93 comments

Selling the Family Jewels

So, some of us Mustachians are getting pretty old. That means our parents are even older, and our grandparents – if they’re still around – are sagely pieces of living history.

I love the many positive aspects of a family that shares its stories and values from one generation to the next. But this natural progression of life also brings with it some practical considerations: a whole load of material stuff that gets passed on from one generation to the next. Assuming you’ve already got enough stuff yourself, this can require some serious strategy to deal with properly.

As a case-in-point, let’s take my dear Mum – the same Grandma Money Mustache who was featured in the Cost-Effective Renovations article. Many years ago, her own parents passed on, leaving various antique things in their estate. One of these was a complete set of sterling silver flatware. It was fancy (although impractical) stuff which we occasionally used for big holiday dinners when I was a kid. After each use, it would become oxidized and require meticulous polishing with special fluids.

Fast forwarding 20 years, this sterling silver has been sitting in a drawer in GMM’s house unused for longer than some of us have been alive.  She has no use for it, and it’s just taking up space. On the other hand, with my family not being overly wealthy, she surely CAN think of a practical use for a little bit of extra grocery money. For years, she has considered selling it, but the task always seemed a bit mysterious and daunting.

This year, I finally decided to take on the challenge. During my recent visit, she handed me the heavy bag of silver and wished me good luck. My research began.

My first stop was the Internet. How much is silver worth these days, anyway? I keep an eye on financial markets in general, so I knew we were still in a middle of a big commodities price boom. Gold, Silver, Copper, and various other things have been running hot since the late 2000s. In other words, this is one of the best times to sell precious metals in many generations:

Silver prices (nominal): 1985 – present. source: kitco.com

In case you’re curious, that flat line on the graph extends back all the way to the late 1700s, with the exception of a spike to about 20 bucks around 1980. As of this writing, the current silver price is about $29.35 per ounce. Excellent.

The next stop in my research was to find a place who actually wanted to buy this stuff. I started with eBay, figuring there are people out there who collect almost anything – maybe this type of silverware “Joan of Arc” was highly desirable.

Unfortunately, nothing similar seemed to be getting bids on Ebay. I researched a bit further by Googling through some online forums. The consensus among silver sellers seemed to be that the collector value of sets like these is lower than the melt value of the underlying silver.

So I turned to the local business directories. I found various gold and silver shops, foreign exchange places, and other traders. I called a few, and they helped me learn some useful things about this ‘stash of silver that I was looking to sell:

Silver flatware actually comes in two varieties:

  • Silver Plated, which looks and feels just like silver, but is actually only covered with a thin coating of silver. Other, cheaper metals lie within. This stuff is not worth much in this context.
  • Solid Sterling, which is always stamped “sterling” on the handle. This stuff is 92.5 percent silver metal.

There is one additional complication: even in a sterling silver set, the knives are usually made with stainless steel blades, and silver-plated handles. This was done for functional reasons, since silver is too soft to make a good knife.

When you add all this up, I was left with three piles, shown in this picture:

Sterling silver: Only the stuff in the center is saleable

You’ve got your knives on the left, sterling silver in the middle, and silver plated stuff on the right. After the sorting process, I was left with only 33.5 ounces of actual sterling, when weighed on a postal scale.

But there was still a hurdle to clear: who would actually buy the silver? All of the local dealers sounded a bit shifty to me. Many of them had bad marks on their Better Business Bureau record when I looked them up, or bad reviews. Most of them were quoting a payout of only about $15 per ounce for the silver – half the market price.

Some more online research led me to another buyer, this place called “Midwest Refineries” in Michigan. Reviews were reasonable, and their payout is a more reasonable 90% of the market price of silver. So I decided to check them out.

They have a circa-1993 website, which may actually be a good thing: what does a metals recycling company need a slick website for?

I sent a couple of emails. They were answered quickly and accurately by a guy with reasonable grammar and an email address that matched the company’s domain name. Once again, a good feeling.

So today, I packaged up the sterling in a well-insured, USPS flat rate box. Shipping was $5.35, and insurance was $12.00. I sent it to Midwest Refineries, and let them know to look for it in Thursday’s mail.

I’m expecting to receive a check for about $800. (33.5 ounces x 92.5% purity of Sterling silver x 29.35 silver market price x 90% payout rate).

Now, at this point, you may find yourself asking,

Eight Hundred Bucks for that tiny pile of forks and spoons in the middle!?

And if so, this article has made its point. If you’ve got silver or gold in your family, and are not sentimentally attached to it, you should seriously consider selling that shit! Many people have much bigger piles of silver cutlery sitting around, and even silver plates, bowls, and other tableware. That stuff is worth thousands of dollars now. And if you wouldn’t currently buy it for thousands of dollars, that means you should sell it for thousands of dollars – a sound general rule for deciding whether or not to sell any of your stuff.

It’s extremely valuable right now, helping with your cash situation. It serves to declutter your life, so you are toting and storing fewer material things for the rest of your life.

And it’s even environmentally friendly to cash this stuff in. Today’s sky-high precious metals prices have caused a mining boom (just ask any Australian). When you sell into the market, you are increasing supply, which tends to decrease the market price and decrease the profitability of mining operations. So less mining happens, if you decide not to hoard silver and gold.

In this case, I’ll be passing all the proceeds on to my Mom once I get them, which makes the project even more exciting for me. I’ll let you know how it turns out.

Update! 

It turned out wonderfully. I published this article on a Wednesday, just after I sent off the package. I didn’t get a confirmation email as I had requested from Midwest Refineries, so I was mildly annoyed, thinking they were slow to process the delivery. But when I opened my mailbox on Saturday afternoon, there was a check from the refinery, addressed to me!

Reviewing the papers they sent me, I got exactly what I was supposed to receive. In the equation above, I not realized that silver prices are quoted in “Troy ounces”, which are 31.10 grams, which is  10% larger than the 28.35 grams size of the standard ounces I had measured in. This is all silly, since I think the world should use the metric system for everything. But anyway, in the end I got $715.00, which is still a wonderful haul for a handful of cutlery.

And because the service was so good, I can now fully recommend Midwest Refineries as a place for US residents to ship their silver and gold stuff for a nice 90% payout and quick turnaround. During the order, I didn’t tell them I was Mr. Money Mustache and that all of you were watching, since that may have influenced their behavior. I have no relationship with the company and don’t get referral fees, I just think they did a good job.

  • Lance@MoneyLife&More August 22, 2012, 6:22 am

    I am not a very sentimental person and don’t need fancy tableware. Fortunately my parents haven’t spent any money on it either so I wont have a dilemma as I will have nothing to sell, although I definitely wouldn’t mind the money I could get from selling some.

