I first began collecting coins around 2010, and as they say, if I only I knew then what I know now!
Like many beginner collectors, I started out looking for silver coins in coin rolls. Eventually, my hobby progressed into purchasing collectible coins in a more organized and thoughtful manner. Since then, not only did I become a more astute collector, but I went on to become a full-time professional dealer, something I’m blessed to still be doing nearly a decade later.
Any beginner coin collector is bound to make some mistakes. It is, after all, a learning process. But I’m offering what I’ve learned through my own experience as a collector and my tenure as a dealer to give you a head start.
While this subject can’t truly be covered in one article alone, we can look at four mistakes beginner coin collectors make – and how you can avoid them!
Mistake 1: Accumulating instead of collecting
When put into practice, this is the difference between quantity and quality.
Accumulators believe that more is better, and most is best.
They are often passionate about coins, and eager to gather large collections. While understandable, being an accumulator tends to be a poor strategy for creating a coin collection that is both satisfying to own and to one day liquidate.
There is a benefit to collecting with a focused intent.
While it might feel nice to own a whole jar of buffalo nickels with partially visible dates, for the same price you could instead buy a single, highly eye appealing Morgan Silver Dollar. The silver dollar is more visually interesting to display, show others, study, and admire. Plus, it is likely to have greater liquidity, because more people will also want to own it someday.
An additional downside to accumulation-style collections is that they also take up much more space to store. Thus they create an increased risk for theft, as opposed to a collection that could perhaps easily be kept in a safety deposit box.
Mistake 2: Filling holes without regard for quality
Most coin collectors complete sets of coins. This means they attempt to assemble one of each date and mintmark combination within in a given series. It can be enjoyable, challenging, and fulfilling to complete date collections.
However, rather than focusing only on completing the task, focus on acquiring truly suitable representative examples for each “hole” in your set.
This is a good place to note that just because a coin is graded at a certain grade doesn’t mean that it is necessarily a quality example of that given date. So simply buying any certified coin you find that fills a hole, simply because it’s certified, probably isn’t going to be a good strategy. There are certain series of coins, like Buffalo Nickels and Wheat Pennies, for example, where the quality of the coins varies so drastically even when it comes to coins of the same date and mintmark that it can affect the pricing as much as plus or minus 50%!
To create a more valuable and meaningful date set, focus on how the holes in the set are filled.
Savor the experience of finding the right example coin. Take time to purchase references materials like the individualized red books for a given series and learn the strike and surface quality variances for certain issues. It simply is not as satisfying to own, for example, a walking liberty half dollar that may be graded as a gem but is completely missing lady liberty’s left hand from the defect of a very soft strike.
Bottom line: Try to seek out quality examples of any given date. In the end this will result in a remarkable and impressive set.
Mistake 3: Beginning a collection without a plan or budget
It is easy to begin a collection, but continuing and completing it typically requires some research, planning and consideration of your budget.
Let’s take the classic commemorative half dollar set as an example.
This set is rich in history and many coin collectors attempt to complete it. Suppose you have $500 at your disposal. That may seem like plenty. And it is—initially! You could afford a nice Oregon Trail Half Dollar (costing around $250 for a choice example) and still have plenty left over for a nice Columbian Exposition Half Dollar (about $150-200 for a pleasing piece).
But then comes the Spanish Trail Half Dollar.
Quality examples of the Spanish Trail Half Dollar will cost $1,000 or much more depending on the grade. Without doing a little research beforehand, you might not be aware that a coin that costs that much is needed to complete your collection. Without doing some planning and budgeting, you might not know whether it makes sense for you to buy a particular example at a specific price point.
The simple advice is to take time to research, plan, and budget accordingly.
If a desired set is too difficult or too costly to complete, consider secondary options. Or you might consider lowering your minimum acceptable grade to a level where the cost and availability are within reach.
Mistake 4: Being overly focused on finding bargains
Newer collectors tend to be a bit timid when it comes to coin collecting.
This is perfectly reasonable. After all, coin collecting has a high learning curve. In fact, it can be daunting! This is one reason why taking time to consult with a dealer will pay great dividends for newer collectors in time, money saved, and mistakes avoided.
Being timid can lead to being focused only on bargains.
Collectors first encountering the coin market are often focused on wanting to pay a bargain price for a coin. They want to pay as close to their chosen price guide as possible, or under it. But while we all want to get good deals, coin collecting is a hobby where what you put into it strongly correlates to what you (or your beneficiaries) take out.
Put simply, many coins that are “bargains” are bargains for a reason.
A coin could be bargain for something as innocent as it lacks eye appeal. But it could also be a bargain because it isn’t genuine – a frequent problem with certain online purchasing venues.
Collectors and dealers alike love to share stories about cherry picking special coins that turned out to be super gems worth many times more than what was paid. These stories are fun to hear, but be aware that they are not the norm.
Yes, it’s true that you can become an expert cherry picker, but…
You might have heard that some collectors manage to become expert cherry pickers. Some even have a side hustle, referred to in the industry as being a “Vest Pocket Dealer,” where they buy certain coins for less than they’re worth and resell them on a small scale. This is often done to fund their own collections.
However! Expertise in cherry picking is developed through years of diligence and knowledge in the industry. It is not something that someone can jump right into and expect to be successful.
Bargain-focused collectors also often overlook high quality coins.
Many newer collectors get so concerned about overpaying that they overlook the nicest high quality examples. Keep in mind that bargains won’t necessarily make up your whole collection. Some examples truly are worth paying reasonable market premiums for.
Also, there are times when paying more is warranted. In the case of high-quality coins bearing truly exceptional eye appeal or anomalies like radiant multicolored toning, sometimes paying 10-20% over price guide is not only merited but is the only way you might have to acquire that exceptional piece.
Pro Tip: The best way for a newer collector to navigate the market is with the right help.
Start by getting to know dealerships in your area. Let them know what you are planning to collect, and let them offer insight and advice. Don’t be afraid to purchase locally, as it helps support the local economy. Honest dealers will always be transparent with new collectors in educating them on how coins are priced.
In terms of which price guide to use, it is okay to start the Red Book, a.k.a. A Guide Book of United States Coins, which is published annually by Whitman Publishing. The values in the Red Book represent the average retain price a collector should expect to pay for a nice example with a given grade.
Collectors should also consider subscribing to the CPG, which is the Collector Price Guide companion to the coin dealer greysheet. This publication tracks the retail market on a more up to date basis than just once per year like the Red Book.
Finally, remember that it takes time to understand all the nuances of coin collecting.
The four mistakes above represent some of the most common errors new collectors make, but they certainly aren’t comprehensive. Coin collecting is a hobby with a high learning curve. Don’t be afraid to get help, and definitely feel free to ask questions.
We offer free consultations at our office in Fishers which are perfect for helping new collectors get started.
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