Did you know? The rare coin market is now worth more than $4 billion. With millions of people collecting coins, you’re probably looking forward to doing it. This article will discuss how to start coin collecting.
But before we get into the specifics of how to start coin collecting, there are a few things you must know.
How to Start Coin Collecting: Important Things You Must Know
From investing to having pure fun, people collect coins for various reasons. Coin collection of currency, including coins, is called numismatics. Numismatics also involves the study of currency to reconstruct history.
In particular, numismatics involves studying the following:
1. Level of trade
2. Means of communication
3. Confirmation of oral traditions
4. Economic life
5. Ancient civilization
Numismatic is rewarding. It offers something for everyone. Some collectors see coins as pieces of artwork. Others appreciate the history behind coins. Some see coin collecting as a way of life.
1. Error Coins
Error coins are rare and expensive. An error coin is different from others of its kind, because of its flaws.
2. Proof Coins
Proof coins have perfect designs. They are expensive and specially minted for collectors.
3. Brilliant Uncirculated Coins
These coins have never been in circulation. They’re slightly lower than proof coins. Nevertheless, brilliant uncirculated coins have an adorable design.
4. Commemorative Coins
They are issued to mark an event or pay tribute to influential personalities.
5. Bullion Coins
Bullion coins are crafted from precious metals such as gold, platinum, and silver.
6. Ancient Coins
These coins date back to the Roman empire. They are historical and often handmade.
7. Circulating Coins
These coins are in circulation for daily use.
8. Worldwide Coins
These are coins made in countries outside the US.
You can join local coin clubs if your area has some.
Most clubs meet twice a month. Collectors often auction coins in such meetings. Plus, you can make friends within coin clubs.
Local coin dealers are often knowledgeable about coins.
To find the right one, ask con club members for recommendations. A coin dealer is likely to be a club member as well.
On the downside, not all coin dealers are for real. Some of them are scammers, so be careful who you trust.
Coin shows are another place to find coin collectors.
These shows usually feature coin exhibitions, auctions, and workshops. So the next time a coin show is held near you, join it.
The American Numismatic Association conducts seminars that coin collectors look forward to.
Coin seminars are usually spearheaded by experts. Plus, you get to ask any questions you might have about coin collecting.
There are 3 ways to purchase coins― the internet, coin shops, and coin dealers.
Purchasing Coins Through the Internet
The internet is filled with many coin collectors. From Facebook groups to forums, your options are abundant.
However, you have to be extremely careful about buying coins online. Since you cannot hold the coins before buying them, ask for as many pictures as possible.
Another option is to set an appointment online and meet the seller in person so you can inspect the coins.
Purchasing Coins Through Shops
Coin shops are a safe place to purchase coins. There are specialized shops focusing on coins only. Many pawnshops sell rare coins as well.
The biggest advantage of buying coins through shops is you can inspect them. Moreover, you can negotiate in shops. Some even offer discounts if you buy in bulk.
Purchasing Coins Through Dealers
Coin dealers know their stuff. They are often good at analyzing coins. Thus, you won’t have to worry that much about the coin’s authenticity.
However, not all coin dealers offer documentation. This is understandable since the coin industry is not totally regulated.
On the other hand, if the coin costs thousands of dollars and has no documentation, think twice.
Evaluating a coin collection is crucial. You don’t want to spend money on coins only to find out that your coin collection can’t be worth more.
To correctly evaluate a collection, consider the following:
1. Coin Grade
The price of a coin is directly proportional to its grade. Coin grade depends on the state of preservation.
For example, a 5 pesetas coin from 1876 usually has a low coin grade. Consequently, its selling price is low.
However, if you have the same 5 pesetas coins of high grades, the price will be higher. More will be interested in buying them because they’re preserved better.
Here’s an explanation of the grading system of coins
VF = almost new and circulated
F = highly in circulation. Some parts of the coin are not highly visible.
UNC = a coin that did not circulate
FDC = first coins struck with new dies
EF = minimum wear, minimum signs of circulation
2. Coin Rarity
A rare coin is possessed by the very few. The more rare a coin is, the higher is its value.
A coin can be rare because of two reasons. First, only a few of its kind exists. Second, only a few of that coin was preserved.
