Who would have thought that the gift of a coin would end up being the best gift I’ve ever received?

I have many fond memories of my grandmother, but one such memory will stay with me for the rest of my life. When I was 10 years old, my grandmother gave me a silver dollar for Christmas.

To this day, I still have that coin. And from that little memento, I gained a lot. I gained the passion to collect coins, leading me to becoming a professional numismatist (coin expert).

Collecting coins has taught me the value of holding on to those special tokens that most people take for granted. And that Carson City, Nev. minted silver dollar ended up gaining a significant value.

Today, people collect coins for numerous reasons. Some accumulate coins as family heirlooms, some simply because they love owning miniature pieces of art sculpted by famous artists. But whatever the reason, they see the gift that coins can bring.

Besides the fact that rare-coin collecting is a fun hobby, here is a list of some other reasons you should start a collection of your own:

* Protect your assets. Hard assets offer you safety and

security in the event of a world currency crisis or stock market crash.

* Maximize your investment in metals. We can’t go back in history and create more historic coins. Only a finite number of rare coins are available.

* Inflation. Gold and silver investments follow a long-term cycle. When undervalued, they gain tremendous upside potential when the value of paper money declines.

* Liquidity. Rare coins gain liquidity as millions of dollars are traded for them weekly on the Internet and through other networks.

* No tax consequences until liquidation. Rare coins that have increased in value are not taxed until you sell them. And if you trade coins for coins of equal or greater value, you won’t be taxed.

* You’ll own a piece of history. You’ll learn about American values and history simply by collecting coins.

A Guide to Rare Coins in Circulation Today

It’s usually a small thing that turns regular looking money into valuable rare coins. Last year’s materials used instead of this year’s, a tiny symbol left off a minting die. Collectors covet the unusual and uncommon above all else, and these minor oversights result in a very limited number of coins. This means that supply is much lower than demand, and even something that looks almost exactly like a common penny can actually be a precious rare coin. Even more interesting is that many of these rare coins were released into circulation before anyone realized that a mistake had been made. Because not many people know what distinguishes precious rare coins from run-of-the-mill legal tender, these coins can remain in circulation for decades, until a lucky coin collector recognizes them.

How would you feel if you knew that you had handed over a penny worth $2,000 or more as change for a dollar? This guide will help you recognize a few exceptional American rare coins that you just might have lying around your house, shoved in a change jar, or tucked away into a pocket.

Rare Coins with Mistakes in the Printing

One of the most common mistakes that turn normal coins into limited rare coins is a mistake in the printing. In the case of a nickel minted in 1964, the problem happened when a plate was cleaned too often, and a part of one letter was worn away, leaving the Jefferson nickel with the inscription “E PLURIDUS UNUM.” It took collectors quite some time to catch on to the misspelling of the word “PLURIBUS,” but now these limited nickels are highly sought after. A similar problem resulted in the 1970-S Atheist Cent, when the motto “In God We Trust” was covered with a blob of metal, causing it to read only “In God.”

Another common oversight is when the mint mark, the tiny letter on most American coins that indicates which mint created the coin, is missing or incorrect. Some rare coins with this mistake include the The 1982 no-P Roosevelt dime. The Philadelphia mint used no mint mark until 1980, when it started stamping coins with tiny P’s. Yet somehow, a small number of dimes minted in 1982 were a throwback to the time before the mint mark, and bear no letter P. There were only a few coins with this error, and their scarce nature has made them valuable to collectors. A similar problem happened in Philadelphia a few years later, when the P on the die of some 1989 quarters was clogged with dirt, preventing the coins from being properly stamped.

Rare Coins with Double Printing

Minting problems don’t only involve the writing on the coin. Sometimes a problem with the die causes a coin to be double stamped accidentally, resulting in a very unusual form of rare coins. Some precious coins with double stamping include doubled-die Lincoln cents from 1972, 1983, and 1984, and a doubled quarter minted in New York in 2001.

Rare Coins with the Wrong Metals

Other than printing problems, another reason why rare coins can be minted is when the wrong precious metals are used to make the coins. American coins have undergone several changes in material. For example, during World War II, pennies were made out of steel, because copper was needed for the war effort. Nevertheless, a very few pennies were minted in 1943 out of copper instead. These rare coins are worth upwards of $200,000 today, and they look exactly like any other penny.

As you can see, sharp-eyed coin collectors can really make a profit by keeping their eyes for rare coins in everyday transactions. Most people wouldn’t look twice at a unique find like a 1943 copper penny or a dime that’s missing a letter nearly too small to see. By knowing what coins are limited and rare, you could make an exceptional find just sorting through your household change.

