Reasons To Collect Obsolete Currency Instead Of Coins

By: Handini

While coin collecting has been a hobby of mankind since antiquity, currency is a much more recent phenomenon and is still gaining interest among numismatics. Most currency collectors in the US collect United States Paper Money issued by the government since the 1860's. These notes remain legal tender and their values for some of the rarer varieties can be worth 5 or 6 figures. Broken Banknotes have recently been gaining ground in the currency aspect of numismatics that their prices, although on the rise, are still low compared to a United States paper note of comparable rarity.

The coin market on the other hand is also on the rise for the most part. Several years ago I purchased an 1895-O and an 1895-S Morgan Dollar. While in their current condition (both are lower grade) they have managed to increase in value roughly 5.5 times of their cost. I also purchased 3 1881-S MS66 Morgan Dollars. While the 1895 Morgans in my collection are uncertified, all 3 of the 1881-S Morgans are. Two of them are certified by PCGS and the third, and finest of the lot, by PCI. The prices for these Morgans are currently what they were worth over the past decade. With the lower value of the dollar however, it means that their values have gone down. Naturally, both 1895-O and 1895-S Morgans are desirable and worth considerably more than the 1881-S which is a very common variety.

The same thing takes place with currency to where the rarer notes tend to go up in value a lot sharper than the more common ones. This is where broken banknotes prove themselves as a great investment value, as they are all quite rare. When purchasing broken banknotes, the same holds true as with coins - the rarer and the better the condition, the greater the investment potential.

Gold too has risen drastically over the past decade. Roughly 10 years ago it was trading for around $300 a troy ounce and now it is above $1300 for a troy ounce. Of course, roughly 10 years ago I purchased 5 $5 proof notes from the East River Bank of New York, NY. I purchased them from three different people so I paid a range of prices for them. A couple of them however, cost only about $115 each. I recently saw them for sale on a currency dealers website for close to $1200 each, and I noticed that they also sold at those prices. So while gold rose 4.5 times, and 1895 type Morgans rose about 5.5 times in value, these proofs rose by as much as 10 times their value.

$5 The East River Bank, New York, NY (Proof)
Haxby NY-1570-G14
Image Contribution: Handini

$5 East River Bank, New York, NY (Proof)
Haxby NY-1570-G16
Image Contribution: Handini

Collecting obsolete currency is not only an interesting hobby, but can be a rewarding one as well.

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