4 Questions to Ask Before Buying a Gold Coin for Your Collection

There are many ways to invest your money, but one unique way is to purchase gold coins. Collecting gold coins can become a fun hobby that actually pays for your future. If you are going to start collecting gold coins, however, make sure you ask yourself these four questions before you purchase any coin.

Is the Coin Rare or Valuable?

You may assume that rare equates valuable, but that isn't always the case. You may come across a rare coin that isn't worth much at all. If nobody is particularly interested in a rare coin, it's not going to be worth much money. If you do choose to purchase rare coins, it's important you know what you are doing. You'll need to do some homework to learn about the coin first. You can easily do this with a price guide. These guides will teach you about rare coins and their value. You'll also learn about the mint mark, designer, metal content and other important information. With this information at your disposal, you can do a better job of determine what is rare and what is valuable.

Is the Coin Popular?

You can always play it safe and avoid rare coins completely. Just stick with what coins are popular. These coins aren't usually rare and a lot of collectors have them. However, a lot of collectors also desire them, making them valuable. Coins that are the most popular have a few features in common. First, they have a coin purity of at least 22K. There should also be a high supply of and demand for the coin. The brand should be well-established, and the picture depicted on the coin needs to be attractive. Some common popular coins include Turkish Republic Gold Coin, South African Krugerrand Gold Coin, Chinese Panda Gold Coin and the American Eagle Gold Coin.

Are You Dealing With a PNG Member?

As with anything that is collectible, there are fakes out there, and if you buy from a shady dealer, you may end up wasting your money on counterfeit coins that aren't worth anything. Plus, even if the coin is authentic, depending on where you buy, you may end up paying too much for it. That is why you should ensure you only deal with sellers who are members of the Professional Numismatists Guild (PNG). Members of PNG follow a strict Collector's Bill of Rights. This means you can trust them because they won't try to overvalue a coin, sell stolen items or sell counterfeit coins. In fact, they are even sworn to help educate you on the coins.

What Is the Premium?

When buying a collectible coin, make sure you know how much of the price is actually the premium. The premium is the cost to craft the coin, and it is always included. Typically a premium for a gold coin is about 5 to 10 percent, and as long as you stick with a PNG member, you shouldn't end up paying too much for the premium. However, you should still understand the premium because some coins have lower premiums than others. In fact, some coins may be worth the same but one has a higher premium because it is more popular. If you purchase the coin with the lower premium, it may be harder to sell if you decide to sell in the future, but you'll spend less for the same value.  

Collecting coins is a great investment opportunity if you know what you are doing and stick with popular coins and PNG members. If you would like to start collecting gold coins, start today. Locate a reputable coin dealer online and start your collection.