    Reply
  • Sarah August 22, 2012, 6:29 am

    This reminds me of a Christmas when I was in high school. My Dad was never very good at buying gifts for my mother (despite being otherwise mustachian, she likes a lot of ‘stuff’ on Christmas). Anyways, they had been tlking about getting into investing, and following stocks/commodities in the newspaper. So My father decided to jump start things by following the price of silver, and when it dipped he purchased a solid silver bar (like those gold bars you always imagine stacked at Fort Knox) to give my mother as her Christmas gift. It was impressive, although she didn’t really know what to do with it.

    For the longest time it sat in a secretary in the living room. I wonder if she still has it.

    Reply
  • James August 22, 2012, 6:33 am

    Glad I can read the rest of the post, I was left hanging yesterday… ;)

    I do have a little bit of silver and gold I’m thinking of selling, my college class ring was a big waste of money and I should sell while the price is high. Couple other odds and ends like that, it would raise a bit of cash right now.

    I also have a good number of silver coins I purchased a couple years ago, I’ve watched the market go up and I consider selling them. But I purchased them as something to hold very long term, so unless we get back above $50 I’ll probably just sit on them and pass them on to my kids.

    Reply
  • AdrianM August 22, 2012, 6:52 am

    Well done on searching out 90% melt value.

    Reply
  • JJ August 22, 2012, 7:02 am

    I think in some cases you can cut the blades off the knives and sell the handles.

    Usually the blade part of the knife will be magnetic unless it’s silver plated non-ferrous (which means you can check with a magnet to see if the handle is less magnetic to decide whether or not to saw off the blades).

    Reply
  • Graeme August 22, 2012, 7:07 am

    Good article!

    I think my mother has some silver she inherited from my grandparents. Our situation sounds like yours – the silver might be pulled out once or twice a year, but always needs polishing. For me, it’s more hassle than it’s worth. However, I’m not sure whether they hold any sentimental value for my mother, so I’m not going to broach the subject any time soon.

    Reply
  • Eric Lindberg August 22, 2012, 7:10 am

    MMM, did you strip the sterling handles off the knives? It should be pretty easy to do by just bashing it with a hammer. I’ve got some silver stocked away at home, but I figure I’ll just keep it as a form of diversification.

    Reply
    • Mr. Money Mustache August 22, 2012, 7:21 am

      I did cut one of the knives in half to check out the handle construction. It’s a very thin silver shell, with a powdery gypsum-like filler (plus the stainless rod extension of the blade running through for stability as well). This is just as the silver shops had told me it would be.. apparently the knives are built like that for balance.

      I’ll try peeling one of the silver knife handle shells off with a grinder just for fun so I can weigh it. It will probably turn out to be too light to justify the effort of stripping them all. But then again, $29.35 per ounce ($469/pound) works out to $5 for something that weighs as much as a single sheet of paper. So it’s pretty valuable.

      Reply
      • JJ August 22, 2012, 1:24 pm

        Not too complicated. At least give them to a scrapper like this guy that will do it for you. Like you said, no need for extra mining of silver with such a high price…

        http://www.youtube.com/watch?v=9UfXeGRkt1M

        Reply
        • Mr. Money Mustache September 10, 2012, 11:27 am

          That is an excellent video.. seeing a long-haired Eastern European dude smashing up the knife on an old concrete slab in the middle of a bleak winter day added greatly to its authenticity. That is Mustachianism in action!

          Reply
  • Chad August 22, 2012, 7:18 am

    I think you could have done better on ebay with this stuff, MMM. Come to think of it, why don’t you ever talk about selling stuff on ebay? Have you ever tried it? I’d bet that you’d like it.

    Reply
    • Mr. Money Mustache August 22, 2012, 8:01 am

      Good point.. I actually started my research on eBay, but found the melt value is usually higher than the collector value with today’s prices. Other websites confirmed this. I’ll add that to the article. In general, I do like eBay and have bought and sold on it many times.

      Reply
      • ET August 22, 2012, 5:34 pm

        If the melt value is higher than the collector value then it could be worthwhile to buy on ebay and resell.

        I have 5 pieces of sterling silver that I use everyday. I like them more than stainless steel and they don’t need more care.

        Reply
  • stealmystapler August 22, 2012, 7:21 am

    Did you consider selling the sterling silver flatware as a set? A quick google search shows that new sets go for considerably more than $800. Depending on its style/rarity/maker, etc., and assuming that you have a complete set, I’d guess you’d have gotten more than $800 on the antique market. You also wouldn’t have the problem of unsalable pieces.

    Sure, it might take longer and require finding the right buyer. I suppose you just created more rarity for others holding similar sets!

    Reply
  • Holly@ClubThrifty August 22, 2012, 7:22 am

    Very interesting! I have some gold jewelry that I have considered selling in the past. It might be time to look into it. I am not particularly attached and I would rather have the money.

    Reply
  • Pollyanna August 22, 2012, 7:41 am

    Just curious – what are you going to do with the silverplate non-knives? You might possibly find Replacements Ltd as a potential buyer. As with others, my family doesn’t have true silverware, although my mother-in-law gave me some silverplate. It’s in a box in my hutch, doubtful I’ll use it. My old Oneida stainless is still perfectly useful after 34 years and I’ve been able to pick up extra forks and knives at thrift stores over the years.

    Reply
    • RuffledFeathers August 22, 2012, 8:05 am

      Definitely check out selling any leftovers, silverplate and the hollow silver knives, at Replacements Ltd. http://www.replacements.com/
      They provide a great service for people missing pieces in discontinued patterns in all matters of tableware. They will accept monogrammed pieces as well. Silver has great antibacterial properties, thus the reason for it’s popularity in earlier times.

      Reply
  • Mr. Everyday Dollar August 22, 2012, 7:46 am

    I have a good friend who is known to go to garage sales to pick up precious metals – coins, silverware, jewelry, what have you. Sometimes the sellers price these items well under what they’re worth in the market, unknowingly. He’ll buy them for what they’re asking or even try to bargain the price down.

    He sometimes will keep the pure stuff for himself as an investment and ships all the rest to a (reputable) refinery that has a 97% payout, in the process making hundreds of dollars.

    It’s a nice side hustle if you need one.

    Reply
  • Howard Q. Bikeman August 22, 2012, 7:47 am

    I’m fortunate that my Great Aunt (the buyer of silver in our family) had impeccable taste and invested in a set of gorgeous mid-century modern silverware. I have no doubt it would sell well on the resale market, but I will gladly hand it down to my children as an exemplary example of artisan craftsmanship. Some things are worth polishing up and enjoying twice a year.

    Reply
    • Mr. Money Mustache August 22, 2012, 9:03 am

      That may be true for some. It’s just somewhat against the message of this blog, since I’m encouraging people to consider getting less of their pleasure from Stuff and Things, and more of their pleasure from learning and experiences. Anything you only use twice a year is definitely in the category of “things you can live without” according to the principles of minimalism.

