Long Term Collecting Goals...

You need to come up with a retirement number then figure out a conservative traditional rate of return on whatever means you elect whether collectibles, stocks, savings, metals, whatever and see if your goals are realistic.

I read something many years ago that money spent on one's education created the most return on investment followed by stocks. I don't remember where collectibles fell.

I really don't like collectibles as investments because of the harsh taxes of collectibles vs tax free growth in a retirement fund. I see them more like heirlooms.

But you would of had a load less of fun with CDs or Bonds! They are just not that interesting!

I say do it. As long as it is discretionary income, coins are about the best hobby investment out there outside of learning skills.


As for retirement, still plan for that. At 32 you will likely never see any government based retirement, other than the taxes of course.

The more I think about it though, I am not so sure that Large Cents are where I would put my money unless at the high end.

Don't get me wrong, I got some Large Cents, maybe 15 or 20 and only one of them is AU and it isn't my Draped Bust Cent either.

I don't put money into my Large Cent collection with hopes of return though, just scratching an itch.


To me, if you are buying Large Cents at retail with the hope of resale, you need to have a reason why these coins are going to go up in value.

They aren't precious metals so you don't have that floor pushing up the price on the low end of the market. It is really more of a supply and demand thing at the lower end of the market like a binder full of 2x2's.

So the supply is static and the demand, well it is a market for older men generally. So you have a loss of collector's yearly due to death or lack of finances in retirement. You have some portion of younger guys joining the market with their discretionary income.

Currently we have a population bubble of baby boomers or older as the primary coin collectors. Just on demographics, there won't be enough new collectors to stimulate demand much if any. Throw in the fact that the economic chances for the younger generations who need to replace the older collectors leaving the market are not as good as prior generations and you have a decent case for decreased demand at the lower end of the market.

I tend to think people going forward will have less discretionary income to spend on coins, not more. Another strike against demand.


I can't build a good case for increasing demand in lower end Large Cents.

I wouldn't even consider retirement plans when collecting. If you love your collection enough to build it over 30 years I doubt you'll want to sell it when the time comes and you'll likely to not get anywhere close to what you would want from them.

I'm 26 and don't have a huge amount of expendable income so I sometimes come across the same dilemma where I think that putting thousands of dollars into my collection when I don't even have enough money to afford stuff like health insurance or a new vehicle down payment if my current ride breaks down. Plus I don't have a retirement account.

So what do I do when I want to collect but feel like it needs to be something liquidable and not a 200 year old coin I know I couldn't part with? I buy rounds and bars. Getting a 10 oz silver bar is still cool but if the time comes and I need some cash I know I could sell it. Plus, if I buy and sell right I could potentially make some money. Buying silver is kind of my short-term strategy to hoard cash. It's $200 sitting in a silver brick and not a spendable $200 sitting in my bank account that would probably just go towards beer and DVD's if left there.

The federal exclusion for inheritance tax is $5 Million. Or in the later stages of life the original poster could gift $14000 a year until the entire collection is given to the intended recipients without paying a tax. The lifetime gift exclusion is again something like $5 million. The only problem here is certain states have lower exclusions for inheritance tax like $500k or $1M vs the federal $5M so they might get you on the state level but that depends on where you live and how much of a collection we're talking about.

The tax comes with the sale of the property so if you're passing down items generation after generation the wealth is retained but when they go to sell the item they're going to get killed because of how collectibles are taxed. Long term capital gains on stocks, real estate and tax benefits on dividends are way lower than collectibles. The famous axiom of Warren Buffet paying lower taxes than his secretary highlights this.

I wouldn't stack silver or precious metals for retirement either because as we all realized from the collapse of silver that the price of metals can go down. So if you don't want to go with stocks or real estate I'd go with a simple boring EE US savings bond that will double your money guaranteed in 20 years and they don't take up space, have security issues and will pay you while you wait for appreciation and they're not taxable if used for tuition but you have to wait 20 years for the bond to mature. You are guaranteed to double your money but I don't know if we'll be able to say the same about the coins you're thinking about as an investment.

Long term collecting goals should include coins you used with disposable income and not money that should have gone towards retirement or anything else important like a child's education IMO.

I know you weren't asking for advice, but SET UP THAT RETIREMENT ACCOUNT!! Each year you wait when you are young can cost you a LOT of money when you are old. For example, lets say you start now and save $100 a month for the next 40 years at 8% avg return. That would equal $360k. If you waited until next year to start, you'd only end up with $332k. So $100 a month this year equals $2400 a month of interest in year 40. If you have employer match and can save a bit more, the numbers are even more dramatic in favor of starting young.