Interesting Article, "Save Your Nickels"

[wharghoul]

Interesting Article, "Save Your Nickels"

http://www.lewrockwell.com/orig10/rawles1.1.1.html

I don't agree with a lot of this article, but it's interesting all the same.

Especially like the parts where the author points out that it is useless to look for silver coinage in circulation because it has all long since been picked by collectors.

 

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[NaturalJWL]

Re: Interesting Article, "Save Your Nickels"

Klava,

You had a very informative post and it is well appreciated. I don;t post often but I do read others post. Thanks to all for the info, myself I listen to the experts and try to learn. No way could I compete with the finds, ( lack of funds ) but I do what I can and enjoy it all. I am just as happy reading what others have found.

HH

 

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[mistergee]

Re: Interesting Article, "Save Your Nickels"

shake,
I am very sorry. I was simply trying to learn. I hope that we can all still be friends my man.

if this is true perhaps you should be careful with how you word your opinions. i'm sure your probably a nice guy but your last couple of posts putting down pennies and insulting those who collect them by calling them dumb is no way to make friends here. these people are very knowledgable and are very willing to help anyone learn what they spent years learning. when you make bold statements without prior knowledge it is you who looks like the dumb one. its like the old saying "IT IS BETTER TO REMAIN QUIET AND THOUGHT THE FOOL RATHER THAN OPEN YOUR MOUTH AND REMOVE ALL DOUBT"

 

[mistergee]

Re: Interesting Article, "Save Your Nickels"

almost forgot what i originally was going to post on this subject due to the above.
not to change the subject BUT, he mentions in the article about going back in time to hoard coins. i have often thought of this....buying coins....buying certain stocks...betting on horses and sports....etc, etc,....then one day it dawned on me.(aside from it being impossible to go back in time) even if you could say go back to 1950.......you would only be able to use money that was printed up to and including 1950 to purchase these things. just think what they would say if you tryed to pay with our new $5 and $10 bills with 2003 on them, not to mention they look like monopoly money.kinda puts a damper on the going back in time theory.

 

[blurr]

Re: Interesting Article, "Save Your Nickels"

Okay here we go....

$0.0182553 is the melt value for the 1909-1982 copper cent on August 10, 2009.

that is an instant 82.5% gain everytime you throw a copper penny in a jar. What does your savings account gain?

I have heard many good arguments both for and against hoarding cu cents but "dumb because your bank will give you more interest" is by far the worst. Yes i understand we cant melt them right now. There is a market though. last year coppers were selling at over 2 cents a piece at times. You can still sell them for more than face.

In my opinion they are a great way to diversify your portfolio. I know people who just keep back the ones they get in everyday change and i also know people who hoard them by the ton. The key is all of these people diversify.


I don't put any faith in fiat money(look that up) or numbers on the screen that represent it and i damn sure wont have any investments in a "savings account" lmao. To each their own though.

HH
-K

Your profit is in theory only unless you have been selling these coins. Just because they sit in a mason jar doesn't mean you have made any profit. Prices will stabilize. Copper is a very common metal. China and India are hogging it all right now to build infrastructure. If you have a mountain of copper pennies, cash them in!!!

John

 

[klava]

Re: Interesting Article, "Save Your Nickels"

Your profit is in theory only unless you have been selling these coins. Just because they sit in a mason jar doesn't mean you have made any profit. Prices will stabilize. Copper is a very common metal. China and India are hogging it all right now to build infrastructure. If you have a mountain of copper pennies, cash them in!!!

Yes it is in theory. I'm sure it will go up and down until the time comes that they can be melted or i sell to a buyer. Your stocks, mutual funds and retirement are the same way. Do you really have anything when it can be huge one day and gone the next?

Anyway I am tiring. cash em in there are plenty of people who would be just fine with finding your stash and holding it back.

 

[blurr]

Re: Interesting Article, "Save Your Nickels"

Your profit is in theory only unless you have been selling these coins. Just because they sit in a mason jar doesn't mean you have made any profit. Prices will stabilize. Copper is a very common metal. China and India are hogging it all right now to build infrastructure. If you have a mountain of copper pennies, cash them in!!!

Yes it is in theory. I'm sure it will go up and down until the time comes that they can be melted or i sell to a buyer. Your stocks, mutual funds and retirement are the same way. Do you really have anything when it can be huge one day and gone the next?

Anyway I am tiring. cash em in there are plenty of people who would be just fine with finding your stash and holding it back.

