The Beginner's Guide To Collecting Coins - 9 Must-Have Tips
Coin collecting is a hobby that you can enjoy at many different price points (including free!) Follow these tips to set yourself up for success in building your first coin collection.
#1. Pick Something That Speaks To You
If you have started thinking about collecting coins, the first step you take is the most important one of all: Choose a coin set that you find really interesting. That's the first lesson in Coin Collecting 101.
There are many ways to collect coins besides the traditional sets. Some people collect coins from the different countries they have visited, as a reminder of their trip. Others will collect special proof versions of the coins minted in their birth year or marriage year. Some coin collectors enjoy the different wildlife coins that the Royal Canadian Mint and Perth Mint make every year.
The point is, there are as many ways to collect coins as there are people who collect them. Pick something that "speaks" to you, and coin collecting will be a relaxing hobby you can pursue for your entire life.
However, if you start buying coins hoping to resell them for a quick profit, you're gonna have a bad time. Most coins have to be held for years before they provide a good return. Treating coin collecting as a job instead of a relaxing hobby is a certain way to kill your enthusiasm, and your business scheme.
Don't have a bad time with your coin collection
(South Park, via imgflip)
Thinking like a collector instead of an investor is not only more enjoyable, it teaches you to spot a good deal. In the long run, you will make more money this way than trying to flip the latest hot coin for a quick profit.
It's a good idea to pick something inexpensive for your first coin set to learn the basics. The coin set with the best "enjoyment per dollar" is a Lincoln cent set. You can build a circulated grade Lincoln Memorial cent set for free by hunting through your pocket change. Another way to build your Lincoln cent set for free is to get rolls of pennies from the bank. Called "coin roll hunting," you never know what you will find. This is also a good way to find replacements for some of your worn coins.
With a little perseverance, you can have a popular coin collection without spending a buck!
A huge pile of Lincoln cents
Olichel Adamovich (Pixabay)
With just a little money, you can stretch your Lincoln cent collection all the way back to the beginning. The original "Wheat Ears" design, aka "wheat pennies," ran from 1909 to 1958. You may have already found some Wheat cents for free while coin roll hunting. You can jump-start your Wheat Cent collection by buying rolls from coin dealers, or online.
Don't feel restricted to pennies for your first set. There are plenty of inexpensive coin sets to collect. The Washington quarter set has more designs to collect than any other coin. There are more than 100 designs, with the 50 States and America the Beautiful quarters.
Buffalo nickels and pre-1965 Roosevelt silver dimes are also popular first coin collections. Jefferson nickels have the added bonus of collecting the 1942-1945 silver "war nickels."
#2. Start With A Short Date Range
Trying to build a complete run of a classic coin series for your first collection can be overwhelming. There is nothing wrong with having big plan, but it's best to narrow your focus at first, then expand from there. One way to do that while collecting your favorite coins is with a "short set."
A short set is a specific date range of coins that avoids the expensive key date coins. Short sets are built to include years that offer good strikes at an affordable price. A short set can be completed in a reasonable amount of time, giving a sense of accomplishment. They also provide a good foundation to expand your collection.
Popular short sets include:
- 1934-1938 date and mint set of Buffalo nickels,
- 1934-1945 Mercury dimes,
- 1941-1947 Walking Liberty silver half dollars, and
- 1922 to 1926 silver Peace dollars.
If your favorite coin isn't included in this list, check online. There are short sets for nearly every coin ever minted!
#3. Learn To Talk Like An Expert
Learning how to properly describe coins and coin collecting can go a long way towards being taken seriously at the local coin shop or coin club. Here are a few of the most important terms you need to know:
- Circulated: This is a coin that has been used as intended, to buy things. Circulated coins will show different levels of wear, with prices to match.
- Date Set: A date set contains one coin from every year that a coin was made. The mint that struck the coin doesn't matter.
- Date and Mint Set: This set includes one coin from every mint for every year a particular coin was made.
- Edge: The edge is called the "third side" of the coin. The most common coin edges are:
- Plain: The simplest type of edge.
- Reeded: Rows of lines around the coin. Usually vertical, they can also be diagonal.
- Lettered: Instead of lines, these edges have writing.
- Decorated: Instead of lines or letters, decorated edges have stars or abstract designs.
- Grade: Coins are graded on a scale of 1 to 70. A score of 1 (Poor) means that the coin is nearly unidentifiable. A score of 70 (Mint State 70) signifies a "perfect" coin that shows no imperfections, even under 5x magnification.
- Graded/Slabbed: A coin that has been submitted to a coin grading company. The two largest ones are Numismatic Guaranty Corporation (NGC), and Professional Coin Grading Service (PCGS). The graded coin is sealed in a rectangular, tamper-proof plastic shell known as a "slab."
