How to Start a Coin Collection: 5 Tips for Beginners

December 1, 2022

Starting a coin collection is a rewarding endeavor — in more ways than one! Not only is it a fun and fascinating hobby, but you can grow your wealth and diversify your financial portfolio if you approach your collection like an investment. 

Whether you’re interested in numismatics for their potential to rise in value, their historical significance, or a little of both, we’re happy to help you get started. Here are five tips to keep in mind as you embark on your numismatic journey.

1. Learn the Language

There’s a whole lot more to coin collecting than just collecting coins! If you really want to dive all the way in, a big part of learning how to start a coin collection is taking the time to understand the lingo. Here are some of the most common words you’ll run into.

  • Numismatics: Collectible, rare, antique, commemorative, historical, and low-population coins. 
  • Numismatist: A person who studies or collects coins and other currencies.
  • The Sheldon Coin Grading Scale: The universal scale that determines the condition of a coin. This is one of the most important terms to know about when starting a coin collection. We’ll talk more about the scale below.
  • NGC and PCGS: Established third-party grading services that determine a coin’s grade on the Sheldon Coin Grading Scale.
  • Face value: The monetary value listed on the coin. As you learn how to start a coin collection, you can basically ignore the face value, as collectible coins have a much higher intrinsic value than their face value.
  • Intrinsic value: The true value of the coin based on factors such as its precious metals content, condition, rarity, mint year, and numerous other factors.
  • Circulated coins: Coins that have been used as fiat currency among the general population.
  • Uncirculated coins: Coins that are in flawless condition and have never been used as currency.
  • Proof coins: The best of the finest examples of commemorative coins produced in small quantities specifically for collectors. Consider investing in proof coins as you learn how to start a coin collection.
  • Commemorative coins: Coins that were minted to celebrate a specific event, issue, place, or person.
  • Mint: The facility that produces coins. The United States Mint and Royal Canadian Mint are two examples.
  • Minting: The process of producing coins.
  • Mintage: The number of specific coins that were produced.

2. Know the Anatomy of a Coin

A variety of coins

Now that you know the most common terms you’ll run into while starting a coin collection, the next step is to get familiar with the parts of the coin beyond heads and tails! After all, part of learning how to start a coin collection is being able to talk shop with fellow collectors.

  • Obverse: Also known as heads, the obverse refers to the front of the coin.
  • Reverse: Also known as tails, the reverse refers to the back of the coin.
  • Edge: The “third side” of the coin — its outer border that may be serrated or smooth.
  • Rim: The raised section that spans the coin’s perimeter.
  • Field: The flat surface of the coin. 
  • Relief: The raised images on the coin’s field.

3. Brush Up on the Sheldon Coin Grading Scale

You must be familiar with the Sheldon Coin Grading Scale, especially if you’re in the early stages of discovering how to start a coin collection. This 70-point assessment scale is the international standard that determines a coin’s condition, and in turn, its value.

The scale runs from 0-70. Grades 60-70 refer to mint state coins — the best of the best. An MS70 coin has no imperfections of any kind, even when examined closely with an eye loupe. MS69 and MS68 coins are very close to perfect, but they may show minor marks when inspected closely.

Before you even think about starting a coin collection, make sure that any piece you’re thinking about buying has been graded by either the NGC or PCGS. This is especially critical for beginners who are just learning how to start a coin collection, as unscrupulous dealers may take advantage of a novice collector’s lack of knowledge of the scale. 

4. Understand How Numismatics Get Their Value

A stack of old coins

There are many factors that determine the value of a numismatic coin. While its grade on the Sheldon Coin Grading Scale is certainly one of the most important factors, it’s not the only one. It may take some time before you’re able to spot the best deals, but the first step is to understand why numismatics have inherent value in the first place.

Rarity and Scarcity

Rarity and scarcity are terms that are often used interchangeably. But there are some important differences you should know about as you explore the ins and outs of how to start a coin collection. 

  • Rarity: The available supply of a coin.
  • Scarcity: The market demand for a coin.

What’s the Difference?

A coin might be rare because it was only minted in limited numbers. Or, it might have a die error or misprint. Simply put, a coin is rare if there aren’t very many of them available

Even if a coin wasn’t rare initially, it could become scarce as market demand makes it even more difficult to obtain. When starting a coin collection, you’ll want to consider current rarity, as well as the potential for future scarcity. For now, your goal is simply to understand how to start a coin collection. But as your knowledge grows, you’ll develop a sixth sense for coins that could grow significantly in value over time.

For example, say a certain coin became extremely popular among the numismatic community because of a political event or a social trend. Even if that coin was originally produced in large quantities, it could become difficult to obtain one because collectors aren’t willing to sell. So, even if a coin isn't rare now, it can still become scarce in the future.

Surviving Population

A coin’s surviving population also plays into its rarity/scarcity, so you should know about low-population coins as you research how to start a coin collection. In the example above, you can see how market conditions can cause a coin to become scarce. However, coins can also become rare over time if their surviving population diminishes.

For example, when circulated coins become too worn, the U.S. Mint may remove them from circulation to reclaim their precious metals content. Another example: In the 1980s when the spot price of silver grew higher than pre-1964 silver coins’ face values, many people melted these “junk” coins down to turn a profit. These occurrences can cause a coin’s population to decrease, making them rare. 

When starting a coin collection, consider the current population of coins. But at the same time, part of discovering how to start a coin collection is also learning to identify past trends so you can make future predictions. Just because a coin is readily accessible today doesn’t mean it’ll be as easy to obtain down the line.

Precious Metals Content

A numismatic’s precious metals content isn’t a major factor when it comes to its value, but it’s still worth mentioning. Numismatics that are made out of precious metals are always going to be worth their weight. Of course, you should never melt down your numismatics. If you want to own gold or silver, you’re much better off buying bullion gold bars, gold coins, silver bars, or silver coins.

5. Consider Building Sets

A person placing coins in a wooden box

As you discover how to start a coin collection, you might begin to gravitate toward specific types of coins, years, mints, and so on. For example, the 1988-2021 NGC PF70 $50 Gold American Eagle Collection is a favorite set among new and experienced collectors alike.

Collecting sets adds a whole other dimension to the hobby. When you’re first starting a coin collection, the possibilities are endless — you simply buy the coins that are most interesting to you. However, as you add more and more pieces to your collection, you start to see gaps in the collection, and you want to fill them in.

Of course, learning how to start a coin collection is a personal thing, so don’t feel obligated to build sets if that’s not your preferred approach — you can always build sets later. Many numismatists find that it’s a fun way to make a collection feel more complete and cohesive, and often the value of a full set supersedes the value of the sum of its parts. 

Start a Coin Collection with Endeavor Metals

These five tips should go a long way in helping you go from a newbie collector to a bonafide numismatist. If you have any questions, please contact us. We’ll be happy to help you add value and beauty to your coin collection, and we can even reach out to our vast network of connections to help you find rare coins on your list.

Now that you know how to start a coin collection, it’s time to get started! Browse our top-graded gold numismatics and silver numismatics, as well as platinum numismatics and palladium numismatics.

Endeavor Metals is a Tier 1 numismatics dealer vetted and trusted by the community. We bring 50+ years of in-house experience to the table and belong to numerous prestigious organizations, including the American Numismatic Association. If you’re planning on starting a coin collection, you can depend on us. Start building your coin collection with Endeavor Metals today.

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