Thoughts on saving Pre 1982 Pennies??
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CardsNCoins
Bronze Member
- Nov 17, 2010
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What do you consider reasonable? People are selling $100 face value lots on eBay for between $145 and $160 every day. After all associated fees that nets them between $25 and $40 profit per $100 face sold, or 25% to 40% profit. Substantially more than reasonable in my opinion.
Good luck with your 1/10 of 1% from the bank. Seems reasonable.
MentalUnrest
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- Nov 14, 2010
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CardsNCoins said:
Well said Cards. I am one of those people and have two ryedales that have already paid for themselves. I also can make a vehicle payment each month based on my copper profits.
It is a lot of work, but I find it very profitable and very substantial.
Great to see you posting again Cards.
MU
hursst
Jr. Member
Great discussion here. Let's do some math. Assuming $3.60/lb as the current copper price, and assuming $2.35/lb as the current wholesale copper price (I got this from the current wholesale scrap price of roofing copper, which is roughly equivilent to a cent, I believe), you should get a wholesale selling price of 65% of full market value, on average. There are 145 copper cents in a pound, which would give you a current profit of 62% over face value. So, each cent is worth $.0162 scrap value currently, at wholesale.
Assuming $10/lb as the price in 2033, and assuming $6.50/lb wholesale price (going by the 65% discussed above), you would make 448% over face value, or a value of $.0448 per cent. Amortized over 20 years of holding onto it, you are making approx a 7.75% annual return on your investment. As a comparison, over 20 years, you would make between 1-4% in a money market acct (depends on interest rates), 3.5-8% on bonds (again, depending on interest rates), 8-9% in the S&P 500 in the stock market, or 9-10% in the stock market with a risky portfolio that was well diversified.
Copper prices are speculative, meaning that it could be $10/lb in 20 years or $2/lb in 20 years, who knows. Investing in money markets and bonds give you a guaranteed and insured rate of return, while stocks give you a riskier rate of return, but over a 20-year period, stocks have always made money, unless you owned stock before the 1929 stock market crash, then it took you 24 years to make money again.
In addition, bullion metal investments, of which penny hoarding is, are taxed at a maximum 28%, depending on your income level, whereas capital gains, of which the other investments I mentioned, are taxed at only 15%, if you earn less than $250,000 per family. To make it worth your while, copper would have to go up to at least $12/lb, and the current law would have to be changed, for someone to just break even over a more mainstream investment strategy. Also, copper (and all metals) are at historically high prices right now, which makes the odds of them going even higher, much lower over time.
You make the call, but these numbers tell me that investing in large hoards of copper cents will not pay off compared to other investment types, even if the price goes up to $10/lb in 20 years. I could be off on some of these numbers as well, but this is just an example.
Assuming $10/lb as the price in 2033, and assuming $6.50/lb wholesale price (going by the 65% discussed above), you would make 448% over face value, or a value of $.0448 per cent. Amortized over 20 years of holding onto it, you are making approx a 7.75% annual return on your investment. As a comparison, over 20 years, you would make between 1-4% in a money market acct (depends on interest rates), 3.5-8% on bonds (again, depending on interest rates), 8-9% in the S&P 500 in the stock market, or 9-10% in the stock market with a risky portfolio that was well diversified.
Copper prices are speculative, meaning that it could be $10/lb in 20 years or $2/lb in 20 years, who knows. Investing in money markets and bonds give you a guaranteed and insured rate of return, while stocks give you a riskier rate of return, but over a 20-year period, stocks have always made money, unless you owned stock before the 1929 stock market crash, then it took you 24 years to make money again.
In addition, bullion metal investments, of which penny hoarding is, are taxed at a maximum 28%, depending on your income level, whereas capital gains, of which the other investments I mentioned, are taxed at only 15%, if you earn less than $250,000 per family. To make it worth your while, copper would have to go up to at least $12/lb, and the current law would have to be changed, for someone to just break even over a more mainstream investment strategy. Also, copper (and all metals) are at historically high prices right now, which makes the odds of them going even higher, much lower over time.
You make the call, but these numbers tell me that investing in large hoards of copper cents will not pay off compared to other investment types, even if the price goes up to $10/lb in 20 years. I could be off on some of these numbers as well, but this is just an example.
hursst
Jr. Member
CardsNCoins, you are correct about the profits made on selling copper to people currently, I won't argue there, but I am speaking about the folks that are hoarding copper for long periods of time and not selling them. If you have a bunch of copper cents now and you are able to sell them on ebay for 40-60% profit, than that is a great investment!
hursst
Jr. Member
oops, 25-40% profit.
