When considering investment opportunities, one niche that consistently sparks curiosity is 90% silver coins. Also known as “junk silver,” these coins have a long history, real intrinsic value, and tangible appeal. But are they truly a good investment? Let me take you through an in-depth analysis based on my understanding and research.
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Understanding 90% Silver Coins
90% silver coins were minted in the United States until 1965. These coins include dimes, quarters, half dollars, and dollars containing 90% silver and 10% copper. Examples include the Mercury dime, Washington quarter, and Walking Liberty half dollar. They are often called junk silver because they have no numismatic (collector’s) value but are sought after for their silver content.
Here’s a quick breakdown of the silver content in these coins:
| Coin Type | Weight (grams) | Silver Content (grams) | Silver Content (ounces) |
|---|---|---|---|
| Mercury Dime | 2.5 | 2.25 | 0.0723 |
| Washington Quarter | 6.25 | 5.625 | 0.1808 |
| Walking Liberty Half Dollar | 12.5 | 11.25 | 0.3617 |
Why Invest in 90% Silver Coins?
1. Intrinsic Value
Each 90% silver coin holds a specific amount of silver. This gives it a built-in value tied to the price of silver. Unlike fiat currency, which relies on government backing, these coins offer a hedge against inflation.
For example, if you own $1 face value in 90% silver coins (e.g., four quarters or ten dimes), it contains approximately 0.715 ounces of pure silver. If silver’s spot price is $25 per ounce, the intrinsic value of $1 face value is $25 × 0.715 = $17.88.
2. Affordability
Unlike gold or large silver bars, junk silver is relatively affordable. Investors can enter the market with a modest budget. For example, you could buy a roll of 50 Mercury dimes (approximately 3.575 ounces of silver) for less than $100 when silver is priced at $25 per ounce.
3. Liquidity
90% silver coins are widely recognized and easy to trade. This liquidity makes them ideal for investors who want a flexible option to liquidate their holdings without a hassle.
4. Tangible Asset
Unlike stocks or digital currencies, silver coins are physical assets you can hold. They’re not subject to cyberattacks, brokerage collapses, or other risks tied to digital or paper assets.
Drawbacks of Investing in 90% Silver Coins
1. Premiums Over Spot Price
The actual cost of buying junk silver often includes a premium over the spot price of silver. Dealers may charge this premium to cover processing and profit margins. For instance, if silver’s spot price is $25 per ounce, you might pay $30 per ounce for junk silver, reducing your potential returns.
2. Storage and Weight
Silver is dense and heavy. Accumulating significant value in 90% silver coins requires storage space and physical security measures. For instance, $1,000 face value in 90% silver coins weighs around 55 pounds.
3. Volatility
The price of silver can fluctuate significantly. This volatility may be unsettling for some investors. For example, silver’s price moved from $18 per ounce in March 2020 to over $29 by August 2020, then fell back to $22 by early 2021.
4. Lack of Yield
Unlike stocks or bonds, 90% silver coins don’t generate dividends or interest. Investors rely solely on price appreciation.
Comparing 90% Silver Coins with Other Investments
| Investment Type | Pros | Cons |
|---|---|---|
| 90% Silver Coins | Intrinsic value, liquidity, affordability | Premiums, storage, volatility |
| Silver Bullion Bars | Lower premiums, higher purity | Less divisible, harder to trade |
| Gold Coins | High value-to-weight ratio | High entry cost |
| Stocks | Dividend income, growth potential | Market volatility, no intrinsic value |
| Real Estate | Passive income, long-term appreciation | High upfront cost, illiquidity |
Historical Performance of Silver Coins
Historically, silver has shown resilience in preserving wealth during inflationary periods. For example, in the 1970s, silver prices rose from $1.54 per ounce to nearly $50 per ounce by 1980, driven by inflation and economic uncertainty. Investors holding 90% silver coins saw their value multiply.
Case Study: $100 in 1964 vs. 2025
Let’s assume you had $100 in 90% silver coins in 1964. That equals $100 face value or approximately 71.5 ounces of silver. If silver’s price in 2025 is $25 per ounce:
71.5 ounces × $25 = $1,787.50
This illustrates how silver coins can protect against inflation over decades.
How to Start Investing in 90% Silver Coins
Step 1: Understand Market Pricing
Know the current spot price of silver and typical premiums for junk silver. Use reputable sources like the London Bullion Market Association (LBMA) for accurate silver prices.
Step 2: Find Reputable Dealers
Buy from established dealers to avoid counterfeits. Look for dealers with transparent pricing and good reviews.
Step 3: Start Small
Begin with small purchases, such as a roll of dimes or quarters. This lets you familiarize yourself with the market without significant risk.
Step 4: Store Securely
Invest in a home safe or a bank’s safety deposit box. Ensure your storage method protects against theft and environmental damage.
Is Now a Good Time to Buy?
Timing the market is challenging, but several factors influence silver prices:
- Inflation: Rising inflation often boosts silver’s appeal as a hedge.
- Industrial Demand: Silver is crucial in electronics and solar panels, driving demand.
- Economic Uncertainty: During recessions or crises, silver tends to perform well as a safe-haven asset.
Conclusion
Are 90% silver coins a good investment? They can be, depending on your goals and risk tolerance. If you seek a tangible asset with intrinsic value, liquidity, and inflation protection, these coins are worth considering. However, they’re not without drawbacks like premiums, storage concerns, and market volatility.
Approach investing in 90% silver coins with a clear strategy, diversified portfolio, and long-term perspective. While they might not guarantee wealth, they’re a solid addition to a balanced investment strategy. Ultimately, whether they’re a good fit depends on your unique financial situation and objectives.
