The Copper Penny Is Worth More Than One Cent
The prices of most commodities have risen substantially since the turn of the century, and some of the coins you have in your pocket or piggy bank are worth a lot more today than in the past.
Pennies used to be made from 95 percent copper, at least until 1982. Since 2000 the price of copper has risen dramatically, making the meltdown value of these pennies more than the face value of the penny. Commodity prices continue to rise and fall with market changes, which could affect the current metal value of the coin.
The Copper in a Penny
A pre-1982 copper penny contains about 2.95 grams of copper, and there are 453.59 grams in a pound. The price of copper in December 2018 was $2.76 a pound, which makes the value of copper in each penny worth about 1.8 cents. Thus, the meltdown value of a pre-1982 penny is about 80 percent more than the face value.
Beginning in 1982, pennies began to be manufactured with 97.5 percent zinc, so pennies dated before 1982 have the greatest metal value. However, the price of zinc has also been increasing in value making the post-1982 pennies worth even more. As of December 2018, zinc was worth $1.25 per pound.
Calculating the Penny's Meltdown Price
You can calculate the meltdown value of pre-1982 pennies using the following more detailed formula:
(Price of copper per pound in cents x .00220462262 x 3.11 x .95)
At $2.76 cents a pound for copper, for example, the valuation works out to about $1.798. That number will increase or decrease depending on the current market price for copper. You can check the latest price of copper at http://www.cmegroup.com/trading/metals/base/copper.html. The nearest month contract is closest to the spot value for copper.
How to Collect and Profit From Pennies
It may sound simple, but you can go to the bank or anywhere else that has large quantities of pennies or nickels and buy them at face value. When it comes to pennies, the pre-1982 pennies will have the best metal content value, although it can be time-consuming to sort through and isolate only pre-1982 copper pennies. Some companies sell bulk pennies that have been sorted, but they will charge you a premium.
A Warning About Legality
Quite a big roadblock exists when it comes to this investment idea. It's currently illegal to melt down pennies and other United States coins, so you would have to consider owning copper pennies as a long-term investment. In 2006, the U.S. government imposed a penalty for melting these coins of up to a $10,000 fine and five years in prison, or both. The U.S. Mint has entertained the thought of stopping penny production because of the high price of minting the coin but has yet to officially do so.
Many other countries have already done away with their version of the penny. When the penny is abandoned, it is likely to become legal to melt the coins down for their copper content.
Investors and collectors have already begun hoarding pennies. It will likely become more difficult to find pre-1982 pennies in the years to come, especially if the price of copper moves higher. Pennies are worth more than their face value today and if prices of the metals rise, an investment in the coins could pay off handsomely in the future.
Storing thousands and thousands of pennies takes lots of space. One thousand dollars worth of pennies equals 100,000 pennies, and $10,000 is 1 million pennies. If you could possibly get your hands on that many pennies, you may run into a storage issue as that many pennies weighs an awful lot.
On a smaller scale, nothing's wrong with sorting through spare change every week and putting the pennies in a container to save for the day when they could be worth a lot more.