That $1000 worth of nickels

Weiss · January 27, 2012 8:26AM

is "worth" $1178.48 as of today (01-27-12) according to coinflation. That's an instant 18% return on your investment.

How long will the US govt' continue to mint them at such a loss? Do you have any interest in hoarding them? Are you already pulling them from change? Do you think it's just a dumb idea?

mkman123 · January 27, 2012 8:44AM

Who do you sell it to to get $1178??

Weiss · January 27, 2012 8:49AM

That's why I said "worth" in quotations.

But I'm sure at least some people said the same thing about people hoarding half dollars in 1965

Baley · January 27, 2012 9:04AM

then you can't have That's an instant 18% return on your investment

in my book you're OUT $1000 until it's back in a spendable form of currency

halfhunter · January 27, 2012 10:22AM

WOW . . . I may eventually break even on that closet full of Westward Journey rolls I bought from the Mint ! ! !

HH

Spooly · January 27, 2012 10:29AM

Will smelter/processors take the product and melt it?

FullCameo · January 27, 2012 10:33AM

<< Will smelter/processors take the product and melt it? >>

If so, there will soon be a shortage in my local area.

Weiss · January 27, 2012 10:50AM

<< i
How long will the US govt' continue to mint them at such a loss? Do you have any interest in hoarding them? Are you already pulling them from change? Do you think it's just a dumb idea? >>

Nobody has thoughts about these questions?

bronco2078 · January 27, 2012 11:12AM

I like nickles ,I buy a box plus whatever they have for customer wrapped once a week and go through them. I'm only saving pre 1960 coins. Last week $140 dollars face yielded 2 dateless buffalo nickles 4 canadians , 1 war nickle , 6 1939P, and 48 misc 40's and 50's.

I have found some interesting things just picking through them probably 70 or 80 war nickles over the past 18 months .

secondrepublic · January 27, 2012 12:23PM

even if it were legal, by the time you paid smelting fees, you'd be in the hole.

gecko109 · January 27, 2012 12:48PM

How long will the US govt' continue to mint them at such a loss? For no more than 5 years is my guess. Do you have any interest in hoarding them? I did at one time. Are you already pulling them from change? No. Do you think it's just a dumb idea? Not a dumb idea at all.

I too once had 10 bank boxes of nickels. Held for about 6-8 months, then wanted the $1,000 to pursue a gold deal, so cashed em in. There are just 3 negatives that I see with hoarding (meaningful quantities) of U.S. nickels.

A) Opportunity cost. This is nullified if that cash was to simply sit in a 0.5% interest bearing account anyway.

Security. Those babies pack a very low ratio of density/value. You'd need a walk in vault to secure more than $10,000 worth.

C) PITA factor. Unless you are taking in a few boxes to the local B&M to redeem for 5-6x face a decade down the road, its really a hassle to lug them back to the bank to cash in at face.

I just think that there are better opportunities for my money out there right now. But to be fair, that was probably the same thing most people said in 1962-64 when certain people began hoarding bank boxes of dimes and quarters at face from their banks!

calleocho · January 27, 2012 2:57PM

I would rather have forever stamps...really.

PreTurb · January 28, 2012 1:56AM

I save nickels and copper cents out of change and just throw 'em in a bucket. Someday, it will at least be worth a couple "crazy daddy" stories.

Weiss · January 28, 2012 2:17AM

Good points all, gecko. One question I heard asked a couple of years back but haven't really seen addressed is if the US takes nickel out of the $.05 coin (admittedly only 25% of current composition, the balance is copper), will it impact the price of nickel globally? Surely the US mint, with a half-billion nickels minted annually, is a major consumer.

A thumbnail sketch shows the mint uses about 1000 tons of nickel for nickel production a year.

(wow, that seems to be pretty close if I"m reading this right:
http://minerals.usgs.gov/minerals/pubs/commodity/nickel/nickemyb04.pdf )

But according to this website, annual global nickel consumption is the the million tonne range (metric ton = 1.102 tons).

So if my math is anywhere near correct, the US mint's use of nickel in the production of nickels accounts for about 1/1000th of usage (?). I think. So if the mint stops using nickel in nickels, it might be enough to effect prices, but seems somewhat unlikely.

jmski52 · January 28, 2012 3:59AM

Gecko's points are what I would normally list as my standard reasoning. But as I think about this, a couple more considerations popped up.

