Retirement......numismatic coins saved....

How to make money in coins:

1. Specialize - Pick a niche, join its club, read the books, review the auction catalogs. Keep making yourself an expert in the field.
2. Time - Maybe at least a decade hoping the prices will go up.
3. Avoid U.S. Mint products.
4. Buy PCGS/NGC coins in the beginning until you learn how to grade. Since I always collected historical coins this was never an issue with me other than currently buying U.S. Errors both in paper and in coin.
5. Attend local shows and if you buy from Heritage or Stacks/Bowers make it coins - you must have. Few dealers I know can make a living buying from these high end forums. Sometimes the same coins are found in more lesser name auctions.
6. Learn how to buy and sell. Most people just buy - it simply makes you HALF of a collector.
7. Know which auction houses specialize in each type of material you wish to specialize.
8. Avoid Heritage and Stacks/Bowers as your "sole source" of buying coins. 17.5%. Maximum competition arena.
9. Learn how to grade - quickly.
10. Move to historical or Ancients if wish to really enjoy collecting solely for its pleasure. IMO - these who do usually break better than even as only experts really venture here rather than the simple minded accumulators we see with 20thC type coins. Its harsh ...

John Lorenzo
Numismatist
United States

 

Log in or Sign up to hide this ad.

I own rental properties, it,s no picnic....in best case, you can turn a profit, but some cases are not of best. Money invested in diversified mutual funds is by far the best way to save for a retirement if you,r still young. Never panic and sell off your fund as you will loose your fees and your number of shares. I have so far invested only about $25,000 and the return has been over 100,000 and the funds are still worth over $70,000! As for the rentals, my overall return has been maybe 20% of what the mutual funds have returned. If I knew then what I know now, it all would be in the funds. Not to mention the LABOR involved with rentals is tremendous and totally non-productive time spent and NEVER recoverable. In the past 10 years, rents have dropped about 33% while the stock market has gone up about the same...it,s not rocket science when you do the math.

 

Coin collecting is a hobby, to be enjoyed like any other. The money to be made(or lost) is in the hands of dealers, brokers, graders, auctioneers, etc. most collectors will never see a substantial profit from collecting, but a few wise collectors may.

 

I started buying gold coins when they were in the $400 - $450 range for St Gaudens I think in 1997. The Dow in 1997 was about 8,000 back then. Now gold is $1275 and the DOW is 17,700. 3.2x vs 2.2x. Gold won in this long term generalization.

But compare it to Apple stock which I bought some time between $4 and $6 a share (when Jobs came back); or conversely if you dare compare it to Enron stock. Hey, I even bought Kmart stock back then.

At least gold will have some value at some time, unlike some stocks.
Stocks can come and go or merge and split. Real Estate is great if you can buy it for cash or have a good renter - and know you have to spend time on them.

There are so many options which can vary based upon your risk adverseness and long term goals and on how much you have to invest in a block or monthly investment.

If you don't know about investing I'd recommend contact someone that can help you. It's very easy to lose money quickly if you don't know what you are doing ( Just watch the Coin Vault on HSN as an example of immediate loss).

As mentioned above, check into Mutual Funds. so many varieties.

 

I also bought some gold about 15 years ago for around $ 230/oz. and again when it was around $500. It got sold for about $1100/oz. when I needed to fix up rentals which were damaged by poor tenants. I got into mutual funds in the mid to late 70,s when the market was around $1200. As it was a IRA account, I could not touch it so I had 4% buy in fees, dividends, splits, which compounded over a period of 25 years or so. I don,t know if markets will mirror these returns or not, but if they do then both market funds and precious metals should do very well over the LONG TERM.

 

if you hold on to coins you are not a half collector as far as I am concerned I take offence to being called a half collector as I don't sell but I assure you in my 50 years of collecting I will turn a profit if I so desire to sell if you can hold them as long as I have a profit is to be made but they take a lot of room and I only get the best just my obsevation

 

Fifty years is no guarantee of a profit either. Many collectors in the early 60's bought BU rolls of coins. The prices were pretty high. 1950 D 5¢, 1960 small date cents and many others traded for thousands of dollars per roll. The prices collapsed and have never recovered.

Even farther back, Hard Times tokens, Washington medals and tokens, So-Called-Dollars and such were among the most collectable and pricy items going. Today? Not so much.

Even Columbia Worlds Fair items have come down in price and interest.

 

you are correct but I was wise and did not invest in that type of coins but what I did will make a profit as I have seen in the past years for what I paid and what I know they will sell at rock bottom todays price i will make a fairly decent profit the deal is a person has to keep them long enough as I have I will make out of course for what I paid for them then and what they sell for now will still beat what I paid for them look at the mint and proof sets what I paid for in the 50s they will always sell higher than what I paid

 

Simon,
It is also best to be out of debt as much as possible.
And to be self sufficient as much as possible.

 

A couple of days ago I Googled Famous coin hoards. The 50-D was in the article by N G C. I started collecting in 1963 and then, a 50-D 5c sold in unc. for around $40. That kind of money for me was only a dream. Only a tiny fraction of the original mintage ever saw the light of day. When the 2.2 million or so coins were minted the bulk of them were shipped to a Fed Res. Bank. I believe it was Kansas City...anyway, a guy bought a million coins when they were finally discovered in the 70s. So many coins were sold that they became one of the most common of the early Jeffersons. The price droped to around $6 a coin or less. Now they have recovered a little but still are one of the most collected but very common of the early Jeffersons. For many of the other dates those kind of numbers were never hoarded so most dates have fewer numbers of unc, coins which exist today. This is why a circulated 50-d nickel is almost never seen in a collection.

