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.
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:
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.
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
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.
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:
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.
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.
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”.
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”.
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:
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
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
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
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
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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