Posted: 2/23/2012 9:09:44 AM |
Previous topics posted on 02/12/2012 - INSURANCE for your collection, and an accurate INVENTORY of your coins.
You may recall that my previous entry originated as a result of another collector's entry about previously obscuring his sets for security purposes.
That posting coincided with an entry from another collector about how to insure one's collection.
Therefore, I made an entry highlighting insurance and inventory issues for our collections. As usual, my entry ran a bit long, which is not shocking to those who know me as they know I can be verbose.
TODAY'S TOPIC: SECURITY
I'll apologize in advance because the topic of security for our coin collections is multi-faceted, and my posting may get a bit long-winded, thus just the one topic this time.
Let's start with the obvious, since it is basic to all places of storage, just at home, in a home safe, or even when using safe-deposit boxes in banks and credit unions -- that is A PROPER ENVIRONMENT.
Coins don't like humidity, nor are they particularly fond of direct sunlight. Some coins are more susceptible to the elements than others. Generally speaking, copper, cupro-nickel alloys, etc. are more sensitive than is silver, which is more sensitive than silver bullion, which is more sensitive than gold. Depending what you collect though, there are books on the subject, and even web sites which have advice about the proper storage of coins. However, the copper example is why when you read the NGC Guarantee, there is a MUCH more limited period for NGC graded copper coins than for other issues.
A dry environment in a fairly constant temperature is important for long-term storage of your numismatic items.
While generally a very secure location, and a location likely to help you save on your insurance rates, if you store your collection in a safe-deposit box, check on your collection every few months to make sure no problems are developing.
Further, when selecting a safe deposit box, consider what you may be storing when you are choosing the size, and check the pricing. While selecting the LARGEST box they have, if you plan on filling it, consider its placement on the wall, and how HEAVY it may be to remove and replace it! Depending on cost, it may be worth two smaller boxes instead of one larger box. Imagine a box filled with several hundred Silver American Eagles in NGC holders, just for example, or with some bags or rolls of Lincoln Cents, Morgan Dollars, or whatever you might have stockpiled. It's also worth mentioning that the safe deposit boxes at many institutions are SOLD OUT, and have long waiting lists for which openings rarely arise. IF you have trouble, be on the lookout for NEWLY OPENED banks/credit unions, and get in on the ground floor, so to speak.
Also, before even DECIDING on using a safe-deposit box at a particular financial institution, it's worth asking some questions about the heating/cooling systems where the vault is, and also checking out the LOCATION of the safe-deposit box vault within the institution.
EXAMPLE: Think hurricane Katrina in New Orleans. Such devastation could happen almost anywhere in the country.
With potential flooding wherever you might be, is a BASEMENT vault the ideal place for your coin collection? Also, if the vault is in the basement, might it be damp which could harm your coins?
This raises a couple of issues which I will bullet point:
A. Just because your coins are in a safe deposit box, doesn't mean you don't need to insure them. I know I'm beating it to death, but just look at New Orleans during Katrina. Your bank could literally no longer exist.
B. Use silica packets or another dessicant to absorb moisture where you store your coins; in your closet, drawer, home safe, safe deposit box or what-have-you. I've seen them sold commercially, but they are also commonly available in many vitamin and medicine bottles. SAVE THEM! Store them in an air-tight jar until you get to your safe-deposit box so they aren't absorbing moisture from the air in your kitchen. Have friends and family save them for you too, and use them! Once you start LOOKING for them, you will be AMAZED at the places you find them, such as in packaging from mail-order companies with your bedding, pillows or shoes, etc. People just toss them without thinking, and they are very useful and a small gift with purchase for those who need them!
C. If you have a home safe, first and foremost, the basement or the garage is PROBABLY not the best location for it due to temperature fluctuations, humidity fluctuations, and potential flooding.
D. If you buy a large home safe, SPRING FOR the dehumidifier! It's a modest add-on which will occasionally need to be replaced. Nowadays, there are also renewable options available, some which will last up to 10 years for very reasonable sums.
