First Person: Investing in Silver on a Budget

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Are you interested in diversifying your retirement portfolio? While many of us can't afford to invest in something as extravagant as gold or silver bouillon, there is a way to invest in silver without spending a lot of money.

I discovered this budget way of investing quite by accident when Grandma found a shoe box of old silver coins that Grandpa had stuffed back in the closet some 22 years ago. He wasn't a coin collector and we couldn't figure out why he had saved them until researching the price on the internet. We were amazed to learn that the coins weren't collectible as coins but as silver instead.

Most of us are too young to remember that up until 1964, silver coins such as dimes, quarters, and half dollars were made of 90% silver. The reason the US mint switched to something cheaper is because people discovered that these coins were more valuable melted down than their actual face value. Starting in 1965, the metals in dimes and quarters were changed to a cheaper alloy. As far as the Kennedy half dollars, these were debased to 40% silver until 1969 but since then have contained no silver.

Even though sharp eyed collectors and old timers like Grandpa have pulled most of those old silver coins out of circulation, they still turn up from time to time as spare change. And when they do, it's a bonanza for the lucky person who finds them. Old quarters from 1964 and earlier have a silver value of $5.25 and old, pre 1965 half dollars are worth nearly $11. Even old Roosevelt dimes are worth $2.09 at current silver prices.

The best places to find old silver coins which are still in circulation is at your grocery store, the gas station, or any other place that deals in cash. You can even ask for old Kennedy half dollars at your bank where they will only charge you 50¢ for a coin that could be worth much, much more.

So what can you do with those old silver coins when you've found them? One idea is to hide them in a shoebox (like Grandpa did) to save for a rainy day in the future. Or, you can sell them on eBay where silver coins are fetching current "silver melt" prices. To give you an idea of how much silver coins are going for, I've been selling Grandpa's old quarters anywhere between $5.25 to $7.00 each which is a pretty good rate of return for an investment that only cost 25¢ to begin with.

While you won't get rich collecting circulated silver coins, it is a nice little way to invest in silver without spending a lot of money. And that's a good thing for those of us who don't have a lot of money to begin with.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

More from this contributor:

How to retire with no money.

The self employed retirement plan

How those old silver coins might be worth more than you think.

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