While this site is all about investing in gold, the topic of today's article is 25 dollar boxes of copper pennies. Copper is
on the rise and you should definitely consider placing part of your metals portfolio in
copper bullion. There are many was to invest in copper bullion. Two
great options are copper bars from E Cohen Mint and
Jetco Minting. These bars are great quality and
an easy way to stock up on copper bullion. (As an aside, I highly recommend you check out my
interview with E Cohen Minting. It's really interesting.)
Another great way to invest in copper is to buy 25 dollar boxes
of copper pennies from your local bank. Let's discuss how it works and how to become a pro at accumulating risk free gains in pennies.
Why Copper Pennies?
Pre-1982 copper pennies are worth over 2 cents each. That means you get an instant 100 plus percent gain by holding copper pennies
for their raw metal value. You can "buy" them for 1 cent each and they are instantly worth 2 cents. There are very few
investments out there that guarantee an instant 100 percent appreciation with no risk. Why is there no risk? The pennies are always
worth their face value and you can sell them back to the bank for the same price it cost to acquire them.
Why 25 Dollar Boxes of Pennies?
Here's the tricky part. To acquire a significant position in copper bullion, you need either large bars of copper or a lot of pennies.
While setting aside a few pennies from your pocket change each day is something I recommend as a fun hobby, it's not a scalable solution.
If you want to scale your position in copper and acquire a few hundred (or a few thousand) dollars worth of pennies, you need to
start thinking in terms of boxes of pennies. 25 dollar boxes of copper pennies are the scalable way to accumulate a position in
copper (in conjunction with bars from E Cohen Mint and
The Economics of Each Box
Each 25 dollar box of pennies has a typical composition of 80 percent post-1982 pennies and 20 percent pre-1982 copper pennies. Let's
assume each pre-1982 copper penny is worth 2 cents and each post-1982 (and 1982 itself) non-copper penny is worth 1 cent (its face
value). 20 percent of 25 dollars is 5 dollars. 80 percent of 25 dollars is 20 dollars. The 5 dollar component is pre-1982 copper
pennies so they are really worth 10 dollars in metal value. The 20 dollar component is really worth 20 dollars because the pennies
are zinc and not copper. Thus, the average "brick" of copper pennies from your local bank is worth approximately 30 dollars
in its non-sorted state. However, you are able to buy them for 25 dollars. That means you get an immediate 20 percent gain with zero
risk without even sorting through the box of pennies. 20 percent risk free instantly is an amazing gain. Moreover, copper
is slated to rise even further as developing countries such as China need more and more base metals. You are getting in on the ground
floor in an appreciating asset with a free 20 percent arbitrage gain.
©iStockphoto.com – vbrownjd
Want To Amplify Your Gains?
What if there were a way to sort the boxes in an automated fashion? (Even if there weren't, the 20 percent gains just described are
enough to convince me to buy 25 dollar copper bricks from the bank.) However, there is! It's called the
Ryedale Coin Artist. This amazing machine
will pick apart the copper pre-1982 pennies from the non-copper post-1982 pennies. Then, you can keep the copper pennies and return
the non-copper ones to the bank. My personal suggestion: Get one sooner rather than later if you are serious about copper. The high
end model is currently sold out! You will quickly pay back the costs of buying this machine as your sort through some 25 dollar boxes
of pennies. This machine gives you more leverage. You can now raise your 20 percent risk free gains to 100 percent risk free gains.
Nervous About Asking Your Bank For Boxes of Pennies?
All penny investors have faced it: You feel nervous going to the bank and asking for several 25 dollar boxes of pennies. First, don't
be nervous. As a customer of the bank, you are doing nothing wrong. They are there to help you. Second, you can greatly improve the
process by understanding how the bank works. Most banks do not stock a huge number of boxes of pennies. They are heavy and take up
space in their vault. If you are going to just walk into the bank and ask for a box of pennies, that's ok but make sure to leave it
at that. While they will probably have one box available, don't ask for more than one because they might not have them on hand.
The solution? It's really easy. Call your bank and place and order for as many boxes as you want (I suggest 5 at a time). Then, they
will call you when they arrive. Make sure to pick them up right away. They won't ask you what you are doing with the pennies but if
they do, you can just say you are a coin collector and are sorting the pennies to complete sets. Another note: Sometimes you will get
a box that is full of post-1982 pennies only. There will be more of these over time as the pre-1982 pennies all disappear due to
Gresham's Law. Don't worry too much. Just take it home and then
return it later.
What To Do With Your Non-Copper Pennies
Many banks offer machines that automatically count your pennies for free. An easy way to return the non-copper pennies is to leverage
this machine. Another option is to go to your local Coinstar. The reason I don't like Coinstar
is you have to pay an 8 percent fee to use the service. However, The 8 percent loss is not that bad considering the 100 percent gain
on your pre-1982 pennies in metal value. As a side note, you may want to look at Coinstar as an investment opportunity (they are a
publicly traded company with ticker CSTR). If anyone is poised to take advantage of
the copper gold rush in a large scale, it's Coinstar.
Buy Boxes of Pennies Now and Some Concluding Points
As a closing thought, I think we are at a very interesting time. 100 percent risk free gains do not last forever. There is a market
inefficiency and you want to take advantage of it now. Gresham's law will kick in and there will be no pre-1982 pennies left
much like silver coins of the past. A few more closing points:
- Should you shift your focus from gold to copper? I certainly don't think so. Gold is the ultimate metal for so many reasons. I am
a firm believer in diversification and boxes of copper pennies provide a great way to diversify. This does not mean you should ignore
the power of gold.
- Take a look at nickels too. Nickels are currently worth 6 cents a piece. That's an instant 20 percent appreciation over their face
value. Moreover, no sorting is necessary. All nickels up to the present date are worth 6 cents. You can just buy the boxes and store
- Remember not to melt your pennies. It is currently illegal. I recommend either storing them away for the future or selling them on
Ebay for their metal value.
- Remember not to ship your pennies internationally. It is currently illegal to ship your copper pennies outside the US.
- For more fun with copper pennies, check out my
images of 25 dollar boxes of pennies.
- I also recommend checking out Pennies.me, a new website all about
pennies, copper pennies,
wheat pennies, Indian head pennies,
- Remember to have fun. It's easy to get obsessed with copper pennies because it's a mini high each time you get one in pocket change.
There's more to life than making financial gains (although I can't deny it's so much fun). Just remember to balance your life and have
some fun. Good luck!
Buy Copper Pennies on eBay
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