The nickel has been the same my whole life. When I was a kid, a nickel would get you a Hershey's bar, and (Qty=2) of them would get you a bottle of pop or a DC Comic book. If I were to gauge the worth of a nickel coin, those would be my baseline data points.

Fast forward to today. How much is a standard-sized Hershey bar, a can of soda, or a current edition comic book (if they still even publish them)? While everything else has changed in price, the nickel has remained constant. Now, it's true that the metal content might not have been worth more than face value "back then", but it illustrates how prices have been skewed by inflation. Now, we have to worry about the production cost of a nickel? The problem isn't the nickel, but the problem has become "how to preserve purchasing power".

If I'm preserving my purchasing power, I think that the only way a box of nickels will do that - is if the economy goes down for the count. At that point, nickels will assume a "trading value" that is much more commensurate as a unit of exchange than it is right now. I mean, much closer to it's purchasing power of 1964 than its purchasing power of 2012. If paper fails completely, I don't believe that coins will go away.

As far as loading up with boxes of nickels - cheap insurance, cheap investment - and a real pita, if somebody wants to steal them.

ricko · January 28, 2012 5:46AM

IMO, not worth the effort... perhaps a very long way in the future... but that ties up a lot of money. Cheers, RickO

secondrepublic · January 28, 2012 5:57AM

You get a lot more bang for your buck setting aside pre-'82 copper pennies. Copper cent is worth 2.55 cents, whereas a nickel is worth about 5.9 cents.

Weiss · January 28, 2012 7:09AM

<< You get a lot more bang for your buck setting aside pre-'82 copper pennies. Copper cent is worth 2.55 cents, whereas a nickel is worth about 5.9 cents. >>

Ah but you can't just go buy $1000 worth of pre '82 cents. Remember that was 30 years ago

. I've been saving copper cents for a decade now and I have maybe a gallon of them.

I appreciate the responses. I'm actually about as skeptical as some of you are.

So what would make you start saving nickels? As of Friday a nickel is "worth" 117.84% of face. Would 125% do it? 150%? Or will it have to be something more dramatic, like officially changing the composition to steel?

TheRegulator · January 28, 2012 9:44AM

I've been pulling out copper cents and setting them aside as a byproduct of roll searching for several years. Probably have several hundred dollars worth. In retrospect, if I was in it just for the money, I would have been much better off trying to find a seller, taking a small profit, and pumping that money into gold or silver. As gecko stated, the opportunity cost is pretty high as the money just sits there in a rather illiquid form. I mainly set them aside just to have some copper cents before they eventually disappear, and out of habit I still just save them all.

I would probably never set aside nickels, although I would love to search through 10 boxes.

It is good to see you posting again, Weiss.

Justacommeman · January 28, 2012 10:08AM

Rhodium, Boxes of Nickels and The Stones Roses. I'm beginning to see a pattern here. MJ

Weiss · January 29, 2012 2:20AM

<< Rhodium, Boxes of Nickels and The Stones Roses. I'm beginning to see a pattern here. MJ >>

That I'm certifiable?

secondrepublic · January 29, 2012 3:10AM

<< Ah but you can't just go buy $1000 worth of pre '82 cents. >>

In the rolls of pennies I get at the bank, there are always between ten and twenty pre-'82 copper cents per roll. The only trouble is finding a place to spend/dump the other 30 to 40 zincolns.

RobertS · January 29, 2012 3:23AM

I got a ryedale penny sorter, that thing goes trough boxes like they are nothing. I started hoarding cooper pennies not long ago, currently I get about 20 percent cooper per box "not bad" I can go trough a box in about 5 minutes tops...

guitarwes · January 30, 2012 2:00AM

In tough times, a box of nickels will yield 2500 nickel-sized washers for a total cost of 5c + drilling a hole in it. That's cheaper than you can buy them at the store and it makes yourself indispensible when someone's needing a washer for their tractor implement and don't have one. You could trade a chicken for one washer, pretty good trade if you ask me.

Otherwise, take the nickel $$$ and put it towards Au or Ag. If the g'ment stops using nickel in nickels, there will be that much more NOT consumed that will be available to the market.