Buy quality! Buy quality! Buy quality! That’s all you hears these days when you are considering rare coins as an investment. First, are you really buying coins as an investment, or merely for the pleasure of owning a piece of history? That is sometimes the real dilemma for many collectors, or is it investors? Everybody wants to make sure that their investment is protected, but there are no guarantees, especially in rare coins. In fact, some rare coins take years to appreciate to the point of being able to sell it profitably.

Hey, I would love to be able to plunk down $100,000 for a 1919-s Standing Liberty Quarter in MS67 condition certified by PCGS. There is only one coin with this date certified by PCGS as of February 7th so it is the finest available. But not many of us have that luxury. I don’t, and I suspect you do not either. It’s hard to comprehend paying more for a single coin than my first house cost. And while the rarest and finest of all rare coins have reached stratospheric prices, what does this leave the rest of us? Not much, unless you are willing to do a little work.

So if my interest is in rare coins as an investment, what do I do? Well, there are many other coins and options you can choose. First, let’s review what drives the price of a coin.

1. Demand. Demand perhaps is the biggest driver of price. A clear example of this is the 1909 S VDB with a mintage of 484,000 and an estimated retail value of $720.00 in G4 and $7,500 in MS65 vs. an 1879 Shield Nickel. The Shield Nickel had a mintage of only 29,100 yet the estimated retail value of a G4 is only $415 while the MS65 example is $1,950. To further illustrate this point, PCGS has certified 703 MS65 Red 1909 S VDB cents and only 27 MS65 Shield Nickels. How many Shield Nickel collectors do you know vs. Lincoln Cent collectors?

2. Scarcity. Generally speaking, putting demand aside, the more scare/rare a coin, the higher its value. This is usually very true, especially when comparing dates within the same series. Scarcity should not be confused with overall mintage. During the silver booms, many, many silver coins were melted for there bullion content. Additionally, some coins with higher mintages can be quite rare in certain grades such as higher MS condition coins due to weak strikes, etc.

3. Condition. This is the most obvious one. When comparing the same coin, the better the grade, the higher its value.

4. Age. Although age can have some factor, I would rate it lower than the three above

Ok then, considering all these factors, how do I find nice coins that I can afford that will not only appreciate in value, but appreciate at a higher rate than other coins? I think the key word here is “nice”. Coins other than Mint State coins can appreciate in value if you know what to look for. Look at the 4 driving factors of price again. They are demand and scarcity. Take a good look at the following chart. The chart shows a good comparison of some different coins. Some you might consider a good investment and some you may not. The main comparison I am trying to make is from 2005 to 2006. I had an old issue of Coins Magazine from November 1973 so I thought I would throw those values in as well.

First, let’s look at the 1877 Indian Head Cent, the key of the series. In a one year period of time, the value of the coin rose 18-19% depending on condition. The 1909 S, the coin with the lowest mintage of the whole series rose only 2-3%. Take a look at the mintages. The 1877 had over 2.5 times the coins produced than the 1909 S yet is valued much higher. Part of this is demand and there are probably less 1877 dated cents to go around.

Next, take a close look at the 3 Lincoln Cents in G4. While the 1909 S and 1931 S are considered keys just as the 1909 S VDB is, it is the 1909 S VDB that has risen in price while the 1909 S did not budge and the 1931 S moved ever so slightly. It is interesting to note though that in XF condition the 1909 S VDB stayed the same.

Compare the mintages of the 5 above coins to the 1879 Shield Nickel. A mere 29,100 nickels were produced that year yet the price for a G4 is a paltry $415

So, what does this all prove? To me, it proves that picking coins solely for investment is as tricky as playing the stock market. You just never know what may be the hot item. Certainly, key issues will continue to rise and will probably rise at a higher rate than non-key issues. If you are truly set on buying rare coins as an investment and you cannot afford the high-end items then keys in some of the lower grades may be the way to go.

What will be the next “hot” coin? Only time will tell and your guess is as good as mine. I suspect that with more and more interest in Lincolns, especially with the upcoming changes to the Lincoln Cent

As always, happy collecting!

Factors that Influence the Value of Collectible Coins

If you are interested in collecting coins, it’s important to be able to have a rough idea of how much coins are worth. Knowing how coin values are determined will enable you to find good deals, and ensure that you don’t get cheated into paying too much money for a coin with a low worth.

