When anyone begins to delve into the fascinating world of collecting coins, they begin to contemplate the sometimes confusing array of possibilities regarding where to start, what coins to research or buy, who to talk to about the various coin types, sets, mintage marks and histories, and so on. Like any new hobby, the pursuit will boil down to the individual’s passion, dedication, budget, willingness to learn, and when it comes to coins, a whole lot of patience.
Many newly-minted coin entrepreneurs set off on this captivating journey with the greatest of enthusiasm, their eyes on the rarest prize, and if they are shrewd enough, some even dream of making some kind of fortune, or at least a decent financial show for their efforts. Most collectors, however, just settle for the uncomplicated joys of holding these shiny tokens of historical legend, remnants and relics of enterprises and empires of old, or simply capturing the commemorative spirit for which, or whom, they were minted.
Like any novice entering this competitive and often complex field, they soon find out their level of knowledge seems to consistently fall short, and eventually they come to understand that the learning curve of numismatics is long, and almost always climbs, leaving plenty of opportunities for errors in judgment, and blunders to be made. Many beginning collectors find they make mistakes, as most have, when they start building or assembling their collection of coins.
A lot of these mistakes are certainly avoidable; some easily and some not, while others require an occasional consult with someone more versed in the tricks of the trade, or an expert long practiced in the numismatic arts. Here is a list of the top ten tips off the coin collecting iceberg, illustrating some mistakes that new collectors tend to make most often, along with some practical ideas or suggestions on steering clear of them.
'1. 'Where to Begin - If you think you may be interested in collecting coins, start by searching through your current coin stash, a sibling’s piggy bank, the glove-box in your car, the cracks behind the sofa, along with any change you get checking out at the grocery store. This is a very passive approach to the hobby, and costs absolutely nothing in terms of up-front investment. Testing the water in this fashion will indicate whether you detest examining coins, or you get very excited about collecting and all the possibilities. This is critical if you are looking at coin collecting as an investment tool or strategy. You also need to know if you possess a genuine interest or passion to sustain yourself for the long-term.
'2. 'Coin Collecting is at First - A Hobby - If you take the attitude that coin collecting and numismatics is a life and death, 24/7 struggle, then as a worthwhile enterprise, there will be little enjoyment to be found. Coin collecting is an exciting, informative, entertaining, and sometimes lucrative hobby, with a vast array of enrichment-filled and highly educational benefits. Always take the time to learn to understand, share, and appreciate the many wonderful and positive attributes that coin collecting can present. There are tens of millions of like-minded enthusiasts out there just waiting to be engaged across the world.
'3. 'Time is The Collector’s Best Teacher - Most of the truly impressive coin collections are accumulated over the span of decades, not months or a few years, and takes a dedication often throughout one’s lifetime. While anyone can complete a set of coins in a month or two, rushing the collection process is a good way to make mistakes, and those mistakes will do nothing but waste valuable time, and of course, your hard-earned money over the long haul.
'4. 'Create a Network of Authority – Build a trusted and amiable working relationship with a few well-informed coin dealers. New collectors need all the help they can get in order to compete in the market against experienced, long-time and coin-savvy dealers and collectors. Knowing the difference between ‘nice’, ‘average’, or ‘inferior’ quality is very important, and ensures your investment is always moving forward in value and diversity.
'5. 'Research, Investigate, and Learn about Coins - No matter what type of coins or currency you decide to collect, the more you time you spend learning and polishing your craft, the more valuable your collection will become. Learning the fine points about how to grade coins is the most important advice. Learn what particular classes and categories of coins look like. Learn about the specific characteristics and histories of the coins you have chosen to specialize in. Learn the fluctuations and economic forces that drive the value of coins and how the coin market operates.
'6. 'Coins Graded by Third Parties - Unless you happen to be buying low-priced coins or bullion-classed gold mintages, it is important to purchase professionally graded coins. It is a known rule of thumb that any ‘raw’ coins you come across will be either over-graded at the very least, or in the very worst-case scenario, will wind up being counterfeit, tampered with, dubiously repaired, or inexpertly cleaned.
'7. 'Coins Graded by The Best - There are two grading services that are the coin industry standard in the market, PCGS and NGC. Coins graded by other services will usually be offered at a discount or will be grossly over-graded or over-priced. Remember that not all PCGS or NGC coins represent the best value based on the grade.
'8. 'Over-investing is the Policy of Risk - When an acquisition plan is put together for purchasing any type of coins, enjoyment should be the primarily focus, not just the investment, and the coins should be purchased for a long-term strategy. Even if good coins are acquired from a very reputable dealer, there is a reasonable probability that if the need to sell them in a hurry presents itself, you may risk losing from 10 to 30% of your investment. If this sort of market risk is unacceptable, then buy issue types with a lower level of negative risk.
'9. 'Quality is The Key, Not Quantity – Over time, you will undoubtedly examine and speculate on which coin collections to purchase. Some collections will contain hundreds or perhaps thousands of inexpensive, inferior quality or low-grade specimens. There will certainly be those that comprise a small number of exceptional coins, and may not be necessarily beyond the reach of your budget. If you managed to put together a yearly budget of $10,000, for instance, there may be a more rewarding investment opportunity in acquiring a few extraordinary $2,500 to $3,500 coins, than shelling out $300 apiece for 30 specimens of mediocre value. Remember, when you come across a particular deal that seems too good to be true, it probably is.
'10. 'The Trends of The Trade - The problematic aspect of collecting coins as an investment is that coins tend to fall in and out of favor within the coin collecting community all the time, and for no discernable reasons. These fluctuations are often based on the economy as a whole, inflation, the value of precious metals indexes, or even something as simple as an impulse, or a new run of coins hitting the market creating attention in a particular series. If you are collecting a certain series or mintage category as an investment, and over time interest in this fades within the coin community, you could find yourself holding a slow or no-growth investment tied to the broad ‘trend’ of interest within the coin market as a whole.