Recipe for Turning Silver Into Gold
by Mike (in Tokyo) Rogers
by Mike (in Tokyo) Rogers
"The best thing to do with your money is to diversify. Now, what we're going to do is take half of it and bury it in an old pickle jar in the backyard. The other half, we'll take to the dog races and bet on the one who does his 'business' before the race."
A friend of mine wrote to say that his wife received two huge bags of old silver US coins from one of her dear deceased relatives estate. These bags were so heavy that it took two people to lift them. The wife has been keeping these bags in a safe deposit box at a bank for over a decade and they were wondering what they should do with them. If the bank closed, would they be able to retrieve their coins? Should they keep the coins at home? If so, where are they going to keep such a large amount of silver?
In times like these, uncertainty is everywhere. It looks like the US economy is on its knees and about to be knocked out. Throw in what the criminals in the government might be thinking; or how Homeland Security could decide one day that they need to "temporarily" confiscate the contents of all safe deposit boxes — in order to protect us from terrorists — with a guarantee that everything will be returned safely, of course. And you have a situation where no one knows what's going to happen.
I suppose, in times like these, I rather have a dollar in my pocket than one in the bank. At least I know where I will be at any given time.
But back to my friend's problem: What to do about all that silver?
Here's what I wrote:
Have you ever collected coins? If so, you would know that certain coins are worth more than others. This has to do with where they were minted, date, how many were made, and condition. (For example a 1804 Silver dollar is worth hundreds of thousands of dollars, yet a 1805 dollar is probably worth $25). A pre-1964 Roosevelt or Mercury dime minted in one particular year at San Francisco (for example) could be worth hundreds, if not a thousand dollars while others are worth just a few dollars. All coins have the date and where they were made printed on them. Having a value to coin collectors is what is called "numismatic value."
You need to examine each coin to find out which has numismatic value and which ones have value in only silver. If you are not clear as to what I am talking about, go to a coin shop and inquire... (Don't tell them that you already have lots of silver, make them think that you want to buy. That way they won't BS you too much.)
Buy a 2008 coin collectors catalogue that states the value of each coin. The book will explain how to grade the coins (get tips from the dealer too). Both you and your wife will need to read that book. Study. Knowledge is power.
Take the coins out of the bank (1/2) on a weeknight. You and your wife go through them together. Trust me, this is so much fun — It's like treasure hunting! But definitely don't drink too much. You'd hate to miss a rare, expensive coin because you were drunk. Do this together and you will have a very fun, rewarding night that you'll always remember. Take the coins with high numismatic value and sell them (not to a dealer — try a coin convention, EBay, or Yahoo Auction).
Some coins might be so worn that the date is not legible. While others, might be so damaged that they have no numismatic value. These are what are referred to as "Junk Silver." I would recommend keeping the junk silver and returning them to the safety box immediately.
From the coins that you sell, I would take the money and buy gold. Now, I am no gold or silver expert. See Gary North or Burton Blumert about that. But if we keep in mind that we have to worry about getting these things back if the banks close, then it makes sense to keep these things at home. Gold is better than silver for this as a $1000 of gold is much smaller than a $1000 of silver so it's easier to hide.
This also diversifies your holdings. Like I said, I'm no expert, but just from a common sense point of view, the metal that is more valuable and smaller in size is the one you can hide easier. Having both gold and silver seems to be wise.
Keeping the junk silver is good because these have zero numismatic value, yet they fluctuate with silver prices. The numismatic coins generally don't (or, if they do, it is minuscule) raise or fall with silver prices. Keeping most of the silver and buying a little gold will also help to temper any emotional attachment that your wife has with the silver coins — which is a serious, and understandable, consideration... You don't have to live with the gold or silver, but have to live with your wife. Don't underestimate how much she loved her deceased relative and surely she treats that silver as a family heirloom.
Also, doing this will cut your costs of a deposit box... Two huge bags of silver in a deposit box must be costing you a lot in annual fees. It is hurting the value of what you own. I think it might be wise not to keep all of this in a deposit box.... Save money, by getting a smaller safety box (that will also help defray costs of buying gold) and keep the gold and half the remaining silver at home. Or, if you'll worry too much that you can't hide a big pile of silver, then convert the silver into gold and keep that at home. You need to cut the costs of the safety deposit box by getting a smaller safety box or getting rid of it.
In Japan, many people have proper safes in their homes while also having professional security systems that call the security service to your home in the case of alarm. These run about $40 a month here. Investigate the costs of such in your city. I like the home security system: It gives me peace of mind when my wife and son are home and I'm out.
If the safe and home security system is not practical for you, then it's easy to hide a gold coin in your house where no one will find it. Use your imagination. How about drilling a hole in the dining table leg? Or in a plastic container buried in the soil of a houseplant? There are millions of places where no one would think to look. Once again, just make sure that you don't drink when you hide the coins — for obvious reasons.... Oh the mistake I've made when I was drunk!
And that's my recipe for turning silver into gold.
October 29, 2008
Mike (in Tokyo) Rogers [send him mail] was born and raised in the USA and moved to Japan in 1984. He is the president of a mass-media production company and also runs a talent agency in Japan. He is now the Producer/Director/Co-host of Good Morning Garage, the most popular FM radio morning show in Tokyo. His book, Schizophrenic in Japan, went on sale in 2005.
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