Detlef and Konrad have lived next door to each other for many years. Both are in their mid-40s, both are employed, both have families. And both can feel it: Money is losing purchasing power, the world feels uncertain and the mountains of debt keep growing. At some point, they both arrive at the same thought: “I want to invest part of my money in something real.”
No speculation, no trading, no gambling – but silver. By coincidence, both have exactly 10,000 EUR available. Not more, not less. And that’s precisely what makes this example so realistic, because most people don’t have an “unlimited” amount to invest. It’s a one-time, hard-earned sum that should work as effectively as possible.
Detlef “Just Buys a Silver Bar” and Realizes the Catch Too Late
Detlef does what many people do: He searches online, finds a well-known precious metals dealer and orders a 1 kg silver bar. “Available immediately”, the listing says. He takes a quick look at the spot price of silver: To keep it simple, let’s call it 1,000 EUR. And then he sees the actual purchase price: 1,350 EUR. That is a 35% premium. He pauses for a moment and thinks: “That’s probably normal, a bit of a premium is just part of it.”
This is exactly where the typical mistake happens. Many people underestimate how far the purchase price of silver can drift from the spot price. In Germany, several cost components are often added on top of the raw metal price: VAT (19%), manufacturing costs as well as transport, insurance, handling and dealer margins. The result is an entry price that is significantly higher than most people expect and it slows your return right from the start.
What a 35% Premium Means in Real Life
Detlef only realizes it later: At the beginning, only part of his 10,000 EUR is actually “working in silver.” If the spot price is 1,000 EUR but he has to pay 1,350 EUR, then with 10,000 EUR he is effectively buying silver with a market value of only about 7,400 EUR. Roughly 2,600 EUR is gone immediately – not because the price moved, but simply due to VAT and markups. So he does not start at zero, he starts with a noticeable disadvantage.
And that disadvantage has a very concrete consequence: For Detlef to get back to his original 10,000 EUR, silver has to rise significantly. When he later sells, he typically does not receive the full spot price, but a bit less (a discount of about 5% is not unusual). That means: Not only is the high entry price working against him, the lower selling price is too.
In practical terms, this means: Silver would need to rise from 1,000 EUR to about 1,420 EUR (an increase of roughly 42%) before Detlef even gets back to his original 10,000 EUR. Only after that does what he actually hoped for begin: Real wealth growth.
Konrad Does His Homework and Buys Strategically
Konrad takes a different path. He has the same impulse as Detlef (“silver as something real”), but he looks into it more closely. He discovers something many beginners do not know: If you buy silver strategically through large-bar structures, you can enter much closer to the spot price.
At Elementum, the purchase premium depends on the size of your deposit and is organized into tiers. And from a deposit of 8,000 EUR, you reach the 11% premium tier. Konrad has 10,000 EUR, so that fits. Elementum works with large 15 kg silver bars stored in Swiss high-security vaults, which spreads the structural costs differently than a classic retail purchase. However note that nobody needs to buy 15 kg of silver: Customers purchase fractional shares of a large bar. An entry is possible from as little as 50 EUR. This way, even smaller amounts benefit from the wholesale structure.
The Difference at the Start: More Silver for the Same Money
Now it becomes tangible: With a spot price of 1,000 EUR, Konrad pays 1,110 EUR. With 10,000 EUR, he is effectively buying silver with a metal value of around 9,000 EUR. Not 7,400 EUR like Detlef, but 9,000 EUR. Right from the start, Konrad is carrying more than 1,600 EUR worth of additional silver, even though both invested the exact same amount.
The Difference at the Sale: How Much of the Upside Do You Really Keep
The second big difference shows up when exiting: While Detlef typically has to accept a noticeable discount when selling through classic retail channels, Elementum’s buyback is listed at spot price minus 3%. As a result, Konrad needs far less price appreciation to reach the break-even zone. In this structure, break-even is roughly around a 14% increase in silver, not around 42% like Detlef.
And then comes the moment both of them are hoping for: Silver rises strongly. Let’s assume the spot price doubles from 1,000 to 2,000 EUR. Detlef is happy. Yet something happens that many people only understand at that point: His return is nowhere near 100%, it is significantly lower. Because of the expensive entry and the discount at sale, he ends up in this example at roughly 14,000 EUR: That is about a 40% return.
Konrad experiences the same market, the same doubling and the same starting amount. But because of the better entry and the clearly defined buyback discount, far more of the upside stays with him. In this example, he ends up at roughly 17,500 EUR: That is about a 75% return. Almost twice as much as Detlef. Not because of luck, timing or insider knowledge, but because of the entry.
In Short: Same Market, Completely Different Outcome
Detlef invests 10,000 EUR, effectively starts with about 7,400 EUR in metal value, needs roughly a 42% rise in silver to reach break-even and ends up, after a doubling, in the range of about 14,000 EUR.
Konrad invests 10,000 EUR, effectively starts with about 9,000 EUR in metal value, needs roughly a 14% rise in silver to reach break-even and ends up, after a doubling, in the range of about 17,500 EUR.
The difference: About 3,500 EUR with an identical market move.
Conclusion: The First Lever Is Not the Market, It Is the Entry
High premiums act like an invisible brake. You barely notice it at the beginning, but it dampens every price move. Every gain ends up smaller. Every doubling delivers less than it could. Over time, that adds up.
