This is edited down from a 3,380-word post originally posted on my old Angelfire site.
Numismatism, coin-collecting, is known as the hobby of kings, though one need not be royalty to passionately pursue it. There’s no one right way to be a good numismatist, but there are things you can do and questions you can ask yourself to ensure you’ll always make the most of your hobby, such as:
1. How much am I willing to spend? Most good coins aren’t cheap, although sometimes you can find a deal. Usually the better condition a coin is in, the more it’ll go for, although if it’s rare, sometimes it can go for a lot of money no matter what the condition.
2. Make sure it’s not a fake. Some people are up-front about selling replicas (e.g., my 1943 copper-plated penny), but others shamelessly pass fakes off as the real deal.
3. Know what type of condition you’re willing to accept. You’re not likely to find coins in Almost Uncirculated or mint condition growing upon trees.
4. Read books and magazines, and attend conferences, conventions, lectures, and shows.
5. Minting errors are practically a guarantee of a coin being worth more. E.g., upside-down, off-centre, missing, superimposed, the same thing on both sides, and misprints like the three-legged 1937 Buffalo nickel.
6. Keep up-to-date on values so you’re not cheated.
7. Store your coins properly. It’s not a good idea to store them in extreme heat or cold, in the Sun, or heaped one on top of the other. They can get scratched and devalued.
8. If you’re not wearing gloves, always hold it by the rim so it won’t get dust and oil from your fingers.
9. Never clean a coin unless you know what you’re doing. This can seriously devalue it. Leave that to the professionals.
10. Ask yourself which you value more, having a certain coin or having a certain coin that looks nice.
11. Have a specialty. Collecting any coin because it’s old is a prescription for disaster. Not only will you quickly run out of room to store them, you’ll also have no focus to your collection. My own focus is U.S. one-cent coins.
12. Auctions are a great place to find coins, particularly estate auctions. A lot of older relatives also have stashes of coins, though they’re not necessarily worth a lot unless they’re in super-stellar condition, have misprints, or are from a particularly in-demand year.
13. It’s harder to find misprints, WWII steel coins, old coins in AU condition, and really old coins. Expect to pay higher for such coins in good condition, and to have to look harder than for a more popular coin.
14. Know the lingo. Coins are graded on a 70-point scale; common abbreviations are G (Good), VF (Very Fine), F (Fine), AG (About Good), VG (Very Good), MS (Mint State), EF (Extremely Fine), and AU (About Uncirculated).
Poor. Almost always uncollectible and not worth wasting money upon, with a few notable exceptions (e.g., 1802 U.S. half-dimes). You can read the date and mint mark, but not much else. Barely identifiable.
Fair. Heavy wear in lettering, dates, and designs. Some detail is visible, however, and you can make out the date. Almost always the rims and fields (the places without design) are quite worn.
AG: About Good. Only the main features are visible (e.g., quiver of arrows, stars, wheat stalks, crown of laurels). Sometimes the details on the periphery are partly worn away (like the date or stars). Some AG coins have moderately heavy wear around the rims. There are some coins, like the Barber series, where the reverse is AG or worse and the observe (the head, the side with the date on it) is in much better condition.
G: Good. Major details are worn flat. Some minor peripheral wear, but the peripheral lettering is pretty good. Often a Good coin has little detail, though it has major outlined devices. Some Good coins have the rims worn through to the tops of the letters.
VG: Very Good. Somewhere between Good and Fine; somewhat more detail than Good, with full rims, apart from certain exceptions, like the Buffalo nickel.
F: Fine. Very good detail design, despite heavy wear. All major details are still visible, but details aren’t very sharp or defined in recessed areas.
VF: Very Fine. This type of coin has a broader range than any other classification. Some VF coins have nearly full and complete details, and others only have under half the original details sharp and intact. Most detail is there, but sometimes lettering or smaller details are indistinct. Some VF coins have blended of details, like an eagle’s feathers or the strands of a woman’s hair.
EF: Extremely Fine. About 95% of the original details are sharp and visible. Only the high points are worn, and there’s some lustre left. Also known as XF.
AU: About Uncirculated (or Almost Uncirculated). The high points have wear, and at least 50% of the lustre is missing. In the highest states, there’s only slight wear on the high points, with less than 10% missing lustre. Many times the reverse is in complete Mint State.
MS: Mint State. A business strike (i.e., regular issue) that’s never seen circulation. Ranges from flawless to covered in marks and/or hairlines. A perfect coin.
BU: Brilliant Uncirculated. Very similar to Mint State.
PR: Proof. Struck from a specially-made die on a specially-made planchet (the blank metal that’s turned into coins). Usually they’re given more than one punch, with slower speed and higher striking pressure, to create more beautiful detail and sheen. Some coins which weren’t struck as proofs are classified as prooflike, since they demonstrate just as much shine and detail.
15. Don’t buy a coin just because it’s old and/or looks nice. Buy it because you genuinely want it!
16. It’s really irritating to see people on e-Bay racking up all these coins and outbidding people who don’t have nearly as many. You have more than enough coins to keep you happy for a good long while; why not let someone else have a chance?
17. Know the types of coins that exist if your goal is, e.g., a complete series of American currency.
18. Don’t handle your coins any more than necessary. Keep them in albums, books, plastic pouches or envelopes, or coin holders.
19. It might be a good idea to get your collection ensured, particularly if you’ve had it appraised for at least $100.
20. Paper money should be stored with even more care than metal money.
At the end of the day, it’s not how many coins you’ve got or what condition they’re in, but how happy you are with what you’ve got.