Investment vrs collecting
Bear
Posts: 18,953 ✭✭✭
This question is really a straw man. If one collection is several hundred dollars,
then the monetary aspects are certainly not a major consideration. However, after
a number of years of collecting, the value of ones collection can run to many thousands
of dollars. Now, one can say that they will never sell and so the value of the coins is not a
concern. Let us look as some common reasons for a person to sell a great portion or liquidate
a collection:
1- You buy a house and require additional money for a down payment.
2- You lose your job amd must subsidize your living expenses.
3- Your collecting tastes change and you wish to go in an entirely new direction.
To raise cash for your new purchases, you sell off the old collection to but into your new
collecting intersts.
4- Your grown children require some financial assistence for school or a home or
perhaps a grandchild on the way.
5- You wish to upgrade the quality of your collection and plan to sell some coins to pay for the new coins.
If the coins you collect represent a meaningful part of your ready assets, then it would be nice
to know you could get your money out of them and perhaps some measure of profit. Perhaps we realize
the financial aspects too late, but eventually, we all realize the implications of managing a collection, as one
would tend a field of produce for a cash crop.
then the monetary aspects are certainly not a major consideration. However, after
a number of years of collecting, the value of ones collection can run to many thousands
of dollars. Now, one can say that they will never sell and so the value of the coins is not a
concern. Let us look as some common reasons for a person to sell a great portion or liquidate
a collection:
1- You buy a house and require additional money for a down payment.
2- You lose your job amd must subsidize your living expenses.
3- Your collecting tastes change and you wish to go in an entirely new direction.
To raise cash for your new purchases, you sell off the old collection to but into your new
collecting intersts.
4- Your grown children require some financial assistence for school or a home or
perhaps a grandchild on the way.
5- You wish to upgrade the quality of your collection and plan to sell some coins to pay for the new coins.
If the coins you collect represent a meaningful part of your ready assets, then it would be nice
to know you could get your money out of them and perhaps some measure of profit. Perhaps we realize
the financial aspects too late, but eventually, we all realize the implications of managing a collection, as one
would tend a field of produce for a cash crop.
There once was a place called
Camelot
Camelot
0
Comments
Camelot
6. Medical Emergency/Condition
It seems like a natural progression to start, and complete, a set/'s, then liquidate/upgrade/start new set? As we age most of us increase our salary's to afford higher/better quality sets? Most folks want to pass on a "Nice" collection to their children. We all want our children to have better lives than we did. Would this be called investing? I don't know if that term fit's. Lee
Many of the same folks consider real estate {more specifically} a home as an investment BUT when you start to regularly buy coins that could easily make most people's house payment then its time to seriously look at the investment aspect of your hobby, because you never know when you may be forced to sell. Buy coins because you like them of course, but also buy coins which should be expected to be quite saleable should that need ever arise.
I generally try to buy coins that have shown a reasonable level demand over time, but nothing too hot or too cold. Coins that are too hot (ie. toned common date, common grade Morgans) are the ones that may become cold, and coins that are cold (ie. often referred to as "undervalued") may stay cold for very long periods of time. I try to find the Goldilocks coins in between.
Now I view collecting the same way I view golf. I enjoy it, and I know it costs money. I don't expect return on my investment, I expect to enjoy it. My only hope is that if I need to liquidate, whether becasue of emergency or change in direction, that I not lose my A$$ completely.
Does this make sense?
roadrunner
2. For the historical value
3. For the challenge and Registry competition
4. For the sense of accomplishment
I figure as long as I can keep my collection somewhat varied (above gold coins, large silver bullion coins, barbers & proof sets) I should be okay to some degree when prices start to drop at some point.
So I collect what I want but have the investment aspect in my mind.
As a kid, I mowed lawns in the 1960s to buy coins via the mail that seemed 'cool' due to their history and uniqueness. Now, I buy what I like, in the series I enjoy, but always with a thought towards ultimate resale and investment. I'm 48 . . . could retire in about 3 years (teaching--30 years), and my wife and I have thought a lot about the 'golden' years (no kids). The coins are part of a triad . . . with 401ks and school retirement as the other two prongs (forget Social Security) . . with other small things added in. But . . . I have a tremendous amount of enjoyment from my collection . . . it's just that when I visit a show, I buy first with an attitude of whether or not I like the piece . . . but close behind . . . is it a piece others would also love to buy . . . and therefor saleable??? That is a major reason why I am not a big 'ebayer' . . . I like to see the piece first in most cases.
10 years ago . . I loved to fill holes. Now . . . the "box of 20" (although I can't restrict myself like that) holds more allure. In either case . . . I never buy without an ultimate eye towards whether or not others on this forum who are astute and discriminating would also enjoy the piece (as a representative group of numismatists).
DRUNNER
<< <i>The investment aspect depends upon how and what you collect.
As a kid, I mowed lawns in the 1960s to buy coins via the mail that seemed 'cool' due to their history and uniqueness. Now, I buy what I like, in the series I enjoy, but always with a thought towards ultimate resale and investment. I'm 48 . . . could retire in about 3 years (teaching--30 years), and my wife and I have thought a lot about the 'golden' years (no kids). The coins are part of a triad . . . with 401ks and school retirement as the other two prongs (forget Social Security) . . with other small things added in. But . . . I have a tremendous amount of enjoyment from my collection . . . it's just that when I visit a show, I buy first with an attitude of whether or not I like the piece . . . but close behind . . . is it a piece others would also love to buy . . . and therefor saleable??? That is a major reason why I am not a big 'ebayer' . . . I like to see the piece first in most cases.
