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CREATING & PRESERVING LEGACY WEALTH Rare Coin Basics Grading Scale Legacy Program
Presented by the UNITED STATES GOLD BUREAU
INVESTING IN RARE COINS
CREATING & PRESERVING LEGACY WEALTH
Former United States Mint Facilities
The 1849 California Gold Rush tested the capacity of the United States Mint at Philadelphia with the task of converting miners’ gold into coins. The U.S. Congress realized that the Philadelphia Mint was not going to be able to handle the increase in capacity, so they approved the establishment of branch Mints in New Orleans, Louisiana, Charlotte, North Carolina, Dahlonega, Georgia, and Carson City, Nevada. These facilities were tasked with accepting and coining the silver and gold from various strikes around the Nation. Although these facilities are closed today, their functions were quite similar to those of the United States Mint at Philadelphia Mint between the years of 1838 and 1893. President Andrew Jackson authorized The Act of 1835, created three of the aforementioned United States Mint production facilities in the South. When the Civil War began, each of these facilities was seized, temporary closed, reopened for the production of confederate money, and subsequently closed for good. All three of the newly established United States Mint facilities were producing coins by 1838. Because all three were in operation at the same time, there was a need for mint-marks to identify which facility was producing which coins. Those minted at the New Orleans facility carried the distinct “O” mint mark, while the Charlotte and Dahlonega production facilities featured the “C” and “D” mint-marks, respectively. Source: United States Mint http://www.usmint.gov/ historianscorner
There are three types of rare coins: 1. Rare 2. Key Date/Semi-Rare 3. Common Date
RARE COIN BASICS
What determines rare coin type? The answer is two-fold: original mintage figures and certified population figures.
Original mintage figures tell you how many of that specific type of coin were minted. Certified population figures tell you how many of that specific type of coin have been certified at a certain grade level. Most people feel that if a coin is 100 years old it must be rare. However, age alone has nothing to do with rarity. Rarity is determined by Supply. Here is an example where supply, not age, determined rarity. Let’s take a closer look:
Pre - 1933 Example
D (Denver) O (New Orleans)
Grade Face Value Description
MS60 MS60 $5 $5 Half Eagle Half Eagle
*MS60 = Mint State 60 (See the next section on Grading Scale.)
As you can see, Age does not determine Rarity. It is the Supply or Mintage/Production Figures that determine Rarity. This is why it is important to know the “Numbers” on the coins you buy. Most people will look at only the price of a coin and say “I can get that same coin cheaper!” This may be true for Common Date Coins, but when it comes to True Rarities - it is simply not the case. The reason is supply. You must become familiar with the Series of coins that you are buying to determine Rarity. Having a Dealer that will take time to explain all the Numbers is invaluable.
KNOWING THE NUMBERS
When it comes to pre-1933 gold, we know that our country was on the Gold Standard. So when you went to the bank to cash a check you received a gold coin. The United States Mint was responsible for minting or producing our money.
PAGE 1 For a free consultation with a Precious Metals Specialist, a price quote, or to place an order, call our Gold Hotline at 800-775-3504. Visit us online at www.usgoldbureau.com.
As our country grew so did our need for Money. More and more gold coins were produced to reflect the growing wealth of our country. So some gold coins that were produced yearto-year had mintage figures in the millions. Total production of this coin was 7,250,261. If you own one of these coins, which type do you own - Rare, Key Date, or Common Date? To answer that question, view the Numbers charts to the right. 7,250,261 total coins were produced, 12 different dates from 2 mints producing 15 unique coins. The average mintage figure for the 15 unique coins is 483,350. Any date of this coin that has a mintage figure above the average of 483,350 is a “Common Date.” Any date of this coin that has a mintage that is at or below the average of 483,350 is a “Key Date.” Any date of this coin that has a mintage figure of 25% of the average, or 120,837 or less, is a “Rare Date.” For example, the $2.50 Indian Head Quarter Eagle was produced from 1908-1915 and again from 1925-1929 at both the Philadelphia and Denver Mints.
Year 1908 1911 1912 1913 1915 1925D 1929 Original Mintage 564,821 704,000 616,000 722,000 606,000 578,000 532,000
Key Date / Semi-Rare Dates
Year 1909 1910 1914D 1926 1927 1928 Original Mintage 441,760 492,000 448,000 446,000 388,000 416,000
• First and foremost it authenticates your coin as being a true United States government issue and NOT a copy, fake, replica, or counterfeit.
