Unique Investing: 4 Financial Benefits of Starting a Collection
Friday, July 26, 2019, 6:00 AM | Leave Comment
Some people scoff at the idea of collecting items like antiques, coins, clothing, porcelain dolls, furniture, jewelry, stamps and model trains for investment reasons.
Given that many modern, home organization experts recommend living with fewer possessions to prevent clutter, these people actually think that a person who keeps a large collection of a particular item is a hoarder.
Although some people do collect things that have no monetary value to the point of these items taking over their living spaces, a true collector isn’t obsessed with merely owning the items in their collection.
Their focus is on the adventure of finding items to expand it and the long-term value their collection represents in terms of not merely enjoyment, but also money.
Consider the following four financial benefits of starting a collection:
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Impulse Prevention
When you collect in a serious fashion, you’re less likely to be an impulse shopper, which saves you money in the long run. Collectors often save money to later purchase specific items for their collections. More importantly, many collectors aren’t out impulse shopping when they have free time. They’re too busy enjoying, sharing and protecting their collections.
For example, a stamp collector might spend their time instead of money talking to other collectors and carefully placing stamps in albums. A lot of coin collectors spend their time hunting for specific types of coins in bank coin rolls.
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Emergency Backup
Many people don’t have enough money saved to pay sudden bills that happen because of emergencies. If you have a collection, you have a money-making resource at your disposal. Although it means that you might have to sell part or all of it, you only have to think of the alternative, crippling debt, to recognize how valuable a collection can be during an emergency.
Plenty of people around the world are trying to complete their own collections, which means that a market exists. You can make money by selling your collection directly to someone or via an auction.
Pawn shops are another option: Instead of selling your collection, you merely leave it temporarily in the hands of a pawnbroker as collateral until you repay the loan that they give you.
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Retirement Savings
Everyone dreams of having a comfortable retirement that includes financial security. Yet, a lot of people have to accept early retirement packages from employers who offer them less money and benefits. Some people never save for retirement or experience catastrophes that obliterate their retirement savings.
A collection can help secure your retirement when you’re older and fail to have enough money to deal with the higher cost of living that naturally occurs because of inflation and age-related health problems. A professional curator like those found at Harlan J. Berk, LTD can help you secure your retirement by making certain that your collection sells for what it’s worth.
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Generational Support
Collections also help people to pass something of real value beyond cash onto their loved ones. A lot of collectible items gain value over time. For example, some antique furniture, jewelry and coins bring in incredible amounts of money at auction because the pieces are rare or made with precious natural materials like gold, silver and gemstones that have always retained or gained value throughout history.
When you invest in a collection, you’re secure in the knowledge that future generations that receive it after you pass on can use it if necessary to help them when times are tough.
It’s important to remember that some types of collectible items lose value over time as well. For example, items that become overnight collectibles because of their connection to popular culture trends and fan whims related to entertainment can lose value.
The market might suddenly become flooded with products or people just stop seeing these items as having significant value. It’s always best again to invest in rarities and items made with precious materials.
You don’t need to stop collecting popular culture items, especially any that have gained value over time, but you should always have a separate collection comprised of items that you know should at least retain their value through the years.
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