in place governments are more likely to spend, rack up debt, and have a large debt themselves.

All the while this is happening precious metals will retain or increase in value. That’s because the truth is that silver can increase in both great economic times and in not so great economic times.

Silver’s Many Uses

Silver is not only money but used in a wide variety of industrial and other uses. These include but are not limited to:

Electronics

Alternative Energy

Industrial

Medical

Computers

Photography

Textiles

Jewelry

Silver in Industry

Silver conducts electricity and heat better than any other metal. Copper is mainly used for this purpose because it's much cheaper in price. Silver, the whitest of all metals, is the best backing material for mirrors because it reflects light better than other metals. Silver is also very easy to shape. Only gold can be worked with greater ease. The rarity of silver also adds to its value. Pure silver is very soft. Therefore, to increase its usefulness, small amounts of other metals are added to it.  Silver's ability to conduct electricity and its resistance to corrosion make it valuable in the electrical and electronic industries. Silver alloys are used for forming electrical contact points and to coat ceramic parts of electrical devices. A silver compound is used in corrosion-resistant batteries. The silver-mercury alloys (called amalgams) used by dentists to fill cavities contain 33 percent silver, 52 percent mercury, 12 percent tin, and small amounts of copper and zinc. This mixture remains soft long enough for the dentist to fill a cavity and shape the filling before the metal hardens.

Silver in Electronics

In today's world, silver has proved to have a variety of uses in the industrial sector. The most popular use however is the electronic world. The use of silver in electronics has been made possible by the fact that it is a good conductor of electricity, has a low contact and mechanical wear resistance and also a has a superb chemical stability.

Owing to its nature of conductivity, silver is used making fuses and switches. All these appliances require a silver contact, circuit board or wiring. It is however used in tiny amounts though in most cases there is usually no substitute.

Telephones, televisions, microwaves and the children toys all use membrane switches made of silver. In the film industry, printed circuit boards usually use links that are silver based to make an electrical pathway.

Thanks to its chemical stability nature, silver is continually been used in making batteries. Batteries like those of Quartz watch use an oxide cell made of silver in order to make it have power and last long.

Silver in Computers

Many people don't know that silver has many applications outside of jewelry and cutlery.  Silver has the highest thermal conductivity and one of the highest optical reflectivities among metals.  These properties have made silver very important in the electrical and electronic products industries.  Silver is used on printed circuits in computers.  Computer keyboards use silver electrical contacts and silver membrane switches.  Some manufacturers even use silver in computer power cables.

So much has silver been used in computers, that there are whole businesses dedicated to silver recovery from computer scrap for profit.  The electronic recycling industry is growing rapidly and includes recovering silver from computers parts such as motherboards, display cards, hard drives, microprocessors, sound cards, and keyboards.

Silver in Textiles

Nanotechnology has shown the way to use minute silver particles in textile production.  The benefits of adding nanosilver in fabric manufacturing are said to be many.  It has antibacterial, antimicrobial, antifungal and antistatic properties; besides removing bad odors and keeping the succulent texture of the fabric intact.  The last set of properties is very effective in sports clothes, while it also maintains the biological balance of the skin.

The amount of silver particles and the way it is incorporated in each kind of textile varies with its end usage.  Normal clothes have an equal distribution of the antibacterial properties through padding method; personal garments get the dip-coating method; medical disposable textiles get the spraying method and mixing method is used with synthetic textiles.  Usual textiles are believed to retain the antibacterial properties even after several washes.

Certain studies and tests have revealed that the silver nanoparticles get washed away and enter the environment.  Some fear the same can also get into our blood system and affect our brain.  Other ripple effects are also being looked into by concerned authorities.

Silver in Photography

Silver has been used quite extensively in the field of photography.  In the late 1990s, photography accounted for about 1/3 of the use of worldwide silver.

A very early reference to the use of silver in photography was made in 1727 by Mr. J. H. Schulze who described the phenomenon that a mix of silver nitrate and chalk darkened with the addition of light.  Later, in 1824, a French Physicist was able to produce semi permanent images using glass plates coated with silver.  Eventually, the photography process improved until the photographic film which we are most familiar with was invented.

This film contains light sensitive silver halide salts which when exposed to light forms an image that can later be developed through a chemical process. While black and white film usually consisted of just one layer of silver salts, color film used at least three layers.

In recent years though, the use of silver in photography has rapidly declined. Because of digital photography, consumer demand for film has fallen drastically.

Silver in Mirrors and Optics

The reflective qualities of mirrors are determined by the optical coatings used with them. Silver is a popular optical coating, which partially explains why the process of applying an optical coating to a mirror is known as "silvering."

Silver is used in mirrors because it has high reflectivity in the visible light and infrared portions of the spectrum. Infrared reflectivity is important because it enable mirrors to be used in industrial applications such as infrared lasers.

Silver's downside as an optical coating is its relatively weak ultraviolet reflectivity. In this respect, gold is a superior optical coating to silver, but its higher cost negates this advantage in most applications.

Unfortunately for people that rely on mirrors with silver coatings, the increasing price of silver means that optical products made with silver are increasing in price. As the price of silver coatings continues to rise, more and more researchers and engineers are looking for alternative coatings that offer the benefits of silver without its high cost.

Silver in Alternative Energy

For electrical applications that need high performance conductor, silver is always preferred over silver.

Silver has vital role in the development of alternative energy due to its impressive capability in transferring electricity. The first example on the role of silver in alternative energy is its usage in solar panels.  Since 2001, solar-powered devices and solar panels are developed massively. Silver functions to collect and concentrate electrical current from photovoltaic cells.

Silver also has vital role in the development of all-electric powered vehicles. Gasoline-powered vehicles have its limit in the future and all-electric powered vehicles will be the best substitution. Silver makes sure that electricity in all-electric powered vehicles is distributed in high speed so the vehicles keep on giving high performance.

Silver in Medicine

Silver, a bioactive metal has been popular for its antibiotic characteristics for a long period. Its antimicrobial uniqueness has been used in different medical approaches from ancient times. Old records reveal its significance among Greeks and Chinese emperors.

Nowadays the silver is being re-invented with some amazing facts. In medicine silver is used as an antibiotic and disinfectant. The use of this metal in medicine in modern days was started in 1970's for treatment of burn injuries and the diluted form of silver was prepared which was tender on skin, helpful in killing bacteria of burns and heals the wound, as well.

These days many silver infused bandages are approved and available in the market for sale. Silver sulfadiazine, a silver blend is the major part of all skin creams useful for burns and wounds, this component is also found useful in the treatment of malaria, cholera and syphilis.

In medical and health industries some other uses of silver include in water purifiers, sewage treatments and in dietary supplements in a colloidal form.

