Rare Coin

Perhaps the most important thing you need to know when looking to invest in valuable coins is the difference between the price and value of a coin. These words are often used interchangeably, but the concepts are actually very different.

The price, or retail price, of a coin is the amount of money it would sell from a dealer on the open market. Prices are determined by various factors, such as coin type, mintage, and grading, and it's market availability. The Red Book is the most popular rare coin books used as a price guide in the U.S.

Note that if you're appraising your coins for insurance purposes, you should use the retail prices, since that would be what you'd pay to replace them.

Rare coin values are a little more complex. Although technically the value of a coin is how much you could sell it for today, this amount will invariably be significantly less than retail price, or what you'd have to pay to replace the coin.

The prices coin dealers charge are inflated by their need to make a profit, but the actual value of your coin is based on its wholesale value, or what a dealer would pay you for it- generally half of the retail price. The Blue Book, is the most commonly consulted guide to wholesale coin values in the U.S.

Keep in mind that rare coin books are great for getting a general idea of coin pricing and value, but they represent a static picture of a variable market. The coin market is effected by supply and demand, the current prices on valuable metals, and other competitive market forces.

After consulting the coin guides, check the current market trade papers for the coin collecting community, and the dealer "coin buying" ads in the classified section.

Buy from dealers with respected credentials and a solid reputation, and confirm that they are offering valuable coins at reasonable prices. There are a lot of dealers out there offering "Mint" coins or collections that have no serious collector value beyond their bullion, or who charge outrageously high prices.

Others offer arbitrarily devised "sets," such as the years of WWII coins. These are often legitimate but low grade or common coins which have little value on the coin market.

If you're looking for to invest, make sure the coins you buy are part of a legitimate Mint. The U.S. Mint has issued warning about the National Collector's Mint, which uses misleading advertisement practices and is unaffiliated with the actual U.S. Mint.

Other premium collectable "mints" sell genuine bullion coins, but these non-official coins are little more than curiosities to serious collectors, and have little value on the investing market. Others offer U.S. Mint coins modified with holographs or added coloring, which are considered damaged by serious collectors.

The best way to get knowledge and experience is to tap into and interact with a community of rare coins collectors. Build a rapport with dealers, and follow online resources, such as the ezrarecoins.com Rare Coins Collector's Blog. There is a sea of information and experience out there, and the only way to get wet is to dive in.