Coin collecting is not an investment. Then why do we spend so much time and money collecting?
AnkurJ
Posts: 11,370 ✭✭✭✭
Many people say that coin collecting should not be viewed as an investment, but a hobby. I agree with this but to a certain extent. I personally love the coins I have, and enjoy the aspect of collecting. From meeting people, talking coins, and completing sets, I have a lot of fun doing it. I have spent a good deal of money on some of the coins I have. Some have been bad purchases, while others have been good purchases. I think part of being a collector is realizing the mistakes you have made, and moving on, even if it is at a small loss or minimal profit. I have sold a few coins at a loss, and have moved on. I'm not talking about loss in thousands of dollars, more like a few hundred at most.
When the investment discussion comes in, things can get a little tricky. Personally, I am hoping to hold on to my collection for many years, and plan to pass it down to my kids. Long term I hope they keep it in the family as heirlooms, and if they need the money or are in a jam, sell them. But along with that, my hope is that the coins I have purchased will AT LEAST retain their value. Based on the history of numismatics, which has been a hobby since the 1800's, the majority of coins have gone up in value. My collection consists mostly of coins from the late 1700's and 1800's in problem free condition. Some early copper have issues, but there is still a market for them. The more valuable coins are in PCGS holders and are CAC'd. Large cents are raw in a dansco except for the key dates (1793 chain, 1793 wreath, 1799, 1804).
Unless the floor drops out on coin collecting, and people just stop, I cant see that quality early american coinage will drop to very low levels. So while I am not buying and selling as an investment hoping for 200% returns, I am hoping the coins I have will keep their value or go up a little bit over the next 40-50 years. For those collectors who have been at this for a long time, what thoughts do you have on this? As collectors putting time and money in this hobby, can we expect our quality coins will retain their value based on historical trends?
Or am I just nuts?
Ankur
When the investment discussion comes in, things can get a little tricky. Personally, I am hoping to hold on to my collection for many years, and plan to pass it down to my kids. Long term I hope they keep it in the family as heirlooms, and if they need the money or are in a jam, sell them. But along with that, my hope is that the coins I have purchased will AT LEAST retain their value. Based on the history of numismatics, which has been a hobby since the 1800's, the majority of coins have gone up in value. My collection consists mostly of coins from the late 1700's and 1800's in problem free condition. Some early copper have issues, but there is still a market for them. The more valuable coins are in PCGS holders and are CAC'd. Large cents are raw in a dansco except for the key dates (1793 chain, 1793 wreath, 1799, 1804).
Unless the floor drops out on coin collecting, and people just stop, I cant see that quality early american coinage will drop to very low levels. So while I am not buying and selling as an investment hoping for 200% returns, I am hoping the coins I have will keep their value or go up a little bit over the next 40-50 years. For those collectors who have been at this for a long time, what thoughts do you have on this? As collectors putting time and money in this hobby, can we expect our quality coins will retain their value based on historical trends?
Or am I just nuts?
Ankur
All coins kept in bank vaults.
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
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Comments
I enjoy the heck out of the history of the coins, the various designs and reasons why they were chosen, the background that comes from books like those from some of our very own board members (I'll refrain from naming names so as not to leave anyone out) and just the general feeling I get from holding something that existed in commerce and American activities in the early days of this country.
If there is a profit at the end of it all, that's a lucky benefit, but I'm certainly not collecting that way. I collect for pleasure.
PLEASURE
IMO, you must look at coin collecting as an investment by always trying to get the best possibly price, and the highest quality for that price.
<< <i>Coin collecting is an Investment. I truly believe my "investment" grows bigger each and every day.
IMO, you must look at coin collecting as an investment by always trying to get the best possibly price, and the highest quality for that price. >>
On a side note, I have an associate at my office and everything he buys is @double the price it should be and likely to be worth only face in the future...I'm working on converting him...
I plan to either A) Open a museum charting the course of money over history (or hopefully as a feature of a general museum- who besides me lists museum operator as their dream?)
<< <i>I do it to bond with my children... I could care less how much money I lose buying and selling coins; this hobby is all about my children. >>
That is a very nice statement. Being a fairly new father it struck a cord with me.
<< <i>If you intend to hand down you coins to your kids it is an investment for them....one that we as collectors enjoy. Its a win win as long as whoever receives your collection is instructed in the proper sales techniques should the need or desire arise. >>
Agreed. That is why I have codes on the back of all of my coins with what I paid for them. My wife and I are the only ones who know the key to those codes.
