Collecting U.S. Coins on a Budget
By Dr. John H. MacMillan
The numismatic hobby is indeed “the hobby of
kings” as a virtually unlimited amount of money
can be spent on rare items if finances permit.
Wealthy collectors such as Col H.R. Green, King
Farouk of Egypt and Louis Eliasberg had no
trouble acquiring rare items when the became
available. Collectors of more modest means must
focus their interest and “buy smart” or else
risk financial difficulties.
Coin collecting can become addicting, and many
collectors go over their budget on impulse
purchases or spending sprees. It is imperative
that you set a maximum amount you will be spend
per month or year. This collector has found that
on an amount of $1500-$2000 per year rapid
progress is possible in many specialties for
several years, provided that the periods are
from 1850-present and the grades are extremely
fine to proof. In today’s age this amount of
money could be spent on a single computer or set
of golf clubs!
The collectors advantage is that the collection
will at least give a partial return of his money
in the future, as compared to other items that
depreciate to zero. The article is written from
the perspective of a modest means collector, who
wishes to enjoy his coins primarily from an
artistic and historical viewpoint.
Of course he or his heirs will want to obtain at
least a modest return on his hard earned money
in the future. I will present the “buying smart”
strategies from the context of a U.S. type set
collector, but these thought processes apply to
other collecting specialties such as date
collecting, World Coins or ancients.
Getting started as a U.S. type set collector is
quite easy if one desires a set of circulating
U.S. coins. One may pull nearly uncirculated
examples from change and upgrade by ordering
proof sets from the U.S. mint at less than
$20.00. As many state quarters are circulating,
this phase can be quite a lot of fun for several
months. After the fun phase the new type
collector can focus on earlier twentieth century
At this point his first buying decisions must be
made. Should he buy uncirculated or proof
walkers, standing quarters, buffalo nickels etc
or settle for circulated grades? As a rule of
thumb, this collector would advise that you
proceed by acquiring the best grade you can
afford, remembering to not show glaring grade
discrepancies if you will exhibit.
For example, a fine condition standing liberty
quarter will “stick out like a sore thumb” in a
collection surrounded by about uncirculated or
brilliant uncirculated quarters. Excluding
Barber quarters, and gold coins, a twentieth
century type collection should be assembled at a
minimum of the about uncirculated (A.U.) grade.
The second half of the nineteenth century will
provide far more difficult grading and
acquisition decisions. Does the collector try
for extremely fine as the minimum grade or very
fine? Should he include all Red Book varieties,
even more exotic variations such as the 1859
“hollow star” half dime, or only the major
types? The financial resources of the collector,
his preferences and patience, all will influence
his decision. I would advise purchasing this
fifty year period in a minimum of extremely fine
grade, even if the acquisitions slow somewhat
due to finances. After all, you have your entire
life to collect, and attractive higher grade
coins always bring more on resale.
The decisions become even more difficult for the
first 50 years of the nineteenth century. Are
“no drapery” versions of the seated half dimes
through half dollars to be included? I believe
they are significant variations and have
included them in my set. Prices are quite
reasonable for the no drapery series in very
fine and extremely fine grade.
Early gold coins from 1800-1833 are rare due to
extensive melting, and are out of the price
range of the average collector. I advise
focusing on completing gold type from 1834 on in
minimum of extremely fine grade. Certain early
gold types are also available as legal
reproductions (see below).
An additional complication now arising is how to
deal with poorly struck issues, such as
1808-1814 large cents and 1800-1805 half dimes
/dimes. Well struck problem free examples of
these series are rare and cost many multiples of
average strikes. My usual advice not to buy
weakly struck coins still applies here unless
the collector is on a very tight budget.
Costs rise dramatically in all series for about
uncirculated grade and above. This collector has
set a minimum grade of very fine for all coins
of this period. As always you the collector must
make your decisions based on “finances,
preference and level of patience”. Never buy
“bright shiny” early copper or silver unless
professionally certified, as cleaning is
probable. A cleaned coin is a difficult sell
Choice condition eighteenth century U.S. coins
become nearly impossible for the moderate means
collector. He may think that difficult choices
must be made between obtaining extremely worn
examples of many series (chain, wreath cents,
early dimes) at greater than $500 each, or
acquiring choice specimens only after protracted
I solved this problem by obtaining a minimum of
very fine grade for the type coins costing $1000
or less. The remaining slots were partially
filled with choice reproductions from the
Gallery Mint Museum in Eureka Springs Arkansas
or Royal Oak Mint in Michigan. Vacant slots
hopefully await further reproductions! Some
discontinued GMM issues such as chain and wreath
cents, have actually appreciated substantially
in the open market.
Several hundred dollars spent on choice copies,
in my opinion, is preferable to many thousands
of dollars for barely discernable specimens
provided that the collector is in the game for
fun and history rather than investment.
