Coin Collecting: Beginner’s Guide
Have you ever held an 1850 Seated Liberty Dollar in your hand? The beauty of the artwork, the rarity of the coin, the weight of the silver and the age and history it represents. There is nothing like it, I was hooked.
Coin collecting has been around ever since coins were first made thousands of years ago. In the following post, I hope to cover every aspect and answer how to start a coin collection. I’ll offer ideas on what to collect, where you can buy coins, and how to store them, as well as everything in between. If you would like to jump around here is a list of contents:
- Fun Facts on Coins
- How to Start a Coin Collection
- Coin Collection Ideas & Themes
- Tips on Collecting Coins
- Anatomy of a Coin
- Tools of the Trade
- How to Value & Grade a Coin
- Where to Buy or Find Coins
- All About Coin Care
- Coin Collecting Resources
Collecting coins for their value and rich history is both fascinating & contagious. Once you start, it will take you on a journey for many many years.
1Numismatics is the official term for coin collecting. Apart from coins, it also refers to the collection and study of paper currency and tokens. A coin collector can be called a numismatist.
2What we call the ‘penny’ is actually a misnomer which is really named the cent. Don’t let a true collector hear you say the word ‘penny’!
3From the years 1850 – 1873, the US minted a 3 cent silver piece. Mainly this was because from 1850 – 1873 the postage stamp was 3 cents.
4Coin collecting has its roots back to ancient kings and queens and has been called “The Hobby of Kings”
5Most expensive coin ever sold was a 1794 Flowing Hair Dollar worth $10,016,875. (Source)
6All coins initially minted by the US Mint were either Gold, silver or copper. Of these metals only copper is still found in the 1 cent coin with a composition of 97.5% zinc and 2.5% copper.
7An original 1792 law made counterfeiting and defacing coins punishable by death.
8It is claimed over $10 billion in loose change is sitting in American homes. (Source)
9Two mottos occur on every US coin, “In GOD We Trust” and “E Pluribus Unum” which is the Latin phrase, “Out of many One”
How to Start a Coin Collection
Collecting coins can be both fun and profitable. There are several types of coin collectors, of which most will fall into the category of the hobbyist. Hobbyists, are less concerned about profit and more about the thrill and excitement of completing a collection. Investors and speculators will buy coins mainly for profit either short or long-term. Inheriting a coin collection is the final group of collectors that stumble upon numismatics through chance and relatives. Contrary to what most people believe, you don’t need any money to start a coin collection. Coin collecting for beginners is simple, all you have to do is just collect the coins you receive from change, already in circulation. Also, if you read some of the coin facts above, you will know that over $10 billion in coins sit idle in houses across the US. Find those loose coins in your home or in that jar and begin your coin collection.
Starting a Coin Collection with Just $5
Here is a great example of how you can begin collecting coins with just $5. This is fun & easy way to introduce coin collecting to kids. We will be focusing on collecting all the years of the Roosevelt dime, which was minted from 1946 – 2014. That is a total of 69 dimes. So, take a $5 bill and go to a local small business or gas station that deals with change on a daily basis, and ask for a roll of dimes. This will have a better mixture of dates and older coins than if you go to your local bank. Break the roll open and sort all of your dimes by year and pick out the best looking dime for each year if you have duplicates. You will want to purchase some coin sheets or coin albums to put your coins in. Congratulations, you’ve just started your first coin collection, a Year Date collection of Roosevelt Dimes! To get you started, below are 2 checklists: 1 of Roosevelt Dimes 1946 – 2014 to begin a yearly coin collection. The other is a checklist for all years and mint marks which is a total of 145 dimes to complete the whole series.
Coin Collection Ideas & Themes
Apart from the Roosevelt Dime example above, there are many types of coin collecting ideas that can get one started. This is the beauty of what makes collecting coins interesting and unique, ranging from thousands of possible combinations and subjects to base a collection on. Below are a few ideas for the beginner collector:
- Year Collections – Probably the most common coin collecting theme is to collect by Year. This can be done in several ways: collect every coin for a specific country for a given year, like your birthday or when man first walked on the moon 1969. Or collect all years of 1 type of coin such as all Roosevelt Dimes from 1946 to the present.
