The first step toward smart coin collecting is to have a purpose

Having a purpose gets you on the right track. Ask yourself “why am I going to collect coins?” Here are some ideas:

• As a hobby for personal enjoyment
• To share with your kids
• As a window into history
• As an investment
  • For future income
  • For descendants and relatives
  • For charitable contributions
• Other

Next find out where your interests lie 

What kind of coins are you interested in?

• US Coins
• International Coins
• Precious metals (Silver, Gold)
• Medallions
• Tokens
• Other

How would you like to approach the hobby?

• Collect individual coins
• Create and improve specific Sets of coins, e.g. Lincoln Cents or Morgan Dollars
• Create Type Sets containing one example of each type of coin
• Advanced collecting to create Certified Registry Sets with NGC or PCGS
• Other

Learn the Fundamentals

Here are three books that are top sellers in their categories:

• “The Official Red Book of US Coins” has information for most US Coins
• “The Essential Guide to Investing in Precious Metals” for collecting/investing
• “Modern World Coins” (Official Red Books) has information for World Coins

Attend a Local Coin Show and/or a Coin Club meeting

The American Numismatic Association maintains a directory of coin shows and coin clubs in the USA.

There’s normally no entry fee and no requirement to make a purchase at a coin show. You can learn a lot just by browsing.

Coin clubs will usually allow you to attend one meeting for free and will invite you to join for a nominal yearly fee. There are usually quite a few knowledgeable attendees in coin clubs. Many coin clubs have auctions where the coins are on display and can be examined before bidding begins.

Early Steps

Learning the Sheldon 70 point grading scale will pay dividends. My blog post “Grading US Coins for Beginners” is one source of information that will prove useful. There are many other free sources that can be found on the Internet.

While learning the Grading Scale take some time to study coins carefully to begin to learn how a coin wears in circulation (from the highest points to the lowest points on the surface). You can also begin to tell the difference between a coin that was struck weakly when it was manufactured and one that was struck well but is worn.

Studying coins will help you to find evidence of coins that have been cleaned and to look at the complete coin, including the rims, to find defects that lower the value of coins. This combined knowledge will help prevent you from overpaying for coins or selling for too little.

Where to Find Free Collectible Coins

Scarce collectible coins are not often found in pocket change, but it doesn’t hurt to look!

My customers have found the coins listed below, and others, in local banks:

• Morgan and Peace dollars by asking a teller if they had any Eisenhower dollars
• 90% silver coins by buying and searching rolls of dimes, quarters, and/or half dollars
• Wheat and Indian cents and Buffalo nickels

You can also trade coins with fellow collectors and coin club members instead of paying for them at a store. You’ll accumulate “seconds” (duplicates) while you’re collecting and you can trade these seconds for coins you don’t yet have.

Where to Purchase Collectible Coins

The Internet has large supply of coins for collectors. In former days if you wanted to buy a coin you had 4 or 5 local shops to choose from. Now There are hundreds of sites to buy coins from on the Internet. This has helped cause a price decline in collectible coins over the last ten years or so and created a buyer’s market.

The modern coin collector has many options. If you prefer to see your coins “in hand” coin shops are still available as are coin shows and live auctions. Many “brick and mortar” coin dealers have an Internet outlet, and many more have an Internet outlet exclusively.

Narrow Down Your Choices

Choose your type of venue(s). Traditional outlets provide personal interaction and you can see the coins in hand. Traditional venues include Coin Stores, Coin Shows, Coin Clubs, and Live Auctions.

Internet outlets provide a huge selection and the coins are delivered to you. (I recommend QualityCollectibleCoins.com of course )

Narrowing down your choices allows you to focus on getting the right coins for your collection.

Avoid "Churn" 

“Churn” is the buying and replacing of coins when building a collection. An example is buying a 1914-D Lincoln Cent in “Good” condition and replacing it later when you find one in “Fine” condition.

The problem with this is that the buyer is paying a premium over the coin value with each purchase. The premium is not normally recovered when the coin is sold. Churn drains cash resources that could be used for a better collection. Obviously in the example above buying the coin in Fine condition first saves money.

One way to avoid “churn” is to plan your collection and stick to the plan.

Higher Cost Coins

I strongly suggest that you avoid buying coins for over $500 that are not certified by a reputable grading company. In today’s world the top companies are PCGS, NGC, ANACS, and ICG.

If a coin with an asking price over $500 is not certified there is probably a good reason. Many will be rejected because of defects that aren’t visible to an average collector. Many others are over-graded and aren’t worth the asking price.

Avoid Fakes / Counterfeits

Inexpensive coins are usually not counterfeited.

For expensive coins, buying certified coins protects against counterfeits. Reputable grading companies don’t certify fakes. They won’t even put them in a holder.

When you buy expensive coins that are not certified there is a risk of buying fakes. Be careful to buy from reputable dealers and if you have doubt about a purchase return the coin.

Be Smart

Coin collecting is a very interesting pursuit with a lot to learn. There is a lot of information available for free or minimal cost. The Internet has a wealth of information about coin collecting. Coin shows and clubs often have speakers on diverse topics. There are many books available on the hobby.

As you learn your enjoyment of the “Hobby Of Kings” will grow.