Storing coins: ORIGINAL GOVERNMENT PACKAGING vs. PROFESSIONALLY GRADED HOLDERS/SLABBED COINS
While the US Mint has greatly improved its packaging in recent years, one need only look at coins in original government packaging (OGP) in say Mint Sets going back to the 60s or 70s and see how the coins have often often toned unattractively. In some cases, like the Silver American Eagles which come from the Mint in PVC-free plastic holders, as long as the coins are stored under proper conditions, the coins aren't in immediate danger from their packaging. While there are certainly arguments for or against the value having the coins graded by a Third Party Grading company like NGC or PCGS, I'll leave that as a matter of personal preference. There are also arguments for and against having NGC grade coins WITHIN their OGP (such as "Blue Pack" Ikes), again, I will leave that as a matter of personal preference. Be aware with such grading however, that NGC's guarantee is modified from their standard guarantee for coins they grade.
For coins in older OGP that might degrade and could even adversely affect the surface of your coin, professional grading may be necessary to protect your coin(s). While it's certainly a matter of choice, a good guide is to balance the value of the graded coin and an approximate grade vs. the price of the having it graded. Be sure to factor in the costs of shipping to/from NGC. This raises a couple other topics which I will bullet point:
A. COIN CLEANING: Generally, the simple answer is NO, just don't do it! Cleaning a coin presents an oddity which many of us already know. A coin that has circulated and shows signs of wear has an altered appearance if it's been cleaned. In essence, what you have is a coin that's bright but worn. Generally, a coin loses value if cleaned. Most experienced numismatists are able to spot a cleaned coin - and NGC and PCGS definitely can. If a coin is so corroded that it is unrecognizable, you may try a solution of mild dish soap and distilled water. Rinse the coin thoroughly with distilled water and allow the coin to air dry otherwise you should consult a professional services such as NCS for professional conservation services. NCS is another division of the NGC family of companies and may be found here:
While the price increased for 2012, don't forget about the NCS Modern Tier which is still a REALLY GREAT VALUE!
Submit any un-certified US or World coin struck from 1970 to present. One flat fee of $26.50 includes conservation by NCS and NGC certification! Following conservation, coins are transferred to NGC where they are graded and encapsulated in the NGC holder. So, if you have coins with some dark spots, unattractive toning, etc., 1970 or later, sending them to NCS first might just increase your grade for a nominal charge over just NGC grading.
B. Grading older coins from, say, OGP mint sets, you can pick and choose which coins you want to submit to NGC. For example, if you don't collect Lincoln Cents or you determine the potential value of the graded versions aren't worth the cost of grading, you can, for example, cut out just the Franklin or Kennedy Half Dollars and submit them for grading, hoping for the bigger pay-off. Again I emphasize it's a matter of choice and ultimately only you can decide what is best for you, your collection, and your wallet. I just want to get you thinking outside the box a little.
C. WHAT IS PVC? PVC stands for Polyvinyl Chloride. PVC is added to plastic coin "flips" to make them softer and less likely to scratch a coin. Unfortunately, when exposed to heat and light, the PVC will break down and release hydrochloric acid which will damage the surface of your coins, so always purchase PVC-free mylar holders for long-term storage. Alternatively, NGC or PCGS holders are inert and perfectly safe for your coins as well. NGC holders are also used for coins held by the Smithsonian; I think that speaks volumes.
D. How can I recognize holders that have PVC? Most holders come in packages which have labels that indicate that they are PVC free. If in doubt, ask a professional. Plastic "flips" that contain PVC have a blue tint and are softer and more pliable than plastic holders that do not contain PVC.
I wouldn't generally recommend one supplier over another. However, since this particular company is the official supplier of the American Numismatic Association (ANA), I feel comfortable mentioning it as a "safe" place to purchase "coin-safe" supplies like PVC-free holders:
SIDE NOTE: If you find the REPORTS available from the NGC Collection Manager inadequate for your needs and are interested in professional software to inventory your coin or currency collection, the above supplier also sells such software. Again, all a matter of choice. Back to SECURITY....
NUMBER ONE ISSUE WHEN PURCHASING A HOME SAFE: Whatever size you THINK you're going to need, or even think you're going to grow into, DOUBLE IT! I'm not kidding. If you think you need a safe that's 25 cubic feet, go for the 50 cubic feet. The simple reality is that your collection will grow, and your use for the safe will grow as well, to include jewelry, an emergency file like insurance policies/Will/Trust documents/etc. Even WITHOUT such additions, storage boxes slabbed coins take up more space than you realize, as do coins in their OGP.
