Essential guide to making money with rare coins, collectibles, banknotes and postal stamps - Quick start

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Essential Guide To Making Money With Rare Coins, Postage Stamps And Banknotes  

There is a growing interest these days in alternative investments and this certainly involves rare coins, banknotes and postage stamps. If you want to get involved in a business like this then you need to distinguish yourself as an investor rather than a collector.  

Ways to make money in Rare Coins, Banknotes and Stamps  

Rare Coins and Banknotes

Let’s take a look at coins and banknotes first. Over the last few years there has been a steady growth in investment and this is likely to continue long into the future. Those that have invested in gold and silver have generated some of this interest.

Rare coins and banknotes are a market that has existed for many years and there are established ways to verify the value of this currency. These coins and banknotes have four different value types and these are:

The book value – this is normally the average of the retail prices charged by dealers for specific rare coins and bank notes. There are books published on this subject that the trade will use and one of these is the Standard Catalog of World Coins.

Dealer buying price – as the name suggests, this is the amount a dealer would be prepared to pay if you sell the banknotes or coins to them directly.

The retail value – what price that dealers would sell the banknotes or coins to customers for. In order for a dealer to make a profit their buy prices are always lower than their retail prices.

The wholesale value - here you are looking at the prices involved when a dealer sells a rare coin or banknote to a fellow dealer. If a buyer wanted to make a large purchase then wholesale prices can also apply.  

What factors will influence value?  

There are a few key factors that you need to take into account when accessing rare banknotes and coins value:

The rarity – you need to know the mintage (the number) of bills or coins that were produced originally. Another rarity factor is how many of these banknotes or coins are still to be found at the moment.

What is the demand – this will vary in accordance with the availability and popularity of a particular banknote or coin. This demand can change depending upon where you are in the world and the year. If the demand is high then the price will be higher.

What is the grade or condition – there are guides to prices around that will show the value of a coin or bill for different grades. As an example of these grades, bills and coins can be considered “mint” (almost like new and perfect), “uncirculated” (there is no evidence of wear) going all the way down to “poor”.

These grade assessments conform to standards laid down for coin and bill condition For bills there is the “International Bank Note Society’s Grading Standards” and for coins there is the “American Numismatic Association’s Coin Grading Guide”.

Rare Stamps

The rarest stamps can sell for an absolute fortune. There value tends to increase over time as well. If you are considering buying rare stamps as an investment then you should look out for these factors:

Rarity is everything – the ideal here is a totally unique stamp but if that isn’t possible then look for stamps where there are just a few of them around

The condition of the stamp – only invest in those stamps which are the highest quality examples. Check the color of the stamp, its freshness, the margins around it and even the glue used on the back

Does it have authenticity – most rare stamps have authentication so don’t invest in any stamps that do not have the right provenance and a documented history. Be wary of stamp certificates as these could be fakes

Check the stamp’s demand – your ideal scenario is to have an army of collectors falling over themselves to purchase the stamp from you. These collectors will drive the value of the stamp so be sure to do your homework in this area

Buy low – you are making an investment for the future here so buy at below value prices so that you can generate the highest return

It is a good idea to have a balanced portfolio of coins, banknotes and stamps. Be prepared to hold onto your investments for at least 5 years, 10 years and longer is even better. Only make your investments with auction houses and dealers that have a long standing reputation.

 

   

 

 

 

 

 

 

 

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