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 Replies: 29 / Views: 4,171 |
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Pillar of the Community
United States
1512 Posts |
Question: Do you invest outside of coins / PMs, i.e. mutual funds, individual stocks or bonds, ETFs, savings accounts?
I have a small but growing retirement portfolio in dividend growth stocks (in my Roth IRA) and my employer retirement (index mutual funds) as well. I just started, this year, to heavily collect coins and precious metals, and this has slowed down my investing in other areas. I am wondering if many people worry about over allocating their total wealth to numismatics/PMs, or if they just collect with the notion that it is not really part of their total portfolio or wealth?
My problem is that my coin collection and PMs are somewhere in the 40-50% of my total assets now and I know many financial advisers only recommend 3-10%. Am I splitting hairs here? What are your thoughts?
Thanks!
Matt
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Pillar of the Community
United States
716 Posts |
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or if they just collect with the notion that it is not really part of their total portfolio or wealth? For me coin collecting is strictly a hobby and is completely separate from my investment portfolio. If, at some point I sell my coins and make a profit that will be great, but I am not depending on it. I also believe anyone whose total portfolio ( or even a large portion) is coins and PMs is a very foolish person. |
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Pillar of the Community
United Kingdom
856 Posts |
My coins too are a hobby. OK, they have some value (I hope!) But probably a very small one in relation to my other savings and investments, given I am all-too-rapidly approaching retirement age.
Fortunately our wonderful UK government are doing their best to help by putting up the pensionable age all the time. It's a bit like the hare and the tortoise. Eventually I will catch up. But I might be 100 before I do!
In the meantime I have an opportunity to put aside any spare money for my 'twilight' years. Shame I like those expensive coffee shops and nice holidays (and coins!) then, isn't it?!
The coins are maybe 5%, in case you were wondering Matthew.
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Moderator
 United States
188213 Posts |
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For me coin collecting is strictly a hobby and is completely separate from my investment portfolio. This.  |
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Pillar of the Community
United States
1158 Posts |
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My problem is that my coin collection and PMs are somewhere in the 40-50% of my total assets now and I know many financial advisers only recommend 3-10%. Am I splitting hairs here? What are your thoughts? I don't think a 40%+ difference vs recommendation in asset allocation is "splitting hairs". That's a huge difference and one you should really evaluate to make sure your goals are being met. Personally I think that depending on your age that having half your assets in coins and PM is probably not the best strategy for future wealth. I'm working toward about 3-4% in silver and gold and then I will just slowly build my numismatics as a side hobby that hopefully has some value but is not part of my "portfolio". Just like If I collected old records or stamps or russian dolls I wouldn't really consider them part of my portfolio of investments. If your hobby of coins is getting in the way of your financial goals, I think you should scale back your coin collecting rather than pretending it can take the place of contributing to your IRA, etc. Edited by tkbslc
10/22/2014 5:01 pm
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Pillar of the Community
United Kingdom
548 Posts |
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My problem is that my coin collection and PMs are somewhere in the 40-50% of my total assets now and I know many financial advisers only recommend 3-10%. Am I splitting hairs here? What are your thoughts? My thoughts are that those financial advisers are right. You are heavily exposed. You've got almost half your entire wealth in coins and precious metals? I don't know how much money we're talking about here but that sounds risky beyond belief. I have some gold and silver coins which are bullion and I consider them part of my portfolio but they only make up about 8% so it doesn't really matter whether they go up or down in value and to be honest I hope I never have to sell them. Edited by Demarco Bishopp
10/22/2014 5:04 pm
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Pillar of the Community
 United States
1512 Posts |
Thanks for your responses.
Let me clarify a few things. I feel like my wife and I are on track for retirement; my investment horizon is likely 30+ years, and we regularly contribute to our retirement accounts.
I've crunched the numbers a little more closely and it appears that my coin collection is roughly 25% of our total assets (not including equity in our home) Now, because I've been spending money on coins we otherwise would have spent on frivolous items, i.e. only discretionary spending, should I cut back, or is my hobby essentially additional savings/investing so long as I don't cut into our retirement funds?
Would anyone have a problem having their asset allocation out of wack in this scenario?
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Pillar of the Community
United States
1158 Posts |
As long as you feel you are on track for retirement and other financial goals, what you spend the rest of your money on is your business. Coins, booze, travel, etc. Whatever floats your boat.
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Pillar of the Community
United States
2202 Posts |
I don't make enough money to be able to invest in coins. I wish I did. It'd be fun to have a really rare coin that I could show to people, or even a gold coin.
I'd like to think that someday some of my coins might be worth something, but none of them is worth more than $100-150 or so.
Edited by jpsned
10/22/2014 7:15 pm
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Pillar of the Community
United Kingdom
837 Posts |
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my investment horizon is likely 30+ years, and we regularly contribute to our retirement accounts.
I've crunched the numbers a little more closely and it appears that my coin collection is roughly 25% of our total assets (not including equity in our home) Now that sounds better !  Given that your retirement is quite far.... I would say having 25% in coins and PM`s (at this point in time) isn't as bad as it seems in the grand scheme of things ...especially if you have the IRA as you can always reduce spending on coins and PM`s later  I am assuming you have gold and silver, hence between now and the next 30+ years I would bet my bottom dollar there will be a spike in the price of one these PM`s hence if you have a significant amounts worth of them and the price goes up by a significant percentage you could hit jackpot  Keep an eye on the commodities market and you will be a winner |
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Bedrock of the Community
Australia
21786 Posts |
At least, numismatics as a hobby need not be expensive.
Even if you do spend a lot on coins, there is always the fact that they are worth SOMETHING! Nevertheless, always more likely to be worth more if bought well in the first place.
Even better, if you have a wide ranging interest across all of nunimatics, and you always look to buy well whenever the opportinity arises. With this strategy, you don't really have any coin in mind that you are looking for; just grab the