# Build an Eight-Piece 20th Century Gold Set

*By Weimar W. White*

* Numismatic News*

Many collectors are attracted to U.S. gold coins, especially if they are in uncirculated condition. Fortunately, one can still assemble an eight-piece 20th century gold type set, made for circulation, at reasonable prices. For collectors who like different coin designs, such a set is very appealing. Capital Plastics offers attractive storage cases for these coins on their Web site, www.CapitalPlastics.Com.

The Coronet Head $2.50, $5 and $ 10 pieces were designed by Christian Gobrecht and contain 0. 12094, 0.24187, and 0.48375 ounces of gold, respectively.

The double eagle, Liberty Head type, was designed by James B. Longacre and it contains 0.96750 ounces of gold. The $2.50 and the $5 Indian Head type gold pieces were designed by Bela Lyon Pratt and contain the same quantities of gold as the Coronet denominations.

However, the $10 Indian Head type was designed by Augustus Saint-Gaudens as well as the double eagle, which shows Miss Liberty bolding stepping forward on a rock with torch in hand. The Saint-Gaudens $10 and $20 contain the same quantities of gold as the Coronet Head $10 and $20 denomination previously mentioned.

Many collectors with whom I have talked like US. gold coins and feel that they can assemble an eight-piece type set in high grade much easier than trying to complete a gold series date set in circulated condition. Some of the gold coins in a date set are just too rare and expensive for the average collector. By contrast, finding the right eight gold coins to complete the type set is both doable, interesting and fun.

Additionally, these coins are the ones that escaped Franklin Roosevelt’s confiscation of gold money in 1933, which makes them even more desirable. Would you believe that our Constitution still states in Article 1, Section 10 that lawful money is to be gold and silver? There have been no amendments to state otherwise.

What I have done is to list in Table I the eight gold type coins that make up a set and their approximate value in MS60 and in MS63. Needless to say, other dates can be used. Additionally, I give the price appreciation of the set with an original face value of $75 starting in 1932 to 2005 for MS-60 and MS-63 graded coins.

The math used to obtain the average annual returns for the two grades is given. This mathematical tool is invaluable to collectors and unfortunately few collectors are aware of it. A scientific calculator is all that is needed to obtain compounded annual rates in just seconds. The math used to extend these compound rates of return into the future, to estimate value, is also given.

Let us assume the present value of the eight coins in MS-60 is $3,550. Let’s also assume that the set was assembled at face value in 1932. The arithmetic used to calculate the average annual rate of return for the MS60 set over the 73-year period is:

**(($3,550 / $75) ^{1/73} – 1) x 100 = 5.43 percent per year.**

For the MS-63 set, we get:

**((10,000 / $75) ^{1/73} – 1) x 100 = 6.93 percent per year.**

One can see that the MS-63 set has given a greater average annual rate of return.

Now let’s assume the collector wants to keep his set and sell it 50 years from now. Let’s also assume that the average annual rate of return will remain approximately the same for each graded set for the next 50 years. What will each set be worth?

**MS-60 set: (1.0543) ^{50} = 14.0673
$3,550 x 14.0673 = $49,939**

**MS-63 set: (1.0693) ^{50} = 28.508
$10,000 x 28.5088 = $285,088**

One can clearly see that the MS-63, set which compounds at a higher rate gives the collector a higher value in nominal dollars 50 years from now, everything else being equal.

The bottom line, as I see it, is that collectors need to learn how to use the given arithmetic to see what their annual rate of return has been for sets or diverse coins and then to use the given arithmetic to see what a set of coins could be worth in future years. Who knows, perhaps the coins your children will inherit from you will make them financially well off.

If one keeps the MS-63 type set for 75 years instead of the 50 years, this set could be worth $1,522,190!

**(1.0693) ^{75} = 152.219
$10,000 x 152.219 = $1,522,190**

The data show that compounding is the “8th wonder of the world”.

The mathematics of compounding excited Warren Buffett in his earliest years. He would memorize compounding annuity tables to help him calculate the merits of his investments and also to keep his personal portfolio on a straight track. As we have seen in the coin appreciation calculations, time has a tremendous effect on wealth accumulation. The longer that assets can compound, the larger their value will be. Adding a few extra percentage points per year can have unfathomable consequences on wealth building. We see this with the two gold type sets in this article that have compounded at 5.43 percent and 6.93 percent per year.

Let me give another example that proves this point. The American Indians sold Manhattan for $24 in 1626. If they wanted to buy it back today, it would cost them more than $3.28 trillion. The $3.28 trillion is what $24 is worth in 379 years at 7 percent compounded annually.

However, getting back to coins, numismatic appreciation depends on popularity and even the rarest coin eventually reaches a maximum value in constant dollars, i.e., adjusted for inflation. In reality, the future coin values determined by the given math, at best, are only approximations. No one knows for sure what the future will bring. Nevertheless, one needs the mathematical tools and know-how to see what the potential value of an asset extended out X number of years could be, at a certain average annual rate of return. Now you can do it, too.