Since its invention, money has held a great fascination for people. But not everyone sees it as just a currency or a means of payment. Some find collecting the world's currencies fascinating. The collectors' motives are very different: Some want to see what is or was paid for in other parts of the world, others want to collect coins that they find aesthetic. Others try to make even more money with their passion. With such different target groups, it is not surprising that there are different types of coins. The difference between collector, investment or commemorative coins and the like is explained here.
Investment and collector coins – what makes them different?
For thousands of years, humanity has used minted coins to facilitate or even make trade possible. Today, in the age of electronic payment methods, coins are no longer just a means of payment. Due to their material value, coins made from precious metals such as gold, silver, platinum or palladium are purchased as investments. But there are also coins that are particularly sought after by collectors; These are usually special coins. However, some collectibles are also suitable as investments. We explain what makes a good investment coin and a good collector’s coin – and when it might be worth buying. In any case, it makes sense to purchase coins from onelicensed dealer, so that you do not become a victim of fraud or counterfeiting.
The investment coin
This category is characterized by the fact that the individual coins have a high material value in addition to their face value. These are also called “bullion coins” and it is not uncommon for their face value to be only a fraction of the material value. Investment coins are usually part of an existing currency. Nevertheless, their “real” value lies in the precious metals used. The fluctuations in the price of precious metals change the material value of these coins, which can be used to make money. One advantage that investment coins have in contrast to “pure” precious metals is that the coin retains its face value even if the value of the metal drops enormously. This means you can always use the coins for what they were originally intended for: as currency.
If you want to look for a particularly lucrative investment coin, you need to obtain extensive information and be well versed in the precious metals and currencies market. That's why it's not so easy to recommend a specific coin. However, even if you're new to coins, you can't go wrong if you choose classic bullion coins like the Krugerrand or the Maple Leaf. The only decision you then have to make is whether you would rather invest in gold, silver or another material as the “foundation” of the coins.
The collector’s coin at a glance
Even today, new special coins are still being minted. As a rule, these commemorative coins are suitable for regular payment transactions, but in fact they are hardly ever used there. These coins are particularly attractive for sale and distribution to coin collectors. The embossed motifs are often reminiscent of certain historical events or personalities and are also often given as gifts. An example of such a coin is the5€ coin “Tropical Zone”from 2017, whose red polymer ring makes it unique. Another well-known coin is the €25 coin, which was issued in 2015 on the anniversary of German unification.
The primary purpose of such collector coins is to represent memorabilia, which is why at first glance they seem unattractive as an investment. The material value of these coins is usually considerably lower than their face value. However, if you want to purchase these coins, you have to pay the collector's value, which is not guaranteed in the event of a resale. In addition, the collector coins are produced in quite large quantities (over two million of the above coins were issued each), which makes a significant increase in value unlikely. If you still want to purchase such a coin, you should pay more attention to its condition and degree of preservation. The best condition is called a “polished plate”.
Collect coins and earn money from them
You can still do a small business with collectible coins. Most of them can be purchased at face value at Bundesbank branches throughout Germany on the day they are issued. Shortly after their release, these coins are often worth many times over because they are sold out quickly and many collectors do not have a federal bank near them. For example, the €5 “Tropical Zone” coin could be purchased online for over €30 on the day it was issued. Nevertheless, enthusiastic investors must be told here: These coins can only be obtained at face value from the Bundesbank upon presentation of an identity card and you can only receive a single coin per person in Germany. So you won't be able to make big profits with this.
Can collector coins actually serve as an investment?
That is possible. Historical coins in particular regularly achieve top prices at auctions. The material value is also a factor here, but the condition, year and mintage of the coin are much more important for the achievable price. Fluctuations in demand are also an important point: sometimes Roman currencies are particularly in demand, sometimes payment instruments from the Austro-Hungarian Empire. Anyone who is interested in historical coins as an investment and wants to invest here should get extensive information. In addition to a very good knowledge of the market, you also have to deal with the coins and currencies themselves in order to be less susceptible to counterfeits. You should also keep in mind that historical coins are often only kept for a long time, if at allSell profitcan. So this market is absolutely unsuitable for impatient characters.
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