The $500 note, I have the urge but know nothing.

66Tbird

The old Price is Right show has been on lately on local TV. One of the prizes handed out regularly is the $500 and less frequently the $1000. They even showed a $5000 note when a price worth that amount was won. It was in plastic and had it's own security guard.



After a few weeks of them tossing around $500 notes I've got the urge to get one. I know nothing about notes in general much less the price jumps, grade populations, where the series is going or where it's been, etc. etc..



Figured I'd jump over here and ask, kind of get the low down on the once circulated piece of art.



The approach I've taken with my 19th century type set in MS is to buy on eye appeal just before the price jump. It's worked well for me over the decades having relied on grade-flation as the primary value increase. Would or does the same approach work here? Resale years down the road is the plan so I'm not looking for a flip.

Tookybandit

I recommend looking for a graded PPQ/EPQ note in the VF25-XF45 grade range. Not nose bleed expensive for a good looking example.

DanCong

Hi I have not ascended to those lofty heights yet, but if I were to buy one I'd look for a "light green seal" one, a search on HA or ebay under Fr 2201 on 1934 500 LGS will bring up affordable ones.
I think the seal color really makes the note.
The other interesting bit would be a 1928 series, for two reasons, it was the first small size $500 (besides the gold certificate which is truly lofty territory), and it has the "gold clause" - redeemable in gold. These are available in light green seal as well. While the "redeemable in gold" is a technically interesting bit, it is steeped in history and I think a better collectible.

66Tbird

Thank you, I'll line up some searches that fit and see how things shape up after month or so.



My (stupid) question list because I've never bought a note.



What are the two best grading services?

What is ''Fr 2201'' and why is it important?

DanCong

eBay permits PMG and PCGS graded notes to be listed in their currency listings. They don't permit other companies from being pictured or their numerical grades listed.
So, PMG and PCGS would be a good choice for graded notes.
Like coins, buy the note, not the holder
One advantage of grading is any defects that you might miss or note be able to see via internet should be documented.
Fr 2201 is the "Friedberg" number or catalog number. it can be followed by the district of the note, like Fr. 2201-A for a Boston district note. Heritage uses the catalog number, so it is easy to search for a specific note. eBay not so much.

66Tbird

Great, I figured PCGS was one of the two services. I'm sure I'll have to look at a lot of notes to get an eye for a good for the grade feel. I'll search around for a website with good grading pictures to further this education. There are a few notes I'd like to get someday and maybe see if my families small stash of large note are worth grading.

NiceDocter

Many a collector has bought an ungraded note at a "great" price only to find (sometimes decades later) that it wasnt all he/she thought (slightly trimmed, pressed, cleaned etc). Buying a graded note by one of the BIG 2 services pretty much eliminates this risk so I do think its the way to go although there are some very nice ungraded notes still out there. Another word of caution.... sometimes an ungraded note is not graded for a reason! Let the buyer beware! Happy collecting!

numbersman

Hi T bird! I remember fondly "Let's Make A Deal" with Monty Hall where he would reach in his pocket several times during the show and pull out "a nice crisp $500 bill",or even a $1000 from time to time.There's much to know about buying a high denom (or any note for that matter) for the first time in an attempt to avoid the pitfalls.The main thing is your personal goals(which you've mentioned).Seeing as you are ultimately looking at this purchase as an investment,there are now several things to consider.....your comfort level for price/pain,star notes,special/low serial numbers,dealers vs auctions,graded or raw,high vs lower grade,light green vs dark,1928 vs 1934,etc.Certainly there's merit in your approach as to coins,but,paper is a different world and rarely follows or mimics the coin world.Grade-flation is happening(in one form or another) in the paper world but it is generally unreliable.Notaphily is relatively young compared to coins and there's much grading growing pains as the grading companies are working hard and evolving as they sift out some "common core" grading standards.The smart money moves slowly in the high denom world as there's much to choose from and many viable approaches to profit(long term)from these wonderful,fun notes.Take some time and research,research,research.Hook up with at least two dealers and get their input before you buy.Many paper dealers,at least in my experience,are reasonable and willing provide some help to you in the hope that your wants will eventually match up with their inventory.Good luck to you!

66Tbird

Thank you to the both of you, nicedoctor and numbersman (great info there). The purchase will certainly be a graded note. All my coins of any value are all graded except for the modern NSLT stuff I flip. I don't know which shade of green I even like. I'm leaning towards dark for some reason. Yet I worry a little because I started out preferring proof coinage then a decade later I switched to MS where I've stayed for the most part. Maybe I'll consider it all part of the fun. Star note sound interesting unless it 2x's the price. Probably be a common date, graded, minimal attributes, but nice eye appeal. I would feel no pain at 2× face for an example that speaks to me.



I'm looking forward to the hunt on this.

gnat

My 2 cents...



If you are looking for a potential future return on a purchase of a $500 FRN, then you will need to get a high grade example. Avoid PMG "Net" or PCGS "Apparent" graded notes - these are problem notes and are of interest to fewer collectors.



For about 2x Face, you are only looking at an AU 53 to 55 in a 1934 Dark Green Seal. Even VF notes are going for about $800+. Not sure of even the longer term "upside" on even a nice AU example. A CU note from Chicago or NY should run $2,100 and up depending on the grade. - figure more for a Light Green Seal.



PPQ or EPQ (original paper quality notes) notes will always have higher demand and price. I would be looking only at PPQ/EPQ notes with good centering and good eye appeal.



As mentioned, the 1928 series are far less common and in higher demand. But, you will pay a good premium for one. Figure 60-80% or more over a 1934-1934A.



My sense is that there are tons and tons of $500 and $1000 notes out there and they are not scarce by any stretch of the imagination -- just cool.



A Star note will run perhaps 4 to 10 times as much as a similarly graded non-star. Remember, on average, only about 1% of notes issued were stars, so they are far scarcer. The upside is that there will always be higher demand for stars.



The market for high denominations has been good for a while and I don't sense bargains.

mfontes

Well said gnat, however I think star notes may demand a much higher price especially if the market is strong.

66Tbird

Thanks gnat, that's great info to help my decision. Sometimes I follow the numbers and trends more than looking at the pictures of the items for sale. Maybe I'll step up and do the loftier level someday. Those little tid bits of info are really helping sort this out. Thanks again.

gnat

A Light Green Seal