Silver in Jewelry

Silver has been used in jewelry and other goods for thousands of years. Historically silver was considered an important metal for jewelry making because of its ductility, malleability, attractive appearance, and rarity. Ductility refers to a material's (usually metal's) ability to deform under tension, or in everyday language, its ability to be pulled into a string. Malleability refers to a material's ability to be shaped under pressure.

Both ductility and malleability are essential characteristics for metals used in jewelry. Unless you are only using the casting process in jewelry making, it is very difficult to make a bracelet out a metal that is not very ductile, and it is impossible to make a bracelet out of a metal that is not malleable.

In addition to its superior ductility and malleability, silver has a lovely appearance and is rare enough to make it something that not just anybody can afford. Its beauty and scarcity influence people to both desire to possess it and to feel proud of their ability to possess it. Jewelry has always been a strong suit for silver and will continue to remain so.

Supply and Demand

Silver is a metal that is mined out of the ground. The fact is that the demand for silver in its industrial uses and for making bullion outstrips this supply.

In between 1990 and 2006 the supply actually fell short of demand. This is what cause silver prices to rise in the first place. Some new mines have opened since then but supply is still teetering right on the edge of barely enough, to too little. There is less silver available in official stockpiles then gold.

Now let's talk about investor demand. Very few people realize the benefits of silver and other precious metals could give them. A common investment saying is that everybody should own a little silver. But the fact is if everyone on the planet owned just a couple ounces of silver, there is even enough of silver to meet that demand! With the weakening economy more and more people will eventually look to silver to be able to hold onto their money. As this happens the price will go up because of the demand. It will be like the run in the 80's once again, except you can be all set and ready to go before it even happens, then happily sell before the peak occurs.

For these reasons some people actually see silver surpassing gold in price, if only for a short time. With gold over $1700 an ounce this would mean a $30 investment would grow over 50 times! Now I'm not saying this will happen but it does lead to the picture that silver will go up in value in the long term, with almost no doubt at all. And likely it will be significantly.

PART 2

Investment Strategies

and Tactics

Buy and Hold (Long Term)

The reason we started off with the history and all the different uses of silver is to give you an idea of where silver is going. In the long term there really is no place for silver to go but up. This makes it a prime target for investing for the long term.

Historically silver has always gone up. As a hedge for inflation you'll make sure the money you earn stays worth something, especially with runaway government spending.

Add to that the fact the most of the industrial uses of silver are expanding. In 1900 silver was almost only used for its monetary value in coins, besides jewelry. These days most high tech industries use it and will continue too. When you add in the fact that supply is almost outstripping demand, you have something that is a sure thing in the long run, and has a good chance of exploding in the short term.

Because the long run is the best strategy for silver investing I wanted to start off with a chapter from The Richest Man in Babylon, a classic in the field of wealth. What you learn here will play into many of the investment techniques we cover later.

The Richest Man in Babylon

In old Babylon there once lived a certain very rich man named Arkad. Far and wide he was famed for his great wealth. Also was be famed for his liberality. He was generous in his charities. He was generous with his family. He was liberal in his own expenses. But nevertheless each year his wealth increased more rapidly than he spent it.

And there were certain friends of younger days who came to him and said: "You, Arkad, are more fortunate than we. You have become the richest man in all Babylon while we struggle for existence. You can wear the finest garments and you can enjoy the rarest foods, while we must be content if we can clothe our families in raiment that is presentable and feed them as best we can.

"Yet, once we were equal. We studied under the same master. We played in the same games. And in neither the studies nor the games did you outshine us. And in the years since, you have been no more an honorable citizen than we.

"Nor have you worked harder or more faithfully, insofar as we can judge. Why, then, should a fickle fate single you out to enjoy all the good things of life and ignore us who are equally deserving?"

Thereupon Arkad remonstrated with them, saying, "If you have not acquired more than a bare existence in the years since we were youths, it is because you either have failed to learn the laws that govern the building of wealth, or else you do not observe them.

" 'Fickle Fate' is a vicious goddess who brings no permanent good to anyone. On the contrary, she brings ruin to almost every man upon whom she showers unearned gold. She makes wanton spenders, who soon dissipate all they receive and are left beset by overwhelming appetites and desires they have not the ability to gratify. Yet others whom she favors become misers and hoard their wealth, fearing to spend what they have, knowing they do not possess the ability to replace it. They further are beset by fear of robbers and doom themselves to lives of emptiness and secret misery.

"Others there probably are, who can take unearned gold and add to it and continue to be happy and contented citizens. But so few are they, I know of them but by hearsay. Think you of the men who have inherited sudden wealth, and see if these things are not so.

"His friends admitted that of the men they knew who had inherited wealth these words were true, and they besought him to explain to them how he had become possessed of so much prosperity, so he continued: "In my youth I looked about me and saw all the good things there were to bring happiness and contentment. And I realized that wealth increased the potency of all these. "Wealth is a power. With wealth many things are possible.

"One may ornament the home with the richest of furnishings.

"One may sail the distant seas.

"One may feast on the delicacies of far lands.

"One may buy the ornaments of the gold worker and the stone polisher.

"One may even build mighty temples for the Gods.

"One may do all these things and many others in which there is delight for the senses and gratification for the soul.

"And, when I realized all this, I decided to myself that I would claim my share of the good things of life. I would not be one of those who stand afar off, enviously watching others enjoy. I would not be content to clothe myself in the cheapest raiment that looked respectable. I would not be satisfied with the lot of a poor man. On the contrary, I would make myself a guest at this banquet of good things.

"Being, as you know, the son of a humble merchant, one of a large family with no hope of an inheritance, and not being endowed, as you have so frankly said, with superior powers or wisdom, I decided that if I was to achieve what I desired, time and study would be required.

"As for time, all men have it in abundance. You, each of you, have let slip by sufficient time to have made yourselves wealthy. Yet, you admit; you have nothing to show except your good families, of which you can be justly proud.

"As for study, did not our wise teacher teach us that learning was of two kinds: the one kind being the things we learned and knew, and the other being the training that taught us how to find out what we did not know?

"Therefore did I decide to find out how one might accumulate wealth, and when I had found out, to make this my task and do it well. For, is it not wise that we should enjoy while we dwell in the brightness of the sunshine, for sorrows enough shall descend upon us when we depart for the darkness of the world of spirit?

"I found employment as a scribe in the hall of records, and long hours each day I labored upon the clay tablets. Week after week, and month after month, I labored, yet for my 24earnings I had naught to show. Food and clothing and penance to the gods, and other things of which I could remember not what, absorbed all my earnings. But my determination did not leave me.

"And one day Algamish, the money lender, came to the house of the city master and ordered a copy of the Ninth Law, and he said to me, I must have this in two days, and if the task is done by that time, two coppers will I give to thee."

