Fin24

Coining it

2012-02-08 07:33

A Fin24 reader asks: If I invest in coins will I be able to create wealth for myself? And do I have to go for any coin I come across?

Shabucks Ismail, the sales manager at Bucks N Gems, an offshoot of SA Coins, responds:

Yes you can create wealth with coins but not all of them. When it comes to investing, do it tax-free with a wide variety of graded mint coins.

Graded coins are of high standards and quality according to a scale of 1-70. The higher the grade, the better the quality and high grades carry a heavy price tag.

But you do not have to go for any coin. The Mandela series of R5 coins are the fastest appreciating rare coins on the planet. They have been expanding more rapidly than any rare coin issue in history.

The three of the known specimens of the 90th birthday of the Nelson Mandela R5 coins have recently been sold for R100.000 each.

These coins are expected to be trading at R150 000 each by the end of this year.

Gold and silver will always be a good investment. When selling gold or silver, it would depend on more than just the gold or silver price.

It depends on how many were created and how many were sold and most importantly how many are in existence at the time. The fewer there are, the more valuable they become.

- Fin24

 

Comments
  • Coping - 2012-02-08 08:12

    Bu the latest copy PERSONAL FINANCE MAGAZINE 2012 1st QTR its carrying a much more detailed analysis of the COINING it industry. You can then make up your mind. For instance I still do not know anyone who has made this R100k on this except for the CON ARTIST on Bid or Buy.

  • Bluemast - 2012-02-17 08:05

    Hi, is there someone out there that can explain why the same coins can be bought on bid or buy for no more than R500?! What was so special about the ones sold for that high price?

  • Claudia - 2012-02-27 08:33

    R5 coins are not what they are made out to be, since they are not precious metal. They have not really proven a sound investment as far as I can gather from my research. I have had many clients who have purchased them for varying prices from R200 to R100 000 each, but I have yet to come across anyone who has been able to sell it. The only company that professes the coins to be worth anything is SA Coin, but they do not buy the coins back from the public as far as I can tell. The problem is that these R5 coins are first of all made of copper and nickel, which means their metal value is that of a normal currency R5 which you might get as change at the shop. The second thing is there are about 5 million of them minted each year. This means they are permeating the market, and therefor you cannot consider them a rare coin at all. Rare coins by default means a limited and absolute number exist, and by definition that would exclude something that gets minted every year by the millions.

  • Claudia - 2012-02-27 08:34

    The hype surrounding the 1994 R5 Presidential Inauguration coin and the 2000 and R5 Nelson Mandela coin shows no signs of abating. The coins that the experts say are worth exactly five Rands each can sell for more than twenty times their value. The 90th birthday Nelson Mandela commemorative coin promises to create similar demand.The authorities have made it clear to the public that the R5 Nelson Mandela coin, launched to coincide with Madiba’s 90th birthday on 18th July, is a normal legal tender. It pays tribute to a great man, and is not meant to be a collector’s item.Given the fact that more and more R5 coins with Mandela’s face on are minted each year, the coins become less and less “rare”, and by default less valuable.

  • Claudia - 2012-02-27 08:35

    I have not had a single client get back to me and say that they were able to sell their R5 for a profit. There are many many sellers, but no buyers as far as I can see. If supply and demand determines the price of a commodity, my question remains: how does a R5 coin sell for R750 000 as the sellers claim? In the case of historic or collectable coins, their value is in the fact that there are less than 5000 in the world. Consider endangered species – the fewer Rhino’s there are in the world the more highly regarded and sought after they become. The same is true for paintings, cars and coins. With collectable coins or bullion coins such as the ones we sell, the gold/silver/platinum weight of the coin will contribute to the value. So a 1/2oz rare coin will be worth it’s weight in gold no matter what the demand in the market is for the coin. If you are buying the R5 purely for sentimental value you can get them very cheaply on the internet but you won’t make a profit should you wish to sell them again.

  • Claudia - 2012-02-27 08:35

    Please note SA Coin and South African Gold Coin Exchange are in no way related or affiliated.

  • Tim - 2012-03-22 21:31

    SA Coin create their own closed market for coins THEY sell. Each time they sell a coin at a higher price, that price then becomes the market value for the coin. By suggesting that they will buy back a coin at 20% below the current market value (as long as the coin was bought from them) they create a closed artificial market. Problem is, outside this market their coins are worth significantly less, e.g. the R5 mandela coin...and that is where the problem lies. Their market is completely artificial and unsustainable. Bottom line is, if you are willing to pay R100k for a R500 coin YOU WILL make a HUGE LOSS. What I like about BidOrBuy it shows you what the public market really believe a coin is worth and not the cr*p SA coin is spinning to people.

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