Coin Collecting: A Beginner's Guide to Numismatics

Have you ever stumbled upon an interesting coin and wondered about its history and value? Perhaps it was an old Buffalo Nickel or a silver dollar gifted by your grandparents. This curiosity can be the spark that ignites a lifelong passion for coin collecting. This guide is designed to provide the fundamentals for anyone interested in starting their own coin collection.

What is Numismatics?

Numismatics is the scientific study of currency and its history in all its varied forms. A numismatist is a specialist in numismatics or a person who collects numismatic items, especially coins.

Getting Started: The First Steps

There's no right or wrong way to collect coins; it's a very popular saying among coin collectors. You decide what to collect. I got started collecting coins like lots of folks, I imagine. I just happened across an unusual coin and I was curious about it, so I stuck it away so I wouldn't spend it.

One of the cheapest ways to begin collecting is by saving specific £1, £2 or 50p coins which are found in pocket change. You can even begin with coins that you already have on hand.

Here's a step-by-step approach to starting your coin collection:

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Learn the Basics: Before spending money on coins, learn everything you can about them. Familiarize yourself with the meanings of terms used by coin collectors and dealers and check out the anatomy of a coin.
Find Other Numismatists: Coin clubs allow you to share your collection with others and learn more about coins. There are many national and local clubs and numismatic organizations.
Define Your Focus: When starting out, very few collectors actually know what types of coins they want to collect.

Choosing a Collecting Strategy

When it comes to collecting coins, there are no fixed rules. Here are a few popular approaches:

Collecting by Theme

Collecting by theme is probably the most common way to get started with numismatics - the possibilities are endless. Simply choose a topic which has been depicted on a coin and away you go. It could be an imaginary character, famous person, animals, cars, railways, flowers, buildings, landmarks, sport or sporting event. This approach allows for a diverse and engaging collection.

Collecting by Historical Period

Historical enthusiasts love to collect coins which relate to a specific period. You may be interested in a time period (e.g. WW2 from 1939 to 1945) or a year which has significance for you, such England’s World Cup win in 1966. Perhaps you could acquire each coin issued from one particular year, like the Crown through to the Farthing, before doing the same for another year.

Collecting by Coin Value or Denomination

If you choose to collect based on a coin’s value, it opens the possibility of acquiring every major design ever featured, such as those on a Penny or Farthing.

Collecting by Country

If you want to learn about the culture and history of a country, collecting coins is a great way to do it.

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Error Coins

Sometimes the Mint makes mistakes. Although most error coins are recycled before they ever leave a Mint facility, the few that make it into circulation are often considered collectibles.

Essential Knowledge for Coin Collectors

Whatever the reason someone becomes interested in coin collecting, there are some fundamentals any collector should understand. The first is to become educated, and there are multiple avenues in which to do so. In our experience, the golden rule of collecting is to only acquire coins that you like or find interesting.

The Importance of Grading

The oft-repeated phrase in the hobby is, ”buy the book before the coin,” and it is probably the best advice any collector will receive. The first numismatic book any collector should read is on grading. Grading is the descriptive term we use to show how worn the coin is from regular use. The higher the grade, the more one can expect to pay for the coin. The Sheldon coin grading scale is used to determine a coin’s value, based on factors such as how well the coin was made, how much wear it’s developed, and the luster. A coin is assigned a number between 1 and 70, as well as an adjective such as poor, good, very fine, or mint state.

Grading is both an art and a science, and, like any skill, it takes the knowledge provided through reading and mentorship combined with practice to become good at it. It is, however, perhaps the most important skill a coin collector can master. There are professional coin grading services, but grading is subjective. As a collector, it’s important to understand coin grading to know the value of a coin and to verify grades given by others.

Key Grading Factors

How worn is it?
Is the coin appealing to you? How lustrous is it? There is no way to restore a coin’s shininess.
Is it damaged? Scratches, bag marks, staple marks, and corrosion will decrease a coin’s value.

Essential Books on Grading

Official American Numismatic Association Grading Standards for United States Coins
Grading Coins by Photographs
Photograde: Official Photographic Grading Guide for United States Coins

Specialization

Many collectors opt to specialize rather than gobble up anything they find interesting, and reading books on their specialty is the best way to do it. I’ve met others who pursue date and mint mark sets of one coin series, such as Mercury dimes, Franklin halves, or Lincoln cents. Each of these coin series and others have a plethora of books from which to choose, so a new collector should select something that interests them and then read at least one book on it. A wise coin collector will learn as much as they can about one series before they begin to collect it. What rare or expensive coins will prohibit a collector from completing a set? What varieties are available and how difficult are they to find?

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Tools of the Trade

Every collector needs a loupe. A loupe allows one to see the coin’s surfaces, typically magnified 5X, 7X, or 10X in numismatic circles. Authenticating a coin’s genuineness by looking at specific points you learned about while reading is one main use of a loupe, as are grading, examining toning to determine whether it is natural or artificial, checking for signs of cleaning or other damage, and attributing varieties. Therefore, after a new collector has spent their coin budget on a book, the second thing they should save for is a loupe. A good one is usually under $50.