      But as I said, to each his own – if you’re enjoying your silver and prefer it over money to invest in productive assets, continue to enjoy it!

      Reply
      • SomeYoungGuy August 22, 2012, 12:09 pm

        I value anything from my Grandparents thought was fancy much more than the utility of 800 USD. We should look forward when selling things and look backward when buying. This is all lost with the short history of our most precious gadgets, but to my parents, a great night was spinning a disc on the RP (or hoping the 8-track would make it) and busting out the best China and Silverware. That experience and feeling is worth more than melt down value and all this consternation with things only used 2x a year. Sometimes, we maintain balance in our life by having silly things that are invaluable, even though they are only worth 800 USD

        Reply
  • Joe @ Retire By 40 August 22, 2012, 8:02 am

    $800 is a nice little chunk of change. The bonus is GMM won’t have to polish the silverware anymore. I don’t have anything of value lying around. My dad likes to collect stuff, but …
    baby woke up gotta go

    Reply
  • Liz T August 22, 2012, 8:03 am

    Very good points! A couple of years back, my husband of less than a year died @ age 55, then a few months later, his older, single sister died. The family was very spread out and disconnected — no one was interested in any of the stuff they had collected and hauled around for decades. A nephew and I were left with the task of clearing it out. I got an immediate and painful lesson in how worthless most of the stuff we hang on to becomes the moment we die. There was no good silver, although I did make a few hundred bucks by selling some of his books back to Amazon for credit (you can do that, you know. Might be worth a post.) The experience shocked me into reevaluating what I hold on to and why. Now that you’ve done this legwork for us, I’m going to go through my jewelry box and see what can go — I know there’s a class ring and a couple of wedding bands in there somewhere!

    Reply
    • jd August 22, 2012, 9:46 am

      Yup, I went through a similar re-evaluation of what I hold onto when I was helping clear out my Grandmother’s stuff after she passed away. That task helped me to become more minimalist, as I realized that most of my “treasures” will probably just get thrown away by whoever is stuck going through them. So best to get rid of unused things sooner to clear up some space now, get some extra cash, and save someone the trouble later. Plus I know that certain items do have resale value (for now, anyway), and I can take the time to sell them.

      Reply
    • Lily April 20, 2014, 12:18 am

      When my mother died I had the opposite problem. Everything she owned was something valuable or artistic or sturdy and well-made. Nothing was junk, even if it was outdated. But we had to dispose of many items because my siblings needed cash and all the possessions could not be kept indefinitely. I like money, but those things were part of my family history that my siblings were happy to eradicate. It was brutal.

      Reply
  • Octavian August 22, 2012, 8:15 am

    Money is very transitory. Your current situation MMM was handled well. However, many of us are using silver, gold, copper, brass and lead to diversify outside of holding cash. If you need cash, by all means, sell your precious metals, the price is certainly right. If you don’t need cash, hold on to those coins/jewelry/flatware for times when you will need cash.
    The indicators are very good that the economic situation is only going to get worse. Yea, I know, stock market is up, big whoop. Have you checked commodities prices lately? You know, all the stuff we eat and use in industrial processes? And let’s not forget all the municipal defaults coming down the pipeline.
    Silver and gold will hold and even increase their value in a down market, hence why their price is so high right now.

    Reply
    • Matt G August 22, 2012, 9:00 am

      You might also want to stock up on food, guns and ammo to protect your gold when the dollar, and stock market crash. There are going to be a lot of hungry, angry broke people trying to steal your shit.

      Reply
      • JZ August 24, 2012, 7:20 am

        As has been shown, even in a complete civilization failure, people naturally cobble together a working civilization out of what’s at hand to protect themself.
        That said, I don’t recommend dealing with precious metals on the long term; a large amount of their high value is predicated on the fact that a lot of people THINK they are valuable, rather than on any actual value. Up until the housing market tanked awhile back, people thought real estate was inherently highly valuable too. And a couple centuries ago, people thought a certain kind of flower was inherently valuable, creating an economic model that was useful for forecasting the dotcom crash. You can’t eat or burn gold.

        Reply
    • Mr. Money Mustache August 22, 2012, 9:13 am

      Thanks Octavian, I was hoping for at least one response in favor of holding precious metals as an investment.

      The counter-argument I would make (and the reason I gleefully refuse to participate in any metals/commodities booms myself) is that your argument depends on an ability to predict the future.

      “The economic situation is only going to get worse”. “Municipal defaults coming down the pipeline”. These are the words of a fortune teller, which is unfortunately an ability I was born without. If you have that ability, you can do things like “buy high, sell higher”.

      So my own investing approach is the less exciting Buffett-like “buy low, sell high” one. Looking at the price chart, it is certainly much higher than it usually has been for the past three hundred years. Since the material pays no dividends, there’s a serious opportunity cost to holding it unless I’m willing to double down on even more increases!

      Thanks for the perspective – neither one of us is right or wrong, they are just two different investing approaches and I’m happy with how mine has worked for me.

      Reply
      • No Name Guy August 22, 2012, 11:56 am

        “The counter-argument I would make (and the reason I gleefully refuse to participate in any metals/commodities booms myself) is that your argument depends on an ability to predict the future. ”

        Or, one holds PM because they KNOW they can’t predict the future and take a diversified view.

        Will the economy collapse? Meh….don’t know. What happens if it does? PM’s or other tangible stores of wealth will be very useful. Ask the German housewives who were cutting sections off their gold necklaces to buy groceries during the hyperinflation how poor an investment PMs were…..or how good their “safe” government bonds were. It’s because I DON’T know the future that I think it wise to have some PM’s……and some bonds…….and some stocks……and some real estate…….and skills…….and social connections…….and useful education (Medieval Poetry, nope….Engineering, yup)…..etc. Which of these will over perform? Don’t know….but I got it covered. Which will under perform? Again, don’t know, but it really doesn’t matter since none are too big a fraction of my total wealth.

        Note that in addition to tangible wealth, IF the shit hits the fan ones social connections and skills as advocated by Charles Hugh Smith – Of Two Minds blog, yourself, and others, will provide the long term means of thriving. PM’s are there to carry you through the rough spots with a concentrated, portable, universal, non-debaseable store of value. As such, I view them more as insurance, not as an investment, per se. With that view, the lack of dividends is moot (does that fire insurance policy on your house pay dividends, or do you gladly pay it to cover your ass in the event of disaster?), and kept to single digit percentage of ones total asset base, the opportunity cost is minimal.

        As the quote goes: There are times when return OF capital is more important than return ON capital.