No need to be testy. I was just pointing out that you have a stash of pennies and nothing more, unless you find someone willing to give you what you want for them. If that's what floats your boat, go for it. There are worse things to invest in I guess.

John

 

[jim4silver]

Re: Interesting Article, "Save Your Nickels"

Your profit is in theory only unless you have been selling these coins. Just because they sit in a mason jar doesn't mean you have made any profit. Prices will stabilize. Copper is a very common metal. China and India are hogging it all right now to build infrastructure. If you have a mountain of copper pennies, cash them in!!!

Yes it is in theory. I'm sure it will go up and down until the time comes that they can be melted or i sell to a buyer. Your stocks, mutual funds and retirement are the same way. Do you really have anything when it can be huge one day and gone the next?

Anyway I am tiring. cash em in there are plenty of people who would be just fine with finding your stash and holding it back.

No need to be testy. I was just pointing out that you have a stash of pennies and nothing more, unless you find someone willing to give you what you want for them. If that's what floats your boat, go for it. There are worse things to invest in I guess.

John

According to Jim Rogers, a very well respected pundit who used to be partners with Soros, commodities in general are gonna be the next big thing in the coming years (even bigger than they have been). I believe that most nations are gonna have very high inflation as they continue to print money to cover deficits and debt. Smart people/institutions/governments will want to have physical things instead of paper money that loses value each year.

While copper may be "common", like all metals it has to be recycled or dug up to get useable material. I think future demand is gonna grow and not level off. There may be periods where demand does not grow as much, but I think the overall trend is bullish.

I don't have the time or desire to save pennies myself (I am happy with silver and gold), but if I was going to hoard them, I would hold them instead of selling them now. Look at how much money you would have made if you started saving silver coins in 1964 and unloaded them in 1980 when silver was $50 per ounce. I don't know if copper will have such growth in the future, but who knows. Perhaps the gov will lift the ban on melting pennies and nickels someday so they can legally be sold to refiners. In the late 60's there was a gov ban on melting silver coinage that was eventually lifted, so who knows.

Glad I am not one of those people who saw their 401Ks or IRAs lose 50% in the past couple years. I got out of all stocks a few years ago and don't regret it a bit.

Jim

 

[jb7487]

Re: Interesting Article, "Save Your Nickels"

Look at how much money you would have made if you started saving silver coins in 1964 and unloaded them in 1980 when silver was $50 per ounce.

You could have said the same thing about AOL stock back in the late 90's. Hindsight is always 20/20. Coins are no different than stocks. The real challenge is knowing when to sell. You obviously know that based on the fact that you got out of stocks in time to save your 401k. It's easy to tell someone that they should be hoarding nickels. It's harder to tell them just how long they will have to hoard them before they can make that big score (if ever).

I'm not convinced that hoarding nickels (or pennies for that matter) is worth the costs in time and handling. Even if you expected a 2 times return on investment you can't ignore the fact that you would need a BOATLOAD of nickels to make any real money. Take $10k in nickels for example. You are looking at 200,000 coins! And you'd only make $10k if they doubled in value. That really isn't that much money when you think about it. This guy is also talking about going out and buying old ammo cases to house them in. Yet these cases are likely to eat up all of your potential profits. And the situation is even worse with pennies because you have to sort them. It takes a million pennies to make $10k. If you want to sell them a bag at a time for $40 profit that is fine. But it's not a long term investment strategy.

 

[jim4silver]

Re: Interesting Article, "Save Your Nickels"

Look at how much money you would have made if you started saving silver coins in 1964 and unloaded them in 1980 when silver was $50 per ounce.

You could have said the same thing about AOL stock back in the late 90's. Hindsight is always 20/20. Coins are no different than stocks. The real challenge is knowing when to sell. You obviously know that based on the fact that you got out of stocks in time to save your 401k. It's easy to tell someone that they should be hoarding nickels. It's harder to tell them just how long they will have to hoard them before they can make that big score (if ever).

I don't have a 401K and I am not telling people to hoard anything. You are right that at certain times certain investments are better than others. There were times when stocks were fantastic, just like in the mid-late 90's.

The key is betting right about what will be hot in the future (buy lower, sell higher). Nobody can see the future exactly, but many people make good investments and turn out to be right when they hit. This is not hindsight but making a good/lucky/insightful decision.