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
<< <i>It is an investment, an investment in enjoyment. >>
This matchs my feelings exactly. I honestly couldn't care less whether after I'm dead someone either does or does not make a dime from my collection. I didn't put it together for anyone's benefit but my own. That's why I only spend personal enjoyment dollars on my coins. As far as I am concerned once spent those dollars are just as gone as they would be if I had spent them on any other form of entertainment.
My kids will be fine financially after I'm gone whether they sell off my collection at ten cents on the dollar or for multiples of what I paid. It is my opinion that anyone's heirs won't be is spending too much money on a hobby.
<< <i>
<< <i>It is an investment, an investment in enjoyment. >>
This matchs my feelings exactly. I honestly couldn't care less whether after I'm dead someone either does or does not make a dime from my collection. I didn't put it together for anyone's benefit but my own. That's why I only spend personal enjoyment dollars on my coins. As far as I am concerned once spent those dollars are just as gone as they would be if I had spent them on any other form of entertainment.
My kids will be fine financially after I'm gone whether they sell off my collection at ten cents on the dollar or for multiples of what I paid. It is my opinion that anyone's heirs won't be is spending too much money on a hobby. >>
Very well said bustchaser.
My coins are also my hobby. I have worked very hard to secure investments for my family once I go to meet my maker. My coin collection
could be given away without an impact on my kids inheritance. Now if they choose to keep them for their enjoyment or sell them for their
enjoyment is their choice which won't bother me either way.
Once I spend money on a coin for my collection I consider it money spent-gone as if I spent it in Vegas.
When the bank told me what they were paying on a CD I was about to renew, I realized that I probably wouldn't do a lot worse just buying some coins with that money....and I knew it would be a lot more fun! I was right!
I don't think of coins as an investment and don't buy with that in mind, but the "holding their value" idea is kind of an incentive to buy since I enjoy the hobby so much.
Pete
Louis Armstrong
<< <i>For the same reason we spend so much time and money listening to the Grateful Dead, watching Steelers games, and traveling to interesting places. >>
Because we can?
I retain significantly more value with the coin COLLECTION, than I do with say:
Hunting
Fishing
Golfing
Shooting
If I had all of the money I've spent on green fees, license fees, equipment, tackle, gasoline, clothes, bullets etc.,
I'd be rich. I enjoy all of those hobbies, and coin collecting too. So I don't get too bent out of shape if I sell for a loss, give someone else a deal, or pay up every now and then. In the end, I have fun with it.
100% Positive BST transactions
<< <i>For the same reason we spend so much time and money listening to the Grateful Dead, watching Steelers games, and traveling to interesting places. >>
I can lose all track of self and time while looking at auction lots, until my stiff neck brings me back in to the real world.
I can remember that happening in much younger years at a GD concert, but that might have been the drugs
<< <i>
<< <i>For the same reason we spend so much time and money listening to the Grateful Dead, watching Steelers games, and traveling to interesting places. >>
I can lose all track of self and time while looking at auction lots, until my stiff neck brings me back in to the real world.
I can remember that happening in much younger years at a GD concert, but that might have been the drugs
What kind of drug gives you a stiff neck... Viagra?
Say I was collecting the state quarters. Each one can be acquired for the high price of 25c (face value) and while it may take months to complete the series, it can easily be done.
But- while completing the series is part of the hobby, shelling out $50 a piece for each state in circulated condition is just plain stupid.
Same with "rare" coins. Each coin tends to have a "going rate" -give or take and paying $100 for a coin that can easily be bought anywhere else for $1 is once again just plain stupid.
So- those of us who purchase coins for the hobby;
We are not "stupid" people (hopefully) and we know that when a 1916-d mercury dime comes along in g4 condition, we know to pay anywhere between $650-$1000 (I left the margin wide). you buy the coin because now you have one for your set, but you are financially wise enough to know that what you paid- theoretically- can be gotten back for the coin if for some reason you DO need to sell.
And that is why you keep your code on the back. Yes you are buying the coin because you love the hobby and you dont plan on selling. But you made an "investment" with your money (either buying a coin or as RYK stated go to a football game) and because of that- when/if the coins ever DO need to be sold, the person that has the coins has an idea as to what the coin could/should be worth.
<< <i>While you may not look at coin collecting as an investment, as many coins are not "common", money does play a large factor in this hobby.
Say I was collecting the state quarters. Each one can be acquired for the high price of 25c (face value) and while it may take months to complete the series, it can easily be done.
