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Are Collectibles a Good Investment?

Posted by Shanna Tingom, AAMS® on May 17, 2022 7:52:00 AM

Introduction

Collectibles are one of those things that people feel strongly about. Some collectors have their houses filled with nothing but collectibles, and they'll defend them. But here's the thing: when you're buying a collectible, you're not buying an investment; in many cases, you're buying something that will lose value over time. It may not be much now, but it will outweigh what you paid for it over time. 

Are Collectibles a Good Investment?

It's probably obvious, but if you're going to collect things, you have to have money to spend on them. If you're starting college or don't have any money saved up yet, collecting isn't an option. This goes for the high-end collectibles and some of the cheaper ones. We say this because even if you settle for something of lesser quality or at a lower price point, it will still cost a few hundred dollars. It would be best to start your collection with some cash to spare.

How Much Is a Good Investment?

The first question any collector has to ask themselves is: how much money do I need to save before I can afford this? That may sound easy, but it gets complicated very quickly when you look at the differences in prices. Even if you start collecting low-end stuff, like a small coin or stamp collection, it still can cost a bunch of money and take some time. 

If you only have $20 to spend, you could spend all of that trying to get a decent value for your first couple of pieces. Then you're out $30 and only have a couple of items. The quality is often inferior, so you're setting yourself up for failure if you don't get what you want. The same is valid for the high-end collectibles. If you're going to start a comic book collection and get in on the expensive stuff, you could spend vast sums of money and sit on property that doesn't depreciate.

How to Collect Without Spending Too Much

There is a way around this, though. One of the best ways to make collectibles work for you is by starting locally and then getting progressively more prominent as you go along. Let's look at comics, for example. If you find a local comic book shop with great deals, you can get ahold of some original art without breaking the bank. This lets you gain experience with different artists and styles without spending thousands of dollars upfront. As you make your way up, you can start to seek out more valuable pieces and then sell or trade down when the time comes. Then you'll have something that's a good investment and will hold its value over the long term.

Let's take a look at a couple of different types of collectibles that are available:

Stamps and Coins :

Getting started with stamps and coins can be very cheap and easy, depending on the level you want. The first thing to do is get a box, which you can pick up for about $20 or less. When you get your first few pieces, you'll know what kind of collection you want and how much cash it will take.

Comic Books :

The same is true with comics, but it's a little more expensive. You can get started by getting a couple of cheap and easy-to-read books. When you start picking up the hardcover collections, you will have to spend some money. This will depend on how much you want in the long-term, but it's not too bad if you're starting.

Conclusion

If you're going to start collecting, you need to think about what you want to do with it. If you're going to buy something and hang on to it, start small. If you want a good investment, then set yourself up for success by starting locally and slowly expanding your collection as time goes by.

Topics: Understanding Investments

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