The Best Way to Deal with a Coin Collecting Addiction
First off, the tone of this article is meant to be somewhat lighthearted. We know that addiction is a serious issue, which we would never make light of. That being said, you may or may not admit it, but you may be a coin collecting addict. The inspiration of this article is from a customer that we met with for a second time in about a year’s time. When we originally spoke with her, she needed funds for a short-term need and reluctantly (no one ever likes to sell their coins) needed to liquidate her collection. The collection consisted of many interesting modern coins, but most of them ended up being novelty items with a somewhat limited market.
Even though she had spent a good deal of money acquiring these items, she was happy with her payout. That being said, she acknowledged that she didn’t have much of a strategy as she acquired pieces for her collection. Rather, she purchased them because they were interesting to her and had not taken resale into consideration. She stated that her goal in the future was to focus more on liquid and marketable items with the intent of holding the items indefinitely.
Unfortunately, this same customer recently found herself in need of financial assistance and chose to sell her newly acquired coin collection to meet those needs. It’s amazing how many coins an individual can acquire in such a short period of time. While we saw some of the same habits as last time, admittedly, she had done a bit better. When we reached out to her with a total and an assessment of the items that she had acquired over the past year, her response was “I can’t help it, I’m a coin addict.”
We suspect that many of our readers are in the same boat. If you identify with this statement, then this article is for you. We’ll provide you with some helpful hints to overcome some of the pitfalls that we see with serial coin addicts.
Limit Your Mad Money Purchases
One way to avoid making purchases that you may ultimately end up regretting in the future is by limiting your mad money purchases.
These are impulsive purchases that are driven by emotion as opposed to logic or reason. If you set aside a specific budget each month for these types of purchases, then you’ll be forced to prioritize your purchases, which will likely make you a more informed and discerning buyer. If you have issues sticking with a monthly budget, you might want to consider the envelope method proposed by Dave Ramsey. While we don’t agree with everything that Dave Ramsey espouses, we can get on board with budgeting and disciplined spending.
We realize that in many respects this is easier said than done. If you regularly expose yourself to novelty-type coins, it will be more difficult to restrain yourself. This really isn’t your fault, as companies employ expert marketers to make it nearly impossible to resist. As an example, me and my family recently went to Cancun. While waiting at the Cancun airport to depart for Atlanta, my wife saw a beach-themed Panama Jack t-shirt for $35. The same t-shirt can be purchased at Wal-Mart for $5 – $10, but the owners of the kiosk know that tourists will likely want a memento from their trip and are banking on the fact that they’re still willing to spend frivolously, as we all tend to do while on vacation.
Needless to say, the t-shirt ended up making the flight back with us to Atlanta.
Even coin experts are susceptible to mad money purchases. For example, my son likes superhero-themed coins, so I oftentimes find myself stretching a bit on the price of items knowing that he’ll appreciate these coins, even if they’re not likely to increase in value at the same pace as many other silver coin options.
Late Night Coin Infomercials
We’ve all been up late at night (probably because we’ve spent too much money on coins), only to turn on the television and find a late-night coin TV show. These are really just 30 or 60 minute infomercials, similar to the Home Shopping Network or Cable Shopping Network, but make for interesting late night viewing. The presenters make compelling reasons for every coin, discussing in detail the beautiful design, production, packaging and rarity of the items. In some cases, this is actually the case, but in many cases, they’re overselling a somewhat mundane or common coin.
Regardless, unless you take time to research the specific coin(s) that they’re selling, you may find yourself picking up the phone and placing your order. If the coins are fairly priced and are something that you had already planned on purchasing as an investment, that’s one thing. However, we recommend taking a step back and an objective approach (at least as much as possible), to see if this is a coin or coins that you have previously identified as being part of your long-term investment strategy. If not, consider passing or changing the channel.
On the other hand, if you find something that the featured coin is on your “collectible” bucket list, isn’t overly expensive, and you haven’t spent your monthly mad money budget, go ahead and purchase it and have some fun. Afterall, there’s nothing like anticipating a package in the mail for something that you’ve had your eye on for some time.
Have Fun with Coins
One reason why coin collecting and investing is so captivating is that it allows you to have fun with your investment and/or hobby. Investing in stocks, bonds, or mutual funds can ultimately be rewarding, especially if you buy at the right price and know when to exit your position, but there’s really no sense of fun or adventure in these traditional investments. Coins, on the other hand, allow you to invest in a piece of history or a rare and desirable item, which provides a sense of satisfaction and financial return at the same time. Here is an example of a gentleman with an coin from the middle ages, check out his story here.
We believe that enjoying these rarities is what makes coin collecting and investing rewarding. Furthermore, taking the time to research and learn the nuisances of various options is also a great way to invest your time. Not only will you feel more confident when you purchase coins, but you’ll also experience a thrill when you are able to find a truly great deal. It’s a fact that coin dealers occasionally leave money on the table, as they can’t be an expert in all things. If you can specialize in a particular area, you’ll likely be able to find deals that you wouldn’t otherwise realize were available.
Making money and having fun is a great combination, and one you should strive for. Take a look at your current collection, see if you can find a particular coin or type of coin that you seem to be partial to, and if this is a coin that you would like to learn more about, start the process today. Afterall, you’re not likely missing out on much if you occasionally pass on a sitcom while doing coin research.
