It has long
been regarded in the collector’s world as a thing of honor and pride to obtain
a valuable collection filled with the most rare and beautiful coins. While acquiring
coins is always a loved part of a coin collector’s world, funny as it may seem,
there is more to collecting than simply filling in dates and completing a
recent goal. One of the great enjoyments in coin collecting is looking back
over your time in collecting. The best way to reminisce over your past experiences
is to evaluate your collection’s value. Evaluating your collection is like “taking
a trip down memory lane” as some would say. However, evaluating a collection can be
difficult when the coin value guides are misleading to the uneducated
collector.
Let’s step
back for a moment; there are a few things you need to realize about coin
dealers. Coin dealers are like any other business man. They are looking to make
a profit. While it is true, that an overwhelming majority of dealers are kind, genuine
people who truly enjoy coins, don’t forget; those same kind, genuine dealer
would love to make a profit off of you as well as collect coins. Like any other
business, they operate on a system of buying low and selling high. Dealers
typically buy coins in bulk from various sources (e.g. auctions, estate sales,
previous customers) and split up that lot into individual sales.
When I
first started collecting over ten years ago, I would go to coin shows like
thousands upon thousands of other collectors do. At these shows, there would
often be over a hundred different dealers with coins from modern times to coins dating back as far as Roman times. While the excitement of being at the
shows is enjoyable, I would always remember my mission, find the coins that I
was looking for at bargain prices. With this in mind, I would search through
the coins intently. Upon finding a coin I was looking for, I would haggle with
the dealer until I believed that I was getting a “good deal” according to my
coin grading book. However, there lied my problem.
So how does
the system trick you? First off, the most obvious way is dealers make you feel good by listing higher prices on the coins than they actually intend to sell them for. This allows the
customer to feel as if they got a good deal from the dealer. At every show I have ever been to, the
dealers would often have bins listed as “50% off!” But if you shuffle through
the assortment of coins, you will find that the coins in the bin are marked
extremely high to begin with meaning that a coin 50% off isn't really 50% off. It was simply mark 50% higher to begin with. These techniques allow for people to feel as if they got a "good deal."
Another way
in which the system of coin dealers makes money is by having coin value books
(e.g. The Red Book, “Coin Values”)
mark the value of the coins higher than they are actually worth. Since the coin
value guides are listing prices higher than they are actually worth, you need
to realize that the actual value of the coins you are buying is usually much less.
While it is difficult to say exactly how much the coin guide books increase the
value of the coins in their listings, I would say around 50% for less valuable
coins and around 30% for more valuable coins. The Red Book and other such
coin value books are looking at the buying price which is significantly higher (Yeoman).
What would
I advise? Don’t carry around a typical coin grading book to coin shows with you.
Instead, bring a different type of book that looks at prices from the selling
end which is what book you will see many coin dealers with at the shows. One of
those books that look at the dealer’s end of coin collecting is called “The
Grey Sheet.” This guide is what the dealers typically pay for coins in reality.
Having the knowledge that the coin dealers have allows you to be on equal
ground when determining what coins would be a good deal.
My
suggestion to you in determining how much your collection is worth is to take
into consideration that the value of your coins is not what the typical coin
value books say. If you want to find the true value of your coins, you will
need to take what the coin value books say and reduce it by 30-50%. But I would
not let this fact hinder your enjoyment of coin collecting. While it may seem
you have over paid for coins in the past, just remember what you can do to make
educated purchases in the future.
If you would like me to write about something, email me at webuycoincollections@gmail.com.
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Work Cited
Yeoman, R. S., and Kenneth Bressett. The Official Red Book Guide Book of United States Coins 2012 / Limited Edition 2012. Atlanta: Whitman, 2011. Print.
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