Sunday, December 30, 2007

Loose Change

Everybody has a coin jar. It's that container that you throw your loose change into every night. The question is what do you do with all of those coins? Some people just sit on them in case of a rainy day. Other people wait until they have a good pile and then take them to the local coin star, give the machine it's 8% cut and cash them in every once in a while. Others just put them back in their pocket every morning. Your coin jar can be a pretty significant part of your preps if you educate yourself a bit about coins.

There are a lot of coins out there that are worth a lot more than their face value. Any quarter, dime or half dollar with a mint mark of 1964 or older is made up of 90% silver. A quarter is worth $3 just in the silver value alone. Dimes are worth $1 a piece. From 1942-1945 the nickels that the US minted were 40% silver. From 1965 to 1970 they lowered the silver content in half dollars from 90% to 40%. A lot of older coins that you're not likely to find in circulation anymore also have high silver content such as liberty half dollars, mercury dimes and morgan dollars. Collectors call it junk silver. These days it's very rare to find silver coins in circulation. It's still worth it to look through your coins before you cash them in. They're old coins so usually they're pretty easy to pick out.

Recently the value of non precious metal such as nickel and copper has been rising steadily as well. This has resulted in the metal value in some common coins to be worth more than the face value. Any penny minted before 1982 is 95% copper. In 1982 the mint changed the composition of pennies from 95% copper to 97.5% zinc with a copper coating. Some of the pennies that were minted in '82 were copper and some were zinc. The easiest way to tell the difference is to take a solid copper coin and a zinc coin and flip them with your thumb into the air. The copper coin will make a noticeable "tinging" noise. The melt value of solid copper pennies is around 2.5 cents each and rising right now. It might not be worth it to sort through them today but if you have a big pile of pennies then chances are good that a lot of them are copper. When they're worth 10x face or more (like the silver coins currently are) then it will certainly be worth sorting through them. The best thing to do is to never spend your pennies.

The same goes for nickels. All nickels (even the new ones that are currently being minted) are worth about 7.5 cents each. They're made up of 75% copper and 25% nickel. If you go to the bank and get a $2 roll of nickels then the metal in them is worth $3. If you get $100 worth of nickels then the metal is worth $150. Are you following me?

The Federal Reserve would love to take nickels and pennies out of circulation due to the fact that the metal costs more than they're worth but they're afraid that it would have a dramatic effect on the economy. If the time ever comes where they do that then pennies and nickels will skyrocket in value. They're so cheap, so common and yield such little return when you cash them in that there's really no reason to spend them.


theotherryan said...

I am pretty sure that it is illegal to melt down coins for their metal content. I think it says something aweful bad about the state of our economy that we need laws like that because the metal is worth more then the coin itself.

theotherryan said...

Im sorry but I forgot to say that despite it being illegal to melt them down having them lying around is just fine and might not be a horrible idea.

The Urban Survivalist said...

That's the thing. Just because it's illegal doesn't mean that the metal content isn't worth more than the face value of the coin. If they ever decide to drop off a decimal point from the American dollar (they have been talking about it) then it could pay off big time for anyone that horded pennies and nickels. Especially if you hold onto them for 10 years after the Fed does it. The special nickels that they've been minting for the last few years makes it even more worthwhile to stock up while you can. Have you noticed how you rarely find the new nickels in change but for every regular quarter that you find you get 5 statehood quarters? At $2 a roll it doesn't hurt to pick up $10 worth of nickels every time you go to the bank or cash your paycheck.

Urban Slacker said...

I've been throwing my $1 and $2 coins in a jar whenever I get home (Don't know if you yanks have 'em). Any old how I've been doing that for a while now. You'd be surprised at how quickly they add up. The best thing is that it is totally without pain. I haven't noticed a drop in my lifestyle yet I have enough to buy another 1'800 rounds for my main rifle if I choose but I do have my eyes on a new pistol. Remember that this will be without me "feeling" it

Anonymous said...

We save up coins, wrap them ourselves, and spend them on splurges.

The last jar bought us a nice new tent. Not sure what we will do with the next one.

I do pick out the 90% silver coins and set those aside. BTW, there is one thing that coinstar is good for! CoinStar machines will not accept the 90% coins. I check the reject bin at the bottom of the machine each time I walk into the grocery store. I've found half a dozen silver dimes this way that other people left behind.