I recommend to my family and friends to be in gold and silver now. I do this myself, and I am over 75% into PMs ratio-wise, the rest is cash (CDs, etc). I may turn out to be wrong and regret it, but I have to make the choice I believe is the best. I follow the mindset that there is no need to diversify if you are right. I don't know where that quote comes from, but I like it. I am not near retirement, so I am not too worried if I am wrong. If I am, I will have alot of cool paperweights.

Everyone should do what they think is right and not to listen to people with vested interests about what is the best investment choice for them.

Many people I know who like stocks like to point out past performance of various stock indexes, etc. This is useless for future direction since our world is constantly changing and things now might not be like they were in the past. Also, the stocks that make up various indexes are not the same stocks throughout the whole time period. Some are added and some removed.

Although I am bullish commodities NOW, I feel there will be a time in the future to get out of them. I don't know when that will be, but no investment vehicle works all the time.

Jim

 

[jb7487]

Re: Interesting Article, "Save Your Nickels"

Jim, I totally agree with everything you just said. I was simply pointing out that I think hoarding nickels and pennies is probably not going to net you any really big money over the long term due to the costs of processing. Just the cost of trying to sell 200,000 nickels or 1M pennies is mind boggling. And I know that you didn't personally tell people to hoard nickels. That's what the original article was trying to do. So I apologize if it sounded like I was attributing that advice to you.

Take care.

 

[wharghoul]

Re: Interesting Article, "Save Your Nickels"

Jim, I totally agree with everything you just said. I was simply pointing out that I think hoarding nickels and pennies is probably not going to net you any really big money over the long term due to the costs of processing. Just the cost of trying to sell 200,000 nickels or 1M pennies is mind boggling. And I know that you didn't personally tell people to hoard nickels. That's what the original article was trying to do. So I apologize if it sounded like I was attributing that advice to you.

Take care.

Ok, so I'm sitting in my cubicle and I've got nothing better to do right now than analyze your scenerio of hoarding 200,000 nickels. I used coinflation.com for some of the data.

Basic Facts: 200,000 nickels = 100 boxes (2,000/box) = 1 or maybe 2 pallets
Or: 200,000 nickels = 2,220 lbs.

$0.0479755 is the melt value for the 1946-2009 nickel on August 12, 2009
Current Ni(25% Comp.) Price= $9/lb, Current Cu(75% Comp.) Price= $2.80/lb

So, if you compare todays non-ferrous metal prices to the recent 5 year highs, in which:
Nickel was $24/lb and Copper was $4/lb

Then, it's plausible that we could see a melt value value in the $.06 to $.075 range if demand picks back up.

So let's assume the prices go way up based on global demand (BRIC countries) and we see those recent highs again,

$.075 melt value/nickel x 200,000 nickels = $15,000 (or $5,000 profit) (before shipping)

SO, WOULD IT BE WORTH IT TO SHRINK WRAP A COUPLE OF PALLETS OF NICKELS OUT IN THE WORK SHOP FOR THE NEXT 5 TO 10 YEARS IN HOPES OF MAKING $5,000.00 PROFIT?

(I'm assuming min. shipping, delivering by my personal truck to one of the local scrap/salvage yards)

Although, I doubt I'd get full melt value, but I'll pretend that the buyer is feeling generous that day.

I'm thinking that after adjusting for inflation and other various expenses that it just doesn't make sense to do it right now.

 

[klava]

Re: Interesting Article, "Save Your Nickels"

Sorry if I seemed testy that was not my intention. Also let me back up and say EQUITY is the word i should have used instead of profit.

Also as I and others have stated diversity is the key. The thing with investing in base metal coins is it has no risk factor. That's the biggest allure for alot of people. Copper happens to be the easiest(in the US) bullion to find and hoard.

***This is one of the best debate/discussions we have had on this board in a long time. With the exception of a few people the posts have been well thought out and presented positively. I hope to see more discussions like this in the future.

-K

 

[jeff of pa]

Re: Interesting Article, "Save Your Nickels"

Time to End Ban on Melting Cents, Nickels



http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7172

 

[quitquit]

Re: Interesting Article, "Save Your Nickels"

This article has got to be a reprint. The prices the author refers to is at the height of the price of nickel and copper when a nickel was worth $.07. When taken into account, hoarding nickels makes sense especially since you dont have to sort through them like pennies.

 

[jb7487]

Re: Interesting Article, "Save Your Nickels"

When taken into account, hoarding nickels makes sense especially since you dont have to sort through them like pennies.

