Wealth Building Lessons

Its the eve before Black Friday. I went to grab an ice cream cone and stopped to admire the lines outside BestBuy. It was 11pm and there were probably 250 people camped outside in the cold. Even the parking lot was entirely full.

Thats one reason I like to shop online at Ebay. Its great for buying new or used stuff at great prices. Its especially good for increasing my coin collection. I started buying gold and silver coins 2 years ago. I’ve bought them all from online retailers like Apmex.com or from Ebay.

Here’s what I like to buy:

• Napoleon I gold 20 and 40 franc coins


These are by far my favorite coins. The coins were minted around 1810 and the 20 francs contain 0.186 Oz of gold while the 40 francs contain twice the amount. Considering today’s spot price of gold is $800 that works out to ~$150 of gold in the 20 francs. You can buy these gold coins $200 on ebay, so you’re only paying a $50 premium to own a 200 year old coin. I’ve bought several of them over the past 2 years from ebay without any problems. They very hard to find in stores (both regular and online) and I expect them to go up significantly in value over the next few years as gold continues it march to $2000/oz.

• Gold Lucky Angels 20 francs


These coins also contain 0.186 Oz of gold and are very popular. They’re called lucky angels because they feature an angel on the obverse side and are considered lucky. (not sure if they bring any luck, but if you bought a few several years ago, you’d be feeling very lucky!) You should be able to buy them for very close to the spot price of gold for that day. I usually buy the ones that are pre-1910.

• Swiss 20 franc gold Helvetias


Even though these were minted in Switzerland, they’re also 0.186 Oz of gold and also have a face value of 20 francs. Not as popular as the lucky angles, but they readily available and are quite beautiful. Most commonly available with dates in the 1930s.

• Silver Peace Dollars

These coins are quite stunning to look at and highly collectible. Minted between 1921 and 1935, they’re easily available and make great gifts. They’re 90% silver and contain 0.77 Oz. You can buy them for a few dollars over the spot price of silver, unless you go for the very high grade versions of the peace silver dollar.

• Gold Napoleon III 20 francs


Most of the coins available are dated 1857 to 1865. Like all the other 20 franc coins, they have 0.186 oz of gold, but unlike the Napoleon I coins, they’re a bit cheaper and they’re currently selling for roughly half the premium.

• Silver Morgan Dollars

These are stunningly beautiful coins. Like the Peace Silver Dollars, they’re easily available and make great gifts.

• Gold Perth Mint Lunar Series

Beautiful gold coins minted by the Australian Perth mint celebrating the animals in the Chinese Lunar Calender. Available in various weights from 1/10 Oz to 1 Oz. There are 12 coins in the series which a new coin minted each year between 1995 and 2007. The current series is now closed and these coins have gained considered premium over the spot price.The 1 oz Dragon coin is depicted and sells for the highest premium. It currently sells for over $2000.

These coins are also available in silver and are very beautiful. The interesting note about both the gold and silver coins is that they are what is called “reverse proofs”, with the foreground polished and the background matte-finished, it appears as if the animal is floating above the coin.

• Gold Pre-1935 British Sovereigns

These coins contain about 0.2354 oz of gold and being widely available, carry a negligible premium. These coins are available from various places in the British Empire, apart from England, like South-Africa, India and Australia. Collect them all!

• Gold Danish Mermaids


Compared to the British Sovereigns of which 100’s of millions were minted, only 1.5 million Danish 20 Kroner “Mermaid” coins were minted. This results in their being significantly more scarce and expensive. It gets its name from the blend of a stoic Lady Liberty enthroned with a dolphin swimming at her feet. Christian IX, pictured on the obverse of the coin, was known as the ‘father-in-law’ of Europe because two of his daughters and one son married into the royal lines of England, Russia and Greece respectively. His grandson became the king of Norway. This coin is exceedingly popular with the people of Denmark in that the mermaid is the national symbol of the country.

• Kruggerands or Maple Leafs


If you don’t want to pay any premiums but still want to diversify out of the dollar and into gold, I recommend South African Kruggerands and Canadian Maple Leafs as the cheapest way to buy bullion coins. You can buy them off Ebay, but be sure to check out the prices at Apmex.com. For bullion coins, Apmex often has better pricing.

Maple Leafs are pure gold and are easily damaged. If you buy a roll, do not take them out. Kruggerands are mixed with copper and are thus more resistant to scratching and dinging. But they’re not as popular as the Maple Leafs so they’ll be cheaper to buy but will fetch less when you sell. However, this difference might not be a lot and as gold prices continue to rise, the difference might decrease.

If you do plan on buying gold and silver coins, remember that the higher the grade, the more expensive the coin. If you are buying a graded coin, make sure you buy PCGS or NGC graded coins only. Don’t pay a premium for a coin graded by some local hole-in-the-wall grading service. And if you do buy off ebay, make sure the seller is reputable and has a good rating. I’ve bought dozens of coins off ebay without incident. (Except for one case where the seller didn’t package it properly and I got an empty envelope. But the money was promptly refunded, so it wasn’t an issue).

Another way of investing in gold is buying the Gold ETF (GLD). However, you’ll only get the appreciation in the price of gold. You won’t get a premium that coins can get as collectibles. But its more liquid and you don’t have to worry about storage or theft. I’ve invested in gold coins and ETFs.

The US Dollar is going to keep on weakening and gold will keep getting more expensive. I personally think gold will hit $2,500/oz or more this cycle. These coins are cheap at today’s prices. Once gold breaks $1,000/oz which could happen within the next 12 months, people’s interest in collecting coins will surge. This will cause the premiums on gold/silver coins to soar, especially the high grade coins (MS-63 or higher). Plan on holding for 2-5 years or until gold hits $2,500/oz.

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