Understanding A Few Things About Coins And Rarity

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Understanding A Few Things About Coins And Rarity

23 September 2016
 Categories: Finance & Money, Articles

If you want a good return on your monetary investment, then it may be a good idea to start collecting coins. Coins are valuable keepsakes that are sought after by many numismatic enthusiasts. Almost all coins will increase in value at least a small amount over time, since old coins become more and more rare as varieties become ruined and lost. However, you will need to seek out the right coins and purchase them at the right price. The right coins are the ones that are the most rare. There are a few things you will need to understand about rarity before you start building your collection.

Low Mintage Does Not Always Mean Rarity

It makes sense that an older coin that has been minted in fairly low numbers will be more rare than a coin that was produced in larger numbers. After all, if there are fewer coins to begin with, then more of the coins are likely to be lost or destroyed. However, numismatics and the collection of coins has been practiced for centuries. Evidence suggests that the Romans collected coins, and the first book about coins was written in 1514. This means that individuals have been searching for rare and unusual coins to add to their collection for some time. In some cases, collectors will anticipate that a coin will be rare and they will collect it in the hopes that they will see a positive return on their investment. 

The 1950 D Jefferson nickel is a good example of a coin that had an anticipation of rarity. Only a little over 2.5 million of the nickels were created as opposed to the 8 or 10 million produced for many of the other Jefferson nickels. The low mint numbers caused many collectors to buy and keep these nickels as soon as the coins were released into circulation. This means that there are many of these nickels that have been kept in mint or fine condition. You may not find the nickel much in circulation, but there are many of the coins that have remained in collections since the 1950s. This means that mint quality 1950 D Jefferson nickels are not particularly rare, and they can be found for sale in many cases. While early collectors spent hundreds on the coins in the past, you can typically get them now for about $15 or $20.

While the Jefferson nickel is an example of a low mint coin that did not result in rarity, there are quite a few coins that are actually quite rare due to their low mint numbers. The 1964 50 cent accented hair coin is an example of a low mint rare coin. 

Mistake Coins Are Rare

Many people collect coins based on the beauty that they see in the coins. Coins with mistakes on them are not typically considered beautiful, but they are rare and valuable. These mistakes are called mint-made errors and they are created on the coins during the minting process. Mistakes that have been made unintentionally are the ones that make coins rare. Striking, die, and planchet errors are the ones that result in unintentional mint-made errors. 

Unintentional errors do happen during the minting process, but coins are inspected closely for imperfections before they are put into circulation. Typically, a large number of coins are dumped into a bin after they are pressed. If machinery needs to be realigned or dies needs to be changed, then all of the stamped coins created during the pressing process will be flawed. A single coin is taken out of the bin for inspection and coins are melted down and reformed if there are mistakes on them. 

If flawed coins make it into circulation, then this means they passed through the inspection phase of the minting process. This does not happen often and this makes the mint-made mistakes rare. Coins that are worth more money, like 50 cent coins, will be inspected more closely than pennies or other small value coins. This means that coins that hold a larger value that appear with an unintentional error will be worth more than smaller value coins. These are the rare ones you should consider buying.