Five Money & Coin Myths

#2 Can Cost You Thousands of Dollars

There are many myths and legends about United States coins and our monetary system. Here are the top five most common misconceptions. 

  • 01 of 05

    The Older the Coin the More Valuable

    a pile of ancient coins
    Ancient Coins. Martin McCarthy/Getty Images

    Sometimes this happens to be true, but most of the time it is not. In fact, the age of a coin has very little impact on its value. Although there are many factors that determine the value and price of a coin, the two biggest ones are supply and demand. When the two of them work against each other, the value of a coin will go up. In other words, if there are a lot of coin collectors looking for a particular coin and the supply is very low, the price will be very high.

    For example, a 1914-D Lincoln...MORE penny has a mintage of approximately 1.2 million coins. A 1910-S Barber dime also has an approximate mintage of 1.2 million coins. In uncirculated condition the Lincoln penny sells for over $3,000 while the Barber dime in uncirculated condition sells for $700. More people collect Lincoln cents then Barber dimes and therefore the demand for them is higher.

    Supply also drives the price. In 1916 only 52,000 Standing Liberty quarters were made. One of these coins in uncirculated condition sells for $17,000. You can pick up a 2000-year-old ancient coin in decent condition for around fifteen dollars.

  • 02 of 05

    Shiny is Better So Clean Your Coins before You Sell Them

    shiny United States quarters
    United States Quarters. Gregor Schuster/Photographer's Choice/Getty Images

    Many people believe this and will clean their coins using acids or abrasive materials like cleanser to "shine up" their coins. Nothing could be further from the truth. Cleaning a coin will damage the surface of the coin and coin collectors do not like to buy damaged coins. In fact, coin dealers and seasoned coin collectors can tell if a coin has been cleaned.

    A coin dealer in California told me a story about a lady who brought a 1892-S Morgan silver dollar into her coin shop. Before she...MORE brought the coin into the store she took her polishing cloth that she uses for polishing her silverware to "shine up" the coin. Effectively she damaged the coin so much she reduced its value from $80,000 down to $30,000 because the coin was cleaned.

  • 03 of 05

    The Federal Reserve is a U.S.  Government Agency That Controls the U.S. Economy

    Seal of the United States Federal Reserve Bank
    The Federal Reserve Bank. The Federal Reserve Bank

    The Federal Reserve is not a government agency but a private entity that is regulated by the United States government and owned by the largest banks in the United States. It was created in 1913 by the Federal Reserve Bank Act with the purpose of creating monetary policy, supervising and regulating banking institutions, and providing financial services to other depository institutions, and the United States government.

    Additionally, its policies and actions do not have to be approved by the...MORE president nor any legislative branch of the United States. It does not receive any funding from the United States government and operates independently of any governmental power. Although it does not directly control the United States economy, it does have some very strong influences.

  • 04 of 05

    The U.S. Can Print All the Money It Wants To Pay Its Bills

    stacks of United States 100 dollar bills Federal Reserve notes
    $100 Federal Reserve Notes. GP Kidd/Blend Images/Getty Images

    The United States prints its paper money at the Bureau of Engraving and Printing and manufactures coins at the United States Mint. With the exception of selling special sets and specimens directly to coin collectors, all coins and paper money that enters circulation must be purchased by the Federal Reserve Bank.

    It costs the United States approximately twelve cents to print a twenty dollar bill. When they sell it to the Federal Reserve Bank for twenty dollars, the Treasury Department makes $19.88...MORE for every bill that the Fed buys. If the government needs money to pay its bills, it must borrow it just like the rest of us. The total amount of debt that is outstanding is known as the National Debt.

    Continue to 5 of 5 below.
  • 05 of 05

    You Must Be Dead To Be On a U.S. Coin

    2015 United States Presidential Dollars
    2015 United States Presidential Dollars. Image Courtesy of: The United States Mint, www.usmint.gov

    Originally, United States coins featured allegorical representations of Lady Liberty. It wasn't until 1892 that a real person, Christopher Columbus, appeared on the World's Columbian Exposition Commemorative half dollar. It then became tradition that only deceased people could appear on United States coins. Currently it is a law that presidents must be dead at least two years before appearing on a coin.

    However, legislation has been passed that has allowed the following people to appear...MORE on U.S. coins while they were still alive:

    1. Alabama Governor T.E. Kilby on the front of the 1921 Alabama Centennial half-dollar
    2. President Calvin Coolidge on the front of the 1926 Sesquicentennial of American Independence half-dollar
    3. Senator Carter Glass on the front of the 1936 Lynchburg, Virginia, Sesquicentennial half-dollar
    4. Senator Joseph T. Robinson on the back of the 1936 Robinson-Arkansas Centennial half-dollar
    5. Nancy Reagan on the front of the 2016 First Spouse $10 Gold coin