You need a memory card to do this trick. When you have 100 coins or more 
in Edo(the first area) go to "Lost'n Town". When you arrive go to the 
second house to the right with the blue curtain on the door. Purchase as 
much sushi as you can from the lady near the door. Sushi costs 100 coins
 each and gives you an extra life plus 2 health points. Leave the store 
and go to the Inn, it has a small door with a white banner on it. Now 
save your game at the inn and push reset on the N64. Select the game you 
just saved and you'll find that 100 coins have automatically been restored 
to you. Now you can purchase more sushi with this free money and more lives 
by repeating this pattern. It takes some patience but it pays off in the 
end against the tougher areas and bosses in the game. 

NOTE: This works on two player games as well but you have to make sure that 
both players buy sushi.