Five Money & Coin Myths

#2 Can Cost You Thousands of Dollars

Coins have been around since 200 BC when they were first minted in Lydia. Time and treasure are two of the main ingredients for creating legends and myths. 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 minimal impact on its value. Although many factors 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 cost 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 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. This considerable difference in price is because more people collect Lincoln cents then Barber dimes, and therefore, the demand for them is higher. This higher demand drives prices up.

    Supply also drives the price. In 1916 only 52,000 Standing Liberty quarters were made. Although, there are not as many collectors of Standing Liberty quarters as there are Lincoln pennies, the minimal mintage of this coin coupled with a moderate collecting base, makes this coin extremely valuable. 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 myth and will clean their coins using acids or abrasive materials like a 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 an 1892-S Morgan silver dollar into her coin shop. Before she brought the coin into the store, she took a 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 now the coin is considered damaged because it was "improperly cleaned."

    Stories like this can be told by every coin dealer around the country. A simple rule to follow is this: If you don't know what it is worth, then leave it alone.

  • 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 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 powerful 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. Except for selling special coin sets and specimens directly to coin collectors, the Federal Reserve Bank purchases all coins and paper money that enters circulation. This procedure allows the Federal Reserve Bank to monitor and control the money supply of the United States.

    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 for every $20 paper bill that the Fed buys. If the government needs money to pay its bills, it must borrow money it just like the rest of us. The total amount of debt that is outstanding is known as the National Debt.

    Additionally, many people believe that the Federal Reserve Bank is a government agency. Actually, the Federal Reserve Bank is a private entity that is owned by the largest banks in the United States. However, they are not free to do as they please. The United States government regulates it.

    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,

    Initially, 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 a tradition that only deceased people could are featured on United States coins. Currently, it is a law that presidents must be dead at least two years before appearing on a coin.

    However, Congress has passed legislation that has allowed the following people to appear 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. Although she died before the United States Mint officially released the coin to the public, it was produced while she was still living.