- Country Collections – Another popular theme is to collect by country, usually the country in which you live. You can also try to get a wide variety of coins from all over the world. This is a hit with little kids.
- Mint Marks – Usually an extension of collecting by year, holding the same coin and year with different mint marks is also a common way to put together a collection.
- Time Period Collection – History buffs will find this way attractive by collecting coins during a certain time period with historical significance. Say your fascinated with World War I, you could collect all US/Country coins involved in the war from 1914 – 1918. Or when Abraham Lincoln was president from 1860 – 1865.
- Series & Type Set – A series is a collection of coins for a given period such as all Roosevelt Dimes. You would need to collect not only the years but also the different mint marks. A type set is a collection of coins for each major design for a given denomination such as all the types of nickels, such as the Shield Nickel, Liberty Head Nickel, Buffalo Nickel, and the Jefferson Nickel.
- Error Coins – Another popular idea is to focus on error coins for a denomination or type. Broad strikes, double strikes, and off-center strikes are some typical error coins.
- World Coins – Outside the US, foreign coins are another fascinating approach to coin collecting. Bi-metallic coins, coins with holes, different languages etc… are all ways to collect foreign and world coins.
- Ancient Coins – Coins that are really really old! Ancient coins are another unique way to collect a piece of history. Before machinery and being struck, coins had to be made individually or hand poured. Greek and Roman coins are particularly popular for the ancient coin collector.
- Composition Coins – Some people like to focus just on the composition or metals of the coins. Gold, silver, copper, platinum are all popular metals for collectors. I’m a big fan of silver coins, particularly silver dollars.
Tips on Collecting Coins
Before you get started, I’d like to share some coin collecting tips on what I’ve learned so far. Coin collecting as a hobby is very rewarding and hopefully through this guide it will make you a better collector.
BE PATIENT Before you dive in and go out buying MS70 Capped Bust Dimes, take some time and educate yourself. Go wide in the beginning and determine what kind of coins you like such as historical, artistic, or quality. Read some basic books on collecting, grading, and caring for your coins.
SPECIALIZE After you have spread a wide net it will be useful narrow your focus and specialize in a given set of coins. Go with what interests you, maybe it’s Lincoln cents, British sovereigns, or 1800 silver quarters. The more you specialize the easier it will be to understand value, grading, and the less chance you have of getting ripped off 🙂 This will make coin collecting much more enjoyable!
SET GOALS As you begin to settle in specific coin sets that you would like to pursue, it can be very useful to set goals. It is very satisfying when you complete ‘your collection’ and most everyone wants to have that perfect collection to display and be proud of. Having clear set goals will dramatically increase the joy of collecting coins.
SEEK PROFESSIONAL HELP Don’t be afraid to get outside help when you are starting out, especially when you need to grade a coin. Also, learning from an older collector can offer invaluable advice. Frequent local dealers and coin shops and get to know them on a name by name basis.
SPEAK THE LANGUAGE Another useful tip is to familiarize yourself with the lingo numismatists use when discussing a coin. Bag marks, brockage, and business strikes are all coin collecting terms that would be useful to know before talking with a dealer or going to your first coin show. You will find that many dealers are down to earth and extremely helpful and friendly. PCGS has a nice glossary of collecting lingo. At the very minimum you should understand the anatomy of a coin.
Anatomy of a Coin
The coin shown below is a 1952 Franklin Half Dollar. Knowing the coin anatomy terms are the basics when talking with other collectors or dealers. Certain terms such as the motto, date, mint mark, designer’s initials, and denomination are located differently on different coins. Study and know the lingo well.
Date – The year in which the coin was minted or produced.
Denomination – Represents the monetary value of the coin.
Designer’s Initials – Almost all coins have the designer’s initials on the coin somewhere. You may have to hunt for them, on this coin they are ‘JRS’ for John R. Sinnock.
Edge – The very outside of the coin which can be plain (smooth), decorated, or reeded.
Field – The flat surface of the coin that serves as a background and is unused.
Legend – This refers to the main lettering of the coin or inscription. It will usually state the country where the coin came from.