But- while completing the series is part of the hobby, shelling out $50 a piece for each state in circulated condition is just plain stupid.
Same with "rare" coins. Each coin tends to have a "going rate" -give or take and paying $100 for a coin that can easily be bought anywhere else for $1 is once again just plain stupid.
So- those of us who purchase coins for the hobby;
We are not "stupid" people (hopefully) and we know that when a 1916-d mercury dime comes along in g4 condition, we know to pay anywhere between $650-$1000 (I left the margin wide). you buy the coin because now you have one for your set, but you are financially wise enough to know that what you paid- theoretically- can be gotten back for the coin if for some reason you DO need to sell.
And that is why you keep your code on the back. Yes you are buying the coin because you love the hobby and you dont plan on selling. But you made an "investment" with your money (either buying a coin or as RYK stated go to a football game) and because of that- when/if the coins ever DO need to be sold, the person that has the coins has an idea as to what the coin could/should be worth. >>
Very well said!
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
In honor of the memory of Cpl. Michael E. Thompson
I've seen a number of purist collectors state over the years that they could care less what they had to spend on their coins, that they were never going to sell them, etc, etc.
Then a year or few years later they are on the BST selling out because of "whatever" reason. Then they proceed to take a beating on their coins and are irate about it.
Just saying.
roadrunner
<< <i>Perhaps I am overly cynical, but I believe that at least part of the reason that the idea that numismatics is not an investment has been hammered at collectors over the decades is so that those collectors will not seek a positive return on their investment when it comes time to sell and that those collectors will be of a mindset that it is not only okay to lose part of the initial investment, but that one should expect to lost part of the initial investment. For me, I invest time, money and energy in numismatics and I wish to waste none of these. >>
Exactly!
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>
<< <i>Perhaps I am overly cynical, but I believe that at least part of the reason that the idea that numismatics is not an investment has been hammered at collectors over the decades is so that those collectors will not seek a positive return on their investment when it comes time to sell and that those collectors will be of a mindset that it is not only okay to lose part of the initial investment, but that one should expect to lost part of the initial investment. For me, I invest time, money and energy in numismatics and I wish to waste none of these. >>
Exactly!
Part of the enjoyment for me is finding undervalued pieces that will and have risen in value.
The same reason we collect Hermès silk handkerchiefs; though not as heavenly soft.
<< <i>Perhaps I am overly cynical, but I believe that at least part of the reason that the idea that numismatics is not an investment has been hammered at collectors over the decades is so that those collectors will not seek a positive return on their investment when it comes time to sell and that those collectors will be of a mindset that it is not only okay to lose part of the initial investment, but that one should expect to lost part of the initial investment. For me, I invest time, money and energy in numismatics and I wish to waste none of these. >>
So who is doing the "hammering", dealers? Is to condition the masses to expect to lose when they sell back to the dealers?
Somethings got to change here. I think the government needs to start registering dealers the same as securities brokers.
<< <i>Coin collecting is a hobby and a business. Your motivation may be with either persuasion, or somewhere in between. For many (especially here on the forum) it is undoubtedly considered an investment. There are also those who enjoy the hobby for the aesthetics and/or history, with no intent of profit. My hobbies, of which there are several, are all enjoyed without thought of monetary gain. I simply have fun with each and while I have memento's (coins, pictures, items etc), they are not for sale, they are for my musings and memories. Cheers, RickO >>
But if you did ever have to sell your collection, its nice to know that what you have spent countless hours on will retain its value, no?
PCGS Registries
Box of 20
SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>
<< <i>Coin collecting is a hobby and a business. Your motivation may be with either persuasion, or somewhere in between. For many (especially here on the forum) it is undoubtedly considered an investment. There are also those who enjoy the hobby for the aesthetics and/or history, with no intent of profit. My hobbies, of which there are several, are all enjoyed without thought of monetary gain. I simply have fun with each and while I have memento's (coins, pictures, items etc), they are not for sale, they are for my musings and memories. Cheers, RickO >>
But if you did ever have to sell your collection, its nice to know that what you have spent countless hours on will retain its value, no? >>
RickO said it better than I did. If my collection ever does come up for sale, I'll be dead and it won't matter. This is no "time to sell" for me.
<< <i>
<< <i>Perhaps I am overly cynical, but I believe that at least part of the reason that the idea that numismatics is not an investment has been hammered at collectors over the decades is so that those collectors will not seek a positive return on their investment when it comes time to sell and that those collectors will be of a mindset that it is not only okay to lose part of the initial investment, but that one should expect to lost part of the initial investment. For me, I invest time, money and energy in numismatics and I wish to waste none of these. >>
So who is doing the "hammering", dealers? Is to condition the masses to expect to lose when they sell back to the dealers?