I don't think the g'ment will lift the ban on melting Nicks and Copper Cents no time soon.

Edited for spelling.

ModernCoin · January 30, 2012 4:04AM

<< I just think that there are better opportunities for my money out there right now. But to be fair, that was probably the same thing most people said in 1962-64 when certain people began hoarding bank boxes of dimes and quarters at face from their banks! >>

That's the way I look at it. Why not store a grand or two in nickels just for the hey of it? If you need the money for other stuff that's one thing, but if you can afford to squirrel away a few boxes why not go for it? Remember, the nickel is the last remnant of sound money in the US. I'm not about to miss my chance at stockpiling a few a few boxes of real money, but at the same time you can only hold on so many nickels before space becomes an issue.

I'm sure people holding quarters back in '62 were viewed as crazy, but only time will tell how nickels turn out. Those of you with time on your side should definitely add a few boxes to the bottom of your closet. IMO hoarding just a few boxes is a no brainer.

meluaufeet · January 30, 2012 4:13AM

Kyle Bass ?

captainkurt · January 31, 2012 7:09AM

So everyone talks about what if you set aside a box of quarters back in 1964 and how it would have been an amazing investment. I decided to check it out and to my surprise it really wasn't that great until this past year. Check this out:

$1000 in silver quarters today is worth $23,965.60 which is a 6.84% return if you set it aside in 1964.

Sure that is a good investment but if you looked back ten years ago not as good. Check this out:

$1,000 in silver quarters ten years ago was worth $3,616.80 which is a 3.44% return on your 38 year investment.

So everyone who thinks they missed the boat on a good investment 48 years ago need to consider this:

Investing in $1000 face of silver ten years ago would have net you a 20.8% return today! So....who really missed the boat?

captainkurt · January 31, 2012 7:23AM

By the way, a $1000 investment in Apple stock 8 years ago would net you $131,172.41 today; an 84% return on your money.

gecko109 · January 31, 2012 8:09AM

<< By the way, a $1000 investment in Apple stock 8 years ago would net you $131,172.41 today; an 84% return on your money. >>

Just to be fair, what would a $1,000 investment in AIG stock 8 years ago be worth today?

secondrepublic · January 31, 2012 10:47AM

You get an immediate 255% return on setting aside copper pennies. Too bad it takes so darn many of them to add up to real dollars.

Tiggs2012 · January 31, 2012 12:15PM

<< By the way, a $1000 investment in Apple stock 8 years ago would net you $131,172.41 today; an 84% return on your money. >>

I wish that were true as I did buy back then. It would actually only be 40k+ now, your math is slightly off. Split-adjusted price was $11+ 8yrs ago today.

ModernCoin · February 1, 2012 1:01AM

<< So everyone talks about what if you set aside a box of quarters back in 1964 and how it would have been an amazing investment. I decided to check it out and to my surprise it really wasn't that great until this past year. Check this out: >>

I can pick specific time frames regarding metals, stocks, or even housing and show you windows in each where you'll be convinced it was the best investment ever. Conversely I can then shift the window slightly and convince you each of the above were the worst investment ever.

Adding a few nickel boxes to the bottom of a closet or two offers no downside other than opportunity costs, but realistically how many here "invest" every single penny they receive? Considering most people spend over $1000 a year on cable television every year, I just don't see how anyone can say a thousand dollars worth of nickels isn't worth it. Metal is money and with our government he77bent on bankrupting us, combined with a FED that has promised to keep rates at zero for at least two to three more years, I just don't see why everyone here doesn't have at least a box or two of nickels just for the heck of it

.

The day we elect honest people to DC who will work to shrink the size of the federal government is the day I sell every single PM I own. Something tells me I may be a long term holder though

...

Baley · February 1, 2012 2:30AM

I have one $100 box of nickels (bank wrapped 2005 buffalos), and a few rolls of the old buffalo nickels

My asset allocation model (which includes transaction costs, storage space, liquidity, probability and timing of expected return, and other factors) does not indicate any more capital devoted to nickels, especially random circulated ones.

I do not believe 2012 is to nickels is what 1964 was to silver coins.

pf70collector · February 1, 2012 2:44AM

nickels and copper pennies are the new silver of the 21 century when the mint starts producing a cheaper alternative. Maybe plastic?

That $1000 worth of nickels

Comments