Coin rarity depends on the state of the coin, the portrait on it, and the material it’s made of. For instance, a low-quality coin can be rare, but that doesn’t mean it’s expensive.
3. Commercial Value
The current price of a coin depends on its commercial value.
In particular, a coin’s commercial value is determined by:
How is the economy?
Are many people willing to buy?
Is the coin in high demand?
The answers to these questions, among others, show a coin’s value.
In some cases, a rare, high-quality coin may be cheap. It’s because of the low market value at the time of sale.
How To Start Coin Collecting: 10 Important Steps
Here are 10 simple steps on how to start coin collecting:
How to start coin collecting in 10 easy steps
- Educate yourself about coins.
Becoming a successful coin collector doesn’t happen overnight. Hence, you must take time to study.
Educating yourself about coins doesn’t just include studying coins themselves. It also includes analyzing market dynamics and creating a database of prices.
The best ways to do this are reading books, subscribing to periodicals, and joining a numismatic association.
- Find your specialty.
After studying about coins, you must find your specialty.
Choosing a specialty allows you to make better purchases. It also lets you find a common ground with your dealers.
Moreover, it saves you time and stress. Imagine not having to analyze every coin you encounter.
- Be passionate.
What makes coin collectors successful? Passion.
Passion drives people to persevere despite the challenges. Coin collecting comes with a lot of challenges.
Remember, most coin collectors make huge profits because they buy coins out of passion.
They don’t buy it to simply make money. They buy it because they love what they’re doing.
- Be patient.
Aside from passion, patience plays a huge role in successful coin collecting.
As a beginner, you must not rush things. Don’t give in to immediate gratification. Be patient enough and know that great things take time.
Most coin collectors took years to be successful. They waited and worked hard to be where they are now.
- Connect with other coin collectors.
There are millions of coin collectors all over the globe. Connecting to a few of them greatly helps.
Networking is a crucial step in starting coin collecting. The right people will give you the advice you need.
Plus, the internet is filled with numismatic associations and coin collector groups. If your city has a local group, go ahead, join.
- Learn how to grade your coin collection.
While third-party grading helps beginners, you must eventually know how to grade coins by yourself.
Take note, nothing beats experience when it comes to coin collecting. Grade as many coins as you can. Attend auctions and showcases. Ask dealers about how they grade coins.
You can also enroll in grading classes offered by the American Numismatic Association.
- Develop your skills to become a coin connoisseur.
After learning how to grade coins, it’s time to take your skills to the next level.
Becoming a coin connoisseur means that you will be able to identify unique and precious coins. You will also be able to classify coins based on material and age.
However, becoming a coin connoisseur takes time and a lot of hard work. The top 5%
coin collectors are connoisseurs. This explains how they’re able to bring in huge profits.
On the upside, you don’t have to become a coin connoisseur to be a successful coin collector. Being a coin connoisseur is just a competitive advantage.
- Stick to quality over quantity.
In coin collecting, quality is better than quantity. After all, what’s the point of having many coins when none of them are highly valuable?
High-quality coins are scarce. As a result, they become more expensive over time. The longer you hold on to them, the more profits you can make.
On the other hand, low-quality coins are found everywhere. Due to inflation, their value decreases over time.
See the difference? If you’re just starting a coin collection, stick to the high-quality coins.
- Think about the long term.
Before you break even, the value of your coin must increase by at least 10 to 20%. That takes time.
Logically, you must hold your coin for at least 3 years. Some significant collections (e.g. Eliasberg, Pittman, and Norweb) were built in over 60 years.
Given these, you must think about the long term condition of your coins. Keep these data in mind when buying your first set of coins.
Remember, your coin collection is like a long-term investment. The longer you build them, the more valuable they’ll be.
- Get the best coins if you can.
We talked about quality over quantity. But how exactly do you get the best coins out there?
Examine the coins before you buy them.
If you don’t know how to, ask someone else to examine the coins for you. This is where your network of coin collectors come in. You can ask them for advice or referrals.
Moreover, keep in mind that you have to be wise with any purchase you make.
Starting a Coin Collection Is Not Difficult
Now that you know how to start collecting coins, when are you doing it? Leave a comment below!
Collecting coins can be enjoyable as long as you act wisely and stick to the rules. When in doubt, come back to this guide on how to start collecting coins.
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