Collectibles is a universal term for everything that can be considered as a collection. Such as antiques, art, autographs, baseball cards, clocks, coins, comic books, dolls, gems, photographs, rare books, stamps, and more. Collectibles are considered as objects with small intrinsic value.
Some people treat collectibles as something that’s valuable, and some of them also wants to invest in such. But if you want to produce income, investing in stocks, real estate, or small businesses is the best way to go. Collectibles have little intrinsic value and are therefore exposed to the whims and speculations of buyers and sellers.
The major problem with collectibles are as follows:
- Markups are huge – The price that a dealer pays for an object and the price he then sells the same object for is often around 100 percent. The difference is even greater if a dealer is the second or third middleman in the chain of purchase. So as a result, your purchase must typically double in value just to get you back to even.
- Additional costs will add up – If you think that markups aren’t bad enough, such collectibles will cost you more than you imagine. When you buy expensive collectibles, you have to pay for the storage and insurance costs too. And it doesn’t stop there, you have to pay year after year when owning such.
- Insurance can’t help you for long – Natural damages such as sunlight, or temperature damages, and a whole lot of other damages can ruin the quality of your collectibles. The worst part is, insurance has nothing to do with these kind of damages which is a huge letdown.
- The returns are bad – The returns you earn from collectibles are so bad that other investors can make a joke about it. Its return is so inferior compared to stock market, real estate, and small-businesses.
In order to get the best return when investing in collectibles is that you have to identify what items will become popular in the coming years. But that’s so hard to do, even dealers can’t tell what’s going to become popular in the coming decades. But if you still want to invest in collectibles, you have to do a thorough research in a specific type of collectible. And if you think this is easy, you’re wrong. You need to spend hundreds or even thousands of hours researching, reading, and educating yourself just for the sake of that collectible. Making plans on investing in a small business an easier way to gain profit than investing in collectibles.
There’s nothing wrong by spending money on collectibles. But using it as an investment is such a joke. If you buy collectibles, these are the important things to keep in mind:
- Collect it because you love it – Collect items for the sake of collection. Collect it because you want to earn it and enjoy it. Collect it to add something on your shelves in your home. Don’t ever think of using them as investments because you’ll probably get disappointed in the end.
- Keep the valuable items – There are other collectibles that will be worth a dime in the coming years. Such as baseball cards you may have gathered when you were young are now worth a thousand dollars.
- Buy directly form the source – It’s important to buy directly from the artist of that particular collectible to avoid additional costs. Buying them from a middleman is expensive.
- Be smart in buying collectibles – Before buying a collectible, it’s better to decide first which one you’re going to get especially by looking on it online. Now that you’ve decided to pick an item, phone the dealer or artist and make an offer with them. Talking on the phone is an effective way to deal things because the artist is far from you, making you feel no pressure.
- Get a money back guarantee – Make a deal with the dealer or artist to buy back the item from you if you want to sell it for at least the same price you paid or make it higher or lower depending on your preference.
- Knowledge is power – Do a thorough research by reading books made by Ralph and Terry Kovel or look at their website to buy, sell, maintain, or improve your collection.