"So I labored hard, but the law was long, and when Algamish returned the task was unfinished. He was angry, and had I been his slave, he would have beaten me. But knowing the city master would not permit him to injure me, I was unafraid, so I said to him, 'Algamish, you are a very rich man. Tell me how I may also become rich, and all night I will carve upon the clay, and when the sun rises it shall be completed.'

"He smiled at me and replied, 'You are a forward knave, but we will call it a bargain.'

"All that night I carved, though my back pained and the smell of the wick made my head ache until my eyes could hardly see. But when he returned at sunup, the tablets were complete.

" 'Now,' I said, 'tell me what you promised.'

" 'You have fulfilled your part of our bargain, my son,' he said to me kindly, 'and I am ready to fulfill mine. I will tell you these things you wish to know because I am becoming an old man, and an old tongue loves to wag. And when youth comes to age for advice he receives the wisdom of years. But too often does youth think that age knows only the wisdom of days that are gone, and therefore profits not. But remember this, the sun that shines today is the sun that shone when thy father was born, and will still be shining when thy last grandchild shall pass into the darkness.

" 'The thoughts of youth,' he continued, 'are bright lights that shine forth like the meteors that oft make brilliant the sky, but the wisdom of age is like the fixed stars that shine so unchanged that the sailor may depend upon them to steer his course.

" 'Mark you well my words, for if you do not you will fail to grasp the truth that I will tell you, and you will think that your night's work has been in vain.'

"Then he looked at me shrewdly from under his shaggy brows and said in a low, forceful tone, 'I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.'

"Then he continued to look at me with a glance that I could feel pierce me but said no more.

" 'Is that all?' I asked.

" 'That was sufficient to change the heart of a sheep herder into the heart of a money lender,' he replied.

" 'But all I earn is mine to keep, is it not?' I demanded.

" 'Far from it,' he replied. 'Do you not pay the garment-maker? Do you not pay the sandalmaker? Do you not pay for the things you eat? Can you live in Babylon without spending? What haveyou to show for your earnings of the past mouth? What for the past year? Fool! You pay to everyone but yourself. Dullard, you labor for others. As well be a slave and work for what your master gives you to eat and wear. If you did keep for yourself one-tenth of all you earn, how much would you have in ten years?'

"My knowledge of the numbers did not forsake me, and I answered, 'As much as I earn in one year.'

" 'You speak but half the truth,' he retorted. 'Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you. If you would become wealthy, then what you save must earn, and its children must earn, that all may help to give to you the abundance you crave.

" 'You think I cheat you for your long night's work,' he continued, 'but I am paying you a thousand times over if you have the intelligence to grasp the truth I offer you.

" 'A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. It can be as much more as you can afford. Pay yourself first. Do not buy from the clothesmaker and the sandal-maker more than you can pay out of the rest and still have enough for food and charity and penance to the gods.

" 'Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.'

"So saying, he took his tablets and went away.

"I thought much about what he had said to me, and it seemed reasonable. So I decided that I would try it. Each time I was paid I took one from each ten pieces of copper and hid it away. And strange as it may seem, I was no shorter of funds, than before. I noticed little difference as I managed to get along without it. But often I was tempted, as my hoard began to grow, to spend it for some of the good things the merchants displayed, brought by camels and ships from the land of the Phoenicians. But I wisely refrained.

"A twelfth month after Algamish had gone he again returned and said to me, 'Son, have you paid to yourself not less than one-tenth of all you have earned for the past year?'

"I answered proudly, 'Yes, master, I have.' " 'That is good,' he answered beaming upon me, 'and what have you done with it?'

" 'I have given it to Azmur, the brickmaker, who told me he was traveling over the far seas and in Tyre he would buy for me the rare jewels of the Phoenicians. When he returns we shall sell these at high prices and divide the earnings.'

" 'Every fool must learn,' he growled, 'but why trust the knowledge of a brickmaker about jewels? Would you go to the breadmaker to inquire about the stars? No, by my tunic, you would go to the astrologer, if you had power to think. Your savings are gone, youth, you have jerked your wealthtree up by the roots. But plant another. Try again. And next time if you would have advice about jewels, go to the jewel merchant. If you would know the truth about sheep, go to the herdsman. Advice is one thing that is freely given away, but watch that you take only what is worth having. He who takes advice about his savings from one who is inexperienced in such matters, shall pay with his savings for proving the falsity of their opinions.' Saying this, he went away.

"And it was as he said. For the Phoenicians are scoundrels and sold to Azmur worthless bits of glass that looked like gems. But as Algamish had bid me, I again saved each tenth copper, for I now had formed the habit and it was no longer difficult.

"Again, twelve months later, Algamish came to the room of the scribes and addressed me. 'What progress have you made since last I saw you?'

" 'I have paid myself faithfully,' I replied, 'and my savings I have entrusted to Agger the shieldmaker, to buy bronze, and each fourth month he does pay me the rental.'

" 'That is good. And what do you do with the rental?' " 'I do have a great feast with honey and fine wine and spiced cake. Also I have bought me a scarlet tunic. And some day I shall buy me a young ass upon which to ride.' "To which Algamish laughed, 'You do eat the children of your savings. Then how do you expect them to work for you? And how can they have children that will also work for you? First get thee an army of golden slaves and then many a rich banquet may you enjoy without regret.' So saying he again went away.

"Nor did I again see him for two years, when he once more returned and his face was full of deep lines and his eyes drooped, for he was becoming a very old man. And he said to me, 'Arkad, hast thou yet achieved the wealth thou dreamed of?'

"And I answered, 'Not yet all that I desire, but some I have and it earns more, and its earnings earn more.'

" 'And do you still take the advice of brickmakers?'

" 'About brickmaking they give good advice,' I retorted.

" 'Arkad,' he continued, 'you have learned your lessons well. You first learned to live upon less than you could earn. Next you learned to seek advice from those who were competent through their own experiences to give it. And, lastly, you have learned to make gold work for you.

" 'You have taught yourself how to acquire money, how to keep it, and how to use it. Therefore, you are competent for a responsible position. I am becoming an old man. My sons think only of spending and give no thought to earning. My interests are great and I fear too much for me to look after. If you will go to Nippur and look after my lands there, I shall make you my partner and you shall share in my estate.'

"So I went to Nippur and took charge of his holdings, which were large. And because I was full of ambition and because I had mastered the three laws of successfully handling wealth, I was enabled to increase greatly the value of his properties.

So I prospered much, and when the spirit of Algamish departed for the sphere of darkness, I did share in his estate as he had arranged under the law." So spake Arkad, and when he had finished his tale, one of his friends said, "You were indeed fortunate that Algamish made of you an heir."

