Poll: Have you ever gone into debt to buy a coin for your collection?
IGWT
Posts: 4,975 ✭
Well?
0
IGWT
Posts: 4,975 ✭
Comments
$3200 loan...and I'll do it again
I have had a coin held on payments, but I won't use a credit card or take a loan/mortgage etc to fund my hobby.
I haven't yet...but I'm not against it.
Russ, NCNE
54 years old and debt free.....
If you don't have the money, don't buy it.
Recipient of the coveted "You Suck" award, April 2009 for cherrypicking a 1833 CBHD LM-5, and April 2022 for a 1835 LM-12, and again in Aug 2012 for picking off a 1952 FS-902.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>If you mean running up the credit card a bit.......Yes.
IMO, that counts as long as you didn't have the funds to pay it off at the end of the month. I've bought on plastic plenty of times...but only when I could pay it all off at the end of the month. I think as long as you set the funds aside to pay the bill when it comes due, it's not really "debt" in the traditional sense.
If you see a "must have" coin that you know is undervalued, what's 8% juice on a 50% gain?
I recently picked up a coin I believe will become increasingly more expensive and tough to come by. If I didn't have the funds at that time, borrowing might have been an option.
1-Dammit Boy Oct 14,2003
International Coins
"A work in progress"
Wayne
eBay registered name:
Hard_ Search (buyer/bidder, a small time seller)
e-mail: wayne.whatley@gmail.com
<< <i>No..and i can't imagine that it could possibly happen............to me >>
It can and it likely will.
Without debt we'd be a 3rd world country.
<< <i>Debt is killing the nation?
Without debt we'd be a 3rd world country. >>
And with too much debt, we can become one.
Debt used responsibly is not a bad thing; all things in moderation and all that. When too many people take on more debt than they can afford -- especially for non-essentials -- it could end ugly.
And as far as the national debt goes, given how much China owns...yes, they could derail us in a hurry. Too much national debt held by non-U.S. interests is a threat to economic security and stability.
maybe the dog if it came up for sale.
bob
<< <i>
<< <i>No..and i can't imagine that it could possibly happen............to me >>
It can and it likely will.
Probably not, but of course I don't run in the same cost lane of coins you folks do.
I sure didnt mean anything bad.
1-Dammit Boy Oct 14,2003
International Coins
"A work in progress"
Wayne
eBay registered name:
Hard_ Search (buyer/bidder, a small time seller)
e-mail: wayne.whatley@gmail.com
If the coin market tanks, and the economy sours, not only will the borrowed money coins go down in value, but so will the rest of the collection. The double and triple whammy is that any sources of income from employment, investments or rents, may also get hit so the debts can become overwhelming. 15 years of mostly up prices in the better coins have lulled people to complacency. When the music stops those folks with standing debt, assets that are going down in value, and what used to be dependable income now missing, may be in a very bad place.
Coin collecting is a hobby, treat it like a hobby. The sky isn't falling, but I repeat my opinion that borrowing money to fund a hobby is foolish.
Took another 18 months before I found a coin like this one for my collection. There is no such thing as coin I must have. Collecting is a hobby, done with discretionary funds. I have walked away from many nice coins that I could not buy and pay for them in full at the time.
IMO, the only things worth going into debt over follow:
Buying or doing a major remodel on a house
A new automobile
A child's education
Drastic measures to save / prolong a loved one's life.
Everything else is discretionary and can wait.
"Seu cabra da peste,
"Sou Mangueira......."
The name is LEE!
have bought some really crappy stuff.
Debt is not a good thing for anything except perhaps a modest home and education at a last resort. Debt is killing this nation and sucking the life blood from everyone who succumbs to it.
I disagree--for the most part--consumer debt fuels the economy.This is a dirty little secret that the government does not want you to know--They are the big lenders. Banks are just the go-betweens. Most people cannot afford to pay a new car off in cash either..The government is making money by lending money. Many more goods are sold because of plastic power. For some reason it is a lot easier to use a credit card when paying for a new purchase than using cash. It just seems cheaper. (even though - in reality- it is a lot more expensive.)
Try going into business without going into debt.
Most working stiffs (including myself) cannot save up enough money to buy a new car for cash--so we make small payments once a month. This way it does not seem as expensive and is doable.
