Turning your passion to a source of income is probably one of the best things that you could ever experience! So, in our case, what about turning coin collecting from a simple hobby to a straight investment opportunity and solid source of income…
… So, is coin collecting a good investment? This depends on 2 factors, how solid and unique your collection actually is, and how experienced you are when it comes to buying, selling and trading coins! If you are confident about those 2 factors, then go for it, otherwise, you probably should continue considering the activity as an enjoyable hobby!
In this article I breakdown all what it takes to turn your coin collection into a real investment and source of income!
Coin Collecting, an investment or more of a hobby?
It can be both!
Investment collectors are looking to preserve coins as they appear currently. Many know that coins go out of circulation, but also that there can be great monetary value in these objects at some point in the future.
When collecting coins for investment purposes, users are inspired to find one of a kind pieces that are unique in some way. They could have an error, unusual damage, or merely an older mint, perhaps from a closed manufacturer.
Either way, coins gradually increase in value over time, which could make them an excellent and pretty easy investment.
Collecting coins as a hobby brings out the joy of the chase.
In fact, hobby collectors are much more likely to gather coins of their own special interest, as opposed to always pursuing a coin of significant future value … This, actually, makes the process much more fun!
Many would prefer to collect a coin that is out of rotation, or one minted in their birth year, focusing on what the coin will give them, as opposed to what the coin will get them at a later date.
My humble advice is simply to consider the activity overall as a hobby, a source of joy … then, when it makes sense and at the right timings; you may want to transition this into a source of income, maybe, a business!
Here is why Coin Collecting could be a great investment
1. Age of the Coin
Coins age as we do, however they are not produced nearly as frequently as humans are born. The age of the coin matters significantly over time, especially as we change the way currency is exchanged in our cultures.
The age of your coin can offer a tremendous value jump, and you might not even know it!
Coins cleaned and preserved, without eroding substances on their surface, have the ability to withstand the long test of time, and only increase in value as time goes on!
Ancient coins are generally highly valuable because of their age!
2. Material of the coin
Coin materials are also great contributing factors to the value that it might hold. This can also make them an incredibly valuable investment over time, as we adapt the materials and metals used to build sturdy coins and currency which will last.
There are coins made of a wide variety of substances and metals, from throughout time. Some of the most popular substances are gold, silver, bronze, copper, and nickel.
It’s likely that we will face a change in the way that physical currency works, so it’s wise to consider collecting these coins now, paying special attention to material.
Gold coins generally hold the most value!
3. Rarity of the coin
Coins value in rarity for a number of reasons, some of which might surprise you. They might be rare for a number of reasons, including:
- Production run
- Materials used
- Errors during mint
- Outdated/expired form of currency
It’s likely that any combination of factors can contribute to the value of a particular piece of currency. You might find a coin that hold little to no monetary value, but it belonged to someone important or noteworthy.
Perhaps your coin was made with significant errors, or a sneakily added tweak. What makes your coin unique can be the key to giving it value.
Uncirculated coins are generally valuable because they are quite rare!
You can learn more about collecting rare coins.
Best Coins you should start collecting
Some of the best coins to collect are not especially difficult to acquire, however many are commemorative pieces which represent a set place and time in history.
If you’re looking to get started with a new collection, here are some top recommendations to get you on track!
Many kinds of pennies are a popular choice for collectors, and they’re seemingly everywhere and easy to hunt downs.
One of the greatest things to look out for, are pennies with doubly stamped faces, (called a doubled or tripled die) …
… These coins typically have a greater value than the perfectly pretty, shiny version. Some go to the bank to ask for rolls of pennies in exchange for the same amount of cash; this gives you 100 coins for the price of a dollar, and you’ll never know what treasures you’ll find.
- 1984 Lincoln cent
- 1992 imprint with a close “AM”
- 1970 Small date varieties
- 1909 Lincoln Cent
- 1914 Lincoln Cent
2. Commemorative Dollars
Dollar coins are made with limited mintage, and are generally a good way to start!
There are quite a few options for those looking to collect commemorative dollar coins. Some favorites to look out for include:
- 1878 Morgan Silver Dollar
- 1851, 1852, 1873 Liberty Seated Silver Dollar
Are silver Coins a good investment?
Definitely Yes! Silver coins are a good investment in today’s culture, especially as we’ve moved away from silver as a currency in most forms.
Some find that silver coins are more enjoyable to search for, like a diamond in the rough.
