Why you should collect coins ?
by: Gary Chingren | Monday, August 2, 2021 | 0 Comments
There is no single correct answer but there are several reasons from my perspective. I started with trying to understand coin collecting when I was a kid learning from my dad. I thought that as a business model this was not for me. You may know the business modal where you buy a product for $5.00 then sell that product for $10 and pocket a $5.00 profit.
Basically, at that time I walked away because I could not see a clear path. The exit market was spotty, and margins seemed thin. At that time, it was coin shows and sticks and bricks. Every coin dealer self-graded then haggled over both grade and price. I did notice my dad would continue with buying, bartering, and selling and his inventory kept increasing month by month and year by year.
Eventually eBay came along and there was limited use as a marketplace. I was still not that interested so I did what I wanted and was generally a casual collector. I had started with Morgan Dollars which at that time were relatively inexpensive except for some key dates but even those could be purchased if you haggled enough. But still - not that interested.
Then third-party grading happened. I saw that as a means to remove much of the disparities and uncertainty when buying coins since common grading methods should bring more buyers and sellers into the market. And it did. Then eBay started being used as a marketplace platform and had low marketing fees. Then you could make a profit margin and it all started to make sense. Do you remember those days? A lot of the sticks and bricks stores were not terribly fond of this newer technology which was to be expected but it slowly gained a foothold.
Then almost overnight sticks and bricks were almost sidelined unless they had a webpage. Things got a little better with a website but then came the 800-pound gorilla and as the gorilla grew so too did marketing fees. They even have a fancy name - Final Value Fees - sounds so innocent and almost makes you completely forget your math until you start saying, why am I not making a profit? I am turning over money, but profit margins are slimmer by the day.
So back to the drawing board with the very same question. Why should you collect numismatics? But times had changed or perhaps I learned something over the years. You see, my dad was silently building wealth and the size and scope of the market had grown exponentially. The main factor initially contributing to this growth were eBay and Third-Party Grading. Then the US Mint added several programs encouraging new collectors and the ANA provided education and workshops and suddenly this started looking more like a business model
I no longer think that there is no business model. It was there right in front of me all those years and it's probably one of the best kept secrets to building wealth. That is why I am so interested in Coin and Card Auctions. Finally, a marketplace that is designed to help people like me that want to make a profit and use those profits to buy and sell more items and yes, along the way I will probably set back a preferred coin or to and one day explain to my grandson the best kept secret my dad always knew about.