"Fortunate only in that I had the desire to prosper before I first met him. For four years did I not prove my definiteness of purpose by keeping one-tenth of all earned? Would you call a fisherman lucky who for years so studied the habits of the fish that with each changing wind he could cast his nets about them? Opportunity is a haughty goddess who wastes no time with those who are unprepared."

"You had strong will power to keep on after you lost your first year's savings. You are unusual in that way," spoke up another.

"Will power!" retorted Arkad. "What nonsense. Do you think will power gives a man the strength to lift a burden the camel cannot carry, or to draw a load the oxen cannot budge? Will power is but the unflinching purpose to carry a task you set for yourself to fulfillment. If I set for myself a task, be it ever so trifling, I shall see it through. How else shall I have confidence in myself to do important things? Should I say to myself, 'For a hundred days as I walk across the bridge into the city, I will pick from the road a pebble and cast it into the stream,' I would do it. If on the seventh day I passed by without remembering, I would not say to myself, Tomorrow I will cast two pebbles which will do as well.' Instead, I would retrace my steps and cast the pebble. Nor on the twentieth day would I say to myself, 'Arkad, this is useless. What does it avail you to cast a pebble every day? Throw in a handful and be done with it.' No, I would not say that nor do it. When I set a task for myself, I complete it. Therefore, I am careful not to start difficult and impractical tasks, because I love leisure."

And then another friend spoke up and said, "If what you tell is true, and it does seem as you have said, reasonable, then being so simple, if all men did it, there would not be enough wealth to go around."

"Wealth grows wherever men exert energy," Arkad replied. "If a rich man builds him a new palace, is the gold he pays out gone? No, the brickmaker has part of it and the laborer has part of it, and the artist has part of it. And everyone who labors upon the house has part of it Yet when the palace is completed, is it not worth all it cost? And is the ground upon which it stands not worth more because it is there? And is the ground that adjoins it not worth more because it is there? Wealth grows in magic ways. No man can prophesy the limit of it. Have not the Phoenicians built great cities on barren coasts with the wealth that comes from their ships of commerce on the seas?"

"What then do you advise us to do that we also may become rich?" asked still another of his friends. "The years have passed and we are no longer young men and we have nothing put by."

"I advise that you take the wisdom of Algamish and say to yourselves, 'A part of all I earn is mine to keep.' Say it in the morning when you first arise. Say it at noon. Say it at night. Say it each hour of every day. Say it to yourself until the words stand out like letters of fire across the sky.

"Impress yourself with the idea. Fill yourself with the thought. Then take whatever portion seems wise. Let it be not less than one-tenth and lay it by. Arrange your other expenditures to do this if necessary. But lay by that portion first. Soon you will realize what a rich feeling it is to own a treasure upon which you alone have claim. As it grows it will stimulate you. A new joy of life will thrill you. Greater efforts will come to you to earn more. For of your increased earnings, will not the same percentage be also yours to keep?

"Then learn to make your treasure work for you. Make it your slave. Make its children and its children's children work for you.

"Insure an income for thy future. Look thou at the aged and forget not that in the days to come thou also will be numbered among them. Therefore invest thy treasure with greatest caution that it be not lost. Usurious rates of return are deceitful sirens that sing but to lure the unwary upon the rocks of loss and remorse.

"Provide also that thy family may not want should the Gods call thee to their realms. For such protection it is always possible to make provision with small payments at regular intervals. Therefore the provident man delays not in expectation of a large sum becoming available for such a wise purpose.

"Counsel with wise men. Seek the advice of men whose daily work is handling money. Let them save you from such an error as I myself made in entrusting my money to the judgment of Azmur, the brickmaker. A small return and a safe one is far more desirable than risk.

"Enjoy life while you are here. Do not overstrain or try to save too much. If one-tenth of all you earn is as much as you can comfortably keep, be content to keep this portion. Live otherwise according to your income and let not yourself get niggardly and afraid to spend. Life is good and life is rich with things worthwhile and things to enjoy."

His friends thanked him and went away. Some were silent because they had no imagination and could not understand. Some were sarcastic because they thought that one so rich should divide with old friends not so fortunate. But some had in their eyes a new light. They realized that Algamish had come back each time to the room of the scribes because he was watching a man work his way out of darkness into light. When that man had found the light, a place awaited him. No one could fill that place until he had for himself worked out his own understanding, until he was ready for opportunity.

These latter were the ones, who, in the following years, frequently revisited Arkad, who received them gladly. He counseled with them and gave them freely of his wisdom as men of broad experience are always glad to do. And he assisted them in so investing their savings that it would bring in a good interest with safety and would neither be lost nor entangled in investments that paid no dividends.

The turning point in these men's lives came upon that day when they realized the truth that had come from Algamish to Arkad and from Arkad to them.

A PART OF ALL YOU EARN IS YOURS TO KEEP.

I would encourage you to buy yourself a copy of this book and read the whole thing.

Different Ways to Invest in Silver

There are a number of different ways you can invest in silver. These include but are not limited to:

Bullion (Coins, Rounds, Bars)

Silver Goods

Junk Silver

Collector's Coins

Hands Off Bullion

ETF's

Mining Stocks

And there is a lot that can go into each one of these areas. We'll be discussing each at length, what they are, and the benefits and drawbacks of investing in them.

What is Bullion?

Bullion is the general term used for any precious metal in bulk form. Commonly it's used to refer to any hard silver commodity such as coins, rounds or bars. There are some differences in these different names.

Coins – Coins are issued by governments. They tend to have higher premiums in many cases and can legally be used as money. Coins are the round shaped coins we're all familiar with.

Rounds – Many privately owned mints create their own coin shaped silver bullion. But since it is not issued by the government it is not called a coin. It cannot be used as currency although the silver value does make it valuable in trading. Premiums on these are less then coins.

Bars – Coins and rounds often come in one troy ounce form, although there are both bigger and smaller versions as well. Bars can also come in one troy ounce form but are commonly seen in 10, 100, or even 1000 ounce form. Premiums on bars is also less then coins, especially in the larger size bars.

Silver Goods

You can also invest in various silver goods like jewelry or silverware. However this is much harder to do. You'll need a scale and also to know how much silver is in it. Most jewelry is sterling meaning it is .925 silver. Also jewelry with any precious stones in it will likely be worth more then the melt value of the silver it contains.

My suggestion is to use these items for their other uses, and save the easier coins, rounds and bars for investing.

If you want to go deeper into investing then sterling silver and various silver goods can be a great way to invest your money. Of course to do this you’ll need to know more then what is covered in this 101 book, like how to test for real silver. Still this will be mentioned again in some of the sources to buy silver.

What to Look For

When you are buying silver there are certain things you want to look for.

