Coin Collecting Basics
So you would like to begin collecting coins. There is so much to know and study, but it can be a lifelong, enjoyable and profitable hobby! But how do you get started?
First, you need to decide what area you would like to start collecting. If you are a true beginner and you like buying bullion items, you might want to collect Silver American Eagles or Silver rounds. What is the difference between the two?
Simply put, Silver American Eagles are actually coins. They were issued by a sovereign mint (the United States Mint) and have a date and denomination on them ($1). Because they are coins, you could take them to the bank and deposit them into your account or you could take them to a store and spend them. But doing either of those would be foolish. While a Silver American Eagle coin has a face value of $1, the Silver content (one troy ounce) makes a Silver American Eagle much more valuable. One troy ounce of Silver, at the time of publication, is worth at least $16. As you can see, depositing that coin into your bank account would be a quick way to lose money.
There are many different ways to collect Silver American Eagle coins. You can collect them by date – these coins have been minted since 1986 – or by type (Proof coins or Uncirculated coins). You can collect uncertified coins (those coins not graded by a third-party grading service) or you can collect only coins graded by PCGS or NGC – the two major grading services. A nice date set of Silver American Eagles makes an affordable and easy-to-complete starter collection.
The typical Silver American Eagle coin that is easy to collect is called a Brilliant Uncirculated (BU) coin. These coins were struck in large quantities and generally are very available. These coins do not receive special handling at the U.S. Mint and may have tiny marks or nicks on them. Proof coins, on the other hand, are struck on polished blanks, receive special handling at the mint and usually cost 2 to 3 times what a BU Silver Eagle costs. One could collect either BU or Proof coins only or could amass a collection containing both types of coins. Collecting coins offers value in two ways – bullion value, because of the value of the Precious Metal they contain, and additional collector value, because they are issued in limited quantities.
Silver rounds, on the other hand, are not coins. They are usually struck by a private mint as opposed to a sovereign mint. While they may have a date on them, they do not carry a denomination or the name of an issuing country. If they do look like a coin but are truly rounds, they must bear the word “COPY” on them to indicate they do not have a face value. However, they are still made of Silver and have a value corresponding to the amount of Silver they contain.
Silver rounds are readily collected due to the sheer number of private, commercial mints that strike Silver rounds. Many collectors choose to purchase Silver rounds due to the variety they offer. They are made by mints around the world. The value is always dependent upon the amount of bullion in each round and the current price of Silver.
You may also choose to collect a series of United States coins, such as Morgan Silver Dollars or Saint-Gaudens $20 Gold pieces, or you might be interested in U.S. currency or world coins or currency. You might be attracted to ancient Greek or Roman coins. The possibilities of what to collect are limited only by your imagination and your budget.
Whatever you decide to collect, you should pick an area, buy one or more books on that area of interest and get some knowledge in that area BEFORE you spend your hard-earned money. Also remember to collect what interests you. Do not buy what is ”hot” in the marketplace today. If you don’t like what you are buying, you won’t enjoy owning it. Coin or bullion collecting can be a fun, exciting and profitable hobby. Enjoy yourself!