A Beginner’s Guide to Investing in Coins

Millions of people invest in stocks, real estate, and annuities to try and get ahead. These investment vehicles aren’t terrible strategies either.

But you could make a lot of money and have a lot of fun by investing in coins.

The sphere of coins and collecting is vast, with different opinions and coins from all world holding values going into the millions. Don’t get lost in a sea of confusion. Use this beginners’ guide to investing.

Why Are Coins Valuable?

There are a few reasons that millions of coin collectors, or numismatists, spend their hard-earned cash on small metal rounds. Here are the three main reasons people collect:

  • Rarity
  • Precious metal value
  • Age

The main reason people collect coins is due to their rarity. When coins were first minted in ancient times, they didn’t have the production runs we do today. In fact, the quality control wasn’t great either.

After centuries passed, coins were destroyed, lost, and tarnished. A high-quality coin from a thousand years ago can be worth an endless fortune.

Are the coins made of gold, silver, or copper? The metal that makes up the composition of a coin helps determine the value. 

A gold coin is always going to the best most valuable based on precious metal standards. Silver is second, with every other metal being below that.

The older the coin, the better chance it has of being valuable. There are a couple of caveats to this condition. It helps if the coins are graded and rare.

Different Strategies

There are several different beginning strategies to help you get started. These strategies will help you save money and avoid headaches like scammers or opportunists.

Books and Videos

Before you start buying, do as much research as possible. This includes reading books, watching videos, and listening to podcasts about coins

Most information on numismatics and currency can be found for free. Don’t fall for exclusive content that makes you pay to learn more.

If reading isn’t your thing, check with a local coin dealer or fellow collector. They will have years of experience and knowledge to share if you ask the right questions.

Don’t forget to check out places like YouTube for millions of videos of collectors. Some have cool ways to obtain rare coins or just to share facts. But be wary of people speculating or spreading false information. 

Collect a Variety

Don’t collect just one type of coin. Make sure you have a variety of coins in your collection.

The main reason for this diversification is to hedge against the rise and fall of prices. In a similar way to stocks, different coins have price surges and lows. Sometimes the prices are affected by the value of precious metals.

One coin might increase in price because a national news story breaks out. Prices may drop because a once rare coin is now discovered to be pretty common. 

Like any investment, there’s always the possibility your purchase could crash to zero. Don’t let a bad investment discourage you from collecting. Numismatic investments are long-term gains, not short-term.

Visit Shops and Shows

Buying coins from the US Mint and other online retailers is a great place to start. But if you really want to find rare coins for good prices, you need to go to local coin shows and shops.

When a seller puts coins for sale online, they are against a sea of competition. When you visit a local coin show, prices are generally lower than anything you find online.

At shows, the sellers know they are competing against online retailers and each other. They want to make money and pass a treasured coin on to a collector who will value it.

Coin shops are the same way. Their prices are generally below market value. Additionally, they know a lot of buyers and sellers in the area. If you are looking for a specific coin, they will know exactly who to speak with.

Buy Certified

The coin world is full of fakes and phonies. Plenty of shady sellers exist trying to pass poor condition coins off as being in good condition.

A way to be certain a coin is genuine and in a specific condition is by purchasing a certified coin. Two main companies grade and authenticate: Professional Coin Grading Service (PCGS) and Numismatic Guarantee Corporation (NGC). 

Different investors have their preferences for each company. There’s a large number of people who use third-party companies to have their coins slabbed and graded.

As you venture farther into the coin world, you’ll decide on what grading and authenticating companies you’ll use.

Different Coins to Start Your Portfolio

There are several coins that new investors should start buying first. These coins aren’t overly expensive and hold their value through time.

Silver Eagles

The American Silver Eagle is a silver coin with a face value of $1. The mint started producing Silver Eagles in 1986, and the coin is popular due to the design and silver content.

Investors and collectors alike buy these coins due to their affordable price points and large supply.

Depending on the silver spot price, these coins can cost anywhere between $20 and $30. A top-graded American Silver Eagle coin can price out at twice the amount.

If you have a Silver Eagle with a limited production run, the coin is even more valuable. 

Buffalo Rounds

While not technically coins, a one-ounce silver buffalo round is a great investment. Not only are they comprised of precious metal, but they have the classic buffalo nickel design.

There are several different kinds of silver rounds out there with different designs, but the buffalo round has developed a loyal and fierce following. 

If you time your investment right, you could sell the buffalo rounds when silver spikes and people pay more than the spot price because of the design. Like a true investment, you’ll make money by simply holding the round.

Gold Liberty Head

Gold coins can cost a little more than your typical coin. But the gold isn’t what makes it valuable. These coins were widely used in the 19th century and the beginning of the 20th century.

The popular versions have a face value of $20, but please don’t sell one for this price. Due to their popularity and rarity, you can purchase a gold liberty head double eagle for about $2,000.

Some of these coins can cost a million dollars, depending on the year and grade. You won’t be buying a million-dollar coin soon, but holding on to the gold liberty head coin will give you high returns after several years.

Wheat Pennies

These coins are perfect staples of Americana. Not particularly rare, they are also not expensive.

But they are still good investments. 

Wheat pennies, or Lincoln pennies, look like the pennies we have today, but it has two stalks of wheat on the reverse side. Unlike the pennies struck today, they are made of copper.

Copper isn’t a precious metal, but it is still expensive. As time goes on, the value of copper will increase, as will the coin.

You should know that some wheat pennies are rare because of errors and mistakes. In 1943 during WWII, the US Mint produced steel pennies to help with rationing.

Before they started the steel production, they made a few copper wheat pennies. No one knows exactly how many were made, but they are extremely rare and valuable.

So the next time you get change at the grocery store, take a few seconds to scan through your pennies.

Canadian Maple Leaf Gold Coin

You might have to go north of the border for this coin. The Canadian maple leaf one-ounce gold coin is an investor’s dream. 

The reason it is a great investment is gold purity. Most coins have several metals along with the gold dropping the level of purity. You might see copper or zinc mixed in.

Gold Canadian maple leaf coins have a purity of 99.99%. It’s rare to have a coin with this purity – even in the United States.

If you get this coin graded, it might be worth thousands (in American dollars) depending on the condition. Remember, you’re not just going to sell this coin to other investors. You might be selling this coin to a collector willing to pay a premium.

Is Investing in Coins Right for You?

You don’t have to become a real estate guru to make money from investments. Investing in coins is a way to build your portfolio and generate wealth.

You can navigate the beginning of your coin journey with this guide.

Are you a curious mind that likes to learn all sorts of subjects? Keep reading our articles on other how-to topics and guides.

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