A
Companion to
Rare Coin Collecting
By Ray Wyman,
Jr.
Interested in rare coins? Do you want to start a rare coin collection? I wrote
A Companion to Rare Coin Collecting for a group of investment advisors
who needed a booklet that introduced basic concepts of the art of rare coin collecting.
For that reason, this text offers equal time to the pros and cons of rare coin
collecting. It provides good insights on how to avoid common mistakes and provides
simple layman explanations. In the chapter "Are Rare Coins for You?" readers will
find out if they fit the profile for this form of investing. "What is a Rare Coin?"
helps define the topic of true rarity while the succeeding chapters - "Grading
Services", "The Market", "How to Buy Rare Coins", "Holding Coins", and "Selling
Coins" - help define the form and structure of the investment.
As to the question, "why is this book offered free?" Simply put, there are too many other better books about rare coin collecting that were written by well-known numismatists (see the 'Suggested Reading' list below). Nevertheless, since its public release to the Web in 1997, this text has been read by more than a quarter of a million readers hailing from Australia, Europe, and the U.S. Numerous webmasters and editors from all sorts of hobby sites, including prominent search engines such as Ask Jeeves, InfoSeek, Lycos, and AOL, have selected this book for their particular venues dealing with coins and hobbies. As a result, Companion is widely read by thousands of new collectors each week. I wish all of you the very best of luck - but most of all have fun.
What Kind of Collector
Are YOU?
I have met many collectors - each with their own set of responses to the question,
"Why do you collect rare coins?" However diverse, their answers formed
three basic "personalities
of coin collecting."
The Incidental Collector
is the most pervasive of all personalities because her collection begins with
the spare change that collects in the dresser drawer or in the bowl on the bookshelf
until it graduates into a bucket then, in some extreme cases, a water bottle or
some other large container that sits in the corner of the bedroom. This collection
will grows until someone accidentally kicks the bucket over once too many times
or until the water bottle finally breaks from the sheer weight of all that metal.
Sometimes the incidental collector is struck by what I call the 'lottery effect."
A story that happened a few years ago exemplifies this tract. A clerk working
at a convenience store on Hollywood Boulevard was bored. To occupy some time,
he began sorting the coins in the change drawer. He ran across an old penny that
had been discolored from years of handling, but he noticed that there was something
wrong with the stamping. After completing his shift, the clerk did some research
and was stunned to find that he was the proud owner of a famed 'double stamp'
1955 penny worth more than $3,000.
Stories like that do more to convert many incidental collectors into instant 'hard
core' investors - or something with that appearance, at any rate. The very idea
that chance fortune lay hidden somewhere in our pocket change is enough to set
off a flurry of book buying and frantic inquires to coin dealers. In extreme cases,
the 'lottery effect' can also trigger hysteric sorting and hoarding. For example,
there are online rumors about the famed 'state quarters' that are circulating
around the Internet faster than forwarded email jokes. Apparently, many people
are taking these ill-advised advisories seriously. Dealers acknowledge that coins
for Delaware, Pennsylvania, and New Jersey are now in short supply - thus in high
value - however the higher value is simply due to the fact that so many incidental
collectors are hoarding.
Ultimately, the incidental collector is faced with a choice: either get serious
and organize the mess, or get real and dump the coins into the counting hopper.
If he gets real, then worst case, he'll be rid of the inconvenience and end up
with enough spendable currency to buy something nice for himself or his niece.
If he or she gets that streak of seriousness then gangway for the next personality,
that of The Investor Collector.
For many years, financial consultants have been advising their clients to hold
coins. Their reasoning is simple: rare coins have been known to be an even-tempered
and reliable investing tool because coin values seem to keep pace with other investing
classes such as stocks, bonds, funds, and real estate. The value performance of
rare coins is actually more predictable than the precious metals they are made
from largely because value for metals is based upon a much wider range of factors
than coins. It is also possible that rare coins can offer a form of 'wealth insurance'
by retaining value when high inflation or low interest rates weaken paper currency
values.
As for other collectibles, nothing performs as well as coins when it comes down
to pure investing: coins are virtually indestructible, they are easy to store,
easier to insure, and rare coins are highly portable commodities that can be easily
converted into liquid assets. One of the drawbacks for investing in rare coins
is that one must possess the liquid assets to acquire the right type of coins
(not all coins are 'value investment' rated). But as the old saying goes, "one
step at a time."
