Numismatics 101: Coin Collecting For Beginners

Finance & Money Articles

Chances are if know what a numismatist is, that you are interested in coin collecting. For the beginning numismatist, there is a lot to learn about the world of coin collecting. You may have questions about what supplies you need to collect coins, where you can get interesting coins and how to value coins. In this article, you'll get the answers to these questions about coin collecting for beginners and some tips to get your own collection started.

Supplies for the Beginner Numismatist

You'll need some basics before you begin collecting coins. These supplies will help you to study and inspect coins, handle coins properly and display the coins in your collection.

Before collecting any coins, collect the following supplies:

• Coin holders. This is the first and perhaps most important item you'll need. A coin holder is where you will store your coins to prevent them from being damaged or lost. You may be tempted to use things like Tupperware or even old shoe boxes, but it is best to purchase something that is specifically designed for storing coins.
• Magnifier and light. These tools will help you view your coins up close to study the details. Lights that are designed for use with coins are typically incandescent. Fluorescent lights are considered too soft and Halogen lights are thought to be too harsh. Handheld magnifiers with a magnification power of 2X to 3X are appropriate for use with coins. If you want to see more detail, you may want to try jeweler's loupe, which has a magnification power of 10X to 15X.
• Gloves. Wearing gloves is important when handling valuable coins because the oils and acids from your skin may damage the surface of them. Many numismatists prefer cotton gloves, but you can also use power-free latex or nitrile gloves.
• Pad or soft cloth. Use a pad or soft cloth to prevent your coins from being dropped onto hard surfaces and damaged.

Purchasing these supplies prior to buying any valuable coins will ensure that you have the right tools to handle and maintain the quality of your coins.

Where to Find and Buy Coins

You can certainly start your coin collection with coins that come from your pocket, but if you're looking for coins that are more valuable and rare, you'll need to find a coin dealer.

Begin by consulting The Professional Numismatists Guide. This guide is created by a non-profit organization founded in 1953, which lists the most reputable rare coin and bullion coin dealers in the country. Members of the organization are required to abide by a strict Code of Ethics when buying and selling coins.

Before making any investments in coins, you should know the following marketplace factors:

• Price. It is critical that you know the value of the coin you are buying or selling. For example, gold coins have an additional fee above the price of the coin itself, also known as the "spot" or "melt" value because they are minted. The sovereign governments also charge a fabrication fee for minting the gold coins.
• Bullion versus Collector Coins. It is also important to be aware of the price difference between bullion and collector coins. Bullion price is determined by the "melt value," or the raw value of the precious metal. Collector coins may have additional value based on their rarity.
• Delivery. Your purchase should be delivered to you or an accredited depository that you choose within 10 to 14 days unless otherwise agreed upon. You should be weary of dealers who want to store the coins for you for a longer period or who do not make you aware of expected delays.

The Professional Numismatists Guide is a resource that you should take advantage of to ensure that you are doing business with ethical and reputable dealers.

How to Value and Price Coins

Learning how to value coins can be a bit tricky and as is true with any collectors item, there are unethical individuals who will take advantage of buyers who haven't done their homework.

You should first be aware that there is a difference between the price and the value of a coin. The price refers to the "retail price," which is what you can expect to pay when buy a coin from a dealer. The value refers to the "wholesale price" or what a dealer would pay to buy the coin from you.

The following five factors help to determine the price and value of coins:

• Mintage. Mintage refers to the number of coins created and supplied to the marketplace. Most countries stop minting a coin at the end of the year in which it was created. The mintage affects the price and value because there is a limited number of coins available. The less coins available, the more valuable and expensive a coin becomes.
• Demand. Many different factors can determine the demand of coins. For example, the 50 State Quarters Series by the U.S. Mint created a demand as well as inspiring new coin collectors.
• Melt Value. The value of the precious metals used to make a coin help to determine the value of the coin overall. This means that the melt value of gold or silver coins can change as the price of the raw metals change.
• Grade/Condition. Uncirculated coins are considered to be the most desirable grade or condition. Just as with other collectors items, the more pristine the condition of the item, the more valuable it is.
• Dealer Stock. The value and price of a particular coin can be affected by the number of that type of coin the dealer has in stock. Even the price and value of uncirculated coins can decrease if a dealer has several of them.

Coin collecting can be both a valuable and enjoyable hobby. Use the tips and information in this article to become a numismatist today (and look around for ancient coins for sale!).

3 October 2014