I agree that hoarding nickels is probably smarter than hoarding pennies because the processing costs are lower. But I still think that people are underestimating the processing costs of aquiring, storing, and getting rid of 200,000+ nickels.

Wharghoul gave a nice breakdown of a typical scenario. And the conculsion was that you might be lucky to make $5k profit on a $10k investment. That sounds great in theory but there are lots of other costs that eat into those profits. And $5k really isn't much to get excited about. The big problem is that your profits are pretty much capped. You might be able to get $5k or even $10k in profit one time. But that's about it. The processing and storage requirements make it virtually impossible to multiply your profits into something really tangible. So although I like the idea of making $5k on a $10k investment, I only want to bother with it if I can parlay it into a nice repeatable investment. Otherwise, I'm better off investing my TIME in something else. And that's what most people are leaving out of the equation: TIME. Just how much time will you really burn trying to process 200k nickels for a small $5k profit? If you spend any more than about 100 hours you are losing money on the deal. And I can definitely see myself spending way more than 100 hours trying to accumulate, store, and ultimately sell 200k nickels.

It reminds me of an old Steve Martin joke that goes something like this (from memory): "Yeah, I'm into the stock market baby. Gonna make it big! You'll appreciate this... I invested in cardboard when it was only 19 cents a ton. It's up to 24 cents a ton now! And let's see, I got 10 tons of it so that makes my profits about... hmmm... carry the one... hmmm... well, YOU figure it out. Oh, and the best part is that I got a "special" deal where I only have to keep 2 tons of it at my house!".

 

[Shake-N-Bake]

Re: Interesting Article, "Save Your Nickels"

This article has got to be a reprint. The prices the author refers to is at the height of the price of nickel and copper when a nickel was worth $.07. When taken into account, hoarding nickels makes sense especially since you dont have to sort through them like pennies.

Everybody has there own reasons for or against what is said in this article.

But people saying it is not feasable to sort pennies needs to be educated. I have a machine(as well do others on this forum) to sort 20,000 pennies an hour. With that said I can sort 200,000 pennies in ten hours. Not very long ago I was shipping out 27,000 copper pennies a week at a profit of $224. Is that a lot for the 20 or so hours it took my to sort... NO!!! but I took that money and bought silver with it. After a few short months I now have a couple of hundred ounces of silver that I paid NOTHING for, just a littel time doing something that I love doing...

This has been a great debate!!!

I personally would not hoard pennies or nickels, but I would and do sort pennies and sell them fast for a quick dollar!
Jason

 

[blurr]

Re: Interesting Article, "Save Your Nickels"

This article has got to be a reprint. The prices the author refers to is at the height of the price of nickel and copper when a nickel was worth $.07. When taken into account, hoarding nickels makes sense especially since you dont have to sort through them like pennies.

Everybody has there own reasons for or against what is said in this article.

But people saying it is not feasable to sort pennies needs to be educated. I have a machine(as well do others on this forum) to sort 20,000 pennies an hour. With that said I can sort 200,000 pennies in ten hours. Not very long ago I was shipping out 27,000 copper pennies a week at a profit of $224. Is that a lot for the 20 or so hours it took my to sort... NO!!! but I took that money and bought silver with it. After a few short months I now have a couple of hundred ounces of silver that I paid NOTHING for, just a littel time doing something that I love doing...

This has been a great debate!!!

I personally would not hoard pennies or nickels, but I would and do sort pennies and sell them fast for a quick dollar!
Jason

Good for you!! Sounds like you have a system figured out. Personally, I don't have twenty hours a week to sort pennies. Rotten kids and honeydoo lists and such!!! My only thought is that people can't expect to warehouse nickels and pennies in expectation of a price spike. Just transporting the kind of numbers of coins needed to make the kind of profit to retire on would chew up a lott of profit.

John

 

[Shake-N-Bake]

Re: Interesting Article, "Save Your Nickels"

This article has got to be a reprint. The prices the author refers to is at the height of the price of nickel and copper when a nickel was worth $.07. When taken into account, hoarding nickels makes sense especially since you dont have to sort through them like pennies.

Everybody has there own reasons for or against what is said in this article.

But people saying it is not feasable to sort pennies needs to be educated. I have a machine(as well do others on this forum) to sort 20,000 pennies an hour. With that said I can sort 200,000 pennies in ten hours. Not very long ago I was shipping out 27,000 copper pennies a week at a profit of $224. Is that a lot for the 20 or so hours it took my to sort... NO!!! but I took that money and bought silver with it. After a few short months I now have a couple of hundred ounces of silver that I paid NOTHING for, just a littel time doing something that I love doing...

