Forty years ago, Dad had the smart idea of collecting silver US coins as a hedge against inflation. He didn't buy these coins at a coin shop. What he did instead was pick out the silver coins from the change he was given from local businesses and save them in a shoe box.
When Mom asked me to sort through Dad's shoebox of circulated silver coins recently, I was stunned to discover that all these coins were worth a lot of money. It wasn't the age of the coin or the rarity that made them valuable, but the silver inside the coin. At current silver "melt" prices, Dad's Washington quarters are worth $5.25 each and the 1964 Kennedy half dollars are close to $11. That's 21 times more than what he paid for them originally.
Until 1964, dimes, quarters, and half dollars were all made of 90% silver. Rising silver prices made these coins more valuable than their face value which is why in 1965 the US Mint switched from silver to a mixture of copper and nickel for dimes and quarters. The half dollar was debased to a mixture of 40% silver until 1969 but since then have contained no silver.
Precious metal investors have a word for circulated coins with no value except for the silver metal used in the production. The word is 'junk silver' and is viewed by investors as a great alternative to buying bullion bars or silver mining stocks. Where can you find silver coins and 'junk silver'? One popular option is to buy single pound bags of junky silver coins from a coin dealer or eBay (be prepared to pay the current silver prices, however). Or, you can do what Dad did by carefully examining the change in your pocket at the end of the day and setting aside any silver coin minted in 1964 or earlier. I've even started asking bank tellers and store clerks for half dollars or buying rolls of quarters so I could check the dates.
While none of us will get rich buying 'junk silver' one coin at a time, we'd be hard pressed to find another investment that is worth 21 times the face value. For people on a budget, collecting silver dimes, quarters, and half dollars is an easy way to invest in precious metals without spending a lot of money.
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