With society’s shift toward digital currency, it can be tempting to think that physical coins and paper money will become obsolete. On the contrary, however, their rarity may help boost their value in the long run.
Coin collecting is a viable hobby that offers both psychological and financial rewards. Typically, the process entails looking for various bullions to build your collection. It’s a good way to pass the time for people who enjoy beautiful products that have interesting backstories.
Here are some potential benefits of building a coin collection:
1. Gain A Lot Of Knowledge
One of the significant advantages of collecting coins is that you get to learn a lot about history, politics, and culture. More than obtaining bullions and other physical money for the sake of it, you’ll get hooked with the act of acquiring knowledge on various topics.
Often, the value of rare coins doesn’t come from physical attributes, like their gold or silver content. Instead, their worth comes from their history, even misprints, which make them more exceptional. Aside from knowledge of history, you also have to possess street-smarts to succeed in this venture. One of the first things that you need to educate yourself about is on how to spot fake coins.
Coin collecting can be a lucrative hobby, which is why some people would dupe unsuspecting newbies. Scammers can easily take a common coin and pass it off as a rare collectible.
Before you venture in this field, regardless of whether you’re in it for fun as a hobbyist or to make some money as an investor, you should know the ins and outs of the industry. Get to know the different coins and find credible resources online that can give you accurate information on the process.
2. Challenge Yourself
Many people think that collecting coins is only for the elite who have extra funds to shell out on a hobby. However, the primary challenge is to conduct this passion project with limited funds. With this, you have to expand your network and get to know fellow collectors, other sellers, and coin experts.
You can think of yourself as a modern-day fortune hunter. You’ll have to research intensively and connect with people who might have an idea of where to find the coins that you want. If you’re feeling lucky, you can grab your metal detector and head to the beach where you may uncover rare coins.
That’s why, as mentioned above, coin collecting is also known to offer psychological rewards. There’s nothing more fulfilling than achieving your goals even with limited resources.
3. Build A Rare Collection
Another obstacle that you may face as a coin collector is the rarity of the bullions that you want to acquire. Nonetheless, it’s these unique collectibles that make this hobby more interesting. Even just one highly-valuable item can boost the value of the entire collection.
These are some of the rarest coins in the world:
- 1794 Flowing Hair Silver Dollar – The value of this coin comes from the belief that it was the first silver dollar struck by the US Mint. It features a profile of the Lady Liberty on one side and the American eagle on the other. The estimated number of remaining coins is lower than 130.
- 1787 Brasher Doubloon – This one was created by a New York City craftsman in the late 18th century. The coin features a state seal and rising sun, and the American eagle with a shield on the reverse.
- 1787 Fugio Cent – Also known as the Franklin cent (named after Benjamin Franklin, the founding father) the Fugio cent is believed to be the first coin circulated in the US during its early days as an independent nation. It has a sun and sundial design, with the Latin inscription ‘fugio,’ which translates to ‘I flee.’ The other side displays the motto, “We are one,” with 13 links in a chain that symbolizes America’s first states.
- 723 Umayyad Gold Dinar – It’s one of the most prized Islamic coins and bears the marking ‘mine of the commander of the faithful.’ The dinar only has about a dozen coins in existence.
- 1943 Lincoln Head Copper Penny – When the US began preparing for war in Europe and the Pacific in 1943, the country saved copper to manufacture ammunition. With this, the mint began using steel for pennies. However, some batch still used copper, which led to this collectible. An estimated 40 pieces are believed to exist, but some say that only about 20 issues remain.
4. Make A Profit
The financial reward that entails coin collecting is that you can sell collectibles to enthusiasts who are looking for the next rare find. The worth of bullions can grow over time. You can go for a short-term buying and selling strategy or opt for investing in these items.
Although the hobby might not provide for you full-time yet, it can still become a viable source of extra income. Here are some tips to help you with this venture:
- Research, Research, Research – Knowledge is your best tool when becoming a trader or investor. You have to learn about the different types of coins, their worth, and even how to grade them. You also must stay abreast on industry updates so that you can land the best deals.
- Narrow Your Niche – Coin collecting is a vast field. If you want to be successful in this endeavor, you’ll be better off becoming a specialist in a particular set of collectibles rather than being a jack-of-all-trades. This way, you can gain valuable knowledge on a few types of coins, which would allow you to provide better service to potential clients.
- Practice More Patience – When you dive into this venture, you should be ready to stick with it for the long haul. A coin’s value increases over time, especially when its production has been halted and its existence becomes limited. If you have the liberty of starting early, you should make the most of the opportunity.
- Always Choose Quality Over Quantity – You can always expect highly valuable coins to become more expensive in the future. With this in mind, you should invest in quality first over quantity. For example, if you’ve set a USD$30,000 annual budget for buying coins, it’s better to opt for six USD$5,000 or five USD$6,000 bullions rather than ten USD$3,000 ones. This way, you increase the likelihood of getting more return on your investment in the long run.
- Be A Collector First – Cultivate the passion that a collector has for their collection. When you decide to trade coins, you should be knowledgeable about your products so that clients can trust you for their purchases. People can feel if you’re truly interested in bullions, which will make them more excited to work with you.
5. Have A Contingency Plan
Time is always on your side when you invest in gold and silver coins. Another benefit that you can enjoy when collecting bullions is that they can be used as emergency funds.
Due to their considerable value and demand, they are highly liquid. This means that you can easily have them converted to cash, which is useful during urgent situations, like a health crisis or accidents.
Although you might not be diving into coin collecting as a contingency strategy, it’s always good to have a back-up financial plan. The thought of parting with your precious collection might be too much to bear, but, at the very least, you know that you can resort to it when you’ve exhausted your other options and save you or your loved one’s life.
6. Give Valuable Heirlooms
Aside from being able to use it during emergencies, you can also pass on your valuable collection to your children and grandchildren. They may even get more out of the set since, as stated earlier, the value of coins increases over time.
Gold and silver bullions are inflation-proof. This means that their price is inversely correlated to the purchasing power of today’s currency. It may be because they can be considered as commodities during an economic crisis or depression.
Moreover, unlike stocks and bonds, the tangibility of coins can give your loved ones a feeling of security. This is because they can store and take care of the collection themselves, without having to rely on third-party assistance for its safekeeping.
7. Spend Time on Yourself
Taking up a hobby can provide you with a temporary respite from the hustle and bustle of everyday life. You can set aside time to be alone with your collection as you check your inventory and clean the bullions. Plus, you can also form meaningful relationships with fellow coin collectors, who can serve as your support system even for issues that aren’t related to the industry.
Conclusion
A lot of people may be hesitant to collect coins as a hobby because it seems like a very narrow niche. However, it does provide several benefits, like learning more about history, politics, and culture, as well as challenging yourself to build a rare collection even with limited resources.
You can also earn a profit when you trade bullions. Plus, your collection can serve as a last resort when you need emergency funds. Lastly, acquiring a hobby gives some sort of stress relief after a hard day’s work.v