This has been a great debate!!!

I personally would not hoard pennies or nickels, but I would and do sort pennies and sell them fast for a quick dollar!
Jason

Good for you!! Sounds like you have a system figured out. Personally, I don't have twenty hours a week to sort pennies. Rotten kids and honeydoo lists and such!!! My only thought is that people can't expect to warehouse nickels and pennies in expectation of a price spike. Just transporting the kind of numbers of coins needed to make the kind of profit to retire on would chew up a lott of profit.

John

Correct I would never, EVER try to retire on a hoard of pennies and nickels. I would not try to depend on the income for anything, and I have been successful doing it for some time. But to me it is extra money to invest in something else. Don't get me wrong I am glad that people out there read articles like this one about hoarding pennies and nickels and actually do it, that way their there is crazy people willing to buy my copper pennies.

Jason

 

[jb7487]

Re: Interesting Article, "Save Your Nickels"

But people saying it is not feasable to sort pennies needs to be educated.

I don't think anyone said it wasn't feasable to sort pennies to make extra money. The idea of hoarding is different from the concept of sorting small amounts and selling off as you go. For one thing there is the whole difference of amassing and holding inventory. If you have a system that allows you to sell pennies for a profit and you like doing that then by all means, go for it. Most people though are not doing that and are simply hoarding in the hopes of some big payoff down the road that may never happen. You are taking advantage of short term gains for known profits which is clearly a different (and better) investment in time.

I have a machine(as well do others on this forum) to sort 20,000 pennies an hour. With that said I can sort 200,000 pennies in ten hours. Not very long ago I was shipping out 27,000 copper pennies a week at a profit of $224.

But isn't that only sorting time? It probably does not include the time to aquire, advertise, and then sell/ship the pennies. I'm not trying to belittle your profits. If you enjoy doing it and it is bringing in steady money that results in a profit for the amount of time spent then go for it. But it is common to miscalculate the amount of time you spend. For example, you state that you can do 200,000 pennies in 10 hours. But I would estimate that it would take you another 10 hours just to aquire those 200,000 pennies in the first place. And you'd be steadily sitting there feeding your machines by hand unless you've invested serious dough in an automated system. Of course, we haven't even talked about how much your machine initially cost or how much you spend on shipping costs, advertising, transportation, taxes, and other such matters. I also assume that your 27,000 pennies a week is one of your better weeks and not your average. So it is reasonable to assume that on some weeks you may make significantly less than that. That's fine as well.

I don't metal detect as an investment. Sometimes when I come back from a two hour outing with 26 cents in my pocket I have to remind myself that it is just for fun and not for profit. I think that CRH is probably similar. Although some people want to look at it as a serious investment, it really doesn't hold up as such under increased scrutiny. But people really enjoy doing it so they are willing to accept the lower payback on their time as otherwise they would just be using that time doing something else instead (like watching TV) that has an even lower return.

But hoarding nickels is a completely different matter. I would get no personal enjoyment out of the process. It would be work. A lot of work. And therefore I would expect a profit that is in the same range as any other work that I would do. And that means that I'd be expecting a $5k profit on less than 100 hours of work. If not, I'm better off sitting at my desk working or finding other investments that make more sense.

 

[Shake-N-Bake]

Re: Interesting Article, "Save Your Nickels"

"Of course, we haven't even talked about how much your machine initially cost or how much you spend on shipping costs, advertising, transportation, taxes, and other such matters. I also assume that your 27,000 pennies a week is one of your better weeks and not your average. So it is reasonable to assume that on some weeks you may make significantly less than that. That's fine as well."

Well lets add it up... Machine cost $300, Shipping cost: already counted for, Advertising: FREE online forums, Transportation: I live 2 minutes from my source and dump bank, I hit the bank while I am out. they also let me order as many boxes that I want at any given time, usaully 20 boxes(50,000 pennies) at once. And the 27,000 is on a so so week. I have had weeks of 60,000 coppers.

I understand your thinking thou, I am not a NORMAL CRHer. LOL! As if any of us is normal... Just to put it into perspective I sorted 2.2 million pennies in 4 1/2 months.

I included a few pics to show you my little world. They include my two machines I use, A glory mini-sort counter and my Ryedale copper penny sorter. I also included a pic of a slow day of boxes and a copper bar I made.

Jason