Supply Influences Coin Values

One major factor in determining coin values is the law of supply and demand. If there are many coins of a particular type available, that coin will not be worth much. On the other hand, if only a very few coins of that type are produced, the coin values will rise. This is why a completely normal-looking copper penny minted in 1943 is worth about $200,000, whereas a 2,000 year old Roman coin may be worth less than $100 – because thousands upon thousands of Roman coins were minted, but only 40 pennies produced during war-time 1943 were made out of copper.

Demand’s Effect on Coin Values

Even among coins with a similar number of copies in existence, some have a higher worth than others. This is because some coins are in higher demand, driving up the coin values. Coins may become popular because they are particularly lovely to look at, because they are part of a topical set that is often chosen by collectors, or because they have a certain historical significance.

Precious Metals and Coin Values

Some coins are made out of precious materials like gold bullion or platinum. These coin values are less volatile because the worth is guaranteed in part by the material. A gold bullion coin, for example, is usually worth more than its melted weight, but it is never going to be worth less.

Coin Values are Tempered by Grade or Classification

The final major factor in determining coin values is the grade or classification of the coin. The more wear and tear that a coin has undergone, the less value it is going to have. This is why uncirculated coins are usually more valuable than coins that have been passed from hand to hand. Uncirculated coins have always been kept in the very best of conditions, making their value much higher. A coin in flawless condition may be worth hundreds of times more than a low-grade version of the exact same coin.

Now that you understand the basic factors that influence coin values, you have a better grasp of which coins may have real value and which will be worthless. In order to get a ballpark estimate of the value of any coins you might have, you will first need to determine its grade or classification. You can do this by comparing your coin’s condition to a published list of guidelines. Then look up the value of a coin in that condition in a book such as “The Standard Catalog of World Coins,” which should be available in most public libraries. If you need to know the exact amount that your coin is worth, you should take it to a coin dealer and let him or her evaluate it for you.

How to Select a Coin Dealer for Your Coin Collection

Why do I Need a Coin Dealer?

It is very difficult to build a collection of rare coins without a connection to a good coin dealer. If you are an investor hoping to make a profit with your collection of rare coins, building relationships with good coin dealers is vital to your success. If you are interested in making the highest profits possible with your coin collection, you will need to find a merchant partner who is experienced in the specific rare coins that interest you, and who will sell them to you at a good price. Most coin dealers will charge a lower premium on the sale of coins to their best customers. After all, it makes good business sense to get the most profit possible from a person who will do business with you only once. If you have a long-term relationship, however, the margin does not need to be as high for the coin dealer to make a good profit.

Because coin dealers are experts in their chosen fields, they will also have better connections than individuals who buy coins on their own will. Finding the right vendor or wholesaler can be a long and difficult task for someone new to the coin collecting trade. Coin dealers will also be more likely to recognize a counterfeit coin, have a higher chance of hearing about the sale of the specific rare coins that interest you, and will recognize an asking price that is over- or undervalued. As an investor, these are all critically important points for your success.

Building a long-term relationship with a knowledgeable coin dealer is the best way to protect the money that you invest into rare coins. All too often, new coin collectors who try to go it on their own without professional help end up being scammed out of hundreds or thousands of dollars.

What Do I Look For in a Coin Dealer?

All coin dealers are not created equal, and it is nearly impossible to specialize in every area when it comes to collecting rare coins. Therefore, it’s important to know what to look for before you select a professional for your coin collecting needs.

The first vital piece of information that you’ll need when considering coin dealers is his or her professional qualifications. Some important questions to ask include, does the coin dealer belong to any professional groups? How long has he or she been in business? Can the coin merchant provide references from other satisfied customers? One of the best indications that a vendor has a high level of professionalism is a membership in the Professional Numismatists Guild (PNG). This group includes the most reputable coin dealers in the business thanks to an emphasis on ethics.

The second most important question to put to a prospective coin dealer is the area in which he or she specializes. There are so many different kinds of rare coins to collect, ranging from gold bullion coins to ancient Roman coins, that it is impossible to be a true expert in all of them. You’ll want to find a merchant that specializes in the particular area that is of interest to you. A trader might be able to recognize every rare American coin at a glance, but that won’t do you a lot of good if you really want to collect legal tender from medieval times.

Finally, you should consider the motivation of the coin dealers you are considering. A highly motivated coin merchant will go to shows and retailer auctions, keep abreast of current prices and trends, and will generally keep up-to-date with the current coin market. Any investor will recognize the impact of current information on profit levels. A coin trader who is highly motivated will also be more likely to provide you with excellent service and the best rare coins.

Once you have selected a coin dealer, it is important to reward him or her with your loyalty. You are likely to get the best prices and service from coin dealers who know that you are working exclusively with them.