Handling Coins with Care

For coins not inside any kind of holder, referred to as ”raw” coins, only hold it by the edges. Oils from fingers left on the coin’s surfaces can damage it over time. Some people use specially made coin tweezers or white gloves rather than holding the coin with bare fingers at all.
Coin envelopes, made from acid-free paper, are ideal for storing single coins.

Evaluating a Coin Before Purchase

When you spot a coin in which you are interested, examine it under good lighting. Look at the luster, or shininess of the coin, to determine whether the coin has been harshly dipped, cleaned, whizzed, or otherwise damaged. Check for hairlines, or tiny scratches parallel to one another, which are indicative of cleaning. A dull luster could indicate the coin has been harshly dipped. An undamaged coin will exhibit luster which reflects in an hourglass shape. When the coin is rotated, the hourglass pattern will appear to spin; this phenomenon is known as ”cartwheeling,” and is the ideal luster. Spotting good luster takes practice, and this is best learned under the tutelage of a more experienced numismatist.
Determine what you believe the grade to be, and use your grading book. In reality, if you ask five different people their opinion of the grade, you will get five different answers. The real question is what you think the grade is, which influences what you are willing to pay. There may be some occasions where you disagree with the dealer’s grade, and therefore the asking price. The key is whether the seller and the buyer can reach a consensus. Additionally, there are, unfortunately, some unscrupulous dealers in the coin market who intentionally “over grade,” or assign a grade which is clearly higher than the coin’s actual grade, in an attempt to bilk an unsuspecting buyer out of their hard-earned money.
Check for problems. Things such as dings, contact marks, or corrosion can adversely affect the coin’s grade to the point where it cannot be graded as a problem-free coin. The Numismatic Guaranty Corporation (NGC), a respected independent third-party coin grading service, refers to these as “details” coins. Other companies have their own terms which denote the same thing. In other words, if a coin exhibits wear which would normally grade as a Fine-15 coin but has a substantial rim ding, the coin would be graded as ”Fine Details,” and command a much lower price than a problem-free coin.
Check eye appeal. Although a coin may technically grade in a range acceptable to you and within your price range, there may be blotchy, dark toning or other factors which impair its eye appeal.
If a coin is encapsulated, or ”slabbed,” by a third party grading service, you can reasonably assume it is genuine. However, examine the photos for all the aspects discussed here and ensure you agree with the grade and/or variety attribution, and whether it has the eye appeal you are looking for. The saying goes, ”Buy the coin, not the slab.” Remember, a third party grading service verifies a coin’s authenticity and then assigns a grade based on wear. They can attribute varieties if the person submitting it for grading pays for this service, so it may be a variety which does not appear on the label. They do not assess eye appeal. Check a price guide or know the going rates for the coin you are buying.

Buying Coins Online

All of these techniques are much more difficult to practice when buying online, but in today’s world, there is no escaping the convenience of finding that perfect coin through the power of the internet.

First and foremost, research the reputation of the seller. Most auction sites have the ability to review sellers and to read other buyers’ reviews.
Secondly, read and understand the seller’s return policy. If the coin in hand does not look like the coin in the photographs online, what can be done to rectify it? Will you get a full refund? Who pays shipping costs?
Thirdly, closely examine the photos of the coin. Photos should be straight on, not at an angle. Some sellers hide hairlines (signs of cleaning) and other problems by shooting the photograph at a sharp angle, causing the light to reflect differently and the hairlines not to show. You could request a different photograph from the seller, or you could simply move on to the next coin.
Fourthly, consider that many rare, or “key,” coins are being counterfeited in large numbers, mostly in China. It is a problem as old as money itself, and online auction sites are rife with counterfeits. Inexperienced numismatists can get excited over the cheap 1916-D mercury dime and think they’ve scored an auction win, only to send it off for grading and have it returned as a counterfeit. Therefore, as a rule, when buying key coins, only buy those certified and encapsulated by a reputable third party grader.
Lastly, avoid online coin sellers who claim they do not know anything about the coin, or coins in general, or are merely settling an estate. As a rule of thumb, these people do know, in fact, something about coins and use ignorance to create a layer of plausible deniability for when their problem coins are discovered.

Valuing a Coin Collection

If you own or have inherited a coin collection and you’d like a professional valuation, please call 01926 499031 or get in touch to make an appointment.

Avoiding Common Mistakes

As with any hobby or specialism, novices are more inclined to make mistakes compared to collectors with more experience. However, you should think long and hard before buying any coin. Is it the type you like and within a price range you can afford? Depending on your budget, it’s always wise to try and buy the best quality coin you can afford at the time. In the long run, adopting this attitude will reap its rewards.

Additional Resources

To make collecting even easier, we've created beginner guides for the most common types of collections. We also offer helpful tips on caring for your coins, and on storage options to protect and display your collection.

Conclusion

Remember, coin collecting should be an enjoyable experience. Take your time, do your research and learn about all the different coins which are available. The aim is to ensure that you get your money's worth and that your coin will someday be worth more than you paid for it.

Just getting started? This guide to collecting coins is a work in progress. And don't forget to check back often.

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