Collecting and dealing in coins is a rewarding, fascinating and profitable experience. At first glance it is an activity that one would perceive as being fairly straightforward, but upon closer examination it is clear that there is much more to this hobby than meets the eye. The hobby of coin collecting has many different facets to it, but one of the most important is to determine the value of a coin. Most will decide whether or not to acquire a coin or to keep it in the current collection based upon its value.
There are several steps in determining the value of a coin and they are not as simple as one might think. The first is to identify the coin. If it is currently in circulation and is from the country where you reside, it is fairly easy to complete this step. However, there are many coins that are no longer in circulation or are from foreign lands. These are not so easy to identify.
For this process it is critical to have a reference guide. There are many available and they are easily found in bookstores as well as library. Since these publications are updated annually, you will want to get a new one each year. These books list the values of currently circulating coins as well as coins that are no longer being minted. The first step is to locate your coin in the book and find the year that is printed on the coin. Each coin will have several prices listed under any given circulation year. This is where it gets a bit complicated.
When evaluating a coin to determine its value, you will want to know the approximate condition of the coin. Unless you are a professional who grades coins for a living, this is no easy task. A rule of thumb is to assume the coin is at the lowest value possible. If you stumble upon a really valuable year, have the coin graded if you suspect it is of higher quality. As you begin to look at more and more coins, it becomes a bit easier to determine an approximate condition of each of them. The most important factors in determining the condition are the mint luster, the detailing present in the art, any scratches, and the coloring. The more a coin is circulated, the more worn down it gets, so the most valuable are uncirculated coins or those that are as close to that condition as possible. This does not necessarily mean proof sets though, as those are often not as valuable as those that were produced for circulation but never circulated.
In certain economic times, the composition of a coin can actually cause it to be more valuable than the year or the condition. Recently this has been the case with silver and gold coins. In turbulent economies, many people will sell their coin collections if they have coins comprised of gold and silver, as this is usually the time when metal prices rise. Many of these coins are not nearly as valuable for their condition. When determining the value of a coin by its metal content, it is important to know the exact silver or gold content as well as the weight. In many cases these coins are melted down after the sale. In other cases they are hoarded by investors, who will then release them into the economy at a later date.
The value of a coin will change from year to year depending on the economy, the condition of the coin, and the scarcity of the coin. Once the value has been determined, it is critical that the coin be kept in a safe, secure area and stored, along with the rest of your coin collection, in books or cases that are designed to preserve quality and condition.