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Many silver buyers fill their collections and portfolios with only bullion coins and bars. There’s a subset of investors who recognize, however, that silver holds value even if it’s not bullion. Finding junk silver is a pastime for these individuals, but there are many junk silver mistakes that can be costly.
The first error many people make is simply not knowing what junk silver is. It’s merely an informal term that describes silver coins that hold no collectible or numismatic value. You could easily find these coins in circulation before 1965, but high demand has made them more difficult to come by.
The best silver coins that fall into the “junk” category are a discussion for another time. Once you’ve decided that buying these items will be part of your investment strategy, though, it’s important to avoid a few common mistakes. Otherwise, you could end up losing your investment.
1. Not Paying Attention to Mint Marks
One of the biggest mistakes with junk silver is a failure to look at mint marks. Many coins are immediately recognizable just by their mintage date, but this isn’t the case for all silver circulation coinage. If you buy a coin based solely on its date, you could end up losing money.
This is because the U.S. Mint sometimes puts out multiple releases of the same coin during a given year. This helps explain the difference in prices between proof and circulation strikes, but some coins have also been released with different metal compositions.
Consider the following examples:
1971-1976 Eisenhower Silver Dollar
Between 1971 and 1976, multiple compositions of the Eisenhower dollar were produced. If these coins don’t bear the mark of the San Francisco Mint, they don’t contain any silver. All silver “Ikes” produced came directly from California.
Unfortunately, even this mint mark doesn’t guarantee you’ve got a junk silver Ike. The mint produced non-silver coins during these years as well. The best way to distinguish between the two is by weight. Silver Ikes are 24.59 grams — nearly two grams heavier than the copper-nickel version.
Wartime Jefferson Nickels
While they’re not the most popular silver currency coins, Wartime Jefferson nickels do contain 35% silver. This is much lower than the 90% we see in coins like the pre-1965 Washington quarters, but there’s still some value there. Of course, that’s only if you take note of the mint mark.
In 1942, the U.S. Mint produced nickels in two compositions. One was composed of copper-nickel, but the other had silver. You can tell the difference by looking at the back of the coins. The silver version has a conspicuous mint mark above the dome of Monticello.
2. Viewing Junk Silver as Junk
One of the chief junk silver mistakes comes from those who don’t even buy coins that fall into the category. The idea that these coins are valueless is pervasive, and having the word “junk” in its name certainly doesn’t help. Regardless of what these coins are called, though, they’re far from junk.
For instance, you can walk into a store right now and get $0.50 worth of value from a 1964 Kennedy half dollar. Throughout October 2021, however, the coin had a silver content of nearly $9. A $10 roll of these takes up less than 2” of space, but its value would be worth almost $90.
There’s also one thing most people haven’t considered: scarcity. When gold reached an all-time high between 1979 and 1980, experts believe up to 98% of junk silver was on its way to smelting houses. Not all these coins made it that far, but many of them did get melted down.
Who knows? One of the biggest junk silver mistakes may be failing to realize their rarity.
3. Overlooking the Dates
We’ve discussed how knowing mint marks is essential, but paying attention to dates is also vital. Many simple errors are easily avoidable by simply looking at the date of a coin. That’s because most of the rules that seem straightforward for junk silver aren’t so straightforward.
For instance, many people know that American coinage before 1965 contained silver. Unfortunately, this wasn’t all American coinage. In fact, not even the Wartime Jefferson nickel contained silver during this time. The only period when the nickels had precious metal was 1942-1945.
Kennedy half dollars also make up a significant amount of junk silver mistakes. That’s because the coins contained silver between 1964 and 1970. Unfortunately, the coins only had 40% silver starting in 1965. This means a 1964 version is worth more than double the later releases.
Bottom line: make sure you know what a coin’s date signifies.
4. Believing Junk Silver Can’t Be Counterfeited
When you think of counterfeit silver coins, American Silver Eagles and other bullion offerings come to mind. A con artist will certainly get great value from a fake coin that allegedly contains .999 pure silver. Of course, counterfeiters don’t only resign themselves to high-dollar items.
In fact, the federal government had to change its Mutilated Coin Redemption Program because criminals were faking junk silver coins. The mere alteration of a date mark can turn a common quarter into a coin containing 90% silver — at least in the eyes of the buyer.
This may be one of the most costly junk silver mistakes currently made, and unfortunately, it’s often difficult to catch. A skillfully counterfeited coin could change many hands before someone notices an issue. That’s why buying these coins from reputable dealers — who authenticate coins — is ideal.
5. Failing to Consider Storage Space
Buying junk silver seems like a great way to invest in precious metals without breaking the bank. After all, you can get a silver Kennedy half dollar for a fraction of the cost of an American Eagle. What many people don’t consider, however, are their storage needs.
To be fair, this is an issue even for people who invest in bullion. Once you start to accrue a large amount of silver, you need to store it somewhere safe. Depending on your stockpile, your storage needs could eventually grow beyond what your home has to offer.
This can be a particularly difficult issue for junk silver, though, because it takes up more space per ounce. For instance, you’d need more than 16 Wartime Jefferson nickels to get the same silver content as a single 1-ounce bullion coin.
Always consider your precious metals storage needs before buying any coins.
6. Not Buying from Reputable Dealers
You can avoid many of the junk metal mistakes mentioned here by simply sticking to reputable dealers. When you buy from a company like Silver Gold Bull, you’ll know you’re getting authentic coins. You’ll also know the silver content of what you’re buying, so no confusion on dates will occur.
While you can certainly buy silver currency coins from a private party, you’re taking major risks by doing so. The chance exists that sellers purchased fake coins and are unknowingly selling them. Additionally, you may end up paying even more due to sudden changes in spot price.
There’s simply no good excuse to not work with a reputable dealer.
7. Paying Too Much for “Rare” Coins
One of the biggest mistakes with junk silver doesn’t involve junk silver at all. That’s because the term is meant to describe coins with no collectible value, but some old silver currency does hold numismatic worth. In fact, one Morgan silver dollar sold for over $265,000 in June 2020.
By definition, this would make many coins not junk. Unfortunately, that’s where mistakes get made. Just because some coins aren’t junk doesn’t mean similar offerings don’t fall into the category. In fact, most Morgan silver dollars will qualify and hold a minimal numismatic value.
Don’t let someone convince you that a coin is worth more due to old age or other factors. You can expect to pay a premium even when buying junk coins, but don’t pay collectible prices when you’re getting a common piece. This is yet another reason to work with reputable dealers.
Avoid Junk Silver Mistakes and Buy From a Reputable Dealer
Most of these mistakes aren’t too costly if you’re only buying one or two coins. If you purchase large quantities or start dealing with collectible items, though, a single misstep can end up costing you big. That’s why you should be safe even when buying “junk” coins.
Fortunately, a few simple steps can ensure you’re making sound financial decisions. No matter what some collectors may believe, junk silver can store value just as well as bullion. And thanks to countless coins getting melted, they may even gain a measure of high collectibility one day.
At Silver Gold Bull, we know how important it is that every silver purchase is an informed decision. By purchasing precious metals directly from us, you can avoid the many junk silver mistakes made by novices. Visit our Junk Silver page today to see everything we offer.