Is Collecting Coins a Good Investment?

People of all ages and backgrounds collect an array of “things.”  Many different products
attract many different people.  So, why coins?

Coins, over the centuries, have been a source of wealth, commerce, trade and stability.  The original purpose of coins were purely for commerce:  A medium to purchase another person’s goods.  Coins were first
introduced around the 5th or 6th century, BCE.  For some collecting coins offer a sense
of fulfillment. It is fun & provides a neat way to learn about different monetary values,
designs and history.  While doing so, you’re also increasing your asset value.

When collecting coins correctly it can be profitable and add to your net worth.
Conversely, if done incorrectly and without knowledge, it can have the opposite effect.

So, why do coins have value?  Coins typically have two types of value:  their physical
denomination (5 cents, $1, etc.) and their numismatic value.  Numismatic value means
the coin’s external value above its base value of the coin’s metal content, silver, gold,
platinum, etc.  Hard to find coins, or low minted quantities will sometimes have a higher
(numismatic) value.

If you are interested in collecting or investing in coins, learn as much as you can before
and during your venture(s).  Understanding the market conditions, the shifts in popularity
and market conditions are paramount in making your hobby profitable, fulfilling and
rewarding.

Begin by learning how to identify “undervalued” coins.  First, identify the coin’s market
value.  Next, search diligently coins, for whatever reason, are selling below their price.
This is a sure way to buy with a profit already built-in to the coin(s).  With time, most
coins value will increase; mainly due to their age increasing which makes that particular
coin’s availability becomes scarcer.  But keep in mind, some coins will lose their
numismatic value due to market conditions and supply.  For example, let’s say you have
a pristine condition 1884 CC Morgan Silver Dollar Coin valued in the hundreds of
dollars. Then, one day a 95-year old coin collector dies and his collection of hundreds of
these same coins hit the market; your coin could go down in value.  This is what I mean
by learning as much as you can about the market.

Whatever you do, make sure you do it for enjoyment and excitement.  Make it fun.  It is
very rewarding and interesting to actually handle the physical coins while you’re
investing and collecting. Buying stocks and bonds is usually a good investment, but not
very exciting.  Coin collecting, on the other hand, tends to add excitement.  Enjoy and
share it with your family, kids, grandkids, etc.  Teach them your passion and coin
collecting and investing will continue for centuries to come.