CERTIFICATION HAS MANY BENEFITS
Year 1911D Original Mintage 55,680
• Second, once the condition of the coin is determined, it is sealed in a protective holder to preserve your rarity from damage.
• Third, your coin is assigned a bar code/serial number. If your coin is ever lost or stolen, you can prove ownership with this number. These “Population Reports” are critical in determining if your coin is a Common, Semi-Rare, or Rare coin. You will also know if a coin that you own has a “Finer” (higher quality) example and how many.
What About Certification and Population Numbers?
At The United States Gold Bureau we believe that it is very important to have all of your rare coins certified by a third party. We recommend PCGS (Professional Coin Grading Service) & NGC (Numismatic Guarantee Corp.) for certification and population count information.
• Finally, each time PCGS or NGC grades a coin they count the coin and include it in “Population Reports” so you will know how many other coins are like yours.
Due to the Gold Recall Act by President Roosevelt in 1933, the gold coins that were returned to the government were believed to have been melted down and turned back into bars.
Since no records were kept of which coins, and how many of each were melted, population reports help us know how many coins are still around. This is critical in knowing if you have a True Rarity.
PAGE 2 For a free consultation with a Precious Metals Specialist, a price quote, or to place an order, call our Gold Hotline at 800-775-3504. Visit us online at www.usgoldbureau.com.
In the circulated grades, One to Ten points separate each grade. In the uncirculated grades, every number represents a grade. Each of the following numbers corresponds to a word description:
DEFINITION OF GRADING SCALE
Grading is a system by which one can describe the present condition of a coin in comparison to its original condition at the time of manufacture. From the moment coins are minted, coins get marks and blemishes from contact with other coins and from being in circulation. Grading gives collectors a common language by which they can describe their coins to others.
In the Uncirculated grades, the numbers are preceded with the designation MS for Mint State. The grades used are MS60 through MS70 with MS60 representing a coin that is uncirculated but may have heavy marks and dull luster.
An MS65 coin will have few marks and none of them can be distracting. An MS65 coin will be very pleasing to look at. At the top of the scale would be MS70, which would represent an outstanding looking coin with absolutely no marks. This perfect grade is almost never used. Coins that fall into the near-perfect category are given the grades MS67, MS68 or MS69.
Proof coins are denoted with “PF” and are not released for general circulation. For these coins, the Proof refers to the method of manufacture and not condition. Proof coins are struck more than once on specially-made planchets using polished dies. This gives Proof coins a deep, mirrored surface with razor-sharp edges and imagery.
Grade Description Poor-1 About Good-3 Good-4 Very Good-8 Fine-12 Very Fine-20 Choice Very Fine-30 Extremely Fine - 40 Choice Extremely Fine -45 About Uncirculated – (AU50) Choice About Uncirculated(AU55) A coin so worn that it is almost unidentifiable. It is not considered collectible except for extremely rare issues. This coin is flat with little detail remaining ad with the rims worn down into the lettering. A heavily worn coin with flat details but with intact rims. A well-worn coin with the main features clear and bold. This coin will have moderate to heavy even wear but will have bold design features. You will find moderate wear on the high points of the design. All the major details are present. This coin shows light even wear on the surface and on the highest parts of the design. All the lettering and features are sharp and clear. The coin’s design is lightly worn. Traces of luster may show. The coin has wear on all the high points of the design but all of the design elements are sharp. The coin must have some mint luster to qualify for this grade. The coin will have traces of wear on most of the high points but it must have at least half the original mint luster. Only the smallest amount of wear will be found on only the highest points of the design. Most of the mint luster must be evident.
For many years, coins were graded only with words and adjectives. For example, terms such as choice, superb, and gem were used to describe uncirculated coins; but it was difficult for a reader of a catalog to get a mental picture of what the coins really looked like. Even professionals were confused. Today, numismatists and all of the third-party grading services in the United States use a 70 point numerical scale that was adapted from an old method of grading Large Cents. It’s called the Sheldon Scale after its originator, William Sheldon. This scale uses the first 59 numbers to deal with circulated coins and the last 11 numbers for uncirculated coins. Every number is not used.
