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Coin Collecting : A Beginner's Guide

Updated on August 14, 2013

It's Addictive!

Collection of objects has been a popular and sometimes profitable venture. In case of coins, it is both. Learn how to start out as a coin collector. Get a basic idea what coins to collect, how to store and keep them safe and clean and how to display them. We will also try to find what it takes to be a honest coin dealer and collector. Yes! Unfortunately there are a lot of fakes out there.

Rare antique coins have been known to fetch millions in auctions. However, you don't need to be a millionaire to be a coin collector. Many historically significant and antique coins are available at affordable prices. Most people start collecting coins as a hobby and in some cases where they chance upon a rare find, it pays rich dividends. As a hobby, it is easy to start out. However, to be a professional coin collector, you need to have a thorough knowledge about not only about the coins, but also about history. Each ancient coin tells a story. If you lend a patient ear, you might find a great story for each of your coins. And once you start, you are going to be a life long coin collector!

Coins Of Imperial Rome
Coins Of Imperial Rome

Where And How To Begin?

That's the question that plagues almost all novice coin collectors. While most people start their collection with a few family heirlooms and also by buying affordable supplies from dealers, I would suggest you decide what coins you would like to collect. A potpourri of coins is still good, but if you want to develop your interest and become an avidly professional coin collector, it is best to start out early.

With many different types of coins out there, it is a daunting task. Lets us make it simpler having a look at the commonly collected coin types

Coins of a particular historical era. Collectors of these types of coins focus on a specific period, like Early Roman, ancient India, colonial coins, old US coins etc

Coins of a particular nation. These collectors are the inhabitants of the country whose coins they collect. But sometimes, people do show interest in collecting coins from a foreign country.

Error Coins. Error coins are an interesting type, containing errors made by the mint during the minting process. Typical errors are doubled die, where an additional impression is made on the coin or a dual mint mark. These are valuable coins. And they are unique in the sense that apart from ancient error coins, modern error coins too are sought after. You can find a latest example of error coin here

Exonumia. Some collectors focus on exonumia which are special coins which might have been used as substitute currency. Examples are wooden nickels, elongated coins which are mostly used as souvenirs or hobo nickels

Challenge Coins. These coins are specific to an organization carrying its insignia or emblem. Traditionally they are given only to members and hence are sought after collector's items. An avid challenge coin collector is Bill Clinton

Apart from the above, there are collectors who specialize in collecting each and every coin of a particular category. The most famous among such collectors is Louis E. Eliasberg, who was the only person to own the complete collection of United States coins ever assembled.

The exact opposite from the above are collectors who accumulate each and every type of coin of a broad variety they can discover.Such collections are famous for their vast scope and variety. Once such collector was King Farouk of Egypt.

You might want to refer these informative books. I am sure you will find a lot of useful information here.

What To Look For Before Buying?

All coins have to pass through a rigorous scrutiny before their value as a collector's item is determined. This is the grading process. Now each country has its own grading system which roughly follows the standard of the Sheldon Grading System. The grading scale runs from 0 to 70, with 70 being a rare and valuable coin in perfect state.

The value of a coin also depends on its rarity. The rarity of coin is measured by various scales, for example the Universal Rarity Scale where a rarity of URS 1 means there is only 1 remaining coin of that type, which translates to the rarest of coins.

There is a third criteria known as liquidity factor which indicates how easily a coin would be sold in an auction. On a scale of 1-5, a liquidity factor of 5 would mean a coin would sell very fast, and fetch more than its originally suggested value.

How To Handle Your Coins Properly

Once you have some coins in your collection, its natural that you will be handling them more often than not. For displaying, for cleaning or shifting to another storage option. Here are some precautions you need to take so that you do not damage your precious collection.

Always hold a coin by its edges and never let your skin come in contact with the coin face.

If your coin is inside an album or a folder, use coin tongs to remove them.

Always lay a soft towel on a flat surface before you handle the coins. If you accidentally drop a coin, the cloth will cushion the fall.

