What is Coin Collecting and how can we start?
This is an overview for those that are exploring coin collecting out of either curiosity, or are finding themselves interested in starting themselves. It is written in an easy-to-understand and very generalized form to accommodate those who are just getting started. If you are an experienced Numismatist then this article is not for you. But keep looking around the Blog, we have those too!
Coin collecting is the hobby of acquiring vintage and new coins either by country, type, date, and/or the mint it was made in. The official name for Coin Collecting is Numismatics. Not all round minted metal things are coins however, so we have to understand that even though every coin collection may have a few, the term does not generally include medals (exonumia), and precious metal bullion.
What makes coins interesting is the history they represent, their value, and their scarcity. Coins of interest to collectors include beautiful, rare, and historically significant pieces. Collectors may be interested, for example, in complete sets of a particular design or denomination, coins that were in circulation for only a brief time, or coins with errors. Coin collecting can be differentiated from other hobbies as a systematic study of currency as a whole and within that, the history of the ebbs and flows of the societies that created and retired that their society depended on.
Humans have been using money since about 500 BC. That is the age of some of our oldest coins. Imagine what it would be like to see an example of every coin ever minted in 2,500 years! Countries have come and countries have gone many times over since then. In some of those cases, all that remains is the money they used. People collect coins for so many reasons, but it is all the history of these many coins record that is the most impressive to me.
Coin collecting is a very rewarding hobby. While it has been characterized as the “hobby of kings,” today one can put together high-quality sets for very humble sums of money. There is a niche for every budget. This includes searching through your own change or rolls of coins from the bank for certain dates and mints! YouTube is full of hyped-up stories about finding amazing coins in change. Each coin and piece of currency is made to every exacting standards so that it is not easily counterfeited. In a way, they are small metallic or linen pieces of art that represent the value system of the country that mints them.
Coin Collecting is not new. It has a rich history as a popular hobby for hundreds of years and can provide anyone with a lifetime of enjoyment. People who seriously learn about and collect rare coins over time amass sizable investments. We have seen coin collections be used as rainy-day funds, or as a way to diversify everyday household savings and investing. There are even some coins that qualify to be part of your IRAs. Coin collecting is one of the most liquid hobbies, by that we mean it is possible to find buyers for your coins at local coin shops or selling on platforms like eBay fairly easily. Especially when it comes to Semi-Numismatic pieces. More on that later, but know that it is a safe and educational hobby for people of all ages.
When one decides to collect coins, they must first decide what to collect. With the field of possibilities being so broad, we tell people one of the hardest parts of collecting is to pick something and then stay focused. It’s easy to say, but hard to do. Let me explain what I tell people to do when they are deciding where to start. There are many different ways to collect coins. Some collectors focus on a particular type of coin, such as US quarters or ancient Roman coins. Others collect coins from a particular country or time period. Still others collect coins based on their design or historical significance. It’s kind of all over the place and makes it so fun.
You might think collecting starts with finding coins to look through or buying what you like online. But that’s putting the cart before the horse. I tell everyone to get themselves a book first. Preferably something like “Guide Book of United States Coins” by Jeff Garret. Or what we all affectionally call the “Red Book.” In this book are photos and price guides for almost all US Coins ever minted. I then tell people to get a stack of Post-it notes and as you are turning through the pages, put a sticky note on any page that makes you go “wow.” When you are done going through the book, you will definitely have more than one sticker in the book. Then you just go through it again and again with the idea of removing as many of the Post-its, leaving just the ones you really, really like. Now you repeat that exercise until you have it down to hopefully one or two series, no one ever does this, but here is where reality starts to set in because taking on too much can give you a sense of “never being able to finish” so that could be a problem. Undoubtedly some of the sets are going to be more expensive to put together than you want to spend, others, maybe not so much. But you can see that going through the price guides on the ones you like can give you an idea of what it would cost to put together such a set. This may change your mind to something more attainable, or something harder, but in any event, it gets you going in a direction that is sustainable for what you want to accomplish and what you can finish.
Coins of interest to collectors include beautiful, rare, and historically significant pieces. Collectors may be interested, for example, in complete sets of a particular design or denomination, coins that were in circulation for only a brief time, or coins with errors. Coin collecting can be differentiated from numismatics, in that the latter is the systematic study of currency as a whole, though the two disciplines are closely interlinked.
So now you know what to collect, and it may not be just one series and that is OK. But the more focused you can stay, the less you will be tempted to start new sets before you finish the ones you start.
Next, read about the series you want to collect. Each section in the Redbook has a write-up about the series. Think of it as the story behind the coins. In these write-ups, you will learn what coins in the series are rarer, how to grade coins by their condition, and what was going on economically in the country at the time. You will also learn what a “well-struck” version of the series looks like if there are any varieties to look for and get an overall understanding of who designed the piece, how long it ran, and where it was made.
