Coin collecting, also known as numismatics, has been enjoyed by people throughout history. Augustus Caesar of Rome was one of the first known numismatists.
Other passionate fans of the hobby range from kings to multiple Popes to legendary singer-songwriter Johnny Cash.
Some people get into coin collections for fun, out of love with a particular historical era, or to complete a museum-quality collection.
Others invest in ancient and significant coins for financial reasons. Coins are one of the more accessible things you can invest in.
They don’t take up much space and don’t need extensive and specialized care. Coins also gain more value over time than trendy things like modern art or toys.
This isn’t the largest market in the world, but it’s a persistent one. Throughout human history, there have been people who were fascinated by coins.
They study, appreciate, and invest in things that have been used as money.
If you’re interested in stabilizing your financial future by investing in coins, these fans are your market.
Buyer Beware
Before we jump into things, let’s get a small warning out of the way. Coins are a great option to invest in, but do your homework. Not every purchase is a good one. Unfortunately, there are a fair number of counterfeits floating around the marketplace.
You may run across coins that have been doctored to improve their condition, hide defects, and overall appear to be of higher value too.
Be careful before investing your hard-earned money. Work with reputable dealers, and be extra cautious with private collectors. You’ll want coins that have been certified by one of these agencies:
- Professional Coin Grading Service (PCGS)
- Numismatic Guaranty Corporation (NGC)
- American Numismatic Association Certification Service (ANACS)
All three of these services are reputable and accepted by serious coin collectors around the world.
Now that you know where to look, let’s talk about how to turn a passion project into real value years from now.
Where to start?
So you want to invest in coins informally or as part of a precious metals SDIRA? Treat it as seriously as you would buying stocks and bonds.
Your first step is deciding what your goals are, the timeline, and your risk tolerance. Coins tend to increase in value over time, but this often means over decades instead of years.
Next, look at your finances. How much can you afford to tie up in tangible items like coins?
What are your regular expenses, including car payment plans, credit card debt, and DSCR loans? Don’t overextend yourself, but do keep an eye out for market shifts and undervalued coins for sale.
There are some great deals out there for people who know what they’re doing.
Finally, what’s your plan for protecting your investment? You’ll want your coins to be insured and stored securely, perhaps in a safe deposit box or fireproof safe. Don’t forget to protect them from damage. Coins, especially of softer materials like gold, are not as rugged as they look.
Resist the urge to scrub the surface, as that could scratch it up. Gently wipe grease and smudges away with lint-free cloths.
Keep them away from humidity, acids (present in many forms of cardboard), and plastics with PVC. These can eat away at the surface, lowering the value of your investment.
Buying Coins the Easy Way
One easy place to start is with precious metals and bullion coins. These include the US Double Eagles issued between 1849 and 1933, gold coins that remain a prized collector’s item. However, you don’t need to get into the complex historical market.
The US Mint also issues modern bullion coins made of pure precious metals. Their value is tied to the current price of silver, gold, platinum, and even palladium.
Bullion coins are accessible ways to invest in coins and precious metals. Here, you’re tying value to something concrete instead of to the unpredictable stock market.
Are you interested in going this route? The US Mint distributes bullion coins through official distributors.
These distributors can protect you from scams, adulterated metal coins, and more.
Ready to diversify?
When it comes to coin collection, value is in the eye of the beholder.
How much is a Civil War-era penny worth in your portfolio?
What about a Spanish Doubloon recovered from a sunken ship?
The answer is: whatever a collector is willing to pay when you’re ready to sell.
Numismatists look at several factors when they decide to buy a coin. These include:
- Country of issue
- Coin age, whether exact or estimated
- Materials used, whether pure metal or plated
- Condition (although some features like strike errors increase the value)
- Coin rarity on the market
- Aesthetic appreciation
- Historical significance, ownership paper trails, etc.
- Sentimental value
As you can see, there’s a lot that goes into a coin’s final sales value. Investors who want to keep it simple can stick with bullion coins.
If you’re willing to study and keep an eye on the market, you can expand to other forms of historic and significant currency. This market fluctuates over time.
You’ll want to have the coins reappraised regularly and stay on top of trends. Learn as much as you can about numismatics. This will make it easier to guess which coins will sell for many times their value down the line.
A Financially Stable Future
Numismatics is a hobby that takes you down a lot of different paths. You’ll learn about history, metallurgy, art styles favored artists, and more. It’s also a way to expand your SDIRA portfolio in an interesting new direction.
Coin investments give you the potential for future profits that aren’t tied to a volatile stock market. So a tech company went under or a real estate bubble burst?
It doesn’t matter to your portfolio. Coins sell on the market because of an enduring human fascination with them.
When you buy coins with the plan to sell them down the line, you have a tangible asset that could be resold for many times its value.