Take care not to breathe on the coin

Use gloves whenever possible. If your hands are gloves free, be sure to clean them properly and rub away any trace pf water.

The idea is to minimize any unintentional damage to the coins. Simple precautions go a long way in keeping coins in proper shape.

Coin Handling And Storing Guide

"A clean coin, like a clean mind...

...is half as valuable and 1/3 as interesting."

- Mercury

Popular Ultrasonic Cleaners Available

Loupes

Loupes are a necessary instrument for any coin collector. Using these, you can minutely examine coins for any damage. Fake coins too can be detected as the loupes have Crystal clear magnification.

What Is Your Coin Collection Worth?

A tricky question! You may think its worth a lot of money but most of the online coin price guides display retail prices, which is what a dealer would charge you for a coin. So in reality, you might have a lower selling price. To get a realistic valuation of you collection, you may refer the books in the Easy Reference section of this article.

You may choose to auction your coins. You might get a better price but you have to pay a 10% fee to the auction house. Even if you undersell. Selling to online dealers is a fast way to get cash but you cannot be always sure to get the best price.

The best way is to get your collection appraised by a trustworthy professional.

How To Identify Fake Coins And Dealers?

It is important that when you buy, you approach genuine coin dealers. There are many fakes masquerading as dealers. The surest sign to identify a fake dealer is authenticity certificates. Fakes do not give you such certificates. Also, if you have started out as a hobbyist, do talk with fellow like minded peers . Ask them where to buy coins. Get advice from them as experience is a good teacher. Also, do not buy from a dealer who sets up shop in a shabby locality. You can know a lot about a person from his appearance.

Keep at eye out for ancient coins that look too shiny. Avoid going to such places again. Also, you can make out if a dealer is professional and genuine by the way he stores, displays and handles his coins. Fake dealers are always in a hurry to sell, cannot produce any authenticity certificate and will quote ridiculous prices. By now, you will have become much informed about coin prices. So it will be easy for you to spot the fakes.

It is much harder to spot fake coins. Sometimes even the experts are fooled. While knowledge comes with experience and with time, you will be able to at least make out a few fake coins, it is always better to go for professional grading services when you start out. Here are some simple tricks to spot fake coins( both old and new)

Any US coin that sticks to a magnet is counterfeit

Some experts tell a real from a fake by the sound of it! By ears of experience, they develop an ear for fake sounding coins by dropping them on a table!

Most fakes are uncirculated. If you are buying an uncirculated coin, pay special attention to it

Of course, by now you know never to buy from Chinese dealers who have a vast fake coin market

Familiarize yourself with particular coin weights. If you encounter a fake coin of the same type, you can instantly tell the difference

If you buy gold coins, use a Counterfeit Gold Coins Detector

These books offer helpful insights into detecting counterfeit coins

Spot The Not!

Let Me Know What You Think!

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    • profile image

      StrongMay 4 years ago

      I never realized one has to prepare to become a coin collector, or that it could possibly be difficult to begin. I've been collecting coins since second grade. It's a small collection, and its growth has slowed down in the past couple years, but I still love it. Of course, as a second grader my collection isn't so expensive or rare - just a big bag of coins from different countries around the world. The only continents I am missing are Australia and Antarctica. I would simply save coins from when I traveled abroad and asked friends for small change rather than souveniers.

    • Digory LM profile image

      Digory LM 4 years ago

      Nice lens. I wish I could collect more. All I do at the moment is save any old coins I find in my change. It's surprising how often I come across old pennies, nickles and even silver dimes.

    • arperinos profile image

      arperinos 4 years ago

      So good to see more coin lenses around ! Good job !

    • profile image

      GetAcneFree 4 years ago

      Great lens! My husband collects ancient coins so this will be a great resource for him.

    • mechanicaleye profile image

      Eda Ċ kulj 4 years ago from Bosnia and Herzegvina

      Very informative. My late grandfather collected coins, and we keep his collection safe. Who knows what the value of some of those may be some day? :)