10 years ago . . I loved to fill holes. Now . . . the "box of 20" (although I can't restrict myself like that) holds more allure. In either case . . . I never buy without an ultimate eye towards whether or not others on this forum who are astute and discriminating would also enjoy the piece (as a representative group of numismatists).
DRUNNER >>
Excellent!
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Edited to add: "Life's a gamble at terrible odds. If it were a bet, you wouldn't take it."
Tom
All in all, these are things that would cause me to think seriously about selling out:
1) I find out that I'm terminally ill. I wouldnt want to make my wife liquidate the assets after my passing.
2) I need the money for health reasons.
3) I could pay the house off with the assets.
4) I need a new car pronto, and dont want to finance.
5) Something happens to seriously harm/destroy the house and/or most of it's contents.
David
you might push the envelope a little and call them stores of value
but still coins are not an investment they are only for collecting
only buy coins you like for collecting as a hobby with an eye towards value and with discretionary funds and best case scenerio coins you might have to live with for a long time
if you choose to do otherwise let the buyer beware
Like that.
Neil
Unfortunately more money has been lost "investing" in coins because "store of value" is not understood by most (especially by newcomers being led to "invest" in coins). Coins and investing should not be in the same sentence IMO.
(OK, no wiseguys now creating sentences where it would be perfectly proper to have coins and investing in the same sentence, you know what I mean.)
Joe.
<< <i>As someone new to this hobby, I've rolled this argument around in my head for a while. Basically this is how I see it. I spent time and money trying to figure out what really appeals to me. It turns out my tastes are simple. I also thought when I first got involved that over time I might make a few bucks. Now I realize that without going to lots of shows and knowing lots of good places to look, it's tough to do. I've realized that I'm not going to be Marty or Russ. The coins I've bought that I am no longer interested in, I have sold on Ebay, usually I get most of my money back and overall I would say I've only lost a few hundered dollars due to my ignorance.
Now I view collecting the same way I view golf. I enjoy it, and I know it costs money. I don't expect return on my investment, I expect to enjoy it. My only hope is that if I need to liquidate, whether becasue of emergency or change in direction, that I not lose my A$$ completely.
Does this make sense? >>
As I newer person to this hobby than you, I agree very much. In every hobby that most people get into that requires some amount of investment. We and including myself, intenvertantly look at it for the monetary gain. ie my former life in R/C airplanes: everyone that was a good builder wanted to build planes on the side or full time as a business. I only know of 2 out of hundreds that actually make any profit.
I like coins, I like snowmobiles, and I like women, and I know there going to cost me $$$!!!
North Pole, Alaska...
I pee'd on the Arctic Circle...
My E-bay Stuff
good ? investment. remember just food for thought.
maybe cc dollars ?
Speaking for myself, I buy some coins as inventory, some to collect and others as investments. And those by no means represent the only options.
As you can see below!
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Like beauty, the classification of a purchase as an investment is in the eye of the beholder. If a buyer pays $50 for a piece of used chewing gum because he believes that he has a good chance of reselling it for $100, the used gum IS an investment.
Speaking for myself, I buy some coins as inventory, some to collect and others as investments. And those by no means represent the only options.
As you can see below!
Ok, so where can one invest in one of these???
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
(1) M/S Morgans up 54% last year!
(2) PCGS says we're early into the coin Bull market,
another 4-5 yrs uptrend in coin prices
(3) I just purchases AU/58 1894 Morgan for $2290.00,
Had 330 lookers at the coin. Someone is interested in coins.
(4) You have people from all walks of life buying coins now.
(5) Try buying a Buffalo Nickel with 4 digit date and you will
a minimum of $10 bucks
(6) A Lincoln cent collection sold on Ebay last night for
$1580.00
(7) Interest rates at hte bank 0.8% LOL
And thats all I have to say about that (Forrest GUMP)
I am interested if others consider the CC Morgans to be investments (89 don't count).
Cause I have a 84 which I got 2 1/2 years ago for $110 and would like to add more, but $240 and up not sure if good buys.
I know that this thread is similar to others we've had in the past. As a professional Financial Advisor I guess I look at things a little differently than you all.
I view my coins as one basket in nine that I put my investable assets. All of us should strive to have at least nine baskets over time. Not one or two. That's speculating not investing!
These are the nine as I see it.
1. Hard Assets (This would be your coins, buillion, etc.)
2. Cash (Money Market funds, CD's etc)
3. Bonds (Laddered portfolio of taxable or tax-free)
4. Small Cap Stocks
5. Small Cap Value Stocks
6. Large Cap Stocks
7. Large Cap Value Stocks
8. International Stocks
9. Real Estate
What muddies the water is that collecting coins is a blast. For some it is a hobby. For others a serious hobby. For others it is just plain serious!
Nevertheless, I view my coin purchases as striving for the highest quality in a denomination that I feel will be easier to liquidate if necessary.
<< <i>I have not read all the threads, so I'm not sure this aspect of coins has been touched upon. To expand on RYK's "store of value" inference; coins are an excellent tax dodge - most efficiently against the federal inheritance tax! >>
Wondo are you some kind of trouble maker?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
To call something an investment, you have to look at long term trends and be able to compare apples to apples. You can't compare what, say, an MS 65 1883 CC Morgan in PC 5 was worth in 1988 with this coin's current worth now. The PC 65 coin in 1988 is probably in an MS 66 or MS 67 holder now.
Sure, you can compare specific pedigreed coins over time, but how many of us on these boards can afford these coins? You can compare what you paid for specific coins you bought twenty years ago with what they are worth now, if you still have them. However, this is not a large enough sample to yield anything other than anecdotal evidence. As long as grading is involved and you're not dealing with specific pedigreed coins, you can't use ten or twenty year trends to evaluate numismatics as investments.
"Seu cabra da peste,
"Sou Mangueira......."