5 Reasons to Collect Coins and Tips to Get Started
Coin collecting is an interesting pastime, and it can actually be a way to earn some money on the side if you do it right. And even if you don’t ever really make money from your coin collection, starting one can be a fun hobby. So why should you start collecting coins? And once you decide to start, how do you get going? Read on for tips.Banking Deal: Earn 1.40% APY on an FDIC-insured money market account at CIT Bank.
Why Collect Coins
When you think about collecting coins, maybe you automatically assume it’s a hobby only rich people can afford. But that’s not really the case. Many times, you can start a coin collection without spending much money. And you may come across some rare samples just by going through your daily change.
If you’re looking for some reasons to start a coin collection, here are a few of my favorites:
1. Earn Some Side Income
Unless you’re a really experienced coin collector, you probably aren’t going to create a full-time income from buying and selling rare coins. But you can generate some income on the side, especially as you get good at spotting good deals that you can re-sell at a higher price. It’s especially nice to earn a side income from coins you happen across in your everyday life, which often just wind up as change in your pocket.
The key to earning money from your coin collection is having a goal for your buying and selling and understanding the product deeply. We’ll talk more about this in the getting started section.
2. Learn About History or Other Cultures
Many Americans prefer to collect American coins, and there’s plenty to learn from them. For instance, you can learn about different times in history when coin designs changed. Or you can learn interesting facts about mistakes that made their way into coin stamps for whatever reason.
You can also use a coin collection of foreign coins to learn about other cultures. Most coins feature culturally prominent individuals, and learning about their background can be interesting. And you can also learn about other symbols from both your own culture and those of cultures around the world. Coin collecting can be an excellent catalyst for learning all sorts of random and interesting facts.
3. Enjoy Their Beauty
The intricate detail you’ll find in many coins is truly stunning. Older coins can also include even more detail and fascinating symbols from history. These are an artistic collectors item that can be easily displayed in your home even if you don’t have a ton of space available.
4. Rise to a Challenge
Sometimes the catalyst to coin collecting for kids is the drive to meet a certain goal. For instance, maybe they want to collect all the state quarters. Coin collectors have other sets that they aim to collect, as well. And getting all of the coins from the same set can be an interesting and fun goal to work towards.
5. Share a Hobby with Your Kids
Maybe your kids are into things that you’ve never really considered trying. If you’re looking for a point of connection, collecting coins together can be fun. Anyone can get started, and you don’t need a lot of money or time to do it. But you can work together to learn more about old coins and their history, to figure out which sets you want to try to collect, and to collect the coins together.
If you combine this with reason number one, you can even help your kids set up a unique side business that could help them fund their college education or beyond.
In short, collecting coins can be a fun and interesting hobby that may also help you earn money. If you’re thinking about getting a collection started, go for it. But before you do, read on to find out how to getting started collecting coins.
How to Start Collecting Coins
Before you rush out and start sorting through your random pocket change, take some time to figure out how to start collecting coins. Here are the first steps I’d suggest.
Start with Some Research
If you know absolutely nothing about coins or coin collecting (formally known as numismatics), take some time to do research. Learn about why and how people collect coins, and figure out where and how they trade and sell them. Pay attention to things like how individuals have formed their coin collections, which often begin with a theme or with a particular type of coin. Just a bit of digging online can lead you to tons of numismatics blogs for beginners, which are a great place to start.
Choose a Theme or Type
Once you know a little more, give your collecting some direction. Maybe you’ll start with something super basic like collecting a quarter from each state. Or maybe you’ll go with something a little more intriguing, like a particular type of penny or pennies from a particular set of years.
You don’t have to choose something difficult to fulfill. In fact, it can be fun to start with a collection you might be able to grab from your own pocket change. If you choose a type of collection that many others are already working on, you may have to be extra patient to find coins you can afford to purchase at first. So just keep this in mind.
