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What percentage of your net worth, not including your main residence, are coins?
DelawareDoons
Posts: 3,254 ✭✭✭✭✭
I was reviewing some numbers today and my coins are a very considerable chunk of my assets when you remove my residence. I was aware they would be a considerable portion but I had not realized just how much they represent.
This insight made me curious to see what this number looks like for others.
I know it's an unusual question so I'd like to stick to percentages and an anonymous poll.
For my part, coins represent approximately 48% of my net worth when you remove my home.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
What percentage of your net worth, not including your main residence, are coins?
This is a private poll: no-one will see what you voted for.
3
Comments
Would you like our addresses and estimated weight for “shipping” purposes too?
Yeah. No thanks.
Ummm... no.
Someone needs a financial planner.
I hope that coins represent a higher percentage in the future (as both grow, in absolute terms). A small drop in a small bucket right now.
It’s not that high of a percent for me. Nicely below 10%. When I was active here before back around 2004 the story was much different. I was silly and let it get to be about 25%. Sold most everything and righted the ship.
TurtleCat Gold Dollars
Fifty cent
Not a major investment area for me....Got some good ones, lots of nice ones... but still a small segment of overall value. Cheers, RickO
I could see it for a YN. But if it was an adult I would say they need Coin Collecting Anonymous before a financial planner.
TurtleCat Gold Dollars
If I intend to retire into being a coin dealer, is it really that outlandish to have about half of my net worth tied up in a business venture?
I would guess most small business owners have a similar percentage tied up in their businesses, if not more. And to be honest, the people I am most interested in hearing from are vest dealer types as well as professional dealers.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
I was assuming they were referring to the people who voted 80%+.
TurtleCat Gold Dollars
I am guessing those individuals are younger coin dealers throwing everything they have and can get into their business to expand their revenues/profits as fast as they can until they get to a spot where they're comfortable.
I'd also be interested in hearing from people who have made the transition from vest dealing to full-time dealing.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
For me much less than 5%.
I wonder if any of the very high percentages are young people with modest collections and lots of student loans or similar factors? Would anyone in the 80%+ range like to comment?
And to be honest, the people I am most interested in hearing from are vest dealer types as well as professional dealers.
Too bad your poll question wasn’t narrowed then!
This honestly is the right answer. Everyone has different goals and circumstances in life. A financial plan should drive what you’re trying to accomplish.
less than 2% for me
Wayne
Kennedys are my quest...
It depends upon how much risk you are willing to take. It's your life.
Personally, even if I were a business owner, I would attempt to reduce my financial exposure to it as I aged if it represented 48% of my net worth or anywhere near it. I'm not a decamillionaire.
If I were in a position to retire with a transition to a coin dealership, I would only do it to the extent I could afford to lose most if not all of the investment without it impacting my future living standards.
I'm under 5% by design. My coin budget is set to keep things in the 2-4% range.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
Higher than I would have guessed years ago mainly due to a -0- interest rate environment.
It would depend on the definition of "coins". If we are just talking numismatic pieces I'd be somewhere around 2%.
If monster boxes of silver eagles, rolls of pre 1965 junk silver, common date double eagles etc. are included the percentage goes up in the neighborhood of ~25%.
The whole worlds off its rocker, buy Gold™.
I consider there to be a big difference between a collection and inventory. The OP just said coins, but middle-class collectors are certainly going to have a different allocation than even a vest pocket dealer. Those with higher net worths can do whatever they like, I suppose.
11.379% .
yesterday it was 11.3245%
i
3%
Dave
I should clarify this transition is at least a decade off and my current plan calls for a substantial escalation of my 401k, IRA and Brokerage contributions over the next 5 years that should shift the balance substantially if my vest dealing doesn't continue to be extremely profitable. If it does, well, I suppose that is a good problem to have. My profits off dealing are consistently creeping towards my salary I make from my day job, which is only skewing the ratios more and more, though I am attempting to consolidate my collection and churn a bunch of the lower-end material once a year or so to limit the effect of this.
The reality for me is that I am already on track to retire at 60 at the latest without factoring in my coin assets. I have 3x my annual income saved in retirement accounts at 34 years old. Coins are another 3x, and my arguable actual hobby is around 1x. My finances are doing just fine despite the unusually high percentage coins occupy. Percentage-wise, I would consider "long-term inventory" (AKA my collection) to be 80% of my coin holdings and my actual inventory accounting for about 20%.