- Key date: This is a coin that, due to rarity, is the most expensive and difficult of a series to acquire.
- Numismatist (nu MIZ ma tist): A coin collector. The hobby of collecting coins is known as "numismatics" ( nu miz MA tics).
- Obverse: This is the "heads" side of a coin. The obverse is where the ruler or leader is found on circulating coins.
- Reverse: The reverse is the back, or "tails," side of the coin. Since the reverse is not as important as the obverse, commemorative designs or artistic themes can be featured here.
- Type Set: A type set refers to the different designs that have appeared on a certain denomination coin. The dates and mints in a type set don't matter.
- Type and Mint Set: The type and mint set expands the type set by including one coin from every Mint that produced that design. Again, the dates of individual coins don't matter.
- Uncirculated: This is a coin that has never left the bank. With modern coins, it is one that has never left the Mint. Uncirculated is also known as Mint State.
#4. Pace Yourself
Going on a coin buying binge at a coin show, or in an online auction, is guaranteed to cause buyer's remorse. A time-tested way to stop yourself from going on an impulsive coin buying binge is to set a budget, and stick with it. Set a monthly or even annual budget for building your coin collection. This will help you carefully consider each coin purchase. Is it a good price for the grade? Does it fit in your collection?
That said, don't let your budget be a straight jacket. If you see a great deal, go ahead and spend the money.
#5. Learn How To Handle Your Coins With Care
One of the most important things to know when collecting coins is the damage your fingers can do to a coin.
Always only pick up a coin by the edge. This should also be on "page 1" of the Coin Collecting 101 syllabus!
Make sure that your coins don't slide around on top of each other or hit one another, as it reduces the grade (and value) of your coins.
Chance Agrella (Freerange Stock)
There are a number of ways to properly store your coins:
- Cardboard Flips: Traditional square cardboard "flips" have little windows of coin-safe plastic on each side, allowing you to see both sides of your coin.
- Plastic Flips: Plastic flips are pieces of flexible clear plastic with pouches on either half. This allows you to include a little card with all the info about the coin in one pouch, and the coin itself in the other.
- Pocket Sheets: Made of clear, flexible plastic, pocket sheets are made to be stored in binders. These sheets have a grid of pockets for storing coins
- Capsules: Capsules are hard, round, clear plastic coin protectors. More expensive than flips, capsules are used for pricier coins.
#6. Do a Little Research And Save a Lot
The most important thing you can do as a coin collector is know what a coin is worth. If you don't know what a coin is worth, you shouldn't be buying it.
The first step to learning a coin's value is learning how rare it is. The Red Book, officially the "Guide Book of United States Coins," is published annually. This should be your first purchase when you start collecting coins. It is indispensable when researching mintage numbers and key dates, which greatly affect a coin's price. However, the prices cited in the Red Book should only be used to calculate relative rarity of coins. These prices are woefully out of date, even when the book is first released.
Learn recent prices for the coins you are interested in. There are plenty of online resources such as the price guides at NGC and PCGS. Subscriptions to magazines such as Coin World and Numismatic News can be a good idea as well.
Jan Steiner (Pixabay)
It is vital to know how to grade a coin. A misgrade of only one tier can affect the price of a coin tremendously. The Official American Numismatic Association Grading Standards for U.S. Coins shows specific areas to check on every U.S. coin. The ANA conducts classes on coin grading at all major coin conventions. It is highly recommended that you attend one of them.
Speaking of coin conventions, go to as many coin shows as you can, to see as many coins as you can. Compare what YOU think the grade should be, to what the SELLER says it is. Also, view certified/slabbed coins, and try to determine why they received the grade that they did.
#7. Be a Smart Shopper
Whether online or in person, choose who you buy your coins from wisely. Beware coins sold online, unless they are from a reputable company.
Make the effort to visit several local coin shops to find one that you are comfortable with. Look for shops that are members of the Professional Numismatics Guild (PNG), the industry association for coin dealers.
#8. Join A Coin Club or Group
If there's a coin set you can collect, there's a group of people sharing a common interest in that coin. Many hobbyists exchange information about their favorite coin series on forums and social networks. These groups may be the best places to learn the details of collecting the type of coin you are interested in. The online forums at ANA, NGC, and PCGS are all good places to connect with numismatists with similar interests.
#9. One Final Tip: Take The Time To Enjoy Yourself
Don't be in a rush to complete your first coin collection. Going on a buying binge makes you more likely to make a poor purchase. Bide your time, and watch for rare coins at a good price.There's no feeling quite like getting a good deal on a nice coin. It's something you will remember every time you look at that coin.
Remember, there's no time limit to finishing your collection. Take your time, enjoy yourself, and welcome to the wonderful world of numismatics!
gaffer (Freerange Stock)
A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.
Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt.