Many people try to buy every coin issued in the year of their birth. If you’re younger than 50, all you have to do is buy the mint set and proof sets issued by the government in the year of your birth, along with any commemorative coins issued that year. If you’re older than 50, you may have to search a little harder — but that’s half the fun of collecting coins, isn’t it? If you really want to go all out, try collecting coins issued in your birth year by other countries!
Staying focused
After you decide on a collecting plan, stick with it. Focus on your goals, and remain immune to the siren call of other coins. I know that temptation is hard to resist, but to conserve your resources and be ready when buying opportunities arise, you must remain strong.
Though I recommend sticking with your game plan, I don’t want to say that you can never change your mind. But there’s an important reason not to get distracted — a little thing called transaction costs.
Transaction costs are the fees you pay to get in and out of the coin market. If you’re familiar with the stock market, you know a different name for transaction costs: commissions. When you buy a stock, you’re charged a commission based on the price of the stock; when you sell a stock, you’re charged a commission again. Because the commissions come out of your pocket, you must figure them into your cost of the stock and the amount of any profits or losses that you make when you sell the stock. In many cases, commissions can eat up all your profits or enlarge your losses.
Transaction costs are part of numismatics, but not in such an obvious way. In numismatics, transaction costs are baked into the buy/sell spreads (the difference between what a dealer pays for a coin and how much they sell the coin for). Buy/sell spreads are much wider than they are in stocks. The buy/sell spread on a $100 stock may be 50¢, for example, but on a $100 coin, the spread may be as wide as $30. Suppose that you buy a coin for $100. Ask the dealer what they’d pay to buy the coin back in a week. If the buyback price is $90, you’re facing a potential loss of $10. Therefore, the market has to go up $10 just for you to break even on the coin.
Thinking long-term
Most big-name coin collections were formed over a long period by people who had a clear vision of what they wanted to accomplish. By approaching coin collecting with the same attitude, you can make your experience with coin collecting just as enjoyable and successful as anyone else’s.
Two areas are of primary importance when you’re developing your long-term view: price trends and opportunities. If nothing else, these two areas offer hope for the collector who may otherwise decide that finding certain coins is impossible. Patience may be its own reward, but a long-term view in coin collecting can make or save you money and open opportunities that are most certainly real and possible.
Long-term price trends
Looking back at the history of coin collecting, you’ll see a general upward trend in coin prices. Just like everything else in the world, coins cost more today than they did 50 years ago. Down the road, you can expect higher prices, but you can’t bet on them.
Long-term opportunities
The longer you’re active in collecting, the better your chances are of acquiring the rare coins you need. Sometimes, the opportunity to purchase a coin is rarer than the coin itself, so you must be patient and ready to pounce when your coin finally appears. Never assume that a coin is locked away forever. Who ever thought that Johns Hopkins University would sell off the Garrett collection? Who suspected that I’d ever have a chance to bid on coins from Byron Reed’s collection or from the Joseph C. Mitchelson collection, or more recently, the fabulous D. Brent Pogue Collection in 2016? I simply don’t know what neat collections lurk around the corner. But the fact that strong hands have sold their coins in the past gives me hope that others will do the same in the future.
Chapter 4
Storing Your Collection Correctly
IN THIS CHAPTER
Assuming that it stays in circulation, an average coin lasts roughly 30 years during a regular journey from the time it’s minted to the day it wears out completely. Check the change in your pocket to see how much money you have dated before 1970. You likely won’t find very many coins, if any. Over the years, coins are damaged, lost, worn out, burned up, corroded, or dirtied, or they wind up in piggy banks and coin collections.
Given proper protection, a coin may last forever under perfect conditions. So although you may think you own the coins in your collection, you’re really just taking care of them for the next owner. By protecting your coins today, you benefit from the preservation of their value for yourself and future generations, just as you’ve benefited from the efforts of the collectors who came before.
The three most important things you can do to preserve your coins are
Protect them.
Keep them safe.
Keep them dry.
In this chapter, I show you how.
Holdering Them the Right Way
Choosing the right holder is an important first step in your collecting plan, because the cost of holders can be quite high, especially if your collection becomes large. Many types of holders and accessories are available for protecting, storing, and displaying your collection. Some holders are meant only for short-term storage and may actually harm your coins over long periods. Surprisingly, I’ve learned that some holders — the very ones that are supposed to protect your coins — are made with chemicals that attack and damage them. Other holdersare perfect for long-term storage and careful preservation of your numismatic treasures. Here are your options:
Cigar box (stogie storer): Inexpensive (unless you smoke high-priced stogies) and great for beginners, but lacks a certain level of sophistication and panache.
Paper envelopes: Traditional and inexpensive. A variety of sizes are available at your office-supplies store. Coin dealers sell small (2x2-inch) paper envelopes made for coin collectors (see Figure 4-1). You can write information about the coin on the outside of the envelope. Colors