How to Start a Coin Collection
About seven years ago I started collecting rare coins after reading Robert Kiyosaki’s recommendation to buy silver. Without knowing where to start at, I decided to buy coins that I saw my dad collect while he was growing up.
During my youth, my dad always had this old black vinyl box with red satin lining that he kept all his old coins, wedding rings, and other valuable trinkets (it always had a distinct musty smell in it too). Every so often I’d sift through his coins, not really knowing what I was looking, but admiring the heavy silver coins he collected. Primarily, he collected Morgan Dollars (1878-1921) and a few of the Peace Silver Dollars (1921-1935).
Dad never collected any gold coins, but had a small collection of coins from his youth, which he’d collected from various relatives, farm auctions, and from his dad. As I started my collection I recalled which coin was the most appealing to me, and that was undoubtedly the Morgan Dollar. I loved how heavy the coin felt, and the glimmer of the nicer coins.
Where to start?
Without knowing a thing about coins in 2006, I decided to start with something familiar, and that was any pre-1921 Morgan Dollars. I first started by searching Ebay.com and other local coin dealer shops. At the time I had no clue about ratings, and why someone would way more than $100 for a coin (seemed ludicrous!). So I started by just buying basic silver dollars for the silver content. I figured, if anything, that the coin was at least worth it’s value as a precious metal (since the Morgans are 90% silver), and I couldn’t get burned that bad. At the time I was buying most of my coins for anywhere from $11-$14, and I felt uncertain if that was a good price or not.
In starting your own coin collection, I’d recommend by starting out small. Go with something familiar. Something that appeals to you whether it is gold or silver coins. For me that just happened to be the Morgan Dollars. I’d recommend buying coins that were manufactured prior to 1965, since most of these coins have intrinsic metal value (gold, silver, and copper). Also, when Nixon took our currency off the gold standard in 1971, it made our currency a fiat currency. Overall, there are a lot of great coins made after 1964, but my suggestion would be to stick to precious metal coins.
Where to buy coins?
So you’ve made up your mind to buy a few coins, but at the same time you don’t want to get ripped off. A good place to start is online with auction sites, and evaluate what people are paying already. In your communities, it’s always a great idea to get involved a meet your local dealers and visit a coin show. However, be cautious of what you are paying, since most of the people have high overhead with a store front or coin show booth cost. Here are my recommendations for where to buy your coins from:
- Ebay (great place for beginners) – Ebay is always a great place to use as a research tool, and obvious place to buy coins. Using Ebay as a research tool? What? Ya…with any commodity, an asset’s value is determined by what someone is willing to pay. Start out by searching the coin you are interested in and select ‘Sold Listings’. These results will show you how much the coin or type of coin has gone for recently. By narrowing the search down to a specific year and mint location (for example: 1941 D Walking Liberty Dollar), then you’ll be able to find more applicable sale prices and value.
- Heritage Auctions (advanced collectors seeking rare coins) – from watching a lot of the PCGS weekly coin updates on YouTube, I came upon this great auction site. HA is known for selling a lot of the world’s rarest coins, and usually sells a lot of the higher end coins. HA just recently auctioned off the 1913 Liberty Nickel, which went for an astounding $3.172 million.
- Local Coin Dealers & Shows (great place for beginners to advanced collectors) – the area I live in has a lot of great reputable dealers, and numismatic raters. Most of the dealers in our metro area will sell ya coins at close to market value, but every once in a while you’ll find a coin shark. You can always spot them a mile away with the slicked back hair, and are always fast talkers. It’s almost like talking to a car dealer! So be careful! I highly recommend using maps.google.com and first search for coin dealers in your area (coin dealers near My_City_Name, State). A helpful tip in using google is to check out the reviews on the dealers in your area. This has definitely helped me stay away from places I could get ripped off at.
- Direct from the government (all investors) – if you are looking for post-1964 coins that are minted by the government, and are a basic bullion USMint.gov. I’m a huge fan of the American Eagle and American Buffalo gold bullion, which are on the higher end most people’s price range (currently $1700+), but is a solid option for all investors.
So this is the first of two posts I’ll be writing this week. On Wednesday, I’ll post the second post in this series in which I’ll talk about should I buy rated coins, numismatic raters, storage of coins, some of my favorite sites, and a few pictures of my collection.
In the mean time, I’d like to hear from some of our readers. Do you have a coin collection, and how did you get started? What are some of your favorite coins to collect and why? Also I’m interested in knowing where other people buy their coins and some of your favorite coin sites!