Mint Mark – The letter or symbol on the coin that indicates where the coin was minted or struck. In the US, single letters are used to locate the city. The coin above has a ‘D’ which represents Denver, Colorado. The following may be found on US coins:
- P or blank – Philadelphia, Pennsylvania
- W – West Point, New York
- D – Denver, Colorado
- S – San Francisco, California
- C – Charlotte, North Carolina
- CC – Carson City, Nevada
- D – Dahlonega, Georgia (1838–1861)
- O – New Orleans, Louisiana
Motto – The Motto for most US coins include ‘E Pluribus Unum’ and ‘In God We Trust’. Older US coins differ.
Obverse – This is the term given to the front of the coin or the ‘head’ side.
Portrait – Probably the defining item of the coin is the portrait on the Obverse side. In most cases it is a US President or historic figure as well as Lady Liberty. Relief – This refers to any part of a coin that is raised and not the field.
Reverse – This is the term given to the back side of the coin or the ‘tails’ side.
Rim – The outer edge that is slightly raised making coins easier to stack and serves as protection for the face of the coin.
Tools of the Trade
As you get more and more serious about coin collecting, you will eventually want to invest in some coin collecting supplies and tools to assemble your collection. While not an exhaustive list, the items below will serve you well in becoming a more efficient and thorough coin collector:
COIN MAGNIFIERS & LOUPES
Every numismatists should have a stellar magnifier. These are essential for identifying the value of a coin, detecting flaws, faults, checking for error coins, as well as spotting counterfeits. Having a solid magnifier at home as well as a pocket magnifier or jeweler’s loupe on the road is both useful and smart. Most collectors prefer between 10x – 20x magnification.
When handling coins you will need to take care how you hold and move them around. I highly suggest you buy a pair of soft cotton gloves to use when holding a coin. Also, always hold the coin around the edges and not on the face, especially if you are not using gloves. The dirt and oil from the skin can be destructive to the coin. A nice pair of coin tongs maybe useful if you don’t want to worry about touching the coin. Also, a nice padded tray is nice to have when you’re sorting through coins and to lay out your collection to show or what not. Of course, a simple towel will also do the trick 🙂
Having a good reference book on coin collecting is a must. Probably the most important book in the industry is the The Official Red Book, which is The Guide Book on United States Coins and comes out every year. Apart from that book, most of the information you will need can easily be found online. Even the Red Book is outdated once it goes to press, and sites such as PCGS will have all the pricing needs you are looking. Other coin collecting books that can be useful are the ones specific to your collection such as a book on Morgan Dollars or US State Quarters etc …
Probably the most abundant item you will need for your collection is a safe place to keep your coins from being damaged. For storage you can use albums, folders, display boxes, coin binders, coin flips, coin tubes, as well as coin slabs.
How to Value and Grade a Coin
Coins are graded on a numeric scale from 1 – 70 called the Sheldon Scale of coin grading. Below are some sample coins on a variety of grades for the Washington quarter. Images courtesy of ha. Below that is a table that shows the grading scale, abbreviations, and description of each state.
Sheldon Coin Grading Scale
At the heart of finding quality coins and getting a good deal is understanding how to grade coins. Half science half art, the skill of grading coins can be learned with time and use.
The only way to get better at this is to practice, practice, practice. Take your loupe and magnifier and go and visit coin shows and shops to see examples of how different coins are graded. When trying to determine the value of a coin try to see multiple coins in the same grade and rarity you are after. Especially before you make a big purchase you will want to see many different grades of that same coin to ensure you are getting what you paid for.
This is why it helps to specialize in a subset of coins, so if you’re only trying to collect 1800 silver dollars, it will make it much easier to grade seeing the same types of coins over and over.
Following in the footsteps of the coin grading scale, there is also a Universal Rarity Scale that was developed in 1992 by Q. David Bowers, a famous numismatist. This was to better assess the rarity of a coin quickly and accurately.
5 Components of Coin Grading
This refers to the process of stamping a blank coin for the design. Strikes are usually placed in several categories such as weak, average, above average, and full strike. A full strike is the highest and sharpest strike. MS-68, MS-69, and MS-70 are usually graded as full strike coins.
The luster refers to namely how the surface reflects light. It is a combination of sheen, contrast, brilliance, and cartwheel, or the rotating windmill effect on the surface. When grading the luster of a coin you will want to take into account the intensity and beauty of the coin’s reflected light.