50cent
Silver Member
None of my English teachers ever used the term cent instead of 'penny'. I was not correcting anyone, I was simply pointing out what the proper word is, its called education. And I'm not sure about you, but I come to this site to learn.
Coins/Cards makes a good point, the interest earned in a bank is laughable, and is taxable as income to an extent. If you want to put your money in a bank, make sure its out of the US, and has an interest rate in the double digits.
CardsNCoins
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You are building your argument on a fact-less foundation by trying assume what copper prices will be in 20 years.
Capital gains are taxed on sales, not on hoarding.
To sum up, I believe that the people that are hoarding, but not currently selling, their copper cents feel like they are in on the ground floor of something that could pay off nicely down the road, so why try to dampen that with made up futuristic numbers based on no facts?
I'm sure there were guys like you back in the mid sixties standing on a street corner telling anyone that walked by (the 60s version of a message board) that it was foolish to hoard silver U.S. coinage.
The point is- Might not make you rich- but -It ain't loosing money like MOST other hobbies...
Sure- I could go fishing of scuba diving and every trip cost over $100- that I never get back...
Same for metal detecting- I spend $10.00 in gas, and countless hours picking up dropped coins-- $5.00 for a whole evening is a good trip- not only does it not pay the gas- but I could, just as well, stay at work and make 10 times that in a couple hours. It's not really about the Money!
With copper cents, might as well push them into a seperate pile while I'm looking for the Wheat cents, just like errors, and oddballs, and silvers, etc- since I'm there doing it anyway!
One day, long down the road, if it turns out to make a return- Horray... If it don't, Hocares...it was worth the effort for an evening that the rain was falling and the cold wind was blowing and there was nothing else, otherwise, better to do.
But- copper will go up in the long run! And if they carry a premium on ebay now- they'll likely carry an even higher premium many tomorrows from now.
Besides- my retirement funds have nothing to do with this hobby and this hobby is in no way expected to provide retirement income. I invest in copper and gold miners for that....
To each his own- do it if it makes you happy!
PEACE
Sure- I could go fishing of scuba diving and every trip cost over $100- that I never get back...
Same for metal detecting- I spend $10.00 in gas, and countless hours picking up dropped coins-- $5.00 for a whole evening is a good trip- not only does it not pay the gas- but I could, just as well, stay at work and make 10 times that in a couple hours. It's not really about the Money!
With copper cents, might as well push them into a seperate pile while I'm looking for the Wheat cents, just like errors, and oddballs, and silvers, etc- since I'm there doing it anyway!
One day, long down the road, if it turns out to make a return- Horray... If it don't, Hocares...it was worth the effort for an evening that the rain was falling and the cold wind was blowing and there was nothing else, otherwise, better to do.
But- copper will go up in the long run! And if they carry a premium on ebay now- they'll likely carry an even higher premium many tomorrows from now.
Besides- my retirement funds have nothing to do with this hobby and this hobby is in no way expected to provide retirement income. I invest in copper and gold miners for that....
To each his own- do it if it makes you happy!
PEACE
hursst
Jr. Member
Yes, that was the whole point of my example; a speculative example based on the $10/lb example surmised on a previous post. Any example provided would be speculative, this is just given as an example of one "better"-case scenario of $10/lb in 20 years.
Right, Captial gains are assessed after selling. I realize there is no tax until you actually sell it.
Silver is different, as it is considered a precious metal, the price per ounce was artificially fixed in the 60's and speculators knew the price would go higher quickly at the time. This is why silver was rapidly hoarded in 1965, while almost no one was even starting to hoard copper cents until about 23 years after they stopped making them, when the price finally went up.
My opinion is that I don't see the price going all that much higher over the next 20 years. There is simply too much supply and the price is artifically high right now because of the poor, yet receovering economy. I believe copper prices will go down over the next 3-5 years. Again, thanks for the inputs, you have valid examples as well, but these are just my opinons, insofar as the original poster requested opinions.
Right, Captial gains are assessed after selling. I realize there is no tax until you actually sell it.
Silver is different, as it is considered a precious metal, the price per ounce was artificially fixed in the 60's and speculators knew the price would go higher quickly at the time. This is why silver was rapidly hoarded in 1965, while almost no one was even starting to hoard copper cents until about 23 years after they stopped making them, when the price finally went up.
My opinion is that I don't see the price going all that much higher over the next 20 years. There is simply too much supply and the price is artifically high right now because of the poor, yet receovering economy. I believe copper prices will go down over the next 3-5 years. Again, thanks for the inputs, you have valid examples as well, but these are just my opinons, insofar as the original poster requested opinions.
