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What Is Numismatic Gold Coins?

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20 kronor numismatic gold coin

Two numismatic collector coins that are very rare. A 20 kronor coin from the Scandinavian Monetary Union.

When you first get into gold investing you often hear the term: numismatic coins. But what is numismatic gold coins? What are they good for and is it a smart idea to invest in them or not?

That’s some of the questions that I want to get answered with this post.

Numismatic coins are collector coins. The best way to describe numismatic coins are that they are collectible, meaning that the numismatic coin is rare. Because the coin is rare (not that many of them in the world and not produced anymore) there are people that like to collect them.

Let’s have a look at the definition of numismatic

Numismatics is the study or collection of currency, including coins, tokens, paper money, and related objects.

The word numismatic derives from the Greek word numisma, meaning “current coin”.

When people first get into gold investing one of the first question they have is usually: “Should I invest in numismatic coins?”. A quick answer is often “If you really know what your doing then go for it but it’s not how I invest in gold.”

What’s the downsides of investing in numismatic gold coins?

So why don’t I invest in numismatic gold coins might be your question. Well, there are a few reasons why and the very first one is:

1 kg gold bars

You don’t get as much of the valuable yellow metal as if you invested in gold bars.

You don’t get as much gold for your money. There are three layers of cost built into a numismatic coin. That is the actual metal, the numismatic value and the dealers profit. In regular gold bars there is only two layers of cost: the metal and the dealers profit.

The numismatic cost is different from every coin and can range from a few dollars to a few millions. The most expensive coins, the rarest of them all, will probably always be a good investment because there is just a few of these coins. However, only the world’s wealthiest collectors can afford to buy them.

I hope you understand what I mean by numismatic cost. It’s the extra cost that someone is willing to pay for an item because it’s rare and it has a collectible value. The same thing as when people buy collector cars, or any other item that people collect.

This numismatic cost can vary a great deal from year to year and is largely dependent on the state of the economy and the mood of the public. If the economy is good and people have lots of money, it’s easier to get a higher price for the coin.

When people invest in numismatic coins what they are hoping for is that the numismatic cost will go up for the coin. They hope that the coin will be rarer and more valuable in 10 years than it is now. If that is true it means that they can sell the coin for more money then they bought it for, if they can find a buyer for the coin.

Because of this extra numismatic cost you do not get as much gold as if you bought gold bullion. For example you can maybe buy 5 regular coins for the same price as 1 numismatic coin. This way you get 5 times as much gold by buying regular (not rare) coins than if you bought a numismatic coin.

And when I invest in gold, I want to get as much gold for my paper dollars as possible because there are lots of fundamental reasons to why you should invest in gold. You don’t need to play with the numismatic value to make money on gold.

That’s one of the biggest reasons why I do not invest in numismatic collector coins.

lots of triangles with scam in the middle.

If you don’t know everything there is to know you will easily be scammed buying numismatic coins.

It’s easy to get scammed. When you invest in numismatic coins you need to know more about the coin (and the collectors market) than the dealer. Because a numismatic coin gets it’s value not just from the physical gold in the coin but from it’s rarity. That way you need to know all there is to know about how rare this coin is.

If the dealer knows more than you he can be saying things like “This coin is very rare and there is only 500 of them every created and there is not any more of them being created.”.

This might be true but it also might not be true. This is why investing in numismatic coins is very time consuming. Because you need to know how rare the coin is, if there is going to be more of them created and how easy it is to sell the coin. Just to name a few of the headaches.

You constantly hear about horror stories where a person has invested in numismatic coins that a dealer recommended to him. Just to realize a few years later that these coins wasn’t rare at all. There was a ton of them being created and there is no way that anyone will buy them for the same price as you did. That person got scammed by the dealer because he didn’t know all the things there was to know about the coin.

If you want to sell your numismatic coin it is very hard to find a buyer. The numismatic gold coin market is not very liquid.

If you want to sell your numismatic coin it is very hard to find a buyer. The numismatic gold coin market is not very liquid.

It’s hard to sell. Another reason that I do not invest in numismatic coins is because once you want to sell the coins it’s very hard to find a buyer.

Say that you need to sell your gold because of an emergency or something else. Then you have to find a buyer for your rare coin that is willing to pay what you want for the coin. This can take months, even years. Or it might not even happen.

There is a saying: “The only thing rarer than a rare coin . . . is a buyer for a rare coin.”.

You might not be able to sell the coin or if you really need to sell it, the dealers will always buy it back. Although they will offer you a very low price. If you want to get cash for your gold quickly, you just have to accept their ridiculous offer and loose a lot of money on your gold “investment”.

What’s the benefits of investing in numismatic coins?

Okey, I have just been explaining the downsides of investing in numismatic coins but are there any benefits?

Of course there are and there are people that have made a lot of money selling and investing in numismatic coins. As long as you know what your doing and you know the collectors market then go for it. But be aware of all the risks and pitfalls that I explained above.

Having a numismatic coin can be a very pleasing feeling. The coins are often very well done and have some type of history behind them. For me it’s a very nice item to own but I do not see it as an investment. If I buy a numismatic coin it’s because I want to collect this coin for some reason. My number one reason why I buy it is not because I want to make money on the coin, but because I like it.

You can make a lot of money fast if you really know what your doing. If you can find a coin somewhere that you know is very rare and you can get it for cheap. Then you can sell it fast and make a lot of money.