The next component to notice when grading a coin is surface preservation. This can include any and all marks, hairlines, bagmarks, general mishandling, and any other marks made during minting. Location and severity of the mark will determine how much it will impact the grade. For example, a deep scratch on the reverse side of the coin off to the side is not as severe than a deep scratch on the main portrait on the obverse.
Tones and coloration are probably the most subjective feature when grading a coin. This is because one person may find the coin below very attractive and appealing while another may not like it at all. You will find tones are much more important and strong in copper and silver coins than in gold coins.
Lastly, all the 4 components above come together to create what is known as ‘eye appeal’. While it may seem subjective, eye appeal to the experienced collector comes naturally with time and experience. Grading a coin’s eye appeal is divided into 7 categories by the PCGS. They are amazing, positive, above average, neutral, below average, negative, and ugly. For some sample images of the above grades you can visit PCGS. Eye appeal can vastly differentiate the price on two coins with the same technical grade. For example, 2 Morgan silver dollars graded as XF-40 can yield different sell prices based on the toning or colors that the coins display. Knowing this beyond the grade can be extremely useful in appraising a coin.
This goes along well with the tip to specialize and focus to know the nuisances of that group of coins. If you are looking to get a coin professionally graded, the two most popular third-party grading services are PCGS and NGC.
Where to Buy or Find Coins for your Collection
To find and buy coins for your collection there are many different places you can look. You can treasure hunt by going to local banks, convenient stores, or credit unions and asking for coin rolls. Granted this will severely limit you to what types of coins you will receive, but if you’re looking for recent half dollars or trying to complete the state quarters this can be an easy way to start. Another way you can treasure hunt is to go to your local flea markets and garage sales. At flea markets you can find anything and everything, possibly someone who came upon a coin collection and is looking to get rid of it. The same with garage sales, people looking to raise some money many times will offer their old coin collections they started long ago or was passed down from family to family. You can find garage sales in your area by using gsalr.com.
PNG COIN DEALERS
PNG is the Professional Numismatists Guild and their members are the top dealers in the world that follow a strict Code of Ethics and trust. Their mission and vision statement is to make the hobby safe for collectors and hobbyists. To find a local PNG Dealer just use their online directory here. You can trust these guys, to be a member you have to have the following criteria met:
- Full time professionals with a verified net worth of at least $250k
- Forbidden to sell coins/paper money that is mis-represented in any way
- Average of 25 years dealer experience
- PNG dealers are elected to the Guild by a majority of the membership
- They must agree to a binding arbitration for any numismatic disputes.
Another great way to browse coins and collections is through coin shows. You can find most any and every type of coin at these events as well as sharpen your coin grading skills. Local coin shops are another avenue to find and browse coins to possibly add to your collection. It’s always helpful to get to know your local coin shop dealer by name. Let them know what you are looking for and when coins come in they’ll gladly contact you to give you first pick. Finally, in this day in age, buying coins online is commonplace. Several places to buy numismatics online are Ebay, Heritage Auctions, and Stack’s Bowers.
All About Coin Care
Safe handling of your coins will guarantee the quality and value of your coin collection for many years to come. Taking the time to study, research, and invest in coins only to mishandle or damage them is not something you want to happen. Below are some simple coin care tips that you can follow to protect your coins from damage.
Do not Clean Coins
Simple word on cleaning coins, don’t! Attempting to clean your coins will many times do more damage than good, especially if they are uncirculated. Cleaning coins even with just soap and a small cloth can cause micro abrasions and strip the coin of its tone and luster ultimately lowering the technical grade. The only exception to this rule is freshly dug up coins from the ground or through metal detecting.
When handling coins, you should never touch the face of the coin and should hold the coin by its edges between the thumb and forefinger. Using cotton gloves or tongs can also help in minimizing the possibility of damaging your coin.
Other tips on proper care for you coin collection is to never talk over or spit on your coins. Holding a coin in front of you while talking can allow tiny parts of saliva to land on your coin unknowingly and cause small spots or blemishes that are hard to remove. Many a mint coin has been ruined in this way. Also, when storing your coins, be sure not to use PVC based containers, the plastic & chemicals over time will damage the surface of the coin.