1 Troy Ounce

If you are buying coins, rounds or bars then most often it comes in 1 troy ounce (abbreviated oz t). A troy ounce weighs just over 31.10 grams. This is compared to a normal ounce which is 28.35  grams. This can be very important to know if you’re weighing goods.

You can have bigger or smaller denominations, just be aware of what you're getting. Don't look at an auction and think its a great deal when you realize it's only for 1/10 ounce.

.999 or .9999

Any silver coins should be of .999 purity. This means it's almost all silver. (Of course junk silver is different but we'll deal with that in a little bit.)

Some coins and rounds are .9999 purity such as the Canadian Maple Leaf. Either way the coin will be marked as such.

Reputable Company

The silver should come from a reputable company. You can always do an online search or talk to someone knowledgeable. After you've dealt with buying silver for some time you should know the major companies that mint silver. This should be displayed on the silver itself.

What to Avoid

Unfortunately you can be scammed when buying silver. This comes down to knowledge and with this book you should have enough.

Some of the things you'll learn to look for is the look of the coin. If it looks off then don't buy it. There should be reeding on the edges in all coins.

Silver not only has a unique shine to it but will also make a distinct sound when you clink it against other silver or another metal.

If you have a scale you can weigh what you're looking at. One troy ounce weighs 31.1034768 grams. So if you buy a silver coin that is one troy ounce it should weight this amount, give or take fractions of a gram. When you're dealing with other coins like junk silver you must know the correct percentages and what the coins should weigh.

Plus if the deal seems to good to be true, it probably is. Except in unique circumstances all silver will cost more then the melt price. You'll learn how to get the best prices in this book, but recognize that you'll just about always pay some form of premium.

Also you'll want to avoid any silver that is plated. This is usually but not always marked with terms like plated, clad, layered or microns, which refer to the thickness of the plating around metal like tin. Essentially silver plated bullion is worthless, yet some people will try to sell it as the real thing.

Junk Silver

Junk Silver is the term for coins which have no numismatic or collectable value. But they do have value from the silver they contain. Here are the common (and not so common ones) found in the U.S.

Dollars

Morgan (1878-1921) - 90% silver - 0.77344 oz t

Peace (1921-1928 and 1934-1935) - 90% silver - 0.77344 oz t

Eisenhower (1971-1976) - 40% silver - 0.3161 oz t

Half-Dollars

Liberty Head "Barber" (1892–1915) - 90% silver - 0.36169 oz t

Walking Liberty (1916–1947) - 90% silver - 0.36169 oz t

Franklin (1948–1963) - 90% silver - 0.36169 oz t

Kennedy (1964) - 90% silver - 0.36169 oz t

Kennedy (1965–1970) - 40% silver - 0.1479 oz t

Quarters

Liberty Head "Barber" (1892–1916) - 90% silver - 0.18084 oz t

Standing Liberty (1916–1930) - 90% silver - 0.18084 oz t

Washington (1932–1964) - 90% silver - 0.18084 oz t

Dimes

Liberty Head "Barber" (1892–1916) - 90% silver - 0.07234 oz t

Mercury (1916–1945) - 90% silver - 0.07234 oz t

Roosevelt (1946–1964) - 90% silver - 0.07234 oz t

Nickels

Jefferson "Wartime" (1942 -1945) - 35% silver - 0.05626 oz t

With a little time spent learning about junk silver you can know what to look for. However it can still get confusing when you're looking at a wartime nickel at the flea market for $5. Is it worth it? If you multiply the .05626 ounces of silver against the current price of $33.59 it comes out to $1.89 cents worth of silver. This is not a good deal.

But if the same coin was only $2 that would be a small premium to pay and likely worth the deal. Of course you must know these numbers. To keep it simple here is the breakdown of silver per coin (only for the 90% silver coins).

Silver dollars have approximately 0.77344 silver content

Half dollars have approximately 0.36169 silver content

Quarters have approximately 0.18084 silver content

Dimes have approximately 0.0723 silver content

Collector’s Coins

Unless you wish to collect coins, as a hobby instead of an investment, I would steer clear of collector's coins, or coins that have numismatic value. This is commonly considered a different ballgame entirely then investing in silver for the metal value.

Coins that are older and in good shape will have more value to a collector.  For most people it’s confusing enough calculating the percentage, the weight and the current silver price to figure out if what you’re about to buy is worth it, yet with gradings and conditions it becomes immensely difficult unless you are an expert.

As an example here’s part of a price chart for the Barber Quarters

Date & Mint Mark Grade

AG              G              VG              F              VF              XF              AU              BU

1892 O              $22              $30              $45              $90              $120              $170              $300              $600

1892 P              $14              $16              $22              $57              $99              $150              $230              $400

1892 S              $55              $66              $120              $175              $220              $375              $600              $950

1893 O              $14              $18              $30              $72              $120              $220              $320              $525

1893 P              $12              $14              $24              $70              $93              $150              $220              $400

1893 S              $32              $40              $75              $130              $210              $310              $600              $950

1894 O              $15              $21              $36              $99              $150              $210              $420              $620

1894 P              $12              $14              $24              $75              $110              $170              $300              $500

1894 S              $16              $20              $31              $92              $142              $200              $400              $600

1895 O              $13              $19              $33              $99              $165              $250              $440              $800

1895 P              $12              $14              $19              $72              $92              $150              $275              $475

1895 S              $29              $40              $60              $135              $200              $285              $550              $895

1896 O              $35              $60              $105              $220              $500              $800              $1200              $1500

1896 P              $12              $14              $20              $60              $99              $150              $275              $475

1896 S              $895              $1100              $1600              $2600              $3500              $5000              $7000              n/a

1897 O              $25              $33              $70              $210              $450              $775              $1200              $1600

1897 P              $12              $14              $18              $58              $88              $150              $240              $400

1897 S              $75              $99              $180              $400              $600              $800              $1200              $1700

1898 O              $23              $30              $60              $150              $290              $550              $900              $1200

So a similar coin can be worth as little as $12 or as much as $1700.

If you want to get into coin collecting fine by me, but for investing purposes if you’re only seeking to get the “silver value” from a coin, aim for the more common (read more recent years) on these coins. Often you can get these at prices right about spot price of silver or just above.

But due to the added complexity, I advise most people to go for the silver  coins or rounds rather then spending time with junk silver. If you can’t afford to buy an ounce at a time then you may have bigger issues to deal with then to start investing. Still junk silver is not that much more difficult then .999 pure silver coins.

The problem with collector's coins is that if the collector's market disappears you won't get the value of the coin. Something that is worth thousands can disappear and become just worth the silver in it. And even if you did sell it for full value it takes time and effort to find a buyer. Plus it is easy to get scammed or suckered in this area, without lots of knowledge.

Small Denominations

When you're buying silver you want to buy small denominations most of the time. This means going for the one troy ounce silver.

