Question about collecting/investing??

[Proudtoown]

I have a question concerning collecting and investing. If I were to start building a collection over the next 20 years to have it help fund a retirement for later which is better, buying items that you like or buying items that you have no attachment to and dont really care about.

 

Heres an example: I like currency, love the art of all the different bills. I could put a real nice collection of them and enjoy them over the next 20+ years, but then my goal may not happen. I might be too attached to them or they might not be worth as much as I planned on because in the end, its only paper. OR I could take the same money, and put it into gold/silver coins. Theres no coins that I really like and could care less if its bullion or collectible, more collectible probably because you have collector value on top of the intrinsic value that could rise. At the end of 20+ years, it would be easier to part with, and if something happened, it wont be entirely worthless because of the bullion value.

 

 

[cpm9ball]

If you plan on using it to fund your retirement, then coins/currency is the last thing you want to buy. Sure, it may be possible for them to increase in value if you live to be 100, but after you've factored in inflation, it still wouldn't be that great a return.

 

You would be better off buying real estate.

 

Chris

[messydesk]

Don't love anything that can't love you in return. This applies to investing as well as many other facets of life.

 

If you want to collect, then collect, but don't look at it as an investment. For investments, use something for which you won't have an emotional attachment. Also, while collecting coins or currency can produce a positive return, overcoming the 10% + buy/sell spread takes a lot more capital appreciation than is required to break even with more traditional investments.

[coinsandmedals]

I think you may have just answered your own question, that choice is very tough to make. I know nothing about paper money and as such I can not speak to its profit range, but if you plan to invest and not collect then it only makes sense to go with the option that would be the most profitable.

[MJ]

Invest in things you know or find somebody that does. Collecting is not investing. MJ

[Proudtoown]

Chris,

Luckly it wont be to completly fund my retirement with the plan I am using, it will more likely be used for those extra spending times. I am retired AF, so I get that check every month, plus 80% disabled, so I get a VA check also. I currently work for the government also, so in 20 years I will have another government retirement. By then, I wont have any bills other than basic living items and utilities, so my monthly income should cover my living expenses. I have money in the stock market, IRA, 401K and 2 houses. What I'm looking at is putting 10% per month into something and I dont want in 20 years for it to be completly worthless, which could happen with the area of collecting I like and enjoy. Plus, who know in 20 years if it will be easy to just sell, its not as liquid as other assets such as bullion. That being said, if I were to park the money into something else such as, coins/bullion, it would be easy to sell in 20 years if I needed to.

[HCumberdale]

If you don't have a financial planner that has helped you set up your IRA, stocks, and 401k then my advice would be to get one and ask them the same question. There are funds that traditionally hold 10 - 20 % of assets in bullion, and your financial planner should be able to direct you towards these funds. Alternatively, if you are set on taking physical possession of your bullion, you should call your financial planner to arrange this for you so you can take advantage of the tax benefits of putting bullion in your IRA.

 

As a side note, if your financial planner is "free" through your bank or otherwise, it is probably in your best interest to fire them. "Free" financial planners put your money in the funds that offer them the greatest kickbacks without too much regard to whether you will make money or not. It is usually best to go with one who will charge you by the hour, or someone who will charge you a low % of the assets they manage. Your "free" financial planner will of course frown heavily on any investment that does not involve him.

 

I agree with other posters that you probably do not want to use collectibles as an investment, although I will say that I do appreciate the fact that when I do sell/trade-up my coins, I can expect to get a price above $0, and generally fairly close to what I paid. There are plenty of collectibles where that is not the case. Of course if you are a novice in numismatics or otherwise, you can lose a lot of money fast. Stick with what you know and tread carefully when exploring new horizons.

[Kurtdog]

I don't know of anyone who made money selling their collections.

[Bruceswar]

I don't know of anyone who made money selling their collections.

 

 

You cannot be serious? I know many people who did, but not everybody does.

[HCumberdale]

I don't know of anyone who made money selling their collections.

 

 

You cannot be serious? I know many people who did, but not everybody does.

 

+1

[MJ]

I don't know of anyone who made money selling their collections.

 

 

You cannot be serious? I know many people who did, but not everybody does.

 

+1

 

+2

 

MJ

[RWB]

"Collecting" and "investing" are very different critters.

 

Never plan to use a collection to help fund retirement.

Use investments in economic growth to do that.

 

Some coin businesses like to promote coins as long-term investments, however their selection criteria are largely after-the-fact. Additionally the coin market is extremely small and thinly traded with each coin being distinguishable from another.

 

[BillJones]

I don't know of anyone who made money selling their collections.