THE THREE TIERS OF GRADING SERVICES
Coin grading and encapsulation services are generally regarded as belonging to one of three tiers: • Top Tier - PCGS and NGC • Second Tier - ANACS and ICG • Third Tier - All others, including ACG, INB, NTC, PCI, SEGS, SGS, etc.
PAGE 3 For a free consultation with a Precious Metals Specialist, a price quote, or to place an order, call our Gold Hotline at 800-775-3504. Visit us online at www.usgoldbureau.com.
We are all familiar with the wealthy in America, The Rockefellers, Vanderbilts, Hiltons, Fords, Forbes, Du Ponts, and many others.
Today we realize that the accumulation of wealth is only the first part. Another challenge is how to retain your riches and create Generational or Legacy Wealth.
These families all had one thing in common - their wealth was created generations ago. The amazing thing is, even though their wealth was created long ago, the families are still benefiting from it.
MALCOLM S. FORBES
In 2004, the Forbes family auctioned off a piece of their family’s wealth in the form of Faberge eggs that Malcolm S. Forbes acquired from the 1960’s until his death in 1990. Although no information is available on how much he spent to acquire these eggs, experts believe that it was a small fraction of the $110,000,000 that the sale brought to the Forbes family. There are 50 Imperial Easter Eggs in the world, including the nine owned by the Forbes family. For the past 16 years, this wonderful Collection has been shared with the public in the Forbes Galleries and in shows around the world.
It took Malcolm Forbes 30 years to acquire this unique collection and an additional 14 years to bring the $110,000,000 to his family. So why is TIME so important? It is easy to understand the value of something that is 100 or more years old. The real question becomes “How do you know an item will be rare in the future?’ Quite simply, Supply. SUPPLY: “An Item is rare or common the day it is produced.” In the case of the Faberge eggs there are only 50 in the world! The very day they were created, they were rare. Now, 200 years later they are Extremely Rare.
HISTORY PLUS TIME: “Age can make any item historical; however some items can be historical the day of creation.” The first Coca-Cola bottles were created around 1900. Even though these bottles were a very common item in their time, today they are considered RARE. A Common or high supply item can become rare after 100 years. In the time it takes a common item to become rare (100 or more years), a rare item can become priceless. Great wealth takes time and the longer you wait to start, the longer it will take. Take a look at a modern day example that can change your financial position. • In 1999, the United States Mint produced 1,505,026 one ounce Gold Eagles. • In 2001, the United States Mint produced 143,605 one once Gold Eagles. You might think that if you own a one ounce Gold Eagle from 1999 you have something special. However, when you realize that the government produced 1,505,026 of them, you understand that you will have to wait 100 or more years before the coin will reach rarity status. In that same amount of time, the 2001 one ounce coin could become priceless! Here’s why.
First, the supply of the coin; only 143,605 verses 1,505,026. In the 20-year history of the Gold Eagle program, the 2001 is the lowest minted coin to date so it will be more valuable than any other dates. In 1907 the United States Government produced 1,451,786 one ounce Liberty head coins. Knowing that your grandparents could have secured this coin for only $20, it is exciting to know that today you can acquire this same coin for $800. That means the value of that coin has increased 4,000%. So, if your grandmother had saved $10,000 in one ounce gold Liberty coins, you would have $400,000 today.
You can decrease the value of a RARE Item by damaging the item and lowering its condition. If you have a rare item you want to keep, protect it from harm. By preserving the condition of your rare item, you are increasing its future value. The Key: History, Low Supply, Best Condition...Plus TIME is a GUARANTEED Formula for Wealth Creation! Start Building Your Wealth Today. You Can Start with $10,000 or $1,000,000. Contact us today at 1-800-775-3504 to start your Legacy Account.
In 1915, the United States Government produced 152,000 one ounce coins. Again your grandmother could have purchased this coin for $20. Today you are looking at a minimum of $2,500. That’s an incredible return on her money of 12,500% or a 125 times return on her investment. So putting $10,000 in one ounce RARE Gold Liberty coins would have turned into $1,250,000 today.
PAGE 4 For a free consultation with a Precious Metals Specialist, a price quote, or to place an order, call our Gold Hotline at 800-775-3504. Visit us online at www.usgoldbureau.com.