I got burned by taking "expert" advice on coins. Learn from my mistake!
Many people get into coin
collecting, with the idea their collection will some day make them rich. This
does happen, but more often than not the collector gets burned and suffers a
substantial financial loss. This is entirely avoidable, and this article will
explain what you need to do.
Begin by obtaining
books on coins and coin-collecting. Your goal here isn't to figure out how
you can make the most money. Your goal is to see what kinds of coins appeal to
you and get a feel for the difficulty (and expense) involved in obtaining those
Next, you will want to see some actual coins. Do you know
somebody who has a coin collection? If so, that's a good start. See what's
involved in cataloging those coins. Ask this person to tell you a little
something about each coin. If s/he cannot, then this person isn't a real coin
collector. To find someone who is, find a local shop that deals in numismatics
(buys and sells coins). Plan to spend a little money, but not much. Just enough
to get your feet wet. Whatever coins you buy probably won't start the collection
you will ultimately go with.
Patronize this store a little and introduce yourself to
people. Tell them you're just starting out and are trying to get an idea of what
kind of collection you're going to build. Ask them about theirs. Listen actively
to people who respond to these inquiries. You'll be able to determine who is
really knowledgeable, and you'll start building relationships and trust.
As you make coin collection contacts, you'll be given
opportunities to see coin collections. You'll also learn about coins in general
and specific coinages.
Have you noticed that we have not yet talked about mail
order coins, buying coins online, or getting Franklin Mint coins? The reason is
those outlets are rife with traps for novice coin collectors. After you get a
few years of specialization under your belt, you might consider buying coins
sight unseen. But typically, you aren't going to find true enthusiasts doing it
One of the traps for nascent coin collectors is the "rare
gold coin" scam. This is often done by telephone. The caller identifies himself
as being with some prestigious-sounding firm that has, amazingly enough, a huge
collection of extremely rare coins (your first clue there's a problem). The
market is poised to take off, and you can probably double your money in eight to
ten months. So these coins are going for only $600 each. Did you want to place
an order for 100, or start smaller at only 50?
Geez, how nice of them to give up THEIR opportunity to
double their money in less than a year. Aren't they stupid? Sure, of course
you'll take those coins off their hands. Is it possible to get more? "No," the
agent tells you, "this is an exclusive offer. Don't be greedy."
So you take delivery of the coins, and sure enough they
are gold coins with an old date on them. The day they arrive, though, you get a
call from the agent asking to buy those back. "But I just got them," you say.
"Yes," the agent says, "but my boss is all over me. Those coins are worth $750
today and they are poised to rise even more in the next few weeks." You tell him
that's too bad, and he reluctantly concedes that, after all, he sold them in
good faith and that's just the breaks.
Now with this good news, there's no reason to see how much
those coins are actually worth. Why would a guy offer to pay $750 for a coin you
just paid $600 for?
The following week, you get another phone call. Now the
agent tells you the coins are $871 as of this morning. You smile. The agent then
says, "Look, I know you want to ride those coins to the high profit that they
will achieve. But I have another deal you might be interested in."
Gee, is this guy a glutton for punishment? Yes. He tells
you these other coins aren't quite the spectacular deal as the ones you bought,
and won't double in value for at least eighteen months. They're $125 right now
and he has 23 of them. But the firm needs to raise cash for an acquisition. Wow,
what a sucker this guy is!
Now you have two sets of very valuable coins that you're
going to sell at a huge profit. Months go by, and you don't hear from him again.
So you call his 800 number. It does not work.
Well, that figures. This guy was such a sucker, he
probably went out of business. Selling gold coins and not understanding how to
make money the way you do.
Then the magic day arrives. It's time to get the value
from those coins. You go to the local coin shop, and ask for an appraisal. The
dealer tells you these are junk coins that are gold-plated, and they're worth
about $4 each if melted down.
To avoid getting burned, know what you want to collect and
don't buy coins based on some dude's promises that you're going to make money.
Coin collecting isn't something people do to make a huge financial gain. It's
something they do because they have a keen interest in a particular coinage. If
they someday make money off it, that's a bonus.