Now that you have bought the book, and selected a series, and read up on the series you have selected, are you now ready to start collecting? Yes!
Using the United States Peace Dollar series as an example you will find it takes 24 coins to complete the set. While getting all 24 coins is not all that hard. Getting all 24 coins in high-quality grades is very hard. I used this series as an example because you can put together a well-worn set for about $1,000 in a matter of days. A top-of-the-line set could take you years to put together and cost over $100,000 by the time you are ‘finished. It’s all that space in between that collectors get wrapped up in, so that is another reason for our advice to stay focused.
Here is a hint: Look at what the rarest coins in the series are going to cost to acquire in the grade you decide, and then plan the rest of your set accordingly. It is easy to find high-grade examples of more common coins in the series, much harder to do with the key dates. No one ever takes this advice, but we try and give it anyway. Start with the Keys! After you buy those, the rest do not hurt as much!
No matter what your interests are, there is a coin collection option out there that is perfect for you. So, if you are looking for a new hobby that is both rewarding and educational, coin collecting is a great option.
Parents, if you have a child interested in Coin Collecting you could not want a more wholesome and life-valuable hobby for your children. The Boy Scouts even have a badge in coin collecting.
Here are some additional tips for getting started in coin collecting:
Spend as much time as you can learning to grade. Buy a book on grading and compare the photos to the coins you see available. Look at as many PCGS, NGC, and CAC graded coins as you can. Go to auction viewings and go through the boxes one at a time and keep your thumb over the grade on the slab. Look at the coin all over and then guess the grade. Then move your thumb and see how good you get very quickly. These are coins graded by the pros, so you will be doing yourself the biggest favor and learning the best way possible.
Do your research. Before you start buying coins, it is important to learn as much as you can about them. This will help you to make informed decisions about which coins to buy and how much to pay for them. And buy only graded coins from grading companies that maintain population reports. That means, PCGS, NGC, and CAC.
Set a budget. Coin collecting can be an expensive hobby, so it is important to set a budget for yourself. This will help you to avoid overspending. It is better to save over time to buy the finest coin available than it is to fill the hole with whatever comes up on the market. Needless to say, patience is king.
Join a coin club. Coin clubs are a great way to learn more about coin collecting and to meet other collectors. They can also be a good source of information about upcoming coin shows and events.
Have fun! Coin collecting should be enjoyable. Don't take it too seriously and don't be afraid to make mistakes. The more you learn, the more fun you will have, and don’t make it all about the math! Some people will not buy a coin unless they can get it for an amount less than those posted on some price guide. Do not get stuck in that trap. That is called investing not collecting!
Just a note on Price Guides. Like any financial guide, it is put together using historical sales. What that means is what you are seeing in the price guide is by definition an “Average Price.” That means half the coins sold for more than that amount and half sold for more. What creates that range? Eye appeal. Beautiful coins sell for more no matter what the grades. So, if you are the typical investor-collector, you will spend the first couple of years trying to put together collections by buying coins at or near those prices. Hint, you will wind up with average coins. Nice coins do not just mean high-grade coins, it means appealing to look at regardless of grade coins. Buy and hold on to those at any price. They do not come around that often and I can recall countless customers who “wished” they had bought that coin when they saw it, but it was 10% over what the price guide says. That is dumb squared.
There are many different ways to collect coins. Some collectors focus on a particular type of coin, such as US quarters or ancient Roman coins. Others collect coins from a particular country or time period. Still others collect coins based on their design or historical significance.
Coins of interest to collectors include beautiful, rare, and historically significant pieces. Collectors may be interested, for example, in complete sets of a particular design or denomination, coins that were in circulation for only a brief time, or coins with errors.
No matter what your interests are, there is a coin collection out there that is perfect for you. So, if you are looking for a new hobby that is both rewarding and educational, coin collecting is a great option.
Here are some tips other tips when getting started in coin collecting:
- Do your research. Before you start buying coins, it is important to learn as much as you can about them. This will help you to make informed decisions about which coins to buy and how much to pay for them. Check Auction prices and look at other dealers Web Sites
- Set a budget. Coin collecting can be an expensive hobby, so it is important to set a budget for yourself. This will help you to avoid overspending. But instead of kicking yourself when you reach for a big purchase, just remember that if you have done your homework you will almost always come out ahead years later.
- Join a coin club. Coin clubs are a great way to learn more about coin collecting and to meet other collectors. They can also be a good source of information about upcoming coin shows and sales. While they are getting farther and fewer between, there are many areas on the Web where you can read and learn about a lot. Search around. See what you find.
- Have fun! Coin collecting should be enjoyable. Don't take it too seriously and don't be afraid to make mistakes. The more you learn, the more fun you will have, not to mention having a collection you can be proud of. Don’t make the mistake of just trying to fill holes. Instead, take your time and buy the finest pieces you can afford. Take your time, do your homework, and be prepared to spend a lot of time enjoying these miniature works of Art!