Myths and Truths About Coin and Stamp Collecting
Your Grandfather may have had a coin collection or stamp collection worth $5000,
and now you want to start collecting and have a collection worth $5000 also.
Good for You! But before you get started, have a quick look at some of the facts below.
Here Are Seven Myths and Truths About Coin and Stamp Collecting …
Your Grandfather may have started that collection 50 years ago, and there is no way to know how much he invested in that collection. Most likely, he purchased the items for a premium in his day. He also probably collected those items because he had a genuine interest and passion for them, not to make money. So, factoring in inflation and profit for the shop where he purchased those items, he probably lost money on his investment.
Because YOU did not invest in that collection, the profit to you is the entire value of $5000. So when you start your own collection, keep in mind the actual cost of purchasing the items for the collection. When selling Grandpa’s collection, most people do not factor in what it cost him to purchase the collection.
Many people just think the items are valuable and therefore must be worth collecting. When in fact most collectors never make a profit on their collections.
Inherited collections, like Grandpa’s coin collection, have no relative cost to you. And inflation has been running rampant for 50 years, so those items appear to hold greater value today than 50 years ago. But in fact they actually have LESS buying power today than they did 50 years ago.
However, because of inflation, they still have a great dollar value today, as long as you DO NOT factor in their initial cost. The cost of acquiring the collection usually outweighs the actual value of the collection over time.
The average stamp collection is worth just about $20. Very few stamp collections are worth more than $100.
99% of all foreign coins are virtually worthless.
These coins hold no value outside of their country, even if they are very old!
The value of most foreign coins (and most coins) is in the precious metal content, like Silver or Gold. However, the reason 99% of all foreign coins have no value is because most of those foreign coins are made of metals with little or no value, such as tin, aluminum, copper, etc.
There are only two values that you should consider when buying or selling coins: Numismatic/collectible value, and the value of the precious metal content in the coin itself. Precious metal content is easily determined, and its value is dependent on the current market price of the metal. Numismatic value, on the other hand, is a science unto itself, and should be approached cautiously. For example, when buying late-night TV offers of “limited edition” coins, be aware – most of these items are overpriced.
In short, most collections are worth money because the collector does NOT factor in their cost when collecting. They factor in their love, therefore the collection, at least to them, is priceless.
Coin & Stamp
Commemorative Stamp Collection