People collect all sorts of things for all sorts of reasons. From bottle caps to Beanie Babies, for fun and for profit, collecting can be a rewarding hobby, a rewarding business, or both. And few collections are as fascinating—and potentially profitable—as coins.
To be sure, collecting coins for financial gain has its risks, just as collecting fine art or any other market-sensitive things can be, but few things have shown as reliable long-term gains as rare coins, and they’re easier to find than Picassos in attics. But collecting for profit is only one of many reasons to become a numismatist, as students of money are known. Let’s look at some.
Collecting for History
Coins are great windows into the history of nations and the world. They’ve been around for thousands of years, originating in Asia and the Middle East. Of course, ancient coins in good condition can be quite expensive, but if rarity and condition are less important to you than the coin’s uniqueness, it’s not that difficult to assemble a historically significant collection.
You can also collect coins of specific nations, eras or denominations. For instance, a collection of U.S. dollar or cent coins can give an interesting look at the history of the U.S. and how it has been reflected in its coins.
Many nations have minted commemorative coins, both in pure gold and silver and in less expensive alloys. The U.S. Mint, for example, has produced several affordable commemorative coin sets including the State Quarters series and First Ladies commemoratives along with coins celebrating important moments in the country’s history. There are also several coins memorializing important events and persons in U.S. history. Many are directly available from the mint, and a secondary market exists for them, as well.
Collecting for Memories
One of the most popular reasons people collect coins is to commemorate important personal or family events. Birth year coins head the list with single coins like quarters or full-year sets the best sellers. They’re available as inexpensive circulated coins, high-quality graded samples, proof sets, or pure silver or gold collectibles. Weddings, anniversaries, holidays and other significant life events are also popular reasons to give or save coins. Coins are also great mementos of travel.
The Royal Canadian Mint has produced a series of six multi-colored 99.9% fine silver Star Wars commemorative coins. They also have dozens of coins for gift-giving ranging from birthdays to Disney characters to wildlife and hockey teams. Other countries also have active commemorative coin programs such as Chinese Panda coins and Australian Kangaroos.
Collecting for Profit
If profit is your motive, there are several ways to approach coin collecting, some riskier than others. Short term scores are the toughest to make. It takes a lot of knowledge and an equal amount of luck, plus a willingness to lose on some of your bets.
To make money quickly, you need to guess right, find bargains or stumble across a valuable coin in an unlikely place.
Most collectors look to longer term appreciation, acquiring the rarest and best quality coins they can afford and waiting for them to grow in value. If they can’t find or afford a top quality coin, they often get the best they can and hold it to trade or upsell later. They know what to buy and how to buy it and use that knowledge to build a collection that grows in value with time.
Other collectors buy coins for their bullion value as well as their collectability, anticipating higher prices for silver and gold as well as collectible value to give them a double chance at appreciation. Gold and silver prices have been relatively low the past couple of years, so now is a good time to buy before prices start to climb again.
Collecting for Fun
Unless you want to become a coin dealer, your best bet is to collect coins because you like it. The reasons can be many, but ultimately, they come down to simply enjoying collecting. True, it can be a profitable hobby, but much of the joy of collecting comes in the thrill and satisfaction of the hunt.
Regardless of whether you’re a seasoned collector or just getting started, The Great American Coin Company® has a wide selection of collectible coins and currency. Our best advice is to buy the highest grade of any coin you can afford, consistent with your collecting goals. Then, as your collection fills out, look for opportunities to upgrade as you keep your eye on the current market.
