Are rare coins a good investment?

Are rare coins a good investment? Now there’s a question.

We’ll come to the answer later – but for now, we just want to give you some background as to how to buy rare kinds and where to sell them, both online and off-line.

The United States has a long history of releasing a varied and interesting range of coinage over the years. Since the time of the Civil War, through the conquest of the West, the modern world wars, and other historic events, coins have reflected the social and economic times and values of the US.

Most of the older coins were made of precious metals. Silver coins and gold coins were fairly standard until the beginning of the 20th century until the decision was made to pull away from metal value to face value. Subsequent coins were often made of alloys or amalgams rather than pure gold or silver.

Ancient coins, those older than the union, such as Spanish doubloons have been chanced upon, over the years, lost by some pioneering explorer – but, in the main, because the United States is a relatively young country it’s own rare coins tend to be because of a fault in manufacture or because of a shortage of the initial minting or a holding back of the release.

Valuable coins such as the “Draped Bust dollar,” the “Capped Bust,” “Liberty Head” and “Liberty seated,” “State quarter,” and “Flowing hair,” are all very familiar to American collectors – but “valuable” does not necessarily mean “rare.”

The problem with rare coins

Straight off the bat, rare coins fetch big money – but, equally, they cost big money. Here are some of the prices that rare coins for sale have fetched at auction in recent years:

• 1913 Liberty Head V Nickel $4,408,650
• 1870 S Liberty Seated Dollar $1,959,995
• 1927 D St Gaudens Double Eagle $1,200,000
• 1794 Flowing Hair Dollar $825,098
• 1838 O Capped Bust Half Dollar $745,000
• 1933 Indian Head Gold Eagle $600,000
• 1817 Capped Bust Half Dollar $500,000
• 1797 Draped Bust Half Dollar $500,000
• 1901 Morgan Silver Dollar $425,000
• 1893 S Morgan Silver Dollar $300,000

Obviously, these kind of prices for old U.S. coins are beyond most of our pockets – and it is debatable as to whether the rarest US coins would make much of a profit beyond the prices paid for them.

The reasons for this are coins which are worth money need to be certified, authenticated, stored properly and kept securely. All of this costs money. These are things you need to seriously consider if you want to collect rare American coins.

Couple such considerations with the fact that nobody will pay much more than the 4 ½ million dollars the 1913 Liberty Head V nickel fetched, as there is a ceiling to both the premium such a coin can command and a limit to the number of people willing to buy.

Where to find rare coins

Coins which are rare and worth money can be found across the country if you are prepared to put the groundwork in and do some research.

Going to local garage sales, house clearance auctions, reading through small ads, advertising that you will buy old coins for cash, even metal detecting, Are all good ways to discover rare old coins which can be picked up for a premium.

Most valuable coins and most expensive coins have been discovered by accident initially. This is where you can make the most money. Buying from dealers – online or off-line – will be more expensive as they take their cut too.

This does not necessarily mean that there are no bargains to be had, but coin dealers tend to be “canny” and you have to be very lucky to snag a bargain with an experienced coin collector.

If you are a beginner and you are looking for coins which fetch money it is worth going to collectors fairs and talking to these more experienced coin collectors. They would agree that most valuable coins are already taken and in somebody’s collection.

Such collectors can guide you to a middle ground where you can find rare American coins that are still available but are more affordable and still have scope to leave some money on the table for you.

Old U.S. coins are the easiest to trade for both buyers and sellers. Most expensive coin mistakes are made because the buyer or seller does not understand the market.

Even if you are interested in rarer foreign coins, we would suggest that you cut your teeth on the homegrown ones to get a feel for bargaining and negotiating. You can then graduate to the most expensive coins and rare old coins which are less understood but have more scope for profit.

Coins worth money are out there – you just have to find them!