Long-term wealth building is rarely the result of headlines or gut feeling. It is the result of decisions. The first lever is not the market. The first lever is the entry.
If you have 10,000 EUR available today, then in 10 years you can either say: “I bought silver.” Or you can say: “I did it right from the start.” Because in the end, it is not only about silver going up, it is about how much of that move actually reaches you. That is why the premium is not a small detail. It is the difference between “investing” and “strategic investing.”
Elementum: The Precious Metals Strategists
If you want to use silver as a building block for your wealth, then the most important decision does not start with “Whether”, it starts with “How.” The difference between an expensive entry and a strategic entry determines whether you have to spend years catching up or whether your silver works for you from day one.
This is exactly where Elementum stands apart from classic retail precious metals buying. We do not see ourselves as a “bar shop”, but as precious metals strategists: Our focus is to structure silver so you can enter as close to the market price as possible, avoid unnecessary premiums and have clear terms for buying and selling. That is why we work with large 15 kg bars in a Swiss high-security vault and fairly tiered conditions, so a silver purchase becomes a real strategy instead of an expensive impulse buy.
So if you want to invest 10,000 EUR, just like Detlef and Konrad: Ask yourself one question: Do you want to buy as much silver as possible for your money or do you want to buy as many costs as possible along with it?
If you do not want the latter, then the next step is simple: Learn about the Elementum silver strategy and check at what deposit size you reach a lower premium tier (from 8,000 EUR you reach the 11% tier).
We will explain the Ratio Strategy, meaning how Elementum systematically combines silver and gold, in a separate article, because it deserves more than a few lines. For today, the key point is: Buying strategically is the difference. And that is exactly what Elementum is built for.
Learn more now and start strategically.
How can you buy precious metals cheaply and store them safely?
Elementum Deutschland GmbH, based in Sindelfingen (Germany), specializes in trading physical precious metals. Customers who purchase precious metals from Elementum Deutschland (or one of the other national Elementum companies in five European countries) can store them in the renowned high-security vaulting facilities in the St. Gotthard Massif in Switzerland at Elementum International AG.
Of course, you also have the option of purchasing gold and silver directly and having it delivered to your desired address. However, storing silver in the so-called open duty-free warehouse (“offenes Zollfreilager”) at St. Gotthard offers decisive tax advantages:
- The 19% value added tax customary in Germany is completely waived on purchases and sales – a considerable price advantage that effectively secures you 19% more silver for your money.
- If you store your silver in this high-security vault, you can sell it back to Elementum Deutschland GmbH at any time – without any bureaucratic hassle and also without VAT, as the trade takes place within the duty-free warehouse. You will receive the funds via bank wire.
- VAT is only payable when you physically remove the stored silver – either by picking it up in person (after prior notification) or by having it shipped to your address.
More silver, more return
Thanks to duty-free storage, you receive 19% more physical silver when you buy. This additional amount also participates in the performance of the silver price if it rises – a leverage effect that significantly improves your return opportunities.
About Elementum
Elementum is a second-generation, owner-managed family business. Trust, consistency, and long-term thinking are at the heart of our philosophy. The Board of Directors of Elementum International AG is composed of internationally renowned experts in the money and precious metals markets, including economists, analysts, university professors, and precious metals specialists. This in-depth expertise forms the backbone of our actions – for your security, your assets, and your future.
About the Author
Stephan Bogner
CEO of Elementum International AG
Stephan Bogner, who holds a degree in business administration, studied economics at ISM Dortmund (Germany) and wrote the university’s first thesis on precious metals as a hedge against inflation. After studying in the UK and Australia and gaining professional experience in Dubai, he took over as CEO of Elementum International AG in Switzerland in 2012. His expertise in precious metals has had a significant impact on the company’s development.
Contact
Rockstone News & Research
Stephan Bogner (Dipl. Kfm., FH)
Müligässli 1, 8598 Bottighofen
Switzerland
Phone: +41-71-5896911
Email: info@rockstone-news.com
Disclaimer: This article reflects the personal opinion of the author. Elementum assumes no responsibility for the accuracy of the content and accepts no liability for its use. This article may contain links to external third-party websites. Elementum is not responsible for the content of these external sites and expressly distances itself from all information provided there. At the time the links were created, no unlawful content was identifiable. This article does not constitute a recommendation to buy or sell. Elementum International AG is a Swiss company that specializes exclusively in the storage of physical precious metals in a high-security vault facility located in the St. Gotthard mountain massif in Central Switzerland. The Board of Directors and Executive Management of Elementum International AG have been selected solely based on their professional expertise and long-standing experience in precious metals markets. As these individuals may also be professionally active outside their roles at Elementum International AG, the company has no influence over their external activities and respects their right to freedom of expression. Therefore, the views expressed by persons working with or for Elementum do not necessarily reflect the opinion of Elementum International AG. Investments in precious metals are subject to risks, including those specific to the structure of this market. Please read our full risk disclosures and consult a licensed financial advisor before making any investment decisions. Neither the author, Elementum International AG, nor Elementum Deutschland GmbH assume any liability for actions taken based on the information provided. Past performance is not indicative of future results. The cover picture has been obtained and licenced from Shutterstock.com.
