Most people who own physical silver and gold own it for one of two reasons.

First, they own it as an insurance policy. In the event of a currency collapse, physical gold and silver can prop up a portfolio when dollar (or currency) denominated investments are decimated. 

Gold and silver “insure” the wealth you already have- even in a worst case scenario where the central bank defaults, gold and silver will help you maintain wealth.

It’s important to note that most people who treat gold and silver as an insurance policy don’t don’t generally plan to run around in a Mad Max world trading bullion. Instead, they view bullion as “wealth insurance.” When the crisis comes to an end, some portion of their wealth will remain in tact.

If you’re buying silver and gold strictly as an insurance product, you should consider buying use assets (like a water filtration system, food, guns, ammo and an electric generator) before buying gold and silver.

Second, people own bullion as an investment in its own right. Both gold and silver serve as a store of value. They are extremely volatile investments, but they can buoy an investment portfolio when other asset classes fall. 

To get the benefits of the investment, you could purchase a gold or silver ETF, but physical gold and silver has the advantages listed above. As long as you own it anyway, you may as well keep it where you can see it (or at least access it).

If you want to own bullion as part of your investment strategy, you will generally keep your investment to about 10-30% of your net worth. Permanent portfolio adherents advocate keeping about 25% of your portfolio in gold.

On the other hand, if you mainly view physical bullion as an insurance policy, you’ll want to balance your need for real returns with the cost of your insurance.

Early stage investors will want to keep a small portion of their investments in gold, and gradually increase their holdings as their need for returns decreases and their need for wealth preservation increases.

One drawback to owning bullion is that you have to store it securely. You can easily keep several thousand dollars of gold and silver in a bank lock box or an in home safe, but you may risk theft or loss when you store them in those locations.

You can buy gold and silver tons of places. Think of places like thrift shops, jewelers, pawn shops, antique stores, collectors conventions, and online.

Some banks even offer gold bullion at low markups. Those who are willing to put a lot of time into finding deals, will rarely find great prices through traditional dealers.

But deals aren’t the only thing beginning bullion buyers should care about. You also need to learn about the authenticity, underlying value, and resale value of various forms of bullion.

I recommend that beginners should buy their bullion online through a site like APMEX when they’re getting started. Although you will pay a small premium to shop online, you’ll have the opportunity to do independent research before buying. 

Plus, APMEX and most other high quality sites have a return window. This window gives you the time to have any items you buy independently certified.

One reason that I recommend APMEX to beginners is that it is a well organized website. It’s categorized by metal-type (platinum, gold, silver, and collectibles), and then further organized by product type (bars and rounds or coins).

The site also has easy to understand pricing, and the checkout is similar to that of an eBay or Amazon store. APMEX generally doesn’t explain how much of premium they are charging you for the products (except in a section labeled “deals”), but their clear prices make it easy to compare to sites like goldcalc.com and eBay, so you can understand how much they are earning from the product.

That said, APMEX charges a 4% fee if you use a credit card to buy products from the site. If you don’t want to pay the fee, you must send a check or wire transfer within 24 hours. You’ll be required to provide a credit card number to lock in your pricing.

If you mail a check to APMEX, they will need to receive it within 5 business days to honor their locked-in price.

This might sound complicated, but APMEX has a responsive Live Chat option, and an 800 number that you can call to work through any issues.

APMEX charges $9.95 to ship orders under $99. On larger orders, shipping is free. Any order paid by bank wire or credit card ship out within 24 hours.

Unlike some bullion sites, APMEX does allow you to return items after you buy them. You’ll have 7 days after receiving an item to postmark the item for return. 

If the item you’re returning loses value, you may be a required to pay a “market loss” fee to restock the item.

In general, most investors won’t take advantage of the APMEX return policy, but it’s one that is good to have in your back pocket. When you’re first starting to buy gold and silver, you may want to have a few pieces independently certified. 

With a 7 day return window, you know that you can send them back if they sent you junk.

Many people who buy gold and silver store it in offsite storage facilities. APMEX is connected to a facility called the Citadel. They charge $15 a month or .55% per year of the value of your stored contents. All gold and silver stored at the Citadel are insured against loss.

However, you should be careful about storing your gold and silver at an offsite facility. On top of the storage fees, you’ll pay a $50 domestic transportation fee if you decide to move your gold and silver.

 Plus, the gold and silver may feel relatively unaccessible in the event of  currency collapse or other social disaster. People who are only investing in gold and silver for financial purposes may like the idea of offsite storage, but those who want it for insurance purposes generally want the gold and silver closer at hand.

What do you think of investing in gold and silver? Have you done it or would you ever consider it?