I will go into debt for the right coins. Bob
Thankfully I'm friends with a Pawn Shop owner & he let's me 'float-a-loan' whenever I find something I just _GOTTA HAVE_
No need for your condescending reply. "Borrowing" doesn't infer that the funds won't be available. Hell...almost every big collector I know has borrowed to get a rare coin when it came up at a time of illiquidity. Foolish? Actually, by smart people it can be brilliant.
But it won't necessarily be because of coins. It will be because of what one poster has already described as "cars, homes, etc" that the average Joe "cannot pay in cash". I disagree. If the average Joe had a little common sense and patience, they most certainly could pay for their house and automobile in cash. I'm not against financing a home if the conditions are right (assuming a recessed market with lots of upside potential, and investment returns exceeding mortage rates), but automobiles are never wise to finance. I've owned 6 cars in my life, and only the most recent car was purchased new. All were paid for in cash. I began with a used $2000 car, and every 3 years or so I sold it and purchased another used car for slightly more money. I focused on vintage autos that I could work on in my spare time and add value to them--everything I buy, I want to appreciate. The problem is that most new things only depreciate, or they are consumables (total waste of $$). I furnished my home in antiques, and so there are very few things I own that I cannot sell for more than what I paid. Wal-Mart mentality makes me cringe.
<< <i>Hey RedTiger.
No need for your condescending reply. "Borrowing" doesn't infer that the funds won't be available. Hell...almost every big collector I know has borrowed to get a rare coin when it came up at a time of illiquidity. Foolish? Actually, by smart people it can be brilliant. >>
My apologies if offense was taken. However, I stand by my opinion and believe I am helping the many new collectors that read these boards by stating it, and stating it in harsh terms. If you don't like my opinion, you are welcome to have a different one. For me, the two biggies for new collectors are collect what you like, and have the money before buying the coins (no borrowing, especially no credit card debt). Things change, and when change happens it often happens quickly. Jobs are lost, cash emergencies happen. Often times these events happen when the value of collectibles also takes a big hit and no one wants to buy coins even at 50% discount from what was paid a few months earlier.
I don't have a clear idea of what you mean by funds will be available. To me that implies short term illiquidity and not real debt. If you mean situations such as having the money in a CD or bond that is coming due, or an inheritance that is clearing probate, and that the coin will be paid off in full, in short order, with guaranteed money, that isn't really borrowing in my mind. To my mind, borrowing implies not having the money, and pledging future income streams to pay off the note. Again, if things turn bad, any income streams may be cut off or cut down, and the perceived value of the collectible may also fall rapidly. In my mind, it just isn't worth taking that kind of risk for hobby coins and those doing so are fools.
There hasn't been a serious coin market downturn in over a decade. When it does turn, many of the seemingly brilliant dealers and collectors buying coins on margin will get hurt instead of getting bailed out by the rising market. Some of them will get hurt badly.
There are exceptional circumstances, where truly exceptional coins become available. However, even for these exceptions, they are only suitable for experienced veteran collectors, not for folks with less than five years in the hobby.
From the poll results it appears that the majority don't share my strong opinion. That doesn't mean I am going to change my opinion. I will continue to state my opinion for the many new collectors that are easily influenced and continue to believe I am being of service by doing so. Again, my apologies, if you find my opinions offensive. They are not aimed at you, they are aimed at the many, many new collectors, and novices that read these boards.
<< <i>i'd bet there are members who wouldn't pay 8% of a coin's value to a CardCompany over four months, but who would willingly save over those same four months to pay a 10% price increase to a dealer.......................just to stay out of debt!!!!
How many coins go up 10% every four months? 33% per year? What, maybe 1% or 2% of all classic coins, even in the current bull market?
What goes up, also goes down. What if the coin goes down 10% like a bunch of coins (Morgans, Walkers, Mercs) have in the past year? Pay 20% interest and have a coin that is worth 10% less than it was a year ago and be down 30% net-net. That's not so funny.
this could be said for perhaps the number one debt builder in America-----a new car. i'd have to view them as a terrible investment, albeit a neccessity, and almost noone thinks twice about taking out a long term loan for a purchase(don't even get me started on leases!!) i guess that's why i'm 52 and have never had a new car, and almost certainly never will.
I limited the question to buying "a coin for your collection" so that the results wouldn't include dealers who use short-term financing to buy and sell. I assume -- but I might be wrong about this -- that many dealers draw on a line of credit to even out cash flow. Using credit to operate a business is something entirely different from what I intended to ask.