LooseChange
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Don't forget that hoarded cents are a physical asset. Everything else (brokerage account, ira, 401k, deposit acct, etc) is just a promise. Those investments can be taken from you with a signature. At least with a pile of metal, someone has to haul it away to take it from you.
Joe777Cool
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I come to this site to learn, to share stories, and because I enjoy it. Having people on here correct one another is NOT enjoyable and is honestly a bit condescending. I'm not looking for a fight or an argument and certainly I am not looking to be "educated" when I am not asking a question.
50cent
Silver Member
I was trying to teach, tell a story, and I would have hoped you'd of enjoyed it. I'm sorry but, I was not at all trying to be condescending, I was only pointing something at other members would have pointed out if I had not. I apologize if you think I was trying to be hostile, but please know I was not.
I am hoarding just canadian pennies. I like the look of them, the shape of them. Copper price is just a extra bonus if it goes up in price. I have a 401K that I wish I could cash out but my dad would roll in his grave if I did that (though I think he's mad at me for cashing my IRA) but now I have an extra amount of cash to CRH with, or buy coinage with. At least pennies are cheap. I was sucked into buying an ounce of copper for 2 bucks. their deal was if I bought 5 I got one free. So I bought 10 of them and got 12. Big mistake once I figured out in my tiny head at the time that copper was 3.50 a pound not an ounce. sheesh!! oh well live and learn right everyone? We were all newbies at the beginning.
Sincerely, Garoulady
Sincerely, Garoulady
sagittarius98
Gold Member
You can resell the rounds on eBay, as people buy them for the art.
Joe777Cool
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No worries man, we are all good! A good argument helps get the blood flowing!
BuffaloBoy
Gold Member
i don't save the pre 1982 cents... only of they are BU, but that isn't often. I am very skeptical on what is BU and what isn't too.
sagittarius98
Gold Member
MS-65+ is BU generally. That is almost impossible for a cent of that age. I keep all the UNC, and put the best one in my album, which looks really nice.
billionaire
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the best bet if they lift the ban is to keep the copper instead of scrap it. Most copper pennies will be melted and those years might become valuable numistically.
SFBayArea
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Personally I have stopped with pennies for a while. However with Obama recently stating that the penny isn't worth it to make anymore and that it's part of the wasteful spending in Washington DC, I did a few boxes recently.
Also for people thinking that if the glut of pennies being turned in will drop prices, I doubt that. Prior to the melt ban, copper pennies were being melted down yet prices still went up. Prices are a product of the traders on the market. Much of it now is done by computers based on algorithms (ie patterns). The price of something is really based on what the majority of traders think it is worth, not really what it should be worth based on actual supply and demand.
I did a short one day trade last week on the SLV right after folks on Kitco were noting it hit the buying low previously. News doesn't mean too much as prices go. They are just an excuse for how the prices moved. Traders don't pay attention to the amount of copper pennies in circulation, only patterns on the market. Traders drive the prices.
Why is it that last year people complained about gas prices going up yet there was plenty of supply? Answer: Traders
Also, I think the U.S. government will be studying Canada as they phase out their penny. They will probably conduct similar guidelines here for when they will no longer manufacture pennies.
It will be worth it to save the copper cents since eventually we will be just like Canada.
Also for people thinking that if the glut of pennies being turned in will drop prices, I doubt that. Prior to the melt ban, copper pennies were being melted down yet prices still went up. Prices are a product of the traders on the market. Much of it now is done by computers based on algorithms (ie patterns). The price of something is really based on what the majority of traders think it is worth, not really what it should be worth based on actual supply and demand.
I did a short one day trade last week on the SLV right after folks on Kitco were noting it hit the buying low previously. News doesn't mean too much as prices go. They are just an excuse for how the prices moved. Traders don't pay attention to the amount of copper pennies in circulation, only patterns on the market. Traders drive the prices.
Why is it that last year people complained about gas prices going up yet there was plenty of supply? Answer: Traders
Also, I think the U.S. government will be studying Canada as they phase out their penny. They will probably conduct similar guidelines here for when they will no longer manufacture pennies.
It will be worth it to save the copper cents since eventually we will be just like Canada.
OtlFrutiger
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I used to do this all the time. I had two different five gallon buckets full for a while. As I started in on my third, I saw a drop in silver, cashed 'em in and bought a whole bunch of silver quarters. You should set aside the wheaties of course, but I never look back on that as a mistake. Silver is a much better investment.
