Starting With Wheat Pennies
Starting With Wheat Pennies, is an excellent way to get started with your new hobby - Coin Collecting. In this blog entry, I will descuss why it is wise to start your new hobby of coin collecting, with wheat pennies. Then I will discuss how to sort through a large quantity of unsearched wheats. Finally, I will get you started in grading your wheat pennies and show you how to determin the value of your coins.
PART I: First Steps
Collecting coins is a popular and very rewarding hobby. Before anyone dives into the market of rare and valuable coins, it is vital that you get your feet wet and test out the waters first. Without some basic knowledge and experience, it could be very easy to loose a large amount of money. For coin collecting is not only a hobby but it is an investment as well. The less knowledge and experience you have with coin collecting, the higher the risk will be. As a high risk investment, coin collecting also has a potential for a high reward. Most rare U.S. coins, continue to appreciate - on a consistent bases - much faster then the rate of inflation. Starting out small with wheat pennies, is an excellent way to gain the knowledge and experience with coins that you will need to build a successfull collection and investment portfolio.
Find the coin stores in your area and go check them out. Find one you like best, with a friendly environment. Inquire about purchasing a bag of 5,000 unsearched wheat pennies (bags of 2,500 or 1,000 would also work well to get you started). The bags of wheat pennies should have an average cost somewhere between $0.03 and $0.09 cents each. Divide the total cost by the number of pennies in the bag, if you are in this range, you are not paying too much. Try to make sure that your group of wheat pennies will be dated all, or at least mostly between the years 1909-1945. You may also want to purchase a book called the Red Book. This book will help you identify each coin you search and provide you with valuable information about it, such as; number of coins minted, grading scales and basic values. As you sort your pennies, you will need a filing system to store and keep separated each date and mint mark (mint mark is a letter that indicates which U.S. Mint, minted that specific coin).
Part II: Getting Started
There are three mints that minted wheat pennies; Philadelphia, Denver and San Fransico. The mint mark will be located on the front of the coin (Obverse - the side with President Lincoln's portrait), right above the date. Philadelphia minted wheat pennies will not have any mint mark on them at all. These are commonly called, "blanks." Denver minted wheats will have a "D" mint mark right above the date. These are commonly called, "D's." San Fransisco Minted wheats have an "S" right above the date and are commonly called, "S's." So, a wheat cent minted in 1914 that was minted in Denver, is called a "1914-D." Philadelphia would be called, "1914-Blank," and San Fransisco is called a, "1914-S."
The first step to sorting you large group of wheat pennies, is not only to sort them by date, but also by mint mark. You will need to come up with some sort of filling system for each year and mint mark of wheat penny you discover in your bag. You can get paper rolls for pennies from your back for free. You can also use a bunch of small cans or even a fancy hardware organizer with dozens of tiny drawers that you can fill and lable which date and mint mark that drawer is filled with. What ever oganizing system you come up with, it is vital that you label them by both date and mint mark.
Now the fun starts! Get the whole family involved in helping you search the wheats. As you sort through your coins, you will begin to discover that some dates and mint marks are far more common then others. That is normal and is because those are the "commons," which had the most coins minted. You will also come across new specimens that you have not found yet. These will be the "key dates" and "semi-key dates." These finds make it all worth your time!
PART III: Grading The Condition
After you have sorted through a organized all your wheat cents, you will want to learn how to grade the condition of your coins. I recommend you purchase, Official A.N.A. Grading Standards For U.S. Coins. There are also many other good book that show you photos of what each condition looks like, along with a description of where to look for wear and how to determine the extent of that wear. Your local coin dealer often can help recommend the best book for learning how to grade coins. As you begin to compare your coins to the photos and descriptions of the different grades in the book, try to keep a non-bias attitude. The natural tendency is to want to *over-grade your coins (*grade a coin a nicer condition then it really is). If anything, you should hold the strictest standards when grading your coins. This will help insure you build the highest quality collection as possible. It will also help you to keep from loosing money in your collection and actually realize an excellent return for your investment. So remember, Do Not Over-Grade Coins!
Going through and learning how to grade hundreds of wheat pennies will quickly train your numismatist's eyes. That's right, you are now a numismatist (a collector of coinage)! You will quickly develop a desire to obtain the key date wheat pennies that you did not discover in your first lot. You may want to purchase another lot of wheat cents. It might be a good idea to buy lots of unsearched wheats from several different locations, to help ensure a good mix and variety of coins. Searching these lots, is only the beginning.