Silver coins also hold the ability to be worth their weight in value, should a time come when that attribute were to be necessary.
They are a great addition to any collection, and worth the long term investment, especially given the projected spike in silver costs over the next few years.
Coins in mint condition are particularly valuable, so keep an eye out.
What about Proof Coins?
Proof coins are among the most rare and desirable of collectors around the world!
In fact, they are created to show the greatest potential of what a coin should look like. It is generally made from high quality metals, with superior finishes and detailing, as mass production of coins can collectively be of lower value, due to quality.
Proof coins are always going to be a wise investment, and they will ultimately age well, especially when kept in a pristine condition.
These coins are a generally beautiful addition to anyone’s collection, and are highly desirable both now, and in the future.
How does the collected coins value fluctuate?
1. For Antique Coins …
Antique coins can fluctuate in value for a couple of reasons…
… Indeed, many have found that some coins are more widespread in access than others. There were often relatives and grandparents who held on to coins which could be extremely valuable or rather run of the mill in terms of current desirability.
Some ancient coins are also fluctuating in value due to the current demand for other coins. One might have discovered something new or intriguing about a coin, which cements its place in the narrative, and increases demand.
In general, antique coins will fluctuate in value, and that could a good thing. It means that there are chances to collect coins which might not be at the forefront of a collector’s list, but also that there might be a time where those coins are in great demand…
… Guess who will have a decent few? It could be you and your collection.
2. For relatively recent coins …
Recent coins can dip and fluctuate even more than antique coins!
This is due to increased availability, especially for coins is that have been minted over the last 50 or so years.
In addition, when a coin is newly minted, there are many who wish to preserve the pristine condition of said coin, and there are truly no shortages those looking to keep the coin in its original, uncirculated condition.
This can cause a bunch of recently minted coins to hold a lower value, as there is little to no need for their collection and preservation.
They currently do not hold any historical value; however this will obviously change as time moves forward.
Recent coins are still worth the investment, however, because they allow new collectors to gain access to currency, without an overhead, additional costs associated.
Coins as we know it might soon be a thing of the past, as digital currency evolves, and collecting the coins from today might one day be just as valuable as the coins of we’ve collected from our own history.
Don’t consider Collecting Coins as an investment if you are a novice!
There’re those who consider this activity to be an investment strategy. This is not the worst idea, however the return on investment is participating in an incredibly long, far away bet.
Collecting coins as a novice is encouraged, however currency doesn’t quite work like a get rich quick scheme. It isn’t worth the investment to collect currency in order to get a quick return.
Nevertheless, if you are planning on keeping and growing their collection over time, it might be worth a bigger investment up front…
… Still, no plans or hopes should be set upon a plan to receive a big return. Many collectors commit to purchasing a decent amount of current currency, aware of the value of long term growth.
I would love to highlight the importance of getting started in this hobby following the right steps!
Mistakes to avoid for a good ROI on your collected coins
When searching for a return on your initial investment, there are a few mistakes that collectors usually are guilty of … Below few traps to avoid:
1. Anticipating a quick turnaround
Investing in general takes time; this applies to coins as well!
As much as we wish it were an easy, quick game, there are moments where your coins will not hold value like you know they could.
Resist the urge to sell or purge your collection quickly. A few, semi-rare coins might one day be more valuable than the “more rare” coin you might be itching to buy. Take your time!
Don’t necessarily sell to the first buyer who comes your way. Be aware of the market fluctuation and know when certain coins are becoming more popular.
2. Improper storage and documentation
Your collected coins should be stored in a ways that keeps them shining and in tip top condition.
Coin circulation is avoided when possible; keep your coins in places that don’t encourage friction.
Otherwise they might lose their value, thus a lower ROI!
3. Poor cleaning and preservation
If you’ve collected a rare or antique coin, it is definitely worth protection, cleaning, and proper preservation techniques!
When possible, give your coins great care, as their long term condition can prove helpful when gaining additional value.
I highly invite you check this coin cleaning guide; you will certainly be inspired to do what’s right for your beloved coins!
Take care of your coins, give them time, and watch them grow.
Hope this article has answered many of your questions and that you’ve learnt new stuff!
Obviously my aim here was to help you explore the possibilities to turn a hobby into a source of cash … Yet, my final thought on that is that you should start with it as a passion, then once you collection is solid enough you can think of it as a money asset!
Finally, I invite to check those beginner friendly coin sets to get started properly.