Important points on Numismatics

I would like to share something about my beautiful wife and family life in general. There is no such thing as beauty without brains. Yes, there are airheads but in both species men and woman. My wife happens not only to possess beauty but also blessed with brains. She is our financial planner, financial controller, event planner, and financier for our kids schooling, groceries purchaser, friend, mother and much more. The list and task of my wife goes on and on. Which leaves me with nothing I guess? Well, that’s how important she is.

Anyone who is good in financial matter is brainy. There’s no doubting that fact. Another person that fits this category would be my sister, Vimala.

So brainy is my wife that she insisted I do a coin/banknote inventory for all coins and banknotes in my collection. She dictated to me that my inventory should have date of purchase, purchased from whom, receipts and pictures. When it was done I showed it to her and she requested, where is my Return of Investment (ROI) column? Huh! Return of investment column? I was dumbfounded. She insisted that I needed it and said how else you would know what is the return in your investments?

I informed her that there is no return in investments as the collection would be inherited to our kids. She answered diligently, all the more reason to have ROI, which will be updated yearly to reflect the collections true value and not purchased value. Take for example, the Malaysian 1971 10 cents version 1 beveled edge in almost UNC condition, purchased in 1986 would be estimated at RM80. However, in 2014, the same coin in the same condition would have increased to a minimum of RM1,200. The seller would need to know the latest market value so as not to get shortchanged. Furthermore, the seller may not be the owner of the coin as it may be his or her inheritance. Hence, the importance of listing down your ROI.

Now you get my drift. Who else would come up ROI and other conditions unless you are born with brains. For that I thank my lovely wife. Coming back to my task for today’s blog. Many of my friends had enquired that they are keen to start a coin/banknote collection for investment purposes but do not want to get cheated and do not know where to begin.

My advice is a follows:-

1. Find a good, honest and reliable Sifu in numismatic.

Ask questions and learn from them. Do not be shy and think that your questions are stupid. Remember that this is an expensive but very rewarding hobby. You do not want to make mistakes by buying worthless pieces, overpaying or even worst purchasing fake pieces.

2. Buy books and read to garner more knowledge.

Some of the notable books are:-

a. Sifu, Steven Tan – Standard Catalogue of Malaysia-Singapore-Brunei Coin and Paper Money

b. Sifu, KN Boon – Malaysia, Brunei & Singapore Banknotes & Coins

c. Numis Coins & Notes – Matawang Malaysia Coins & Banknotes 1967 – 2014

d. Sifu Saran Singh – The Coins of Malaysia, Singapore & Brunei 1400-1967   

3. Decide which type of coins/money that you would like to focus on.

Always have a focus point. Do not stray and decide to collect everything you can get your hands on.  This will result in you getting substandard coins/banknotes and not having your collection complete. If you decide to collect old Tanah Melayu tin coins, deicide on which state you want and ensure your collection is complete before going on to another state or going for a different series of banknote, i.e. If you decide to start with Melaka tin coins, complete your collection first before going to Kedah tin coins or Straits Settlement notes. This will ensure that not only is your collection complete but collectors will always be willing to pay more for a complete series than bit and pieces here and there.  

4. Buy only the best quality coins or banknotes that you can afford.

Preferably graded professionally by Professional Coin Grading Services (PCGS) or Numismatic Guaranty Corporation (NGC). This would ensure that the encapsulate coin or sealed banknote is original and it would remove the guessing game of the condition of the coin or banknote. Try to stick to Very Fine (VF) or Extra Fine (EF), About Uncirculated (UNC), Mint State (MS-60 to 65) (UNC) Splendid (SPL) and Mint State with full luster (MS-66 to &70) Fleur de Coin (FDC) and above only. This would ensure that you investment is the very best that you can afford and there is always willing buyers for items in this condition, locally and internationally. Value of items in this condition will only increase with time due to its rarity and being exclusive. If can afford Proof coins even better.

5. Find out what is in demand.

Since you are entering into this hobby as an investment, always ensure that the coin/banknote that you intend to collect is highly in demand. You do not want to collect something that no one else wants or is not willing to pay substantially more than what you paid for. For example you can see on the internet that there are many Malaysian commemorative or conservation coin set trying to be sold. But very few can fetch a better rate than the purchased price when it was first released.   

My personal preference would be on the following Malaysian collection VF and above:-  

  

a. Coincard Bandaraya Shah Alam. Rate in 2014 estimated at RM750

b. Tapir 1976 RM500 Gold Proof Coin. Rate in 2014 RM18,403

c. 1976 1 cent copper. Rate in 2014 RM9,000

d. 1971 10 cents version 1, 2 and 3. Rate in 2014 starting from RM1,200

e. 1994 20 cents. Rate in 2014 starting RM100

f. 1969 50 cents. Rate in 2014 starting from RM1,000

g. Kelantan Kijang Gold Kupang. Rate in 2014 starting RM3,000

h. Any replacement notes. Generally starting with the prefix “Z”. Rate in RM2014 starting by adding a minimum RM10 to the original value of the denominated banknote.  

6. Do not buy washed coins/banknotes or counterfeited ones

Learn how to check if your items are original or counterfeit. This is easier said than done. Now days, there are many high grade counterfeit Straits Settlement coins from China, making it difficult to tell the original from the reproduction. They even go to the extent of using chemicals and abrasive to tone the coin making it look like it’s worn with age. You will need to check the internet on advice, books and also consult a respected Sifu on this issue.

Always keep a strong magnet and excellent magnifying glass. The magnet is to check if your coins are metal or copper. Copper coins are not attracted to magnet.

The magnifying glass is to check the condition up close, prior to purchase. With the naked eye an item may look VF but upon magnification you may even see green patina eating on your metal coin or many surface damages/scratches.    

Washed / cleaned coin/banknotes always carry a lesser value. Do not attempt to do so as you may end up damaging the coin/banknote surface which may lower its grade and value.

A clean, spotless, shiny coin may be very nice to look at and can be very alluring but collectors always look for the natural patina that you can only obtain from age.  

7. Storing your collections

Now that you have spent a small fortunate collecting coins/banknotes, just take it a step further to properly store it. Always pack coins/banknotes in individual coin holder or banknote holder to protect your investment.

8. Inventory

Just like a stock take, ensure that you have a proper inventory to list down in details all the items you have purchased and its details. This will aid you in later years as your collections grow.

You can use the sample below which I created with input from my lovely wife.  

No	Date Purchased	Purchased From	Amount	Receipt Copy	Date of Item	Country of Origin	State of Origin	Composition
1.	7/7/2014	MNS Auction No. 159	RM 9,000	(Scan and attach copy)	1976	Malaysia	-           -	Copper

Denomination	Weight (g)	Mintage	Rarity	Condition	ROI 2014	PIC	Remarks
1 cent	1.94	100 – 5,000 unconfirmed	RRRR	UNC	RM 10,000	(Scan and attach picture)	PCGS MS - 65

And last but not least, enjoy your new found hobby and happy numismatic.