Why Some Americans Are Hoarding Their Pennies…. (Literally)
Allow me to introduce you to a new kind of Penny Hoarder. While these hoarders may never have read this blog (they would be welcome of course), they do share something in common; they know the value of saving those little disks of copper we affectionately call pennies.
However, there is something that probably sets them apart; they literally buy and hoard pennies...
Why are some Americans Hoarding Pennies?
No doubt, you are familiar with the traditional form of literal penny hoarding. First, find a really old or uncommon mintage of penny. Then sell it to collectors willing to pay extra. Now, there is a completely different reason to collect pennies.
Over the last few years, the market for copper has skyrocketed. Just last January, the market peaked at $3.649 per pound. At 146 pennies to a pound, a single penny’s copper has a value of about 2.5 cents.
That’s not a bad deal! Get a penny for 1 cent and sell the copper for 2.5 cents? How often do you find an intentionally undervalued investment that is easily purchased?
Not All Pennies are Created Equal
The “copper standard” for pennies are those minted in 1982 and earlier. It’s pennies from this era that are composed of 95% copper.
The more recent generation of pennies are made of copper and zinc to lower the cost and value.
One Big Catch
If you think that making money on your pennies is too good to be true, there is a catch. It’s illegal to melt down currency and sell as scrap. Also, there is no crossing the border with your penny bags either. It’s illegal to leave the country with more than $5 in pennies. Most penny hoarders are stockpiling their currency in the hopes that the law will change and allow them to finally cash in on their stockpiles.
Getting rid of the penny is not an outlandish idea. The Canadian government recently abolished one cent coins arguing that it was too costly to produce. Legislation for exterminating the penny isn’t strictly Canadian in origin either. In 2006, the US congress mulled the extinction of the penny. Once the penny is no longer used as currency, the flood gates open for penny hoarders to sell as scrap metal.
You Can Make a Profit Selling Pennies Today!
The good news for the penny hoarding entrepreneur is that you don’t need to wait for an act of congress to make money selling pennies.
As with all investors, there are those with high risk tolerances. These investors are hoarding pennies today in the hopes that laws will change and they can earn a big return. However, they need to get their pennies from somewhere and grabbing a roll from the bank is likely to be littered with pennies from 1983 and later. This is giving rise to penny entrepreneurs who are selling pennies to penny hoarders. Here’ s how it works:
- They get pennies from banks, stores and their own pockets
- Sift through the lot for pennies from 1982 or older
- They sell these pennies in bulk on eBay to the folks looking to stockpile for future legislation
Pennies can be sold in bulk at 2 cents a penny on places like Ebay (watch out for seller fees) and penny hoarding forums (seriously, they exist). After shipping, it adds up to a $.76 profit for every $1.00 of pennies you sell.
Good luck Penny Hoarders! (both kinds...) :)