There are a couple reasons for this. One, if the economy did collapse completely you could use your silver as real money to trade with others. When you're talking about trading like this having your money in easy to deal with amounts is best.

I don't really recommend the half, quarter or 1/10 ounce silver coins, because usually these have higher premiums. But if you do find them for good prices there's no reason not to get them.

And junk silver is another thing you'll be able to easily trade as real money based on the silver content.

Of course if you have a large portfolio then it will likely better to get larger bars. You can also store your wealth in other metals like gold or platinum. On these larger bars you’ll pay less of a premium.

When and how you do this is up to you, but for the beginning investor buying one ounce coins or junk silver is the easy and cheap way to start.

Know What You’re Buying

It takes some know how to not get ripped off. An example is the Morgan Silver Dollar. Many people will tell you the price of silver is at $33 for example. Then they say they'll sell you a Morgan Silver Dollar for only $33. This seems like a good deal to the initiated this may sound like a great deal.

However the Morgan Silver Dollar is only .77 ounces of silver. This gives it a value of approximately $25.41. That would mean almost an $8 premium which is very high.

Besides junk silver, I would avoid buying coins or rounds that are less then one ounce. The premiums on these are usually higher and not really worth the investment. It should go without saying that investing in grams of silver is next to pointless. Gold is a different matter, but that's not what this book is about.

A little knowledge goes a long way. And if you don't want to learn really anything about silver, stick to the one ounce coins and rounds, or go with the hands-off option we'll discuss later.

The Three Rules of Silver Bullion Investing

1) To keep it easiest stick with silver coins, rounds or bullion. All you need to know is the spot price of silver and try to get as close to that as possible. Buy from reputable sources and you'll be safe.

2) The next step with some knowledge you can invest in junk silver. But make sure you know the silver values in those coins.

3) And unless you want to collect stay away from coins with numismatic value.

Markups

Assuming you stay away from the collectible coins a general good markup will be in the ball park of 5-15%. If you're paying 20% or more you're getting ripped off. You can seek to get lower premiums but if someone is advertising for less then spot price your alert should go on guard.  Still, in general, as close as you can get to the spot price is best.

American Silver Eagles tend to have a higher premium then rounds and bars. The good news is that as long as they're kept in good condition they should hold onto this higher premium when you sell them too. Canadian Maples tend to be a little less then American Eagles, but still higher then generic rounds.

Other coins will also have higher premiums. This starts to get into the collectable category depending on the coin.

Junk silver tends to have the lowest premium as long as you know what you're doing.

Also any time you buy larger amounts you can expect to pay less of a premium then smaller amounts. If you have lots of money to invest then buying 100 or 1000 troy ounce silver bars, you’ll often only have premiums of 1-3%.

Resources to Buy Silver

There are a number of places that you can buy silver. We'll talk about the benefits and drawbacks of these different places.

Online Shops

Ebay

Coin Shops

Pawn Shops

Flea Market

Private Owners

Online Shops

There are a number of places you can buy silver and other precious metals online.

www.straightsilver.com

www.apmex.com

www.bulliondirect.com

www.goldsilver.com

I have personally dealt with some of these though have heard good things about them all.

The Benefits:

Wide selection

Online shops can usually offer low premiums, especially with larger orders. Even lower premiums with cash or money transfer versus a credit card.

Occasionally some of these companies will have special deals that are even better.

The Drawbacks:

You need to be aware if there are taxes, shipping charges, or other fees associated with buying.

You don't immediately have the silver in your hands, though shipping is usually insured and quick.

Ebay

Some people say to steer clear of eBay. Other's think it is great.

The Benefits:

You can find exactly what you're looking for.

Sometimes you can get good prices. They usually start auctions real low to pay less fees and get people bidding right away. Sometimes good deals don't get heavily bid on.

The Drawbacks:

You need to be aware what the shipping is as that adds to the price you're paying.

There are some scammers on eBay. Only deal with people with great feedback.

It can be a huge time-suck searching for the best deal.

Beware of plated or clad silver they're trying to pass off to unsuspecting buyers as real.

Coin Shops

There are many shops that specialize in coinage.

The Benefits:

Most shops are reputable or else they'd go under.

You don't have to pay for shipping, and will get your hands on the bullion right away.

The shop owners or workers are knowledgeable and can be asked for advice in many cases.

The Drawbacks:

There may be taxes on your purchases.

You may have slightly higher premiums then certain online places.

I would avoid pawn shops, unless they specialize in coins and money, as you're likely to pay much higher premiums, then what they're worth.

Flea Market

Believe it or not, the flea market can make an interesting place to invest in silver coins.

The Benefits:

If you know what you're looking for you can find some great deals amongst junk silver and sterling silver goods. Sometimes even below spot prices!

It can be fun to search through the flea market looking for deals.

You'll get your hands on it right then and there with no additional fees or taxes necessary.

The Drawbacks:

You must KNOW what you're buying. The flea market can be filled with people trying to part your from your money while pretending to help you out.

Even genuine dealers may have fake coins or have wrongly marked something. Know your values and weights so you can test for yourself.

It can take lots of time wandering down the aisles and you may come up with nothing.

Private Owners

There are a variety of ways you can get your hands on silver from others privately and often in good deals. These can include sellers on Craigslist, estate sales, yard sales and others.

If you're willing to do the work it can be great, but this area is not for everyone.

The Benefits:

Look for motivated buyers. If someone is moving, needs to raise money, or is trying to clear up all the stuff from someone who has just past away, they're willing to sell sometimes for less then the spot price.

Get your hands on it right there with no extra fees.

The Drawbacks:

You must KNOW what you're buying. You can get scammed if you don't.

Again this can be time-intensive, searching the listings, meeting with people, and sometimes having to say no.

Advanced Tip

Place an ad on Craigslist or in similar places saying you'll pay people for their silver coins at just below spot price or even for spot. It's a great deal for you and them if they're looking to sell they could get more from you then at any Cash 4 Gold's, coin or pawn shops who pay usually about 10% or more below spot.

Where to Store it?

So you've decided to go the hands on silver bullion route. The next big question you must answer is where do you store it? This will depend on the size of your investments as well as what matches up for you. Basically there are three main options.

Home

Your bullion can be stored at home. There are a couple benefits to this approach. You'll always have it in your possession and will have immediate access to it, should emergencies arise. It is also the only free method available. If you go this route I would at the very least get a safe to store it in.

The problem with this is that, especially if its known that you have wealth hidden in your home, you can become the target of thieves or other criminal elements.

Safety Deposit Box

Many people store their silver in a safety deposit box. For a low yearly fee you can have a very safe place for your valuables, with all the security that comes with it being in a bank.