One easy collection for kids is to start a cents collection. This one has you collect a coin with Lincoln’s image on it from every year it has been minted since 1909. You can get coin folders specific to common collecting goals like this one. And this is a fun one, since you can do it mainly from sorting through pocket change.
Another option is a U.S. type set. This collection contains a representative coin from all of the types of coins ever put into circulation in the U.S. You can also define these sets by century or years. For instance, you might collect a 20th century cent, nickel, dime, quarter, half dollar and dollar since 1900.
A full type set would go further back and have a deeper collection, including specimens from each design since 1792. This would include half-dimes, three-cent pieces, gold dollars, and eagles.
Learn About Valuation
At first, you may have to trust expert opinions when buying coins. But as you collect, you’ll get a better feel for the values of various coins. There are four main factors of valuation:
Condition: The first part of this equation is pre-circulation. That is, what happened to the coin at the mint, including how the design was struck and marks other coins left during transportation. The second part is post-circulation. Coins with more lustre and less wear and tear from circulation are worth more. Many companies provide the coin with a 1 to 70 score, or grade, that tells you exactly what condition a coin is in.
- Rarity: Most modern coins will never be rare. These days, the mint produces many items of each type of coin each year. Unless you happen to find a modern coin with a misstrike or error, it’s probably never going to be rare. Some older coins are fairly common, too. But the rarer a coin is, the higher its value will be.
- Bullion Value: Most coins are composed of multiple metals, which have a market value. For instance, if silver is worth about $15 an ounce and copper is worth about $3 a point, the bullion or melt value of a 1960 quarter is about $2.70. You should be able to sell a coin for at least its bullion value.
- Demand: Even fairly common coins can be worth more money if demand for those particular types of coins is high. Demand can be hard to predict. But doing some research online can help you figure out how high demand is for a coin at any given time.
Find Places to Get Coins
You’ll want to figure out where you plan to look for and purchase your coins, of course. For coins that are already valued, you can check out local dealers and online stores. But you can also just turn coin collecting into a treasure hunt by searching your own pockets and rolls of coins from the bank. Of course, there are no guarantees that you’ll get anything interesting even if you sort through hundreds of coins. But you just never know!
Buy the Best You Can
If your goal is to build a truly valuable coin collection, you should look to purchase the best versions of each coin that you can afford. The “afford” piece is key here, though. Make sure that you aren’t wildly overspending on this hobby by setting and sticking to a budget for it!
Collecting hobbies, unlike some other types of hobbies, require a lot of patience. It takes time to find the right coins for your collection or to find buyers when you’re ready to sell. So plan to spend a while researching coins and deciding on the right ones for your collection. And take time to understand the hobby thoroughly before you put your money on the line, of course.
Store Your Coins Properly
Whitman coin folders are a popular option for new coin collectors because they have holes for each individual coin. They don’t take up a ton of space but will protect coins from additional wear and tear. However, if you have more expensive coins, you might want to look into a more protective case like a coin album or individual cases for particularly expensive coins.
Some Potentially Valuable Coins to Start
Even if you don’t want to collect a full coin set, you might start casually looking through your change jar for a few specific coins that could be more valuable in the future. For instance, pre-1982 pennies and nickels are worth more in bullion weight than they are face value. Eventually, the Mint will likely change the composition of these coins to account for the difference.
If you already have a change jar, try to keep the following coins on hand, as they are likely to continue increasing in value, even just based on melt value.
- 1909-1982 Cent (95% copper)
- 1946-2011 Nickel
- 1982-2011 Cent (97.5% zinc)
- 1965-2011 Dime
- 1965-2011 Quarter
- 1971-2011 Half Dollar
- 1971-1978 Eisenhower Dollar
- 1979-1981, 1999 SBA Dollar
- 2000-2011 Sacagawea Dollar
- 2007-2011 Presidential Dollar
It may seem silly to collect some of these coins, which are relatively common these days. But if your parents and grandparents had held on to silver dollars and half-dollars, they would have passed down some valuable coins after the alloys for these had changed. It’s likely then, that you can do the same for future generations.