Pros and Cons of Modern Coins
Modern coins are some of the most intriguing coins in the market today. The creativity, detail and design of some of the coins, especially from foreign mints, is truly a work of art. Never have we seen such artistic beauty, nor have we been able to invest in theme-related coins before, such as superheroes, national parks, animals, artists, etc. Many of these coins (some of which aren’t in the traditional shape of a coin) are limited edition and may increase in value over time. We discussed modern coins in this article if you want to lea
Some coin dealers specialize in these coins and have relationships with foreign mints as the sole distributor of the coins, which gives them a leg up and allows them to dictate the market for these coins. These collectible coins may be sold with the original packaging, as a certified coin, or as a combination offering including a certified coin with the mint packaging.
Oftentimes, these coins trade at a substantial premium over the underlying precious metals value. While we expect for numismatic coins to trade for more than their precious metals content, we’re concerned that some of these coins are priced so high that it might not be possible to recoup your money within a reasonable time frame. Furthermore, if the coin is not traditional from the perspective of its size, denomination, design or issuing mint, you may have a limited market when the time comes to sell.
As an example, at the end of the year, we were inundated with inventory. Much of it had to do with executors attempting to settle estates prior to year-end, but we also purchased coins and coin collections for many other reasons, such as individuals freeing up cash for travel and the holidays. We also suspect that some sellers were attempting to take advantage of a strong coin and bullion market with above average premiums. The level of activity was such that we had to pick and choose and ultimately ended up passing on some more obscure coins and sets that a couple of prospective customers were interested in selling. In both cases, the sellers were selling Canadian commemorative coins and sets, many of which were non-traditional sizes, and coins for which we’ve never had demand from our local buyers.
This isn’t to say that all commemorative Canadian coins aren’t liquid. In fact, that’s hardly the case. We regularly purchase and have in stock many interesting coins and sets from the Royal Canadian Mint. It just so happened in this situation that the coins and sets were too obscure and not a good fit for us. The moral of the story is to make sure that there’s a market for the modern coins that you’re looking to acquire, as there may be a need at some point in the future to liquidate the items. The goal is to have as broad and liquid of a market as possible. Ideally, you’ll invest in something that is so desirable that you’ll have coin dealers trying to outbid each other for your coins.
If you are looking to learn more about the value behind modern coins, check out this article we recently published.
Buy from Recognized Mints
A common mistake we see is that many coin collectors purchase coins from obscure mints. In fact, the country may only be one that you’re vaguely familiar with and couldn’t identify on a map. We understand that it can be somewhat of an internal struggle, as some of these mints produce beautiful coins that you won’t find anywhere else. The problem, of course, is like our above example, in that it may be difficult to find a buyer when and/or if the time comes to sell.
One way to improve your chances of successfully selling your coins in the future is by purchasing coins from recognized government mints. There are a number of government mints, but those that are most recognized and popular include the U.S. Mint, the Royal Canadian Mint, the Royal Mint, the Perth Mint, the Mexican Mint and the New Zealand Mint. Many of these mints release similar coins on an annual basis, while others produce and release one-of-a-kind type items. You may be more attracted to these special release coins, but they typically trade at higher premiums and can be more difficult to sell in the future.
We recommend that you stick with coins that have somewhat of a track record so you can see how the coin has performed over time and if it’s relatively easy to sell. For example, the American silver eagle anniversary sets from the U.S. Mint have been a big hit and have maintained their value over time. There’s a good chance that the next silver eagle anniversary set issued by the U.S. Mint will be in high demand will continue to have a strong market in the future. One way to improve your chances is by purchasing a coin or set with a track record that has a limited issue. An example of a few U.S. minted coins that fit these criteria are the 1995-w proof silver eagle, the 2019-s enhanced reverse proof silver eagle, and the palladium American eagles. The popularity and rarity of these coins will help to create a market for years to come.
In conclusion, we get it – being a coin addict is difficult, but by following a few guidelines, you can help keep your habit in check and hopefully purchase coins that will appreciate over time.
First things first – set aside a specific budget for your mad money purchases. This can be a weekly, monthly or annual budget. If you find it difficult to stay within your budget, use the envelope system and limit your purchases to the cash that you’ve set aside.
Be careful with late night T.V. coin shows, which can draw you in and drain your bank account before you realize it. If you find something compelling, do some independent research to confirm their claims. We recommend that you also steer clear of obscure coins from small unrecognized mints. These coins may be difficult to sell in the future.
Do have fun with your coin buying and investing. Take time to research coins, and if possible, attempt to become an expert in a particular field of coin collecting. If you do, you’ll likely be able to identify bargains that the general public misses, which is always fun and exciting. We also recommend that you stick with recognized mints and coins that have a track record to improve your chances of a positive return on your investment.
The coin experts at Atlanta Gold & Coin Buyers offer a variety of investment, collectible and even some novelty coins. We recommend that your core holdings be in investment coins, but don’t hesitate to enjoy yourself and have fun with coins and coin collecting. Unlike some coin dealers, we’re not paid on commission, so you can be sure that we’re providing unbiased advice and recommendations, which should improve your chances of success. Give us a call today at 404-236-9744 for all of your coin collecting and investment needs.