There are some who think that if the economy does collapse or there are other governmental problems that the assets in these safety deposit boxes could be seized, or you couldn't gain access to them. This has never happened before but that doesn't mean it never could happen.

Other Storage Options

The other option is to have your precious metals entrusted to a private company. You'll have to do lots of research in this area to find what works for you. With this option you'll be paying higher fees for storage, likely including shipping charges moving bullion to and from the location.

And there are different options like segregated accounts, allocated accounts and unallocated. What segregated means is that what you put in is exactly what you get out. It's like a safety deposit box. An allocated account would mean you get the equivalent. If you put in 100 American Eagles, when you go to take them out you will get 100 American Eagles but they may not be the exact same ones you put in. And  I would just steer clear of an unallocated account all together.

An example of this storage option can be found at www.goldsilvervault.com

This also brings us into our second main investment option besides bullion itself....

Hands Off Bullion

I like to call this option hands off bullion because it is both those things. It allows you to invest completely hands off but at the same time gives you real bullion, unlike ETF's which we'll get to later.

There are a couple companies that do this. But the one I personally use and recommend to others is AutomaticSilver.com.

Benefits:

This is the most convenient way to save. Opening an account takes a couple minutes, then you can setup automatic savings deposits to come out of your checking account. This matches up perfectly with the idea from The Richest Man in Babylon to pay yourself first.

The silver (and also gold) is stored in a safe facility with lots of security. It is an allocated account, which is fine  because you're not even putting in your own silver to start with just money.

The prices are really pretty good. Of course the more volume you buy the more you'll save. And there are no fees associated with transferring your money to and from accounts (at least in the USA).

You get the benefits of Dollar-Cost Averaging. This means that without even paying attention to the up and downs in the price of silver you'll be buying more of it when its cheaper and less when its more expensive. Since silver always goes up over long periods of time this can truly become a retirement account.

You can make one time purchases as well as set automatic saving plans.

At any time you can have your bullion shipped to you for very low fees. They has many different options of junk silver, American Eagles, rounds, bars and more.

There's also the possibilities of getting free silver by recommending this program to your friends and family.

Drawbacks

There are some fees for storing the silver.

You can find better deals in some places.

So here is the big picture. For most people I think this is the best option. You're getting a good deal and can truly set it and forget it. This is the most hands-off way to reap the benefits of silver.

Even with people like myself, who love to hold the silver in my own hands, and find great deals in the real world, I have setup an account for all these reasons. This way I can have silver in multiple places at once.

Get more details and signup at www.AutomaticSilver.com

Liquid but not too Liquid

One of the reasons I like silver is that while it is liquid, meaning you can sell it quickly any time you need to, its not instant like a money transfer.

When I first read the story from The Richest Man in Babylon I started a savings account. I did this at a bank that gave a good interest rate (as far as banks go, but there are much better places to park your money). However, there were times where I “dipped into savings” because I needed the money. Over time this meant I wasn't really saving.

But by investing in silver whether the physical bullion or in a hands off account you're much less likely to do this. Sure in real emergencies you can sell your silver, or if you need money for a great investment. But you're not likely to do it for everyday things. In fact, you'll start to not even think of your silver as money you can spend when you get in the long term mindset.

That's what I mean by liquid but not too liquid. Add to this that the money is inflation proof and is likely to go up in value from the other industrial factors and you have a real great place to park a portion of your portfolio.

Some people say 10% is enough. But some of the big time silver guru's like David Morgan are saying that 20 – 25% is a better number at this date and time.

ETF’s

ETF stands for Exchange Traded Fund. The idea behind these was to give people an easy way to invest in silver without having to worry about investing in silver and trying to trade or store bullion. As with everything else there are some benefits and drawbacks to this.

Benefits:

All you need is one of any number of brokerage accounts and you can get silver ETF's.

There are a number of different options to choose from, some tracking the price of silver, other's tracking other aspects of silver.

The ability to make more money (or lose it!) through leveraged ETF's.

The ability to short silver.

Drawbacks

While the companies themselves say that their holdings are backed by real silver there is reason to believe that this is not entirely the case. Many silver investors say “if you can't hold it, you don't own it” and thus steer clear of ETF's.

The price is not necessarily tied to the price of silver. There are a number of reasons that it could be skewed, and often in a poor way. If the price of silver really did skyrocket my guess is the ETF's would follow suit for a short time but then dwindle down close to worthless.

List of ETF's

(SLV) iShares Silver Trust Fund

The objective of the iShares Silver Trust is for the value of the shares of the iShares Silver Trust to reflect, at any given time, the price of silver owned by the iShares Silver Trust at that time, less the iShares Silver Trust’s expenses and liabilities.

(PSLV) Sprott Physical Silver Trust

The Sprott Physical Silver Trust provides a secure, convenient and exchange-traded investment alternative for investors seeking exposure to physical silver bullion without the inconvenience associated with direct investment.

(DBS) PowerShares DB Silver Fund

The PowerShares DB Silver Fund is based on the DBIQ Optimum Yield Silver Index Excess Return. The Index is a rules-based index composed of futures contracts on silver and is intended to reflect the performance of silver.

(USV) ETRACS CMCI Silver Total Return

ETRACS CMCI Silver Total Return is designed to track the performance of the UBS Bloomberg CMCI Silver Total Return, less investor fees. The Index measures the collateralized returns from a basket of silver futures contracts. The commodity futures contracts are diversified across five constant maturities from three months up to three years.

(SIVR) ETFS Physical Silver Shares

ETFS Physical Silver Shares is designed to offer investors a simple, cost-efficient and secure way to access the precious metals market. SIVR is intended to provide investors with a return equivalent to movements in the silver spot price less fees.

(AGQ) ProShares Ultra Silver

ProShares Ultra Silver seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London.

(ZSL) ProShares UltraShort Silver ETF

ProShares UltraShort Silver seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London.

(USLV) VelocityShares 3X Long Silver ETN

The ETNs seek to provide long exposure to three times (3x) the daily performance of the S&P GSCI Silver Index Excess Return.

(DSLV) VelocityShares 3X Inverse Silver ETN

The ETNs seek to provide inverse exposure to three times (3x) the daily performance of the S&P GSCI Silver Index Excess Return.

There are other ETF's like in other countries but this is a relatively complete list.

Short Term, Advanced Leverage and Short Opportunities

For the average person I do not recommend investing in ETF's. Instead stick to bullion in physical form or hands-off. But there are some reasons why you may want to invest in ETF's.

Short Term

I would never say to use ETF's for the long term. However, for the short term, if you look at the technical indicators and stay up on the news, you can easily get into and out of a position and generate some nice profits. But you must know what you're doing. This is highly speculative and should not be your mainstay of investing.

In addition to ETF's you also can use futures and options. Those are even more advanced options beyond the scope of this book.