        Reply
        • JJ August 22, 2012, 1:37 pm

          Agree w/you here no name. Hold some as a hedge. Also agree that the price of PM is likely to come down. I would say the price will definitely come down if I were able to predict the future. Since I can’t predict the future, I hold some as a hedge.

          Totally agree.

          Reply
        • Debbie M August 22, 2012, 1:43 pm

          I’m kind of with Matt here. For example, I saw the crazy mortgages being handed out, but wisely got a fixed-rate loan on a mortgage I could actually afford. That wisdom (and some good luck in getting roommates and keeping jobs) saved me from mortgage troubles, but it did not protect me from the job insecurity, lack of raises, and more-with-less philosophies at work that eventually resulted from so many other people getting the crappy loans.

          There are certain things I’m unwilling to prepare for. So I don’t have guns. And I don’t have precious metals. (And I don’t live in crappy small towns away from everything in case of nuclear war the way my boyfriend’s parents did for their entire lives.)

          I’d rather hold canned goods and tools as my weirdo diversification investments. (I totally got through the last pumpkin shortage with my can ‘stache. Guess with the drought going on, I should think of stocking up on canned goods again. Because sometimes you can predict the future.)

          Reply
        • Gerard August 23, 2012, 9:23 am

          I dunno, NoName, that German housewife argument isn’t very convincing. If you decide to protect yourself against every possible (but unlikely) negative event, you’re pretty well guaranteed to spend a lot of money on Dumb Shit. I’m not sure I understand how holding a chunk of shiny rock as a hedge against hyperinflation is any different from buying Hit By An Asteroid Insurance. “Tell that to the people who were hit by an asteroid!” But yeah, I totally get your point that a little diversity is a good thing.

          Reply
          • No Name Guy August 23, 2012, 10:39 am

            Its one of those things where I hesitate to throw away 3,000 or so years of human history. PM’s have, with the sole exception of 1971 to present (or arguably 1965, or 1933, depending on where one draws the line), ALWAYS been money, everywhere on the face of this earth (a few hunter – gatherer societies excepted). Current times are the exception, not the rule, in human history. Is it prudent to take an un-hedged bet on the side of 41 years versus 2900+ years? Especially if the hedge in question is only a small percentage of ones total wealth? And considering that every single fiat currency regime in human history has collapsed in hyper-inflation. Of course, you risk tolerance may vary, for me, it’s all about the safety margin (to steal from MMM).

            Reply
            • Gerard August 23, 2012, 11:36 am

              But don’t you worry about the cumulative effect of all the possible hedges you might need against all rather unlikely events? Or do you just pick one or two and hope they’re the ones that happen?
              I know these questions sound a bit smartass, but I do mean them sincerely. Let me try a more productive angle: How much of your portfolio do you think you would need in precious metals in order to protect yourself against the risks you fear, and how much would that choice affect your worth and earnings if the catastrophe doesn’t come to pass?

              Reply
          • swiming_naked August 23, 2012, 11:59 am

            Why buy house insurance Gerard? On an individual basis, it isn’t likely that your house will burn down. Certainly the insurance companies work with actuaries to ensure a profit at the amount they charge the collection of homeowners buying insurance. That means that collectively the insurance is not worth the price.

            Like you say, it’s silly to protect yourself from an unlikely negative event.

            Matter of fact, I’d much rather drop our homeowners policy than the small amount of precious metals I own. The insurance policy is worth zero if I don’t need it, the silver is still worth “something”.

            Reply
            • Gerard March 27, 2013, 7:33 am

              Actually, I’ll probably let my house insurance lapse once my mortgage is paid off (my lender insists on insurance, for now). My house is small and cheap, my insurer insists on insuring full appraised value of similar houses (um, in case the land burns down), I earn a lot of money, and I could probably sell the land without a house for more than with it. Other people might have big expensive hard-to-replace houses, and will make different choices. My point is that we’ll all make different choices based on our risk tolerance and our rewards vs. costs calculations. Holding an overpriced non-productive asset in the hope that I’ll be fine if the whole system goes to hell? Too tin-hatty for me.

              Reply
    • Mr. Everyday Dollar August 22, 2012, 10:10 am

      Short term, sure. We may be near another recession depending on how the situation in Europe plays out. Long term stocks have shown that their return has been much better – since 1965 the total return on gold is 4,455% but the total return on stocks is 6,072%.

      Reply
      • Mr. Money Mustache August 22, 2012, 3:52 pm

        These “return” comparisons on stocks vs. metals are interesting.

        The stocks provide a large portion of their return through dividends – money that you get, and keep (i.e. spend on groceries) as an early retiree. That money can never be taken back from you, no matter what happens to the stock market.

        With silver, there have been no dividends. If the price goes back down to $5/ounce, there has been ZERO return for the past several hundred years.

        So the only way you can ever benefit from precious metals is to sell them higher than you bought them, as described in this article.

        If you were to buy at today’s prices, still up near their 300-year-highs, having a chance to sell higher in the long run seems just incredibly unlikely.

        On the other hand, if silver were to be back at $5/ounce in the future someday, even I might dust off my speculative dice and try picking up a few bars, just for fun. More of that buy low/sell high idea.

        Reply
        • win August 23, 2012, 6:48 am

          To calculate the return on stocks, they probably assume they you reinvest the dividends and don’t pay any taxes on the dividends, because they are in an IRA. If you pay taxes on the dividends and spend the dividends on groceries, as many people do, the returns would be lower.

          http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm

          “The orange curve shows the result of having all dividends reinvested (i.e., the total return), while the blue curve disregards dividends, therefore reflecting only the evolution of price. As can be seen, reinvesting all dividends produced about 8 times the return. “

          Reply
          • Mr. Money Mustache August 23, 2012, 9:11 am

            True.. but disregarding dividends isn’t the way to calculate the total return either, since you really do get those dividends. One way to calculate could be to add up only the nominal value of the dividend stream over time.

            But since that also ignores the discount rate (the fact that money delivered to you long ago is worth much more than money today), I prefer to just consider stock returns in the standard dividends-reinvested way.

            We could of course write several books in a debate over holding commodities vs. stocks (and I just finished reading a few of them this year – scary stuff!). But my own humble opinion is that dividends and property rents are a much better way to generate an income stream than slicing off a few chunks of your silver bars every year and cashing them in at the current market price.

            For the record, I also believe that modern paper (electronic) money will continue to be the dominant form of human trade for my entire lifetime and beyond. And I’m willing to bet ALL my paper and electronic money on it, while sleeping well every night. You heard it here first! :-)

            Reply
  • Lisa August 22, 2012, 8:25 am

    Great post. Any ideas for selling sets of China in Canada? I have been thinking about this for awhile since it never gets used.

    Reply
    • Pollyanna August 22, 2012, 8:42 am

      If http://www.replacementsltd.com/ has a demand for your china pattern, they might buy it from you (or try eBay). You’d have to ship to US, they are located in North Carolina.

