Numismatics 101: Coin Collecting Tips for Beginners

A passion for coin collecting has been around ever since coins were first created thousands of years ago. Its roots date back to ancient kings and queens who referred to it as the ‘Hobby of Kings’. Encyclopaedia Britannica explains that coin collecting was classed more as an art collection rather than by monetary value, as ancient people appreciated the craftsmanship of the coins. Today, collecting coins is more focused on value and its official term is now globally accepted as “numismatics”.

The process can be both fun and potentially profitable for collectors. Collecting coins require much more than just saving spare change. The process of building a collection takes time, patience and perseverance, and may often also require a significant financial investment.

How to get started

Here are some helpful steps to make the collecting process more fun, easy and profitable:

1. Get all the tools and supplies needed such as a magnifying glass, a price guide, protective sleeves and holders, a thin pair of cotton gloves and felt or other non-abrasive cloths.
2. Educate yourself. Learn how to determine the different kinds of coins (i.e. historical, artistic, quality) by reading some entry-level books on collecting, grading and preserving coins.
3. Look to specialise in a given set of coins. The more you narrow your focus, the easier it will be to understand the value and grading, minimising the chances of purchasing coins above their market value.
4. Set goals. Determine the scope of your collection and how far it can go before you can display it.
5. Seek assistance from professionals. When starting out, do not be afraid to get help, especially when grading coins. By seeking help from older collectors, you can learn a lot from the lessons they’ve learnt along the way.
6. Familiarise yourself with the basic numismatist lingo (bag marks, brockage, business strikes), as this can help you when talking with a dealer or when you plan to attend your first coin show. The PCGS website has a useful list of coin market terms and slang used by people in the industry.

Coins as investments

Coins offer collectors more than just something to collect and display, and there are some numismatists that gather coins for investment purposes. People investing in gold and silver bullion have been introduced to coin investing, for example, as a way to diversity their portfolio.

A senior numismatist recently told CNBC that " … we're at the genesis of a new way of looking at rare coins—from an investment perspective instead of a collecting perspective."

While rare coins are great, there are also new ones on the market that are highly collectable. In April, it was reported the new £1 coins are worth $AU 419 (£250), for example. Britain’s recent announcement to exit the European Union may well be affecting the volatility of the British pound. Just as traders do various checks before buying or selling stocks, a prudent coin collector should also consider key factors when considering whether to invest in British coins, such as central bank policies, currency account deficit, market psychology and political uncertainty.

Should I collect coins?

Collecting or investing in coins is obviously not for everybody. Here are some reasons why coin collecting might not be ideal for you:

• Coins are not an overnight ‘guaranteed’ investment. The increase in value may take many years until it sees significant growth.
• Coins can be expensive to collect, especially if you aim to acquire rare coins, some old coins, gold coins, and investment-level coins with high value. You will need to show persistence and patience in saving money to manage your own expensive collectables.
• These collections can raise insurance premiums, including your home insurance premium.
• Coins can be difficult to store and protect. The proper way of preserving coins requires space and money to keep the quality of the coins intact.

Final thoughts

I hope this article has provided you an insight on how to get started in collecting coins. The most important factor in coin collecting is to have fun! Enjoy each coin that you encounter including its historical background. And learn from yours experiences along the way.

About the author

Brianna Langley has been collecting coins since she was five years old. She has coins that date back to the early 1800s. Her passion for coin collecting was passed down by her grandfather, who was a numismatist with 100 different coins in his collection. She has attended several notable coin shows and events in the United Kingdom and hopes to attend similar conventions in Australia and Asia in the coming years.

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