I like big umbrellas, not small ones.
I am including bullion in these numbers.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
The price of gold has propelled me into the 10% range of percentage of net worth not including house. it's not uncomfortable to me because additions are from 'extra' funds and whenever I sell anything it tends to go back into the collection (or heap if I want to be honest).
Successful transactions here and ATS with: jwitten, Rob41281, bajjerfan, cucamongacoin, Jim F., physics-fan3.14, x2rider, Wahoo554, Weather11am, Relaxn, jimineez1, Ronyahski, Bliggity, SurfinxHI, McGrump (thru BAJJERFAN), ms71, Downtown1974, ad4400
If I get my 60 2021 Morgan CCs and they all grade ms70 and I flip them all then it’s 6% otherwise it’s less than 1%. LOL
I don't know if it is "outlandish". A lot of small business owners have a significant percentage of their net worth tied up in the business. It is, however, dangerous. And unless you are retiring this year, it is very dangerous because you are accumulating inventory that may be worth less when you actually want to sell it.
Inventory should turn over (EOC will be along shortly to argue the opposite). Accumulating inventory for a future dealer venture isn't really good business. Dealers do not have cases filled with life long accumulation. 90% of what's in a dealer's case should be less than a year in inventory.
You would be better served going into a new business with zero inventory and a pile of cash.
Bob Brinker had sort of a similar rule for asset classes, although it depends on how you interpret coins as asset classes. I think he would tell anyone who had more than 10% to sell immediately.
I think this is good advice.
Margins on coins are very slim. If you are retiring with most of your assets in inventory, you are NOT retiring. You are transitioning to a new career that will have to make money. [Unless, of course, the gross numbers are huge. If you have a billion dollars and half a billion in coins, you can retire.]
Apparently your hobby isn't coin collecting but coin counting, Mr. McDuck.
I'm praying that the 6 people who are over 70% are the teenagers on the board.
Very little
For me only enough inventory fill 2 -3 show cases. Currency can be stacked. Slabbed coins prefer no more than roster of 100-200. I mainly go to local shows buy from wholesaler retail to public. Plus online store. Any gap can be easily filled with stacks of currency both graded and raw. I buy some coins from online auc pickoffs can sell for more.
Coins & Currency do not pay dividends or interest and can be slow moving plus drop in value. So if not selling at decent profit no incentive buy any more. Many dealers went bankrupt - 89 crash.
When gold sort of tanked around 07-08 took my gold coins off market until went up in 2011 and banked.
Cash is king in the coin business. Being inventory heavy = bad situation. If not selling (poor mkt cond) then I stop buying. Furthermore a dealer under gun move inventory quick. If not turning over quick your in trouble.
Ok Business Guru
And your the one with a pile of acid date buffalos LMFAO, OMG
Go get em business genius, LMFAO
I think for me, the biggest thing is that my cost basis on most of the stuff is pretty low. Just selling it right now I would probably realize 200-300% of my invested capital. My mantra is to keep the best and sell the rest. As a general rule of hand, I keep approximately one out of every 20 or so coins that I buy. My actual inventory gets turned over 5 to 7 times a year. The profits on that pay for my "long-term inventory".
Don't get me wrong, when I retire I am retiring. I'm not going to work 40+ hours a week as a dealer. The goal would be for dealing to account for maybe $20,000 a year in income. If you are familiar with the concept of FIRE (Financially Independent, Retired Early) and it's derivatives, coin dealing with transition me to a coastFI type situation. I'd only deal at a point where I just need my investments to grow for a few more years and I still have some moderate expenses to cover, but the big items like a mortgage payment are gone.
As a vest dealer, my margins are 21% on average. I see no reason I cannot sustain that given I carry those margins on low 6 figures in revenue per year right now.
Appreciate your insight and comments, thanks!!
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
I don't exactly have a pile of acid date buffalos. But when you buy estates, they come with everything attached. And since I paid ZERO for the acid date buffaloes, they only show up as 5 cents on my inventory value.
I'm not sure why you want to attack based on solid business advice. It is business 101. Inventory costs and turn over are issues that all businesses try to manage.
If/when error coins cool off, you are going to learn this the hard way.
I do not buy estates.
I handpick every coin in inventory.
What am I going to learn????
Going opposite your advice has turned out perfect for me.