      Reply
  • Heather August 22, 2012, 8:53 am

    I overheard a friend of mine asking her mother if she could take the old china home, and just use it. That’s right, just use it normally, until it chips and breaks and gets thrown out. It made sense to me. What the heck: if you enjoy seeing the cheerful patterns, and playing dress-up a bit, why not just enjoy it until it is gone, and then forever free up the extra cupboard space?
    I appreciate the value of heirlooms, but ones that are always locked up and never seen, are not providing any sentimental value either.

    Reply
    • Mr. Money Mustache August 22, 2012, 9:19 am

      That’s a nice middle ground for otherwise-impractical antiques!

      I really like heirlooms too. But to me, they would have value if they were things someone in your family actually MADE, and that you would continue using in your real life too. Journals, books, or artwork that some of your ancestors wrote or painted or sculpted. A rocking chair made by the old Grandpa craftsman, and other stuff like that.

      To me, heirlooms like forks, spoons and cups are just the fancy consumer purchases of a generation gone by. Sure, they’re nicely made.. but so is my iPhone. Do I want to pass that down to my grandchildren so they can store and display it on a bookshelf in the late 21st century? Nah, that sounds like just another material burden.

      If it’s really small and easy to own, that makes the burden smaller. But some of these things are enormous, and they’re tying up huge amounts of productive cash that could otherwise be working for the modern family.

      Reply
    • jlcollinsnh August 22, 2012, 9:20 am

      this is exactly what we are doing with our wedding china. It sat rarely used for almost 30 years.

      last year we dumped our junk stuff and now we use the good stuff every day.

      Reply
  • jlcollinsnh August 22, 2012, 9:17 am

    What about the pile of forks and spoons on the right?

    My mother passed on a few family heirlooms as well. A sliver tea set, plate as it turned out, some antique vases and books. all “very valuable”

    So I used to worry about the damn things.

    Now in the age of the internet a little research has shown they are nice pieces but nothing the would set the Antiques Roadshow folks all a-twitter.

    Good. Now I can enjoy them without it being a tragedy when I drop one, as I did with a vase a few years back.

    The silver-plate tea set is the most problematic. Like sterling, it needs regular polishing without the underlying value. Plus it has a few small dents that remove most of any collector value it might have.

    Interesting chart you posted. One look at that, especially with your note as too how far back the flat line goes, would be enough to have me selling all my silver ASAP.

    Reply
  • totoro August 22, 2012, 9:57 am

    Loved this article. We recently sold a platinum ring after some internet research and a visit to a few brokers. We eventually got twice the price offered by several brokers just by going to a larger city.

    I am all for decluttering and have been both burdened and blessed to inherit furniture from my grandparents. After years of carting around a giagantic horsehair sofa that required four men to lift it, I finally donated it. I kept the matching chair.

    I think there is a balance of sentiment, practicality and aesthetic appreciation. I absolutely love the antique dining room set I inherited, it is finely crafted and we use it every day. The sofa had sentimental value but was really impractical. The ability to let go of objects is pretty key and using practicality and/or aesthetic enjoyment is a skill that needs to be practiced.

    I know that I have had to consciously work through the unease I have with letting go of beautiful things that I have inherited. The idea of getting money for them has not been as big a motivator as the freedom from maintenance… although silver would be different.

    I do have a weakness for nice antique silverware and dishes. Unfortunately, I am not a fanatic about maintenance and have accepted that if it can’t go in the dishwasher I can’t keep it. Took a while, but that is my test for these items. My test for anything else is, “am I willing to move this again?” (we just bought a different house. I am not willing to move most things as it turns out :)

    I lived overseas in Japan and they have rules about keeping stuff. The rule is if you haven’t used it in a year it goes out.

    So the balance between stuff and what you can get for your stuff if you sold it and the freedom to not have to maintain your stuff – I’m sure there is a mathematical equation there somewhere!

    Reply
  • slowth August 22, 2012, 1:04 pm

    I’ve never understood our culture of fancy silverware and china. You must polish the silverware and most even have a dedicated piece of furniture to display china. It’s bizarre. What makes it more strange is that this stuff isn’t really used anymore, they are just display pieces.

    Well done, MMM. I would have sold that stuff in a heartbeat.

    Reply
  • Lauren August 22, 2012, 1:45 pm

    What did you do with the other two piles that no one wanted???

    Reply
    • Mr. Money Mustache August 22, 2012, 3:39 pm

      They’re still sitting on my breakfast bar countertop. Why, you wanna buy some sweet silver-plated cutlery? :-)

      Reply
  • Prashant August 22, 2012, 2:28 pm

    Quick note, dear MMM. The spot price of silver is almost always in TROY ounces. I collect old silver coins as a hobby, albeit not much anymore, and just wanted to point out the listed price of silver and gold is always in troy ounces, for various arcane reasons.

    1 ounce = 0.911458333 troy oz.

    So, redoing your math, you should receive a check for about $745. (30.5 TROY ounces x 92.5% purity of Sterling silver x 29.35 silver market price x 90% payout rate).

    Reply
    • 205guy August 22, 2012, 3:17 pm

      Arcane measurement units strike again! Not that the ounce is good to start with. Me, I’ll stick with decagrams (OK, maybe grams–at least the conversion is easy between them).

      Reply
    • Mr. Money Mustache August 22, 2012, 3:38 pm

      Ahh, crapola! I feel like I just lost $55.00 now :-) Thanks for the information Prashant.

      I’ll update the article once I hear back from this refinery place with the final numbers.

      Reply
  • MUFF August 22, 2012, 3:53 pm

    MMM first of all love the site and have been following for a year – congratulations.

    Interesting post on selling stuff that is not needed. I fully agree with sale of stuff that has minimal utility. I have personally sold, for example, a lot of books that I have enjoyed reading. I was never going to read them multiple times and had to find space to keep them on “show”. The proceeds have been put to work.

    Interestingly the case of selling scrap” silver for paper dollars is a conundrum to me. The government is “printing” dollars for fun so a scare metal such as silver should go up in value as the dollar in this instance is devalued by money printing\quantitative easing.

    Secondly I am from the UK and have seen several reports that silver is very scarce (USGS and BBC – http://silvervigilante.com/bbcs-global-resources-stock-check-portrays-world-on-the-edge/ 10-20 years supply left in the ground). So selling a scarce resource for a paper dollar asks the question what will you do with the cash….. I can fully understand re-investing in income or something that saves money (such as your french doors article) – is this how you would use the cash?

    All the best

    MUFF

    Reply
    • Mr. Money Mustache August 22, 2012, 4:23 pm

      Yeah, I sure don’t have much use for cash! I only keep enough around to pay for the little monthly expenses. The rest of it gets swept into income-generating investments

      On the stock side, things like a combination of small-cap value index fund (VISVX), large-cap US stocks in (VFINX), and non-US stocks (VGTSX)).

