There are a lot of people collecting pennies these days. Not just any pennies. They are collecting pennies that date before 1982 and plan on making a lot of money on them. These people are penny hoarders and they have a plan.
Penny hoarders are only interested in the pre-1982 pennies because these pennies are made with 95% copper. Pennies made after 1982 are made mostly of zinc with a thin copper coating. Why is this important? Because just as other metal prices like silver and gold prices have dramatically increased over the last few years, so has copper making each of the pre-1982 copper pennies worth more than a penny in copper. In fact, the copper in each penny from these years is worth about 2.5 cents at today’s prices.
So for every 95% copper penny you find (and there are still plenty in circulations), you can take it to copper recyclers and get more than a penny for it. It seems like a fool proof way to instantly make money, but there are a couple of problems. First, it’s currently illegal to melt pennies. Those who think they can avoid this by taking them to Canada or Mexico to melt have the problem that the law also that makes it illegal to transport more than $5 worth of pennies out of the country. So why are people hoarding these pennies if there is no way to sell them for their copper value?
The penny hoarders know that the penny might not be around all that much longer. Even the new, mostly zinc pennies cost the mint more to produce than they are worth (the same is true with nickles) and with ever tightening budgets and voter backlash to waste, the penny may not be around too much longer. If the penny eventually is abolished, anyone that has them will be free to melt them down for their copper value. This is the calculated risk that penny hoarders are taking, but also a pretty safe one. The penny will still be worth a penny if this doesn’t happen so they won’t lose money.
There is also a way to make money now, even with the laws, hoarding these pennies. A lot of hoarders who want the copper pennies don’t want to actually go through all the trouble of collecting and sorting them. Since they believe that these pennies will one day be worth much more their current face value, they are willing to pay a premium for large lots of the copper pennies. Lots of $100 worth of pre-1982 pennies are currently selling for about $175 on eBay. That means that anyone that puts the time into collecting and sorting the pennies can see a 75% return on their monetary investment today.
(Photo courtesy of koocbar)