Are you one of the folks who started buying rare or valuable coins as investments and got bit by the bug? The history and beauty of coins and paper currency is fascinating and has drawn in more than a few who hadn’t given it a prior thought.
So what’s the difference between being an investor and a numismatist—besides one being easier to pronounce? And how do you make the transition?
Bullion Investors Looking for Variety
As an investor, you’re mainly concerned with the bullion, or “melt” value of a coin. An ounce of gold is an ounce of gold and the spot market will tell you exactly what it’s worth. You probably shopped around to check commissions—the amount over spot a dealer charges—but that’s about as much research as you did. Then you got tired of buying the same Gold Eagles, Silver Maple Leafs or Krugerrands and decided to spiff up your purchases with Austrian Philharmonics, Chinese Pandas and Mexican Gold Pesos. At that point, your toe was dipped into the water of collecting. And you were hooked.
Beginning a Coin Collection
New collectors typically build their collections around a theme—a specific type of coin (Morgan dollars, wheat cents, etc.), specific years (birth dates are common), or maybe a particular country’s currency (Mexico or England, for instance). They may start with lower-graded, less expensive coins to start and begin upgrading as time and money allow.
Rare Coin Collecting for Numismatic Value
The “gold standard” for collectors (pun intended) is rarity, with condition coming in a close second. Soon they become familiar with coin grades and grading services like PCGS and NGC that will authenticate and grade coins for a fee. They may join coin clubs, subscribe to magazines, find favorite coin shops and websites and go to coin shows and auctions, all in the interest of building knowledge about coin collecting.
They learn the difference between the bullion value that most interested them as investors and the numismatic (collectible) value that can cause a coin to be worth hundreds or even thousands of times its face or melt value. Many U.S. pennies can bring several hundred dollars; Buffalo nickels thousands, rarer coins millions. In 2015, a guy dropped $4.8 million for 2 coins with a face value of 26¢, half of it for a single penny.
Collecting for Love and Money
Some coins are easy to find, others may take a major effort, but once the bug has bit, the itch demands to be scratched. You can meet interesting people along the way—and you can meet some crooks. The internet is full of them. Knowledge is power and forewarned is forearmed. But finding the coin you’ve been chasing forever can make you feel like Indiana Jones.
For a more in-depth look at making the transition into collecting, CoinWeek.com has an article about getting started. There are also links at the end to various collecting strategies, including one on jumping in at the $100-dollar level.
If collecting coins or paper currency is in your future, be sure to browse the collection of U.S. and foreign coins and banknotes available online from The Great American Coin Company®.