 

I know a great many people who have made money from selling their collections because I belong to organizations like the Early American Coppers Club that is made up almost entirely by very dedicated collectors. I've know collectors who made astronomical profits from their collections when they sold them, but most all of the gains were long term wins, not flashes in the pan. The late Malcolm Forbes once wrote than "Collectors almost always buy well." The reason for that is the studying the coins you like and the market for them is not work for a collector; they enjoy it. Therefore that study usually results in informed purchases.

 

Collectors also tend to know what other collectors like. They tend to avoid problem coins because they don't like them and other really dedicated collectors think the same way. Most investors don't have clue as to what coin collectors really like. They get hung up on very high grades, current promotions and advice from "experts" who are often more interested in selling what is easy to find instead of items with a true collector following.

 

I'm not a paper money expert so I can't tell you much about that market. I have dabbled in some paper like Fractional Currency and some colonial stuff, and my impression is that I could get out with a gain if I went to sell it, but I don't know for sure. I do know that I could sell my coin collection at a profit even though I've bought some expensive stuff in recent years and probably over paid for it. The coins I've owned for over a decade would bail me out, if my perceptions are accurate. I know the main profit I've gotten has been pure enjoyment, and if I can sell after that at a profit, I have been truly blessed.

 

I'd say that you might do well to approach this as a hobby for entertainment and forgo the investment thing. If you make a profit, more power to you, but I would not put my retirement nest egg into to hobby related items.

 

[Kurtdog]

Investing in coins is like investing in stocks. In the short term, anything can happen. In the long term, unless you're somebody truly exceptional--and, I'll add to that, very lucky, besides--you're a loser. I'm sorry, but from what I've seen and know, coins are one of the worst long term investments there is.

[halfpint]

 

...since the election i would think the money makers would be investing in tear gas, ammunition and gun manufacturer stocks.

[BillJones]

Investing in coins is like investing in stocks. In the short term, anything can happen. In the long term, unless you're somebody truly exceptional--and, I'll add to that, very lucky, besides--you're a loser. I'm sorry, but from what I've seen and know, coins are one of the worst long term investments there is.

 

My experience as a collector and a dealer in "classic coinage" has been the direct opposite. Just about anything that I have owned for more than a decade I can sell at a number higher than what I paid. If you adjust for inflation, I might end up down, but even that would be rare for me.

 

If you have spent a lot of money on modern coins, I can understand how you have lost your shirt in the long run. Most modern coins that have a fad period, where the flippers make money, have had a very poor track record over the long haul. I used to post a list of these losers that I have seen as a collector since 1960. Dredging my memory banks, here are a few:

 

1. 1960 Small date cent (The Proof was once $50.00 in early 1960s dollars)

2. 1950-D Nickel (Once was $35.00 in 1964 dollars)

3. 1964 Proof set (Yes it once sold for $35.00 in 1964 dollars.)

4. 1968-S Proof set (Yes it once sold for $35.00 in 1968 dollars)

5. 1973-S Silver Proof and Unc. Ike dollar. (The silver Proof was once over $200; I sold one to a dealer at $175 when bid was over $200. I KNEW where it was going.)

6. 1973 Mint Sets because of the "rare" not made for circulation Ike dollars.

7. 1975-S Proof set (Sold for over $25 because it had the "rarest" Lincoln cent in it since the 1914-D.)

8. 1986 Statue of Liberty three piece set once sold for $450.00 when gold was less than $300 an ounce.

9. 1995-W silver eagle (Still an expensive coin, but with a mintage of 30,125 destined to continue to head south from the lofty levels it once was. (Over $4,000)

10. Various Proof sets from the 1990s. I forget the exact dates, but I just looked at the Gray Sheet and thought to myself, "Somebody is crazy!" They once were pushing $100, now you would be lucky to get a fraction of that.

 

If you bought any of these modern coins that were heavily promoted at the time of issue, you became a loser.

 

[HCumberdale]

From my limited perspective as a collector for only 10 years, this all sounds accurate to me. Classic coins seem to do rather well, though strictly as an investment I don't think they are likely to be your best choice. As a collectible, I think they are quite nice indeed, and you stand to not lose money in the process while (hopefully) enjoying yourself.

 

If all you want is an investment, I repeat my earlier advice: consult a financial planner.

[Buffalo Head]

 

+1

 

 

+2

 

MJ

Yep, struck a cord with that one....

[RWB]

...since the election i would think the money makers would be investing in tear gas, ammunition and gun manufacturer stocks.

 

Sorry, I don't understand the comment.

[derryb]

If building a retirement, consider gold and silver bullion coins graded (certified authentic) 69 by a leading TPG.