This leads us to the third and final personality: The Professional Collector.
Rare coins are interesting because their rarity makes them precious and fascinating.
Surely, the more that a specimen is sought after the greater its price tag, but
for some collectors that's an incidental fact in a much larger story. For them,
the supreme pleasure and thrill of discovery motivates a lifetime of collecting.
They have a deep appreciation for the art and a history not found in your average
run-of-the-mill water bottle collection. Note also that some avid coin collectors
are not coin collectors at all, but numismatists - people who study all forms
of monetary value including coins, but also paper money, tokens, commemorative
medals, even checks, stock certificates, and notes of financial obligation.
The bottom line for coin collecting is that this is not the way to 'get rich quick'
- in fact, there is nothing about coin collecting that is quick at all. It takes
patience, much learning, lots of reading, and some amount of luck to grow a collection.
Unless you are already uncommonly wealthy, it'll take a very long time to see
your collection come to any sort of value. If you are looking for the fast track
for riches, I suggest the lottery or arbitrage. If you are looking for a rewarding
hobby that teaches history, culture, and the growth of civilization, then coin
collecting might be for you.
About the Author: Ray Wyman, Jr. is a freelance writer who has been working in the publishing industry since 1975. He began his career as a professional marketing communications practitioner in 1980 and started freelancing in 1984. He is the author of "The Art of Jack Kirby" (1993, Blue Rose Press), "Tales from the American Civil War" (unpublished), "A Companion to Rare Coin Collecting" (1988, IRC&B), "Promoting Your Organization" (1995, NetDay96), and "Achieving Vision" (1990, The Inventioneering Project). He is a veteran storywriter for the Star Trek franchise and is the owner and chief editor of Heavypen.
Suggested Reading:
Coin Collecting for Dummies
By Ron Guth, this handy guide covers all the basics of this fun
activity, shows beginners the ropes, from buying, collecting, and
storing coins. Simple, short, and easy to understand - a must for
beginners. ISBN: 0764553895
2002 Blackbook Price Guide to US Coins
By Marc Hudgeons (et al), the Blackbook covers every US Coin ever
minted including colonial tokens, farthings, half cents, and gold
pieces. All types evaluated, graded, and priced. Includes rare and
scarce coins: general issue coins, popular oddities, varieties,
and error coins. A must for beginners. ISBN: 0676601731
The Coin Collector's Survival Manual
By Scott A. Travers, this book was called "one of the most important
coin books ever written" by The New York Times. It examines the
coin field from an insider's perspective and breaks important new
ground in disclosing the ins and outs of coin collecting and investing.
Graduate from 'beginner' to 'advanced beginner' by adding this book
to your personal library. ISBN: 1566251494
Coin Clinic: 1,001 Frequently Asked Questions
By Alan Herbert, an internationally renowned numismatist, a professional
coin authenticator and photographer. Herbert answers the top 1,001
questions asked of him by collectors, dealers, scholars, authors,
columnists, and specialists through his "Coin Clinic" column published
in "Numismatic News" and "Coins" magazine. Illuminating reading
for the beginner collector. ISBN: 0873413806
One-Minute Coin Expert
By Scott A. Travers, one of the most knowledgeable coin dealers
in the world, this book offers many specialty sections written for
the advanced beginner. A bit on the 'fad' side of coin collecting,
but Heavypen has been told that it offers good tips and ideas on
how an 'advanced beginner' can specialize new collections. ISBN:
0609807471
The Comprehensive Catalog and Encyclopedia of US Coins
By Brad Reed, and presented by Coin World, the most respected and
widely read newsweekly in coin collecting. Reed has revised this
edition with newly discovered rarities and offers recent valuations,
all-time high auction records, and actual-sized photographs. A must
for the advanced collector. ISBN: 038079859X
Planning Your Rare Coin Retirement
By David L. Ganz. A typical collector spends $2,500 a year on your
collection. Here's a book that can help advanced collectors flesh
out a profitable portfolio while keeping collecting a personally
rewarding and enjoyable pasttime. Not for the beginner. ISBN: 1566250986
Introduction
Are Rare Coins for You?
What is a "Rare Coin"?
Grading Services
The Market
How to Buy Rare Coins
Holding Coins
Selling Coins
Concluding Thoughts
Back To The XFiles
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for your company or project. Make all inquiries to
Ray Wyman, Jr.
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Copyright ©1997 - 2004
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