Somethings got to change here. I think the government needs to start registering dealers the same as securities brokers. >>
Sorry DB... but in my humble opinion, it is not the government's job to "protect" us from our own stubborn ignorance... I would never "believe" what a licensed person has to say, simply because they have a license. I will educate myself and slowly develop a relationship with someone to find out if their word/opinion can be trusted... yet ultimately, I am responsible for my own decisions... whether I am investing in stock... buying a car... buying a coin... whatever...
If I am outright deceived then I can choose to turn to legal council if need be... yet even then I would feel a need to do my OWN research and not simply accept the word of a person, simply because they have some license or so-called credentials or governent sanction... heck, I am wary of even trusting the government... and I work for them LOL
... I feel the same way about Doctors... my health is MY responsibilty and I need to be responsible for it... if I am not, then even the finest doctor on earth can not help me in the long run...
Many in our society have gotten far too complacent and depend on "others" rather than possessing self-reliance... we are quick to blame others and seem to feel entitled to much...
The last thing I would want to see is MORE government intervention... especially into this hobby... I would make a quick exit if that were to happen...
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Perhaps I am overly cynical, but I believe that at least part of the reason that the idea that numismatics is not an investment has been hammered at collectors over the decades is so that those collectors will not seek a positive return on their investment when it comes time to sell and that those collectors will be of a mindset that it is not only okay to lose part of the initial investment, but that one should expect to lost part of the initial investment. For me, I invest time, money and energy in numismatics and I wish to waste none of these. >>
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
and eye appeal. Collecting had become a mania by the 1980's and there were, and still are, people collecting almost everything, and everything had it's own guidebook and price guide, just like the coin market.
I have always been a collector, and the thought that I was going to make money in any field has never been of importance, what was paramount was getting certain objects before their prices made them unobtainable. In retrospect I should have kept those Golden Age comic that got me started in the early 70's. I had a few chances to literally become very affluent ( one friend did with Carl Barks art, another with sports memorabilia) but didn't make the "right" moves and have had to content myself with slowly amassing a couple of collections, that, with my coin collection, represents what most Americans don't make in a few years. This working for a utility company most of my working life.
I would hope that my "things" would hold some of their value, some of them have fluctuated and many areas of collecting are experiencing the doldrums in regard to price, but this is generally for the low end, even the middle range has been affected. However if you buy the best you can afford and possess or develop a good eye, I believe you will enter your older years with a "nest egg" that most don't have.
Agree.
Well said - I could also insert my family, friends, faith, art, other collectables, antique furniture, my home and business.
and eye appeal. Collecting had become a mania by the 1980's and there were, and still are, people collecting almost everything, and everything had it's own guidebook and price guide, just like the coin market.
There's a very logical reason why "collecting" so many things has become a mania over the past few decades. And you don't have to look very hard to find the reason. Without it, most of these collectible areas would have remained the realm of the pure hobbyists.
roadrunner
I tell people that everyone should have a hobby especially when the word retirement comes into the conversation.You need something to replace the time you lost through retirement.
I have a few hobbies,one happens to be coin collecting,plain and simple it relaxes me.I love the thrill of the hunt,and it keeps my mind busy with the "strategies" involved in collecting.
So with the time involved it is an investment,also I look it as an investment financially also,part of the thrill is selling a coin for profit and using that money to add or enhance your collection.Part of my plan is looking at other series and finding that one coin that could potentially make me a profit.
Just to sum it up: It relaxes me,I love the thrill of the hunt,and finally,if it can me me a profit that is just a bonus.
Rob
I’ve made a far amount of realized income from my collection, and I used what I’d learned, together with my business college degree, to earn a living for 12 years after I’d had enough of working for somebody else. I guess from that you would have say that I’ve gotten some pretty good returns.
With the exception of my time as a coin dealer, I’d say that profits from coins have been a pleasant by-product from a most enjoyable hobby. And I still remember what the late Malcolm Forbs wrote years ago when he was trying to dissuade stock market from getting into coins. He wrote, “Collectors always buy well.” That’s not always true, but there is a much greater chance that those who study the hobby and know its ins and outs will buy better than those who go into it with no experience strictly for profit.
It’s like picking the right major in college. If you concentrate on a subject that really interests you, it’s a lot easier to spend a lot of time learning about it, and chances are you will succeed.