[newprepper]

From my experience over at the water cooler, that comment will get you in trouble

[BillJones]

If building a retirement, consider gold and silver bullion coins graded (certified authentic) 69 by a leading TPG.

 

I don't know why TPG involvement is necessary for bullion gold coins. All it does is add to the purchase price. A grade of anything less than MS-70 adds nothing to the value, and I'm not aware that the Chinese or others are counterfeiting American gold eagles.

[BKW]

 

I think Bill's making some good points here.

 

 

[$ilverHawk]

I don't know of anyone who made money selling their collections.

 

I know a great many people who have made money from selling their collections because I belong to organizations like the Early American Coppers Club that is made up almost entirely by very dedicated collectors. I've know collectors who made astronomical profits from their collections when they sold them, but most all of the gains were long term wins, not flashes in the pan. The late Malcolm Forbes once wrote than "Collectors almost always buy well." The reason for that is the studying the coins you like and the market for them is not work for a collector; they enjoy it. Therefore that study usually results in informed purchases.

 

Collectors also tend to know what other collectors like. They tend to avoid problem coins because they don't like them and other really dedicated collectors think the same way. Most investors don't have clue as to what coin collectors really like. They get hung up on very high grades, current promotions and advice from "experts" who are often more interested in selling what is easy to find instead of items with a true collector following.

 

I'm not a paper money expert so I can't tell you much about that market. I have dabbled in some paper like Fractional Currency and some colonial stuff, and my impression is that I could get out with a gain if I went to sell it, but I don't know for sure. I do know that I could sell my coin collection at a profit even though I've bought some expensive stuff in recent years and probably over paid for it. The coins I've owned for over a decade would bail me out, if my perceptions are accurate. I know the main profit I've gotten has been pure enjoyment, and if I can sell after that at a profit, I have been truly blessed.

 

I'd say that you might do well to approach this as a hobby for entertainment and forgo the investment thing. If you make a profit, more power to you, but I would not put my retirement nest egg into to hobby related items.

 

Bill, a very insightful reply and very sage advice. I agree 100%. A dedicated collector with years of experience will amass a collection that most certainly will yield a positive return in the market place. Astute collectors do not buy with a profit motive, they buy well because they have studied their areas of interest and buy the coins that fit their goals regardless of potential profit.

 

Carl

[AnkurJ]

Since you have your investments and your cost of living set, I will give you these few pieces of advice which will work for any aspect of collecting.

 

1. Be patient. Even if you think something you're looking at will never come along, chances are, it will. Take your time with it.

 

2. Buy quality. This ties in to #1. The worst purchases I made were in haste simply to fill a hole. Many times, these items were not quality. If you do, these items WILL go up in value over time. Every quality piece I have bought, whether it be comics, art, or coins have gone up in value.

 

NOTE: I am not talking about coins whose prices have a strong correlation with bullion values.

 

3. Ask questions. The more you ask, the more you will learn. Either on this board or another. Keep in mind everyone will have their own opinion as you have already seen here. With that said, there are many people here who have vast amounts of knowledge and will be very helpful.

 

4. Have fun! If you aren't, then stop what you're doing and reasses.

 

I am personally taking a break from coins right now as I am happy with what I have. There are a handful of coins I would like to add, but they are extremely rare or expensive. So to keep things fresh, I went back to collecting vintage comics as you can see from my sig line.

 

Ankur

[newprepper]

I went back to collecting vintage comics as you can see from my sig line.

 

Ankur

 

You should put out a media release on the other boards, that way they won't think you're a coinee, you'll get more respect over there..................hahaha

[thehumantorch]

I went back to collecting vintage comics as you can see from my sig line.

 

Ankur

 

You should put out a media release on the other boards, that way they won't think you're a coinee, you'll get more respect over there..................hahaha

 

Too late

[newprepper]

Are you slumming Torch?

[Nutmeg Coin]

Semi-numismatics purchased around GS have done quite well over the last ten years. type gold with small premiums are one of the safest investments, but there is quite a bit of opinion variability on where the precious metals are going. I would go to a few coin shows, look for the most honest dealers who invest in what they personally sell, and follow sharp collectors/investors who buy smart. Asset preservation is rule number one when it comes to investing.

[James_OldeTowne]

My advice is simple: do NOT mix "investment" with a hobby.

 

Of course, it MIGHT pay off, and handsomely, but I think the pressure of "performance" kills the enjoyment aspect of such a fabulous hobby like collecting coins.

 

Collect ONLY with EXPENDABLE funds, and value the enjoyment as the primary return on your efforts, rather than worrying about the financial value.