PART IV: NOW IT GETS EXCITING
Now you have searched thousands of wheat cents. You have learned to identify commons from semi-key and key dates. You have learned how to grade the condition of your coins. You have also built a sizable collection of circulated wheat pennies. Quite frankly, neither your eyes or concentration can take much more of digging through wheat pennies. That's OK, because you are now ready to move onto the real fun! You are now armed with the skills and knowledge, needed to build an impressive coin collection. So now you need an coin display album for wheat pennies. This will be where you place one of each date and mint mark, of only the finest specimen you can find. This will take time, and money. You will be able to buy uncirculated (MS) or almost uncirculated (AU) specimens of each of the common dates and mint marks right away. Then you will have to keep checking back with your coin dealer each week, as he gets new coins in, to see if he has acquired one of the tougher dates in a high enough grade, for your collection.
Remember, Don't Over Grade Coins! If your dealer gets a coin in that you need for your collection, but you don't think it grades as high as your dealer says it does - or perhaps you don't like the color and eye appeal of the coin - you don't have to buy it. More coins will come, it won't be the last opportunity you have to fill that spot in your collection. If the dealer may even eventually come down in price, to a reasonable level. Just make sure you don't over grade or over pay for your coins! At some point in the future, you may want to sell some of your coins to buy nicer, more rare and desirable specimens. If you are wish enough when buying, you will sell your coins for at least 20% more then what you paid for them - but only if you don't over grade and over pay!
PART V: COLLECTING OTHER COIN SERIES
After at least 6 months to a year of collecting wheat pennies and building your nice wheat pennies coin album, you will be ready to expand you collection into other coin series. You will have already been tempted by coins other then wheat cents. However, it was important you first gained the knowledge and experience of coin collecting by building your wheat penny collection. To many, new coin collectors by up coins they know nothing about and/or modern coinage with a very limited potential for increasing in value. These new coin collectors often by modern coins from TV, the internet, newspapers and/or dealers they no nothing about.Not only are they often buying from the wrong sources, which are less then trustworthy and most certainly more interested in their profits then your investment, but they are also buying the wrong coins.
The Older The Coin, The Better. You can use this rule of thumb as a general ruler for judging a coins value, rarity and potential future value. Guided by your Red Book and your knowledge, your experience you gained with building your wheat penny collection and a trust worthy coin dealer you have built a relationship with, you will avoid these scams and bad investments in the numismatic world!
So, in your search for over thousands of wheats, you discovered some Indian Head pennies. You have also seen some coins at your local coin store that caught your eye. Perhaps the ever popular Buffalo Nickel or the famed Morgan Silver Dollar? Now you are ready to begin building collection of your favorite U.S. Coins. You may want to build one series collection at a time, or perhaps you want to build a collection of one series from each denomination all at once? Try not to bit off more then you can chew and focus your new coin purchases into a handful of coin series. Most importantly, keep having fun!
PART VI: CERTIFIED COINS
So you've noticed some coins your dealer has got in, that are in sealed plastic holders, that he has told you were certified by a coin grading company. These coins have been graded and certified by a third party coin certification service. The most reliable companies to go with are, PCGS, ANACS, ICG, and NGC. These coins have been graded by some of the best coin graders in the world. Before you start buying ultra-high grade, rare and valuable coins, it is a good idea to acquire some of these certified coins for as low as you can talk your dealer down to in price. Study the luster and eye appeal. Count the number of scratches and blemishes on each side of the coin. Determine how many of those scratches and blemishes are in the prime focal areas - as highlighted by your coin grading book. This will familiarize yourself with the differences between say a MS-62 and a MS-63 and so on. While all four of the coin grading companies I mentioned above are very reliable and respected, do not buy a coin based on it's label. You must grade the coin yourself (Do Not Over Grade!) and pay only what you think is a fair price for that coin, based on what grade you think it is. If you don't agree with a grade assigned to a coin and can't buy it for the price that's fair for the grade you think the coin is, then don't buy that coin!
Eventually, you might be able to buy certified coins that you think were graded too low and have them re-graded and for grade higher - thus increasing the value you will be able to get out of your coin, if you sell it. This is because certified coin often get 80%-120% of retail book value. By contrast, raw (uncertified coins) can often be purchased for as low as 60% of retail value (possibly lower, if your lucky and good enough at grading).
PART VII: CONCLUSION
Follow this general plan as a new coin collector and you will develop a fun new hobby, that will be an excellent investment at the same time. Avoid the mistakes and financial loses that many new coin collectors experience by diving into a brutal market without knowledge or direction. As you learn how to grade your wheat pennies of other series of U.S. coins, remember to not form a bias opinion of the coin when grading. Do not over grade coins and do not pay too much for your coins.Remember that older coins are better then modern coins. When you start to look at certified coins, don't buy the label and grade assigned to the coin. Grade the coin yourself and pay a fair price for what grade you think the coin looks like, or don't buy it at all.
This is the advice, knowledge and wisdom of a long time coin collector and investor. I hope you find this plan valuable and useful. I wish you good success with your new hobby as a numismatists. In closing, always remember to keep having fun!
© Warren W. Gregory (2007)
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