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Investing in Precious Metals for Kids

By Edited Jan 30, 2014 0 0

Children should learn about real money

How to Teach a Child to Invest in Precious Metalsthumbnail
Silver Panda Coins from the Author's Collection

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It is easy to teach children the value of investing in silver and gold at a young age. Kids love shiny things and learning about precious metals can be a lot of fun for children and parents alike.  Here are step by step instructions on how to teach children about investing in silver, gold and other precious metals.  Start your kids down the road of saving real money and you will have children who are responsible, self sufficient children you can trust.

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(This article is copyrighted by its original author. Short excerpts with links are welcomed, but please do not repost the whole article without written permission. Thanks.)

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Difficulty:  Moderately Easy

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Instructions

Things You'll Need

  • Quality Time with your children
  • A little money
  • Rolls of 1/2s, Quarters or Dimes
  • A trip to a coin shop
  • A trip to the mall
  • A library card
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Introduce your children to silver and gold very early. Early exposure to silver and gold will give kids a positive impression and comfort level with metals.  Even my 9 month old loves to play with larger silver rounds (ones she can't swallow). She is attracted to the shiny surfaces and noise they make when dropped. She also likes to clink them together and bite the rounds. There is nothing toxic about pure naturally anti-microbial un-circulated silver and pure silver is a much better toy than imported lead paint covered toys. 
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Jewelery Store Field Trip - Photo by Nick King
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When kids are old enough to understand, take a field trip to a large jewelry store. Preferably talk to the manager and arrange an educational mini-tour for the kids.  Ask the manager to explain and show examples of sterling silver and various types of gold including 10K, 14K, 18K, and 24K gold jewelry. Also they should ask about rose gold, white gold and other alloys.  Explain the value of the underlying metal plus the value of the workmanship to craft the jewelry. The kids will learn about an important consumer market for gold and silver and technical aspects of how it is used and alloyed with other metals.  The whole trip will give new appreciation for precious metals.
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Junk or Circulated Silver coins are still available in circulation
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The US used 90% silver coins up to 1965 and silver halves up to 1970. Canada phased out silver coins in 1968.  It is still possible but tough to find silver coins in circulation. They trade at many multiples to face value through coin dealers and on the internet. 
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Go to the bank with your children and have them buy rolls of half dollars, quarters and dimes with their own money or money borrowed from you. US half dollars are the easiest place to find silver in the wild, but dimes and quarters are easier to find rolls of and you can make a good point with them.
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Have your children sort through the coins looking for silver. They should tally how much silver they find out of the total searched. It may take a lot of coins to find silver, so keep at it until the kids build a nice little silver collection.  Also, this exercise will show the effects of Gresham's Law on the money supply.
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Poured 10 Ounce Silver Bars (thanks Market Harmony for the photo)
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Ask the children why the older silver coins are hard to find. Have them research what one could have bought for a quarter in 1950 (for example). Have them find out what those same items cost today. Have them check coinflation.com to see what the silver quarter is worth today. Ask them how precious metals can help preserve purchasing power and what else they learned from the exercise.
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Larger Silver Bars (thanks Coppercave for the photo)
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Take your children to a coin dealer. They can bring along the silver coins they found. Have the coin dealer show them silver and gold coins and other types of gold and silver bullion. Have the kids find out what the dealer will buy their silver coins sell for, and how much the dealer charges for silver coins.
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You might also explore silver and gold coins from other countries to expand the children's understanding.
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Buy each child a 1 ounce silver bar or round to start their silver collection and a fractional gold coin or bar (even 1 gram is a good start) to start them into gold.  Buying the first coin of actual precious metals is the first hurdle that prevents the vast majority of people from benefiting from precious metal investing.
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Establish a relationship between the dealer and the children because you will want to bring the children back to buy silver and gold with their own money they have made.  Most coin dealers are very happy to help introduce youngsters to collecting precious metals.  They know that acquiring a long term customer is priceless.
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Egyption Gold Mask - Gold has always been valuable
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Take a trip to the library or go online with your kids. Have the kids research, or help them research, what silver and gold is used for today and in history. For example:
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Look into ancient Egypt and the gold of the Pharaohs.
Look into gold and silver mining.
Look into industrial uses for silver.
Look into how gold is used in computers and electronics.
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The key is for the children to understand why gold and silver have intrinsic value, have been used as money for thousands of years, and what drives the prices of these metals today.

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Tips & Warnings

  • This process should be followed over many years. Always be age appropriate with your instruction, and come back to the step periodically as children will learn more about each area as they mature.

  • Model good investing by personally investing in physical gold and silver as part of your retirement plan. You can have the children help you pick out silver and gold bars and rounds - at first they will be interested just because the precious metals are shiny, but later they will start to understand premiums, spot prices and spreads.

  • Remember to teach the children to keep their precious metals in a safe place.

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