Just why otherwise normal people spend perfectly good money on collectible coins is a very good question.
If you’re able to understand why people collect coins, you’ll be better work in with your fellow collectors, and better positioned take advantage of the many opportunities that are available.
If you’re looking for a quick answer that will tell you how to make a fortune in this market, you’ll probably want to skip this section. Stick with it though – you’ll give yourself a much better chance of being successful if you get a good understanding of what presses the average collector’s buttons.
The instinct to collect runs deep in many of us – collecting is a compulsion that can’t always be explained clearly, let alone be controlled by rational thought! There are as many different reasons for collecting as there are collectors and collections, however there are a number of broad reasons that people choose to collect coins over other items.
As physical items of money, coins are used every day in the following ways:
Coins are a medium of exchange, and are handed over most of the time when we buy and sell things;
Coins are also used as a unit of account – to express the prices of the things we buy and sell.
Coins are a modest store of value – they are tangible items that are saved, and if required, used in future to buy something.
Connecting With Early Memories of Money
Behavioral psychologists believe that some people collect in an effort to remember and relive their past, and when we consider the tasks that coins perform, we can see why many people are literally compelled to collect coins and paper money.
The time at which a child is first given the opportunity of sharing the responsibility of buying a household item regularly consumed by their family is important from developmental point of view – this small increase in independence marks just one of the phases of growth from child to adult, and can have very strong memories associated with it.
Coins and notes can act as a strong reminder of the prices that everyday consumable items such as newspapers, milk or even a bus ticket used to command in earlier years, such figures can be seared into the memory of a child. Once the child becomes an adult, and sees or holds a tangible item that links them to those events from their childhood, it can evoke a range of proud and fond memories.
I have clients who remember a parent or older relative using a certain coin or note in a particularly important purchase from their childhood, whether that be for something as seemingly mundane as a ticket to the cinema, or for something as significant as a new electric appliance, a car or even a property. These strong memories have driven these collectors to acquire a range of coins or notes, so they can share the stories of their importance with their children and grandchildren.
Parents and grandparents obviously play the major role in introducing money to children, it can be an event as simple as a child receiving a shiny, new coin as a Christmas or birthday gift that starts a lifelong fascination with coins and money.
Regular contributions of pocket money to a piggy bank can evoke powerful memories later in life, particularly when the contents of the piggy-bank are intended to fund a much-anticipated purchase!
I’ve also had clients share stories of a particular coin or note that had been lost or stolen during childhood. Once they’d gained the financial means of being able to do so, many had felt compelled as an adult to finally acquire an example of the item, in so doing giving themselves a powerful sense of completion and satisfaction.
Connecting With Historical Figures or Interesting Periods of History
If many collectors choose to acquire items directly related to their younger years, how then can we explain a collecting interest in coins from a time well before a person’s birth, from a foreign country or even from an ancient civilization?
Collectors of much older coins generally come to the hobby in one of two ways - some, after receiving a gift of an historic coin when they were younger, others while looking for a memento of a particular historical figure or period they’ve had an interest in.
Either way, ownership of a historic coin almost demands that the owner learn about the entire background to the coin – when and where it was issued, the nature of the designs featured on it, the value that it had and the people behind it.
While working on their collection, the collector can effectively escape the stresses of their day to day responsibilities, and to be almost transported to another world for a short period of time.
I have numerous clients that take a great deal of satisfaction in the fact that their collection enables them to relax, yet make money at the same time!
They see it as a diversion from their primary occupation and responsibilities that doesn’t hurt their back pocket or leave them feeling guilty about wasting money or otherwise hold them back from reaching their broader goals.
Building a Reserve to Reflect Upon
Still other collectors choose to acquire coins that are produced in the present day, often as a way of building a resource they’re proud to reflect back upon in future.
The coins of ancient Greece and Rome are often described by historians as being “the newspapers of their day”, and to the degree that they depict the themes that were important to the rulers that issued them, the description is certainly accurate.
Today, most people regard coins solely as objects used to buy things, they often don’t even look at the designs on the coins that they use, much less do they study them or have a warm regard for them. Even though we may not give it much thought, the coins issued today by both of Australia’s mints (the Royal Australian Mint and the Perth Mint) also depict the themes that are considered important to our society.
Many a parent and grandparent diligently sets aside every new commemorative coin that is either released into circulation or produced by one of the mints – many of these collectors are looking to build a nest egg for younger members of their family, while at the same time collecting items that mark the major events and themes of our time.
Collectible coins such as those released to commemorate the Sydney Olympics, or to honour famous Australians such as Don Bradman, Weary Dunlop or Douglas Mawson can all be used to educate children about their heritage in a way that is far more immediate than a dry history lesson delivered in the classroom.