      On the real estate side, you already know I’m fond of rental houses, and I’m shopping around locally for a single house or duplex to buy in the next 0-2 years to replace my bigger, less cap-efficient rental house which might end up being sold in that time.

      Reply
      • Pete August 23, 2012, 1:04 am

        Hi MMM. I just recently completed reading the whole backlog. Thank you for your prolific and generous contributions.

        You have identified your primary Vanguard investments on a couple other occasions. A question that I’ve had each time is why do you own the investor class shares instead of the admiral. In absolute terms, the costs are good in either case, but relative to each other the admiral shares are significantly lower cost (lower expense ratio).

        VISVX (0.35%) vs. VSIAX (0.22%)
        VFINX (0.17%) vs. VFIAX (0.05%!)
        VGTSX (0.22%) vs. VTIAX (0.18%)

        The difference is a minimum investment of $10k for admiral versus $3k for the investor shares.

        Since your stash is clearly big enough to afford the $10k minimums, I see no other explanation as to why you do not buy Admiral shares except that you think that the requisite admiral hat [1] would somehow be unbecoming when combined with a flowing money mustache. On this point, sir, we disagree. A money mustache serves as a fashionable counterpart to all manner of head wear; *especially* fancy naval hats.

        [1] http://www.portcities.org.uk/london/upload/img_200/BHC2889.jpg

        Reply
        • Mr. Money Mustache August 23, 2012, 6:35 am

          Welcome, Pete!

          Sorry for the confusion – I do use the admiral shares when applicable.. It’s just that vanguard seems to upgrade you automatically once your accounts reach the new balance, so I figure it is best to list the starter fund name rather than confusing people with still more letters.

          (at least, I know this auto-upgrading has happened to me in the past. But my accounts are almost 13 years old.. Others can let us know if this policy is still in place).

          Reply
          • lurker August 23, 2012, 10:12 am

            yes. Vanguard does the auto upgrade when you hit the higher amounts. Love this company as much as I love this blog!

            Reply
          • Joy August 23, 2012, 11:30 am

            MMM,

            What do you think of VBIAX?

            After reading a post where you talked about VFINX
            I asked my husband to purchase shares.

            Instead he ended up buying VBIAX. Seems the guy he
            talked to on the phone told him that VBIAX was the same
            thing as VFIAX. He said it was simply the admiral share
            of VFINX. Reading Pete’s comment clued me to the
            error. Hmmm…

            Reply
            • MUFF August 25, 2012, 7:35 am

              Hi MMM,

              We have been stung a few time trying to pick individual stocks. It requires a lot of time and research but you do get to learn the ropes.

              The reason we went down this route was to outperform index funds (and avoid fees). We eventually found investing in small cap did not work for us so we stuck to companies we know and sectors we have an interest in.

              Admittedly this has been risky for us, like all investing, but fortunately it has worked out well (so far).

              As we wanted to retire early and quickly so we decided to start with more risk – 80% was in perceived high risk investments but a relatively small total stash at the time. We banked some of the “winnings” and moved them into “safer” funds and utilities.

              We found that getting a good size stash together quickly start compounding faster because of the lower overall cost of buying more shares each time. The solid regular dividends were re-invested into our next choice of stock instead of re-investing straight back into the same company.

              This took years off our timeline to retirement than “risk off” to start with. The “risk” really paid off – perhaps we got lucky. We are now in the process of changing our risk profile to “safer” investments. We have not diversified into rental property but are considering real estate investment trusts.

              It would be interesting to have your thoughts on this (more risk \ less diversification at the start versus trackers when you are set)?

              Many thanks,

              MUFF

              Reply
  • PawPrint August 22, 2012, 7:41 pm

    Absolutely love this article! I sent a link to my DH. We’ve been toting around pounds of inherited silver flatware, tea sets, platters, etc. for years. Decades, actually. My son took a spoon that had gotten dented to a dealer here who said it was worth $15. One spoon. None of the kids want the silver or the china (two sets from his family, one set from mine) either, but we’ve moved it to four different states since we got it. Alas, his response to my plea to sell all this stuff is, “But once you get rid of it, it’s gone.” Fine by me. . .

    Reply
    • Bella August 23, 2012, 10:35 am

      So, I think this is the problem in general with ‘antiques’ or ‘valulables’. We put them on a shelf and don’t use them – so no one is attached to them – and then theyr’e just a burden to offload when the time comes.
      Case in point – both hubby and I have parents who regularly used their nice china, we have memories of thanksgivings, and christmases and all the food is on the nice plates. We want the china. My parents have a set of waterford crystal – that they never use – cause it might break – so once my parents pass on – NO ONE cares to keep it since no one has any memories attatched to it.
      I think to a large extent the rule should be – if you can’t bear to sell it – use it!

      Reply
      • PawPrint August 23, 2012, 10:57 am

        I agree. Unfortunately, you can’t stick china in the dishwasher, and my DH does the dishes so he doesn’t want to have to wash the china by hand. Quite the conundrum–for him. For me, I really want to get rid of all that stuff! I do use the Waterford crystal wine glasses, though. :-)

        Reply
        • Bella August 23, 2012, 12:27 pm

          Yea, BUT
          Most modern dishwashers have a china cycle. The only problem with the dishwasher is that the plates get beat up faster. If he’s never going to sell them – who cares if they retain thir value – or if you lose one or two. There is something to be said for if you’re kids haven’t ‘set up house’ yet. They probably don’t want it when their in college but might when they get their own families. But seriously – three extra sets of china!
          Maybe you can find someone else who wants it, which would make hubby feel better than selling (a niece or nephew?).
          Maybe this story wil help him let go – we bought our dining table set off craiglist, it’s heirloom quality and the people’s kids just didn’t want it – it will be an heirloom for us and ours – but if they don’t want it – I hope they sell it so someone else can have great holiday dinners around it.

          Reply
          • yosnowden August 24, 2012, 1:41 pm

            My parents actually do wash their china in the dishwasher – the gilding came off, the resale value probably went down, but they use the nice dishes every day, so I call it a win. Plus, washing the dishes for 30+ people (only on holidays, when we use all the nice stuff with extended family) goes much faster when you can stick the dishes, silver, etc. in the dishwasher.
            It’s a less mustachian solution than selling it, but a more mustachian solution that just letting it all sit around and gather dust most of the time.

            Reply
  • Wrecked August 22, 2012, 8:26 pm

    I don’t buy a lot of stuff but I tend to have a hard time getting rid of belongings. There are two ideas that I love from this article though:

    – Sell something if you can sell it for more than you would be willing to pay for it.