Leveraged Stocks

With some of the ETF's you can also leverage your money, like with AGQ, ZSL, USLV and DSLV. Once again, if you know what you're doing you can make double or triple the money in a short time. But this should only be used as a short term strategy.

Shorting Stocks

Over the years there will be times when silver is going down. Wouldn't it be nice if you could benefit from these down turns? That's what shorting a stock is all about. If you know that silver is going down, you can make some profits in its fall, even while keeping all your holding in silver for the long term. It seems counterintuitive to be both long and short something the same time but I have done just that and felt great about doing it.

To sum up, these aren't for everyone, but if you decide to follow silver closely you can make added profits in this form of day trading or short term speculation.

Only invest in ETF's in the short term and only if you follow the prices and trends regularly and know what you're doing. In addition I would only make this a small portion of your investment portfolio.

Silver Mining Stocks

ETF's are suppose to be tied to the price of silver. When we get into the Silver Mining stocks there are a number of other factors at play. Yet they allow you access to silver in an altogether different way.

Benefits:

Can be even more profitable then Silver itself, if you time it right for the growth of the company.

Some companies pay dividends on their stocks.

Not only tied to the price of silver, as many mines mine other metals as well, like copper, zinc and tin, which can be beneficial or a hindrince.

Drawbacks:

You need to know the company and the fundamentals of the stock beyond just the price of silver.

There are a whole number of factors that can come into play that decide price, like opening or closing mines, finding new veins, hirings and layoffs, leadership and much, much more.

While the price of silver will never go to zero, a mining company can close down and thus go to zero.

My advice is only to invest in a silver mining stock if you want to follow it regularly, believe silver prices will rise, and have faith in the company. If you have all this and would like a dividend on top of it, then find the best mining company you can and go for it.

List of Silver Mining Stocks

This is by no means a complete list, but should give you some idea of what is available. This is mostly focused on some of the bigger and well-known companies. But if you're looking for explosive growth in a new company you will need to do your own research.

(SILW) Silver Wheaton Corp.

Mines silver in the Luismin mines of Mexico, and in Sweden. Also buys silver from a mine in Peru. This is one of the biggest and most well known silver mining companies.

(SSRI) Silver Standard Resources Inc.

Engaged in the acquistion, exploration, and development of silver properties all over North and South America as well as Australia.

(PAAS) Pan American Silver Corp.

Has many silver mining operations in Mexico, Peru, Argentina and Bolivia. Also heavily invested in copper, zinc, lead and gold properties in these same mines and others.

(SIL) Apex Silver Mines

This company has the rights to or control over claims or concessions to most of the silver producing regions in Central and South America. Has 65% ownership of the San Cristobal mine in Bolivia.

(HL) Hecla Mining Co.

Discovery, acquisition, development, production and marketing of mineral resources. Owns a mine in Idaho, Venezula, Mexico and other areas.

(EXK) Endeavor Silver

Has its primary operations in Mexico, which is the biggest silver mining country in the world. Produces 75% silver and 25% gold. Only deals in the precious metals while other companies deal in many industrial metals.

(AUNFF) Aurcana

A relatively new company with its primary operations in Texas. This stock at under $1 per share lately, may be poised to go up as its second mine goes into operation shortly.

Where is Silver Going?

This is purely speculation but if you follow many of the silver guru's they're saying that silver could go way up in 2012 and beyond.

Some say to $50 an ounce.

Others to $150.

Some even see that silver could become more expensive then gold!!!

And they have compelling reasons to believe this will happen. When you look at the still suppressed price of silver, in relation to how gold has soared, that is one factor. Add to this the growing demand and the dwindling supply. Then the fact that the dollar, and many worldwide currencies are growing even weaker. All these together could lead to much higher prices in silver.

The best time to invest was 50 years ago. The next best time to invest is now. If even the lowest of these predictions come true you'll have made a good amount.

Silver Investing in 123

To recap what we've covered here:

1)              For a person that doesn't want to learn much about silver, but wants to get in with no hassle I would recommend a hands-off bullion source like AutomaticSilver.com.

2)              If you want to learn a little bit more about it, you can buy online, at coin shops, eBay, or even find deals from private buyers and get your hands on the coins right then.

3)              For more advanced traders, look at silver ETF's or mining stocks to leverage your expertise. You can also invest in larger quantities of silver, and other goods like sterling silver if you find a good place to do so.

And I would follow silver investing just in this order. 1, 2, 3.

Bonus Report - The New Junk Silver?

If you follow the economic news at all you’ll here lots of people talk about the upcoming insane inflationary period. And listen to other people like the Fed chairmen Ben Bernanke, and his commitment to keep inflation below 2% and it just might make your head spin.

What if there is an investment that works just as well in any inflationary or deflationary period?

Silver most likely will work just fine, but in this bonus article I wanted to give you one more idea...NICKELS

Not the element nickel, but the U.S. issued 5 cent nickel.

That 5 cents is the face value of the nickel. However the metals that make it up, 75% copper and 25% nickel, are worth more then the face value. This is just like a silver American Eagle has a face value of $1 but is worth far more from the silver that makes it up.

This is exactly what happened to those previous coins that are now called junk silver. A dime is worth 10 cents. But a 1964 or before dime is worth over $2.5 dollars (depending where silver is currently at). What if back then you had hoarded your dimes seeing this coming?

Well its too late for that unless you have a time machine, but the same thing seems to be happening with nickels right now.

It’ll probably happen sooner then later that the metal composition of nickels will change.

And even if deflation happens the nickels will still be worth 5 cents so you really can’t loose.

The only problem is that storing nickels could take some space. But if you have that space its probably one more thing you can do as a long term investment strategy.

A nickel weighs 0.16 troy ounces.

That’s 0.12 troy ounces of copper and 0.04 troy ounces of nickel.

About 90 nickels (a face value of $4.50) equals one pound.

1 pound of copper is worth about $3.90 right now.

1 pound of nickel is worth about $9.80 right now.

This gives $2.93 worth of copper and $2.45 worth of nickel

Current prices give nickels a value a little under six cents in their metal composition. But as prices rise a doubling of your investment could happen in about 10 years time.

And nickels are everywhere. Just collecting them yourself and hanging onto them in rolls could be enough for some people. Or you can go out and buy huge volumes like some people have done.

What about Pennies?

In addition pennies from 1982 and before are worth over 2.5 times their face value. You'll have to look at your pennies but these are still in common circulation. That means a roll of 50 pennies is worth over $2.5. You can't melt down these coins but if you hold onto them for years a roll could become worth even 10 times this much.

You'll even find people selling these pennies on eBay. I wouldn't suggest paying a premium for pennies or nickels but you can start saving them yourself for many years down the road.

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Table of Contents

Silver Investing 101