We’ve been collecting and selling coins for more than 15 years and writing about coins on this blog for more than 10. In that time we’ve seen new collectors make the same few mistakes time and time again. So, what are the top 4 mistakes that new coin collectors make?
Thinking that Coin Collecting is Investing
So many new collectors see their collections as an ‘investment’. We can assure you now it’s not. If you get into the hobby thinking you’re going to make a bomb all you’re going to do is lose money. There’s people around who know MUCH more than you, have been doing this for longer than you, and they see a new ‘coin investor’ as an easy mark and they’ll do their level best to teach you an expensive lesson. And once that money is lost many collectors get dis-heartened and leave the hobby as quickly as they entered. Collect what you love, educate yourself, appreciate your collection for what it is. In time you may become knowledgeable enough to recognise a bargain or an under-graded item when you see it and make a small profit from it.
Getting Caught in the Hype
See a news article about $2 coins? Gotta buy those as an ‘investment’ for my grand-kids. See a video about the year 2000 $1/10c mule being worth $2000 or more and see one for sale for $1000 and snap it up thinking you’ve got a bargain? Or perhaps there’s an ‘All Australian’ grading company and the ‘herd mentality’ says that must be a good thing. So you get all your coins graded by a fly by night company that has little clue what they are doing and even encases your coins in slabs that damage the coins themselves.
Don’t get caught up in the hype. Think about what you’re doing, sleep on it, take a sceptical view and don’t commit unless you’re 100% sure. Coin collecting is about knowledge and education, not following the masses.
Rushing into Purchases
We see this all the time. New collectors that have a hoard of NCLT, coins, and banknotes 6-12 months into their collecting journey. There’s no theme to the collection, no consistency of grades, no rhyme or reason to why a certain Royal Australian Mint release was bought and another wasn’t. New collectors have an almost feverish need to add items to their collections and see it grow. Sites like eBay, and the rise of buying and selling on social media have only served to enable that sort of behaviour.
The end result is a pile of items the collector loses interest in and has to dispose of, usually at a great loss which is always a dis-heartening exercise. Our tip to be taken from this? You’re better off having one of two well considered purchases a year netting you items you love and value than 100 purchases of rubbish that you don’t even remember buying.
Not Being Able to Grade
If a collector is buying individual coins or banknotes rather than mint issues then that collector MUST be able to grade. New collectors often have little idea how grade effects the value and demand for a coin or banknote. They rely too heavily on the grade assigned to an item by the dealer or the third party that has graded it. Yes, we admit that if an item is graded by a reputable third party (like PCGS or NGC) then a collector can have more assurance in the assigned grade. But even then, if you’re spending your own money on a hobby do you want to put ALL your faith in someone else? We certainly don’t.
So, learn to grade, look at coins in hand, look at third party graded coins and try to understand why those coins or notes have been assigned their grade. And don’t think you can learn to grade by looking at images on social media or eBay. You can’t, and those platforms are full of ‘keyboard warriors’ who have held very few coins in hand but somehow seem to be able to assign split grades to a coin based on fuzzy images.
If you’re a new collector and you can avoid these 4 mistakes you’re well on the way to having a hobby that coin last you a life time!