    – Make use of treasured belongings that you have instead of putting them away for special occasions. I’ve been thinking along similar lines with more mundane items. Like if my microwave stops workign and I can’t repair it I will not replace it with a new one, I will just do without one.

    Reply
  • Ray August 23, 2012, 6:41 am

    I love this article, and the idea behind it. I think it can be extended to a lot of other expensive, unnecessary items. I read a rule of thumb (It might have been on this blog, actually!) that if you didn’t own the item currently, and you wouldn’t be willing to buy the item for its current value, you should always sell it, because the marginal utility of the money is greater than that of the item.

    On an unrelated note, MMM, I have heard, but not researched firsthand, that the Better Business Bureau is somewhat of a scam, which sometimes gives companies low scores and phony bad reviews if they refuse to become a member of the BBB, and makes a company’s marks high if they pay for a membership. This of course would not mean that a company with bad marks is actually good, but simply that the BBB can’t be trusted on its own.

    Reply
  • Laura August 23, 2012, 8:20 am

    Ha! I’m from Michigan and after reading your post yesterday I found that Midwest Refineries placed a full page ad in our local newspaper. They are coming to West Branch, MI for the weekend. Wish I had some gold or silver to sell.

    Reply
  • fiveoh August 23, 2012, 8:40 am

    Nice article! I lean towards the thinking that QE3 will be launched sometime this year so prepare for PMs to rise again. Still good to get cash for some stuff you aren’t using! My mom has some silver from my grandma and unfortunately it was all the plated kind. :(

    Reply
  • rschwarzg August 24, 2012, 7:02 am

    Hey MMM, maybe I am not thinking this thorough as you may have so I could use some help with a nagging question resulting from the following progression of statements:

    1. Our monetary economy is based on infinite growth (simply put – money is borrowed and has to be repaid with interest).
    2. Early financial independence depends on the compounding effect of this growth.
    3. Economic growth demands the conversion of natural “resources” to monetary goods, a.k.a. the destruction of the planet.

    So my question is this: aren’t conversations about saving the planet by EFI/FI affectionados silly talk?

    Reply
    • Mr. Money Mustache August 24, 2012, 11:57 am

      You might want to start with this little article sort of related to that:
      http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

      In short – a market economy doesn’t depend on debt explicitly. Our CURRENT system uses loans as a way to expand the monetary supply to absorb new production and demand. But we could still do lots of trade and have fun even if we happened to stop growing GDP at some point.

      Financial Independence doesn’t depend on compounding. Just on owning productive assets. Companies can still make money and pay dividends even if they’re not growing. Rental properties (just a special case of the general idea of a business) can always provide cashflow.

      Economic growth doesn’t necessarily demand conversion of non-renewable resources to goods. You could also have an economy based on re-using materials, or using stuff that grows (wood, crops), and things that aren’t physical (software, education, knowledge in general).

      So I’d say it’s not silly talk. The real goal is to get people to VALUE natural resources, so that they are willing to spend more for things benefit the earth, and less for things that harm it. This alone could drastically change our burn rate.

      At the current moment, 99% of people don’t give even the slightest, teenytiny, shit about how their purchase decisions the very ecosystem that keeps them alive.

      Reply
  • Sara August 24, 2012, 7:36 am

    I had some family silver given to me. It wasn’t a complete set, had many missing pieces and it was kind of ugly to boot. I did sell it. It was heavy and I sure didn’t want to lug it around. While I was dealing with it, I kept thinking how important it probably was to my great grandmother, she probably thought it really made a statement and made her look good. My family had some serious money at one time. Divorce, alcoholism, disease took their toll on that. And here I was selling for a few dollars (well, more than a few I admit) something that raped the earth when it was made, frittered away other assets and generally left the world in general more impoverished. Really got me to thinking about the value of things in general. I tend to shop often at yard sales for furniture and so on and so many times people are selling things they once thought had value and were not really worth anything. It always makes me deeply thoughful.

    Reply
  • JJ August 24, 2012, 10:17 pm

    This is what you do with old spoons and forks – make mozzie coil and candle holders. Doesn’t help with the knives though.

    http://www.eumundimarkets.com.au/stall-holder/cutlery-creations

    Reply
  • Jen August 26, 2012, 1:33 am

    My mom-in-law has a bunch of fancy china – wedding gifts from the 60-ies. Never gets used- as my husband said, waiting for a visit from the pope :) I checked one set recently – says Made in Japan. Quite curious now what a 50 year old Japanese dining set may be worth.

    Reply
  • A Brit August 29, 2012, 1:50 am

    This post is pertinent to intergenerational gift-giving as well as receiving.

    Whenever I give a gift to my children to mark a milestone (16th birthday, starting senior school etc) it’s always something made of precious metal. That way, should they ever hit hard times they’ll always have “the family silver” to fall back on. And, if they don’t need the cash, they’ve got jewellery that’ll last forever.

    The same cannot be said for gifts of i-crap, ponies, grand parties or, heaven forbid, motor cars.

    PS. The comment function is demanding my email address. I am assuming this is not published!

    Reply
    • Mr. Money Mustache August 29, 2012, 8:32 pm

      You’re right – no email addresses are ever published here (you can even use a fake one, although it may be more likely to be caught by the spam filter)

      Reply
  • sanjinthecity September 8, 2012, 7:25 am

    Anyone recommend a gold refinery place in Canada? I would like to avoid the issues of custom and duty to get the most for my unwanted gold jewelry.

    (I’ll post this in the forum too)

    Thanks!

    Reply
    • Ottawa September 18, 2012, 7:02 pm

      Hey sanjinthecity – I had an excellent experience using these guys in Toronto:
      http://www.goldrefining.ca/

      They pay out 98% on gold…not sure about silver! BTW – with larger amounts you can negotiate the payout! In the building these guys are located are at least 2 other refiners. So, it is a great idea to shop around – and settle on a price. Just be careful to watch closely with the scale tare etc…

      Reply
      • TomTX September 23, 2012, 2:08 pm

        The best place I found for selling silver coins (colloquially known as “junk silver” no collector value) was the local gun show. There are a couple of guys there who pay 101% of spot! Yep, they actually pay a tiny bit more than the market price – they want silver, and the dealers around here charge more like 110% or 115% of spot (and pay 50-80% of spot.)

        Reply
  • susana September 12, 2012, 2:20 pm

    a little late to this, but I believe wholeheartedly with MMM if you wouldn’t buy it, sell it philosophy and others “if you are going to keep it, use it.” This is why I put out my extensive collection of silver from my south american grandmother and polish it. Plates and trays are hung on the walls. Yes, it takes a bit of effort to polish monthly, but I just do it like ironing, in front of the tv or NPR and LOVE the look of the gleaming plates on the wall and around my home.

