Appreciating Collectibles – Make Money From Your Hobby

The following is a guest blog post:

Whether you are into coins, stamps, fine wines or classic cars, you probably tell yourself and your loved ones from time to time that your hobby is also an investment. We have all seen the tales of a childhood collection of Star Wars memorabilia or a work or art languishing in an attic for years that have turned out to be worth millions.

Increasingly, the eyes of the investment world are looking to just these kinds of examples as alternative investments that they can add to their portfolio. Could your own personal collection constitute that retirement fund you need? And if you don’t have any collectibles, should you consider acquiring some? Let’s take a look at some of the most popular collectible investments.

Coins

Coin collecting is one of the most popular and historic hobbies around – which is hardly surprising, given that the first coin is thought to have been made in around 600BC. Coin collections come in various shapes, sizes and types. Children might collect quarters from every state, for example – fun and educational, but not, of course, an appreciating investment. On the other hand, the serious collector might buy Morgan silver dollars from Golden Eagle Coins. Minted around the turn of the century, these are hugely popular among collectors, and values vary depending on condition.

Coins are simple to take care of, do not take up much space and will only appreciate in value. All in all, it is hard to see a downside.

Classic cars

From the iconic vehicles of the 1960s like the Jaguar E-Type to 1980s sedans that were commonplace a generation ago but have suddenly acquired scarcity value, it seems that anything with a wheel on each corner starts going up in value so long as it manages to survive for 30 years.

On the face of it, that sounds like a winning formula. After all, a new car depreciates rapidly, so why not drive a classic? You will get all the fun of driving something unusual, and your car will be going up in value instead of down.

Of course, there are several flaws to that idea. One is that the more you use a classic car, the more wear and tear you will put on it, meaning more cost to keep it in top condition. You will also be adding value-crippling miles to the odometer. Even if you keep your beautiful classic cocooned in the garage, it will need money spent on maintenance – cars need to be used, and do not respond well to standing for extended periods.

Fine wines

Most of us love a glass of wine, but as with the classic cars, if you buy from an investment perspective, it is all about storage and maintenance as opposed to enjoyment. A bottle of wine is also fragile – so while it might not be as demanding to look after as an automobile, you will still need to treat your investment with extreme care, storing it in the right atmospheric conditions.

4 thoughts on “Appreciating Collectibles – Make Money From Your Hobby

  1. I always find collectors really interesting. However, it’s just not for me. Storage, care, maintenance, insurance, research, etc. turns me away from this area of investing. I will stick to financial assets. I will say however, it is weird to think sometimes of having all of our assets aside from our house represented on nothing more than a computer screen. Sometimes it’s nice to be able to touch, drink, wash/wax what you own. Tom
    Tom @ Dividends Diversify recently posted…The New Millionaires | Demographics | Part 3My Profile

    • Hi DD,

      I guess it’s just the nature of the beast. Any collectible is a tangible asset and tangible assets usually require some sort of maintenance, security and other costs just to remain in ideal condition. As you stated, collectors tend to be of a different breed in that sense.

    • Hi Passivecanadianincome,

      Well said. You always have to factor in the maintenance costs of any collectible and include that in your final value. In a way it’s similar to owning a home. The asset can appreciate but there is a lot of maintenance along the way.

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