Economics & Money

Prepping with Coins and Precious Metal Bullion

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Normally when we think of precious metals like gold or silver we are thinking about things like their use in jewelry or currency. They are valuable in other ways too, including uses in the manufacturing of electronics. If you want to stockpile items for trade, precious metals are time tested items of value.

Coin Melt Values

It’s a common misconception that the US dollar is backed by gold (though that’s a topic for another day). Even our coins are now made with cheaper materials than they used to be. The good news is many of the older coins made with more valuable metals are still in circulation. You can educate yourself on the coins with the best “melt value” to collect and set those aside when you encounter them. Going through change is a great task to do with kids or while chilling in front of the tv.

Keep in mind that even though we use the term “melt value” it does not mean that you’ll be melting these as you find them. It just means that the coins are inherently more valuable because of what they contain and could be used for bartering in emergency scenarios. A good listing of melt values can be found here or here.

The following is a list of fairly modern United States coins which still have melt values above their face value:

  • Pre-1982 Pennies [88-95% copper; only moderately more valuable]
  • 1942-1945 Nickels (Silver Wartime) [35% silver]
  • Pre-1965 Dimes [89-90% silver]
  • Pre-1965 Quarters [89-90% silver]
  • Pre-1971 Half Dollars [89-90% silver]

Collecting Bullion

Then there is bullion: Solid metal shaped like bars or coins, but valued by weight rather than being part of a country’s official currency. It’s a straightforward means of collecting precious metals and knowing exactly how much you have (rather than trying to calculate the percentage of a certain metal in each coin). You can buy gold which is a compact way of holding something of high value or you can get metals like silver or copper which are cheaper and may be easier to use in the event you need to use them for trade. To go a step further for ease of trade you can buy these in fractional form, meaning in amounts less than one ounce in weight each.

Bullion is priced according to the weight (“spot price” times the weight) and then you add the “price over spot” which is essentially where companies are able to make their profit and may be higher for collectors items or bullion that’s more decorative.

For example, if the current value (spot price) of an ounce of silver is $15 and I want to buy 20 half ounce rounds which cost $1 over spot, they will cost me:

$15 x 0.5 + $1 = $8.50 per round
$8.50 each x 20 rounds = $170 total cost

While their value may vary over time, it’s highly unlikely they will become completely worthless (as opposed to stocks, crypto, etc which are more volatile). They also don’t have a max shelf life (like storing food for trade) and would be fairly easy to resell in future if you found yourself suddenly in need of funds. As long as you buy the physical bullion and have it shipped to you then you will be in full possession of your investment and not be at the mercy of hackers, fraud, or similar crises. I typically purchase from Apmex although there are other sources out there.

Protecting Your Investment

As a side note, check with your homeowner’s or renter’s insurance policies if you decide to accumulate sizable amounts of precious metals. Most policies have a maximum they’ll pay out for cash or precious metals around $500 and there may be inexpensive riders (add-ons for your insurance policy) which will increase the covered value. After all, prepping is for whatever life throws at us and not just a zombie apocalypse. There are similar maximums for all sorts of personal possessions on these policies (a max for electronics, a max for jewelry, a max for firearms, etc) and its always smart to know the fine print on what your policy would actually cover.

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