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Evolution of Coins

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Today's April's Fool, but this article is not a joke. 

The golden rule of managing personal finance is to refrain from using cash, so why should you keep coins? Why does the post matter to you? 

Parenthood

When your child goes to primary school, you need to give them pocket money. 

Giving them a $2 note could mean putting all your money in one basket which can be worrisome. 

So, most parents would normally give them coins to spread the risk and let them understand money concepts. 

You might as well start your coin collection today.

Hobbyist / Forced Savings

This is quite iffy, as everyone has a different reason for collecting it. 

For me, I wanted to collect coins hoping to fund my large ticket items in the future.
It's quite bothersome for me as there is always a shortfall in my cash account during my monthly reconciliation. In addition, the lure of interest rates convinced me to give it up. 

While others could be attracted by the scarcity of coins and look towards value appreciation.

Business use 

Hawkers are heavy users of coins. 

I also think that coin-operated businesses could also be heavy users of $1 coins. 
I guess they face some form of leakage and require top-ups. 

They will need to exchange with the bank at the following rates:

Bank

Fee for every $50

%

OCBC

$1.50

3.0%

DBS

$1.80

3.6%

UOB

$2.00

4.0%

 On top of that, they would need to queue at the bank for at least 2-3 hours which can be a heavy opportunity cost.


In practice, there will be a Runner that would supply them with coins and they would have to pay a higher rate. 

So instead of letting all your coins go to waste... why not evolve them into their useful state.

The Catalyst 


The coins that are suitable for pocket money and in demand are the $1 Coins. 

To get them, you definitely need a VENDING MACHINE. 😂😂😂


Just put the coins into the machine and press cancel.
They will return you the same amount with the least number of coins. 

That said, there are some smart ones so... "May the force be with you"
I remember in NUS, the users were doing it so frequently that the vendor placed a notice that their machine does not provide change. 😂😂😂

To be honest, the collection process was fun but the coins can be quite dirty. 

Proft Margin

In my most recent experience, I've collected about 600 $1 Coins and listed them on Carousell.
I didn't really know about the market rate and exchanged the old $1 Coins at face value which was dumb of me. 

For the remaining coins, there was a buyer who took them at $3 for every $50 which is a 6% return. 

It really got me wondering about the true market rate for $1 coins when hawkers are paying at least 6%. 😟😟😟 

Sidenote:

If you just want to get rid of your coins for cash, just make a purchase in any supermarket or Cheers and throw them in the coin machines.


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