    Reply
  • hands2work September 24, 2012, 12:46 pm

    So, after reading this post a few weeks ago I got my ‘stash of silver out from its hiding place and did my research. My set (handed down from my paternal grandmother) turned out to be worth $2k, but before I sold it to the smelter I called my mother and my sister as they are both much more sentimental than I am. I wanted to give them first right of refusal. My mother immediately paid me $2k and she intends to actually use the silver. It’s a win/win!!

    Reply
  • Lucas Smith September 26, 2012, 7:07 pm

    Any update as to whether you got the amount you were expecting? Thanks.

    Reply
  • Jennifer October 20, 2012, 4:47 pm

    So this is way late… but I just sent some old gold jewelry that I never wear to Midwest. I mailed it Monday, got a call from them Wednesday with a question, and then just got a check in the mail today. Less than one week and I am nearly $400 richer! I calculated the weight and then the price based on current gold value and the purity of what I had and I got that exact amount in the check. Thanks so much for sharing this resource. I am going to see if I can scrounge up some more gold to sell!

    Reply
  • stellamarina October 30, 2012, 4:43 pm

    Mr Money Mustache, THANK YOU Just what we needed to know and thank you for checking out this company for us and telling us how to do it. Last week we sent in about 3 pounds of old silver jewelery….mostly beach finds…..my husband has a metal detector. Today we got a check for $779 in the mail. Very quick service. It will go to pay down the house mortgage. It is way more than we would have got if we had taken it to the local gold dealers. You have done us a great service……and I will never look at silver knives the same after seeing that video. :0) Thank you Sir.

    Reply
  • Pamela Staton December 19, 2012, 12:47 pm

    Thanks for this article. I am giving them a try today! I’m sending some old gold jewelry, for which they pay even better (95%).

    I’ll let everyone know in a few days how it turns out.

    Reply
  • Dan February 15, 2013, 12:32 pm

    Awesome site, thanks for the tip. We once sold gold to a shifty local buyer, but I suspect we might have been low balled.

    Can you address the need to sell expensive engagement and wedding rings in order to cash out on these pricey, once purchased diamonds? For example, I bought an expensive diamond, online of course, for 6k when I got engaged, per the wife’s request. This was a lot of money back then. I once got an online quote for “around 8k” out of a buyer in Chicago. However, this was not for sale, but is it possible to convince a spouse that your expensive items first purchased are now worth selling?

    Reply
  • Stan September 22, 2013, 10:33 am

    Very useful blog. I have been wondering what to do with some silver coins I collected, but not complete collections, as a kid in the 1960’s just before the silver content was lowered. I also have some silver and gold chains, rings and earrings that belonged to my mother that I had no idea what to do with. I didn’t see mention on the Midwest Refineries website of what to do if there are any jewels in the jewelry. Is there a place you can recommend that would buy the loose jewels? Most are very small diamonds, rubys, and sapphires. Thanks.

    Reply
  • Young Mugwump May 10, 2014, 4:25 pm

    AHHHH MMM!

    Again I was a bit too late with finding this article. Since I found your site, I have been trying to increase my badassity by cutting all the crap from my life and lowering expenses. I was motivated to sell stuff on Craigslist and I have been successful for the most part. I did end up going to a pawn shop without doing any research on the value of the 14K gold signet ring I had or the sterling silver money clip. The money clip was close to a fair price, but it looks like Im out about $1K on potential resale of the signet ring. I guess I was too excited to take action.

    Similarly, I was motivated to get my stash out of cash and into some sort of investment to make it work for me. I tend to subscribe to the Nassim Nicholas Taleb barbell theory so I put it in municipal bonds…definitely not drooling over the rates, but I thought it was better than losing real purchasing power sitting in a savings account. After I tied the knot on that, I found the lending club articles…since its relatively new and doesnt seem to have been through the 2008 crash/recession scenario for shock testing, I would still deem it a bit risky…but those rate are something Im drooling over now.

    Overall lessons learned…read more MMM before taking action (Ive been trying for a senior mustachian distinction by reading from the beginning to present day). I am very happy there are more people out there that think the way I do about money. Most people just considered me crazy most of my life, so its nice to see Im not a unique snowflake haha.

    Reply
  • Brian July 1, 2014, 11:26 am

    Dear Mr. Money Mustache,

    My wife and I are avid readers of your blog. Using a mix of your principles and Dave Ramsay, we have paid off over $200K of student debt in the past couple of years (law school adds up). Thus, we feel a bit let down after taking your advice here. As Prashant pointed out, after doing the math you don’t get what you expect based on the advertisements on Midwest Refineries’ website. You should have received $745 for your silver (instead of $715), based on how Midwest Refineries advertises.

    We had a similar experience with our gold. Midwest Refineries advertises “NO fees or charges period!” However, instead of adding specific fees, they discount the value of everything through an equation that is much more complicated than the 95% rate posted on their website would lead you to believe. For instance, there is a disclaimer that “[g]old orders under 3 troy ounces are purchased outright, based on average after melt weight loss and karat purity.”

    What that means is if you send in an 18K ring, they discount it to 70% purity (less than the 75% you see on the internet for the purity of 18K gold). They explained that some jewelers will shave off some gold, or put in a 14K plug when resizing a ring. It still doesn’t feel right to treat all customers like dishonest jewelers and discount a full 5% off 18K.

    Also, another 4% is discounted for the “melt weight loss.” I’ve visited a gold smelter and seen the process demonstrated: http://www.perthmint.com.au/visit_the_mint_visit_the_perth_mint.aspx. The tour guide explained that they have used the same piece of gold to melt, form, and remelt thousands of times without losing hardly any weight (it’s based on a principle of physics called conservation of matter). Some gold does evaporate onto the walls of a smelter building: “The nineteenth century brick walls of the melting house are literally embedded with gold dust, accumulated over many decades of continuous refining.” However, the rate of evoraption is much lower than 4%, or else that piece of demonstration gold would be almost completely gone after a few dozen melts, instead of thousands. Moreover, smelters are not dumb. They don’t smelt in an open air field; instead, they use an enclosed building and scrape the walls eventually, so the gold isn’t really gone, it’s just stored.

    In summary, the Midwest Refineries equation for gold actually looks like this: Convert your oz to troy oz through multipling by 0.911; then multiply by 0.96 for the 4% “weight loss;” then multiply by 0.7 if you have 18K gold (instead of 0.75); then multiply by 0.95 for the refinery’s advertised 5% share; then multiply by the spot rate for gold = $ in your check. I’m not saying the company is dishonest or fraudulent (I’m an attorney, so this post is based on facts rather than idiotic defamation), but it pays to know how the company actually calculates things before mailing off your precious metals. Otherwise, you’ll end up expecting much more than you actually get (like Mr. Money Mustache and my family).

    Reply

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