Tuesday, May 31, 2011

Are you losing money by collecting certain coins?

Believe it or not, many collectors are losing money simply by collecting and holding onto certain items in their coin collections. 1976 Bicentennial Washington Quarters and Kennedy Half Dollars, Susan B Anthony, Eisenhower, and Sacagawea Dollars, The New State and Territorial Quarters, I come across items like these in nearly every coin collection I appraise. When I inform the collector that they have actually lost money by hanging on to these items, I am usually met with a healthy dose of skepticism. But let me explain, see if you agree.

These items are worth face value, even in brilliant uncirculated condition. So many of these items were minted, and so many collectors put these items away, they are quite literally, not very collectible. You may find these items for sale at coin shows for a small premium over their face value, but if you have any of these items in your coin collection and you are trying to sell them, dealers will offer face value, if they offer anything at all. Most dealers won't buy them, as there is no mark-up or profit to be made off these items.

I have come across collections with hundreds of Eisenhower Dollars from the early 1970s. These Eisenhower Dollars are still worth a dollar each. Imagine the compounded interest you would have made on that one dollar, had you put it in a simply interest-bearing savings account for the last 40 years. I've taken the liberty of calculating the results: At a simple 5% rate, your one dollar would have grown to $7.04. Let's say you have 100 1971 Eisenhower dollars in your collection, today's value of those 100 dollars is $100 dollars. Had you put those same Eisenhower dollars in the bank in 1971 at 5% interest and not touched the money until today, you would have $704.00 in your account. I don't know about you, but I would much rather have $704 dollars in the bank, than 100 Eisenhower dollars in my desk drawer.

The same can be said of Susan B Anthony Dollars from the late 70s and early 80s, 1976 Bicentennial Quarters and Half Dollars, and Sacagawea Dollars. A simply interest-bearing account would yield a greater return on those items, than hanging on to them in your collection.

I'm not saying don't collect these items, not everyone is looking for a return on their collectibles, but if the purpose of your collecting is to someday sell your items for a profit, it might be better to put the items in the bank and collect interest on them. Even at today's super low interest rates, you are actually still better off putting those Ike Dollars, Susan B Anthony's, Sacagaweas, State Quarters, and Bicentennial Quarters and Half Dollars in the bank.

For more info, or advice on what to collect, save, or put in the bank, please feel free to give us a call, we're here to help, and consultations and appraisals are always free: Charlton Coins, your leading Massachusetts Coin Dealer (508) 335-6788.

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