But once again:

Make sure you know what your doing, otherwise you WILL get scammed by people that know more than you.

Final Thoughts

I hope that I answered the question: what is numismatic gold coins with this post. They are collector coins. This is not the way that I personally invest in gold because you get less gold for your money, if you don’t know more than your dealer it’s easy to get scammed and it’s very hard to find a buyer when you want to sell.

If your just getting started with gold investing I do not suggest that you go with numismatic coins. You can read about how I invest in gold where I talk about investing in gold bullion instead.

If you have any questions or any other input please post a comment below and I will for sure answer them.


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14 Comments

  1. Scams on numismatic coins for both gold and silver are easy to fall into. It’s always good to do the research on a seller before buying from them. Great post Marcus!

    • Thanks for the comment Jaron.

      Yes your right, because the price of a coin can vary so much it’s easier for a dealer to scam you. If you do not want to get scammed you should focus on just buying gold. That’s best done by buying gold bullion.

      Marcus

  2. Hi Marcus,
    Very interesting article. I had never heard the term numismatic coin before, but once I started reading your post, I knew what they are just not that term associated with them. I know people who collect numismatic coins, and I don’t think they really make that much. So from my perspective, I think you’d really have to know the coins and which ones might be profitable in the future, right? Seems like a gamble to be, and that I am not much of. I think I would prefer to invest in gold bars itself. Thanks for the insight. Great article.

    • Thanks for the comment. Yes your right, investing in gold bullion (bars) is the way that I do it. Because there is so much to know about the collectors market and it’s easy for a dealer to scam you saying that “This coin is going to be worth XYZ in the future” where that is not close to being true.

      I’ve heard about a lot of people that got scammed buying numismatic coins. Like I said, I buy them if I really like the coin and I want to keep it. Because a lot of numismatic coins have nice graphics on them and a good history behind the coin. But I don’t buy it as an investment. If the coin doesn’t go up that much in price I don’t care because I want to keep the coin anyhow.

      Buy gold bars when you first get into gold investing.

      Marcus

  3. I have only invested in bullion and never in numismatic gold. I just don’t think I have the time for the learning curve to buy them without getting scammed. The only real positive I can think of for them is that you can purchase them without government knowledge if that sort of thing worries you. Bullion purchases are regulated in ways that collector gold coins are not.
    I agree though, when you buy gold, it is much safer to buy bullion.

    • Thanks for the comment Sue.

      Yes your right, gold bars is regulated by the government in the United States but there is still ways to get around that. Because what you want with gold is wealth that is outside of the governments reach and outside of the financial system.

      But to buy numismatic coins takes a lot of knowledge like you said and for me it is to risky for the time that I’m going to have to spend. That’s why I buy gold bars instead.

      Marcus

  4. Hello, Marcus and thank you so much for this vitally important information about numismatic gold coins. I know a lot more than I ever did before and think I will pass this on to others. This is an excellent article.
    “The only thing rarer than a rare coin . . . is a buyer for a rare coin.”. Good to know. thank you again, Pj

    • Hi PJ, thanks a lot for the nice comment 🙂

      Yeah my goal with this site is to let people know how I do when I invest in gold and silver. I’ve been doing it for around 10 years and I’ve fallen into a lot of traps and tried out almost everything when it comes to gold so I want to make sure that my readers know as much about their investment before they invest.

      Yeah finding a buyer for a rare coin is really really hard. And you need to find a buyer that is willing to pay the price that you want for the coin.

      Marcus

  5. Hello Marcus,
    this is a very good explanation of numismatic gold coins and ther advantages and disadvantages. I think, it is the same as with every other rare thing. If you know all about it, then you can make a good deal, but only then. Otherwise buy it, because you like it or leave it and don’t see it as an investment.

    • Hi Bernd. Yeah exactly. If you know everything there is to know about the collectors market you can make a lot of money very quick. But to know everything about the collectors market is a lifetime challenge.

      I stick to gold bullion because it doesn’t require that much knowledge.

      Thanks for the comment
      Marcus

  6. So would it be fair to say numismatic coins are the equivalent of dealing with antiques, your ok if you know what your doing but if your not an expert stay away?
    Well as a novice to the subject I think I’ll give it a miss for now, perhaps some time down the line.
    I’m learning a lot from this site, keep up the good work.

    • Hi Dan. Yes that’s exactly right. If you are the best antique dealer in some items then you can make a lot of money and fast. But you also have to be the best. If the person you are dealing with is better than you then you are in trouble.

      Buying regular gold bullion doesn’t require you do know that much. You need to know why you want gold and from where you can get it. I will put up a post soon on Where I buy my gold. I have the why I buy gold and how, now it’s time for the where :).

      Thanks for the kind words, really happy that your learning a lot from this site. That is my main objective, to teach people about gold and why it’s a must in this current economic system.

      Marcus

  7. Great post!

    I have never heard of numismatic coins before and you did a great job explaining what they are.

    I have always thought about investing in gold for a while but I didn’t know where to start. I will be reading your way of investing in gold here soon, but where you recommend I start if I really wanna get into gold investing?

    • Hi Derek.

      Thanks a lot for the comment. I will be writing a post today of where I invest in gold. I have been doing it for almost 10 years and feel like I have found the best ways to do so. I will be emailing you the article once it’s done and I think it will help you a lot. I will explain exactly how everyone can invest in gold. If you have $100,000 to invest or $100 doesn’t matter.

      Marcus

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