by R. Nelson Nash

When I wrote Building Your Warehouse of Wealth a short chapter was devoted to my personal experience with U.S. Silver Eagle coins.

A short review of the decision to purchase these coins is necessary.

In 1977 two partners and I bought some timberland on Interstate 20 in Talladega County, AL. On the North side of the highway we had the highest point in that broad valley — an ideal spot that attracted owners of cellphone towers. Several years later we got a lease from one of them at a modest annual income for five years — and with a provision that the income would increase 20% each five years as long as they wished to do so.

At the time of my silver purchase my annual income from the tower lease was $2,075.00 and was scheduled to increase 20% in just two years.

During a few years we had offers from several tower operators that wanted to purchase our lease for a lump sum. Since my partners and I were now “senior citizens” we made a deal with one of them for $45,000.00.

Dividing it three ways my share was $15,000.00. I knew that the government was going to confiscate $5,000.00 — so what should I do with the $10,000.00 left over? I decided to buy U.S. Silver Eagles — $44.00 each in 2011.

There has been no annual income from the silver purchase in the last seven years. But, suppose we did not sell the lease. If so I would have had two years of $2,075.00 income plus the 20% increase for five years ($2,490.00/ yr).

So, let’s see — $2,075 for 2 years is $4,150 plus $2,490 for 5 years is $12,450. That would have been a total of $16,600 income that I gave up in order to buy the silver. Plus, the fact that I would have still had the tower lease that was scheduled to increase to $2,988 the next year.

In 2011 I paid $44.00 per coin plus shipping and wire fee. If I sold the coins back to the dealer, I could get $17.00 per coin plus I would have to pay the shipping fee.

So, buying silver coins is “the way to go”, huh?