 

I feel if I break even with my collectables, I did well. Some will go up and others down. Because of this, I have set a limit on my collectable currency purchases. I have reached it and will now sell some of the completed sets in order to start others. It's a practical and flexible line, not a rigid one. I enjoy the chase and the find of a note or coin, but it doesn't need to be a rarity. I'll keep one or two from a set I am about to sell, as a keepsake. I photograph ever one I buy to have and provide reference for others. I too gave up on our government's modern and commemoratives. I collect the classic U.S. coins, large sized paper currency and a few small ones. I also found some substantial gains in exonumia, but you need to keep current on unique collectables. I have bought and sold exonumia such as tokens, medals, casino chips, money banks, cash registers, dies, items from well known fairs, fantasy pieces, unusual serial numbers, fractional currency, jewelry based on a currency theme, repousse coins, and engravings. I'm sure I missed a few items here, but if you know what your doing, there is gold in them there hills! :>)

 

Stu - a few dealers have told me buying the right coin is EASY but selling is MORE DIFFICULT. Knowing how to buy and sell IMO makes your a more astute collector. As an example non-silver post 1965 Proof Sets when first issued most people when first entering the hobby make this mistake particularly if purchased from a dealer just after issue and then their decline one year later. A simplistic example ... some can claim I am just in it for the FUN and not the money ... its an interesting claim that over 10 years say someone can spend $50,000 and net only $25,000 and they have no qualms about this ... ??? Stu - it would be interesting in how much LOW END stuff you have in your collection which you bought when you first started that could be flipped for some key date Federal pieces - NOW? Yes ... its MORE work than simply buying. I have seen very few specialists operate in this manner and more so of generalist in terms of this hobby. Of the few specialists most were not as effective as the specialist that bought and sold ... upgrading more effectively to obtain a more rare or higher condition example.
Saltysam-1 I agree exonumia if you research and become an expert there is always a bargain at antique shows or if someone just purchased a small hoard of items and its not their specialty ... even on E-Bay simply moving a token to a better category and giving it a more fuller/accurate description can see positive changes.

 

But if one considers what those 1950 dollars could buy back then and what they buy now, it's not such a money making deal either.

My grandfather told me a truism many years ago and I live buy it......

"David", he said. "You'll never loose money taking a profit."

 

the point being missed is what happens if the dollar were to fail? if a new president stopped paying our creditors and the dollar became worthless. in this somewhat apocalyptic, certainly possible future (if you believe what one candidate has openly vowed to do), the dollar could become like a 3rd world currency. if it did, then specie, a/k/a gold, silver, other precious metals, then become the only accepted method of paying for food, etc. this has been a major, if single, selling point of many financial advisors whose papers on this can easily be obtained.

someone else mentioned using a financial advisor. beware. i tried running this idea past one and he fluffed it off. and most of them are "on the take" in that what they sell, like 'blank' fund or stock but they have a financial interest in selling it to you: usually their company owns the produce they are selling as a good investment. i think that's called a conflict of interest, but is widespread apparently.

 

Johnny Oneal,
A lot could be said on this subject. You are questioning what would happen in hyper-inflation. You are right precious metals would be good to own. Also, if you new it was coming be in debt as much as possible because you could pay off the debt in worthless dollars. Any tangible items would be good to own. Instead of high value gold coins, I would suggest silver dimes. It may be hard to get change when you are buying a loaf of bread for a dollar and all you have is a 50 dollar gold piece. A silver dime may be all you need in this case. Plus it is a lot easier to afford a some dimes than a gold coin right now. In both deflation and inflation it is best to be as self sufficient as possible.
I agree with your statement about financial advisors. I would suggest you invest in one of the Utilities companies you use. I use Verizon and can buy stocks directly from them without any fees. In either deflation or inflation, I think utilities could keep up. More importantly if the bad times are not severe, it is a great income investment without vultures trying to get a piece of the action. I have been hearing about these scenarios since the early 1980's. They got me into precious metals and then coin collecting.
BTW, have you ever heard how Germany solved there massive hyper-inflation after WWII? With utilities you are buying an income stream. What ever approach you take it would be best (IMO) to be prepared for all 3 possibilities. Good luck.

 

All of your points are excellent!

 

King George,
These notions that bullion will do you well in a hyperinflation panic may be false. For one thing, merchants do not accept gold or silver in exchange for goods and services. One will always have to convert their tangible assets into paper assets or into currency in order to make the transaction. If anyone ever found out merchants used barter as payment, both the seller and buyer would be in serious danger of being either plundered or killed. If you fill your pockets with bullion right now and go out and try to use them for barter, no one will dare to deal with you, after all, we are and have been in a mild hyper state for many decades. Weather it,s art, jewelry, bullion, foreign currency, drugs, or whatever, you will always have to convert (for a fee) into currency.

 

At that "rock bottom" price will you get back five times what you put into them? After 50 years that's the return you need to break even in real terms. Now I realize that you probably have not held all of them for over 50 years so you don't have to actually reach 5 times but just making more than you put in doesn't necessarily mean you have "made a profit".

 

I think that post set a record for not using a period.

 

I really am not concerned with everybody's inflation theory. I am only concerned with what I paid for each which I keep very good records. when I paid $3.00 for liberty seated dollars I no for a fact a profit is to be made. I keep track of what people are paying at the rock bottom price of todays market if I sell them which I wont I will get a profit yes it took years but they will turn a profit no matter what all this inflation and other analysis style of others thinking. even with the certified coins back in the days when they started certifying coins I do have a lot so a profit can and will be made in my situation but the grandkids will get them and a profit with them is a sure thing as they paid nothing for them.