The topic of grading will always bring
controversy, but I will give brief guidelines.
a. Buy a copy of “Photograde” by James F. Ruddy
and study all the pictures. Read the fine print
about idiosyncrasies in each series. Try to
grade yourself all circulated type coins you
view, as moderate means collectors will include
many circulated coins in their type set or other
b. If you are uncomfortable grading yourself,
buy only Professional Coin Grading Service
(PCGS), Numismatic Guarantee Corporation (NGC)
or ANACS certified coins, even if they cost
more. The old cliches read true in coin
collecting, “you get what you pay for” and
“there is no Santa Claus in Numismatics”. On
eventual resale, a high percent recovery of
cost, or even profit, is more probable for coins
graded by these services. Lesser known services
are more spotty in their standards and should be
c. Do not buy weakly struck coins, even if
attractively priced. A weakly struck coin shows
design obliteration only in specific areas, not
on all, as is the case for a worn specimen. If
you are unsure, pass on it.
d. If you do not like how a coin looks don’t buy
it, as others probably wont like it either.
e. View as many coins as possible in all series.
Internet auctions such as E-bay, and Internet
dealers on-line catalogs are great starters. Go
to all local shows and scan the bourse floor!
Learning to grade your self before bidding is
especially critical for internet auctions, as
many coins offered there are grossly over
Optimal Collecting Grade (OCG)
Eminent numismatic scholar Q. David Bowers has
presented this wise collecting strategy in his
recent work “The Experts Guide to Collecting and
Investing in Rare Coins” and elsewhere.
Basically, the budget conscious collector will
“get the most bang for his bucks” by avoiding
grades where the next lower grade is
dramatically lower in price. Three examples will
illustrate the concept.
Data are from a recent “Coin Values” issue.
1. 1902-O silver dollar, MS-64 $65.00, MS-65
$175.00, MS 66 $800.
2. 1922 Grant Memorial 50 cent, No Star, MS 63
$200, MS 64 $350, MS65 $1000
3. 1877-S, $20, AU58, $650.00, MS-60, $900,
The highest grade listed for all three should be
avoided. For the 1877-S, AU-58 may actually be
the best value and the most attractive, as most
MS-60 coins are heavily bag marked.
Avoid “MS-70″ certified common modern coins.
They are usually highly priced and extremely
subject to price downturns, as many more of them
will be certified in the future.
I have made most of these mistakes myself. “Act
in haste, repent in leisure”. Warning you of
these pitfalls will help in economical
a) Buying low grade low price coins to “quickly
fill the holes” is always a mistake, as low
grade coins have poor eye appeal and have
practically no resale value. If you are a
compulsive and impatient individual like me you
can easily fall into this trap.
b) Not returning a coin with some problem as it
is a “hassle” to repackage and mail. Believe me,
it is a bigger hassle to be stuck with a “doggy”
coin and face the necessity of upgrading it
later. Ship it back to the dealer and don’t look
c) Buying for profit. Coin collecting is for
fun, and a collection acquired over many years
can sometimes but not always be sold for gain.
Most circulated type coins bring only 30-60% of
retail. If you seek profit from collecting buy
only P.C.G.S or N.G.C. certified coins in mint
state 63 and higher. Even for these coins profit
is not guaranteed. The coin market is extremely
cyclical with constant switching of “hot” and
“slow” series. An advantage for the type
collector is his intrinsic diversification by
possessing many different series.
d) Impulse buying. Always have a short list of
coins you wish to add in the next several
months, their range of conditions, and expected
price ranges. If the next morning after purchase
you have regrets, return the coin immediately.
e) Going off the track. If you wish to enjoy
collecting to the fullest, you should focus on
at most two collecting specialties at a time.
Doing otherwise will squander money and time on
what will look like a mishmash with no theme.
This collector in addition to U.S. type coins
also has small collections of political hard
times tokens, civil war tokens and ancients. I
focus on only two of these in a calendar year.
In general, if you have the patience and
discipline, it is always best to buy your coin
just once in a pleasing grade that shows all the
design details. Buying lower grade coins to fill
the holes was mentioned earlier as a mistake.
When you upgrade you become saddled with a lower
grade duplicate that you probably cannot sell at
retail value, or even at a loss. Thus you are
paying more for the item in the long term. If
you must upgrade, my general rule is that
upgrading less than two full grade units is not
worth it. For example, upgrade a very fine coin
to about uncirculated, a fine coin to extremely
fine, etc. At least in this manner you will also
see a significant upgrade in eye appeal and
detail, partially compensating for probable
It was mentioned earlier that many early U.S.
type coins are high priced even in low grades.
It is a matter of collector preference if you
wish to fill these holes with modern
reproductions. All legitimate reproductions
contain the word “copy” on obverse or reverse.
Avoid counterfeit coins or old reproductions
without the word “copy” as they present resale
and legal difficulties! This collector has been
well satisfied with those manufactured by the
Gallery Mint Museum in Eureka Springs Arkansas
and the Royal Oak Mint in Michigan. They are
made with close reproductions of original mint
equipment, are original size, and are quite
attractive. I collect the uncirculated rather
than the proof versions, as they more closely
resemble the look of the original coins. “Medal
size” reproductions are junk. Avoid them.
The extremely successful state quarters and
westward journey nickel series have drawn
millions of novice collectors into our wonderful
hobby. Many of these new collectors have limited
finances but have been “bitten by the bug”. They
will wish to expand into other collecting areas
without straining their budgets. I hope this
article will assist them in enjoying many years
of collecting pleasure.