So Pittman was stupid for having 90% of his wealth in coins. Hell even his house equity was used for coins I believe . I am under 5%
That seems like a solid plan. But I would still suggest that you are more FIRE ready if you have the pile of cash not the pile of coins. If the coin market collapses for an extended period of time, your retirement assets would drop significantly if they are over-weighted in coins.
I knew a dealer who had a million dollar inventory and no cash. He struggled constantly because every time he needed to pay rent or buy a car, he had to liquidate inventory. When a big buying opportunity came along, he had to find financiers which cut into the profits.
The really successful dealers I know, always have ready cash and their inventory, therefore, is a lower percentage of total assets. This makes it possible for them to self-finance opportunities that arise and they are never forced into making a distressed sale.
Cash is always king. Inventory can be a liability, especially if it isn't very liquid.
Edited to add: Your costs can go up if you are a "full-time dealer" rather than "vest pocket". Vest pocket dealers walk around shows for free. Start paying several hundred dollars for tables and hotels and your net margin will shrink.
We can argue over whether Pittman was lucky or smart. I know someone who knew him back in the day and always felt that his kids looked like paupers because he put all his money into coins when they were growing up. I didn't know him back in the day, but he was definitely obsessive with the coins. He won because the market went his way. It didn't have to have worked out that way.
The type of increases that occurred at the time he collected will probably never happen again percentage wise.
I thought he was boasting about his newest four figure acquisition.
I didn't ask you to learn anything. I didn't ask you to buy estates.
The market has been in your favor since your niche has been hot. It is, inarguably, dangerous to have all of your assets tied up in inventory if the market goes soft. You have not lived through a downturn in the error market.
I also don't know nor need to know what percentage of your assets are tied up in inventory. But if you had 90% of your assets tied up in inventory and the market goes soft, you end up needing to make distressed sales to pay bills. That is why I said it is "dangerous".
The guy I referred to in the other post was a full-time dealer for 35 years from his early twenties until the day he died. So, yes, he made the business work with 90% of his money in inventory. But he struggled constantly and he also did a high degree of turnover on things like bullion and widgets which usually financed his daily living.
Dude, I got 50% in Cash, stocks, and crypto all very very liquid.
Zero debt.
My inventory is very liquid, if I want it to be.
Not listening to you has made me a ton of cash.
Your wrong as the error market had a BIG downturn a few years ago.
At that time, I bought everything I could which turned out to be a smart move.
I would love to see another big downturn in error coinage as I am at 50% cash
Dude, I never told you to do anything one way or the other.
But don't translate your hot niche into good general business advice. If error coins go soft, your inventory might be liquid but at very reduced prices.
Imagine you were a Morgan dollar specialist for the last 20 years rather than an error coin specialist. How do you think an inventory heavy business in Gem Morgan dollars did over the last 20 years when prices were sliding?
I'm glad your model works for you. I do NOT hope that error coins go cold. But as general business advice, telling anyone to load up on coin inventory and hold it is HORRIBLE advice as pretty much any dealer or business owner on this forum will tell you.
The fact is, I can make money in a collapsing coin market because I don't hold excessive inventory. Even if prices are sliding, I don't care because I buy today and sell tomorrow and as long as the bid/ask spread isn't shrinking by the hour, I don't need the market to appreciate. That is how almost all businesses run. Walmart doesn't need the price of bread to be going up to make money on a loaf.
Because it didn't last, and you were lucky. Morgan dollars have been slowly sliding for 20 years. If you had loaded up on Morgan dollars 15 years ago because they were 'on sale" due to the slide, you would not have been so lucky.
But again, I don't care what you do. I'm glad it works for you. But it is important that other people recognize that it is not generally a good way to run a business.
OMG, a little over a year ago we had an endless argument over flipping vs building a solid long-term business inventory.
"Imagine you were a Morgan dollar specialist "
LMFAO Really. A billion Morgan Dollars vs Unique error coinage is what you use in your "business" argument. OMG Morgan Dollars and error coinage are not even on the same planet. Comparing the two is just silly nonsense.
I'm not comparing the two. I'm making the point that the general business model of buying and holding inventory simply doesn't work in flat or sliding markets which is why it is "dangerous".
And there is no reason why your "unique error coinage" couldn't do the same thing that Morgan dollars did: slide slowly in price for 20 years. You can argue that it is "different", and maybe it is, but no matter how "rare" or even "unique" something is, someone has to want it. Markets are not driven solely by supply.
Probably the weirdest and most uncomfortable question ever asked on this forum.
Just my humble opinion.