Further, shelves can only take so much weight, so you may need to build supports for your shelves, or pack the shelves beneath the ones above them such that they support the higher shelves.
Lastly, ONE 50 cubic foot safe is MUCH LESS expensive than TWO 25 cubic foot safes, making it a no-brainer.
With options for your safe, you obviously want to think about a few things:
A. Will this save me money on my insurance? Before laying out a couple thousand dollars, you may want to check with your insurance agent about the brand and model of safe you're considering will help save on your premium. While there may certainly be others out there, Liberty brand safes are well known and have a solid history of quality:
B. When buying a large safe (as opposed to the small sort you might find in Target or WalMart), you generally WON'T find one that is both fire resistant AND water resistant. This is part of why I don't advise storage in a basement. Consider storage on a ground floor, and consider fire resistance, length of time for the fire resistance and temperature, etc.
C. Liberty offers MANY models at a variety of prices and which have different fire ratings. There are also a variety of models which you could either place out of sight, or select a model that is visually appealing and suits the decor of any room in your home.
D. Once you select your safe, before sealing the deal, have the dealer come to your home and ensure that there is a way to get it INTO your home. If not done beforehand, your dealer will likely still come out ahead of time to scope the entry points to your home for options to get the safe in. Secondarily, you should be prepared with AT LEAST TWO POSSIBLE PLACEMENT LOCATIONS for your safe, in case something goes awry on delivery day.
E. Comparison shop! I've seen some Liberty and other large safes on sale at Costco and on Costco.com -- so if you're a member of a warehouse club, it's worth a look! However, don't settle. If you can't get what you want, say a big enough safe, it's not a bargain if it doesn't meet your needs.
Now, onto HOME SECURITY. Aside from a HOME SAFE, the following things should be considered, and of course vary depending on the value of your collection:
A. Home security systems. Check with either your homeowners or with your coin collectors(specialty) insurance plan (or both) to determine discounts for home security systems, and if so, what kind of discount and for what kind of system! This will likely vary depending on your carrier, and even possibly vary based on your state.
B. Basic home security. Deadbolts. If a door has glass windows in or next to the door, consider deadbolts that are keyed on both sides, inside AND out. Some states may or may not allow a locksmith to do this because of fire/exit concerns, but the locks are widely available in home improvement stores. If you have young children, this may not be the choice for you, just because of the potential in the event of an emergency. Your insurance carrier will likely ask about deadbolts.
C. Security cameras and/or lighting. Exterior lighting on motion sensors aren't a bad idea, nor are security cameras. While their efficacy may be subject for debate, the cost may be easily justifiable. I've seen some excellent choices at Costco.com, and they often have coupon "sales" making them even more reasonable.
D. Similarly, it may be "old school" but INTERIOR lighting shouldn't be overlooked. Whether you're home or away, lighting on timers or even motion sensors is sensible, as is alternating the timers or sensors. There are "motion sensors" which you can plug into electrical outlets, and then plug something into them (lamp, radio, etc.), and when someone either knocks on your door, or even when you (or someone else) opens a door to your home, the light, radio, etc. turns on for several minutes, then goes off. I personally like a couple of these just for myself -- if not for security. When I open the door from the garage, a light comes on, so I never enter a dark house. At night, if I open the bedroom or bathroom door upstairs, a lamp on the landing pops on. It also pops on if someone knocks on the door, like the postman or the UPS guy, and the light it casts is within view of the front door.
It may sound silly, but another option for timed lighting are FLAMELESS CANDLES. While you can put them anywhere decoratively, I think putting them near ground floor doors and windows is an interesting way to give the illusion that someone is home, whether you're home or not. After all, who'd leave the house with candles burning, right? Obviously, not all flameless candles make this simple, but MANY of them come with timers. You simply set them to "TIMER" around when it gets dark, then it stays on for a set amount of time, say 5 hours, then turns itself off until the same time the next evening when it come on again for the same 5 hours, and repeats the process. Periodically, reset the timers to adjust for seasonal changes in daylight. QVC.com has a WIDE ASSORTMENT of these real wax candles which even have LED lights which flicker, to fit any decor - they're really remarkable.
E. While unrelated to flameless candles, fire safety is certainly an issue for any home, and is most certainly a threat to any coin collection, even if stored in a fire resistant safe. Therefore, one or more fire extinguishers are wise to have on hand. If you have one already, have you checked the date on it lately? They do occasionally need to be replaced. Along the same lines, smoke detectors are old news, but are essential for fire safety. Even if your detectors are hard wired into your home's electrical system, still replace the batteries as back-up, as power outages can drain them. Just a couple months ago, I lost power for just short of two full weeks. So ultimately, fire resistant safe or not, smoke detectors and fire extinguishers may seem obvious, but are worth a mention.
MISCELLANEOUS SECURITY TIPS/IDEAS/SUGGESTIONS:
1. Don't discuss your coin collection with people around town, at school, at the playground with other parents while the kids are off playing, at the grocery store, around the water cooler, etc. You just don't know who might overhear, or who might innocently share the information with someone unscrupulous.
2. Don't discuss your coin collection with the folks at the bank where you get a safe deposit box either. When you bring or remove anything from the box, be sure to bring a bag or case to disguise it all - no need to advertise.
3. Consider a post office box. If you get any/many coin or collector publications, it may be worth considering a post office box, even just a small one, this might be of greater concern if you have a rural mailbox or a mailbox in an apartment complex that is NOT locked -- either of which might provide easy access for someone. A mail thief could might make an association that if you get a coin publication that there are likely valuables in the house to go with it, and voila! This is not a dissimilar concept for mail safety from mailing things at a post office or in a mailbox rather than putting the red flag up on your mail box which is a LITERAL RED FLAG to identity thieves who look for flags up on mailboxes to steal outgoing mail in hopes of finding a check or something with personal information used for identity theft.
4. If you make many coin purchases, whether from eBay or other sources, which puts you on a first name basis with your postal carrier or UPS delivery person, don't feel the need to mention what you might collect -- EVEN IF ASKED. I've had my mailman ask, and when pressed, I say something like "teddy bears" or something otherwise innocuous. While I may trust my carrier and know him personally to be a decent fellow in small town USA, one just never knows what he might innocently mention and to whom.
I realize that some of these tips are a bit outside the box, like flameless candles and motion sensors for indoor lighting. I also realize that some things may make me sound a bit paranoid.
However, let me rhetorically put this to you like this:
How much is your collection worth?
Where is it stored?
What would it take to replace it if stolen?
Well, if you don't know the value of your collection, I urge you to read my previous Journal entry from 02/12/2012 about how to INVENTORY your collection. Take even a ROUGH ESTIMATE. Think about when you might have acquired a large quantity of silver or gold, even if it's not high grade silver, but a big supply of it. What if you bought POUNDS of silver coins at melt value when silver was about $4 an ounce? Never mind hundreds or even thousands of SAEs at $10-$20? How about Gold American Eagles or Buffalo cons at $800 oz or less?
At today's prices and values, what might your collection be worth?
It all doesn't sound QUITE so paranoid when you realize the potential value of your collection due to bullion values which though off their highs, are again rising.
Then, that doesn't even take into consideration if your coins are encapsulated by NGC or PCGS and graded as MS69/70 or PF69/PF70 Ultra Cameo, or if you have * or DM PL coins in the mix, high value error coins, coveted limited editions, etc.
Some historic coins are simply irreplaceable.
Am I paranoid or practical?
EXAMPLE FOR THE ROAD: I've included a photo of the 2006 Reverse Proof Gold American Eagle 20th Anniversary which earned a PF70 from NGC. The original 3-coin set of three 1oz gold coins sold for grand total of $2,610.00 or $870.00 per coin on average.
The coin shown below in Reverse Proof graded at PF70 is listed by NGC with a value of $3,690.00, with the other two coins over $2,200 and up...each!
My point is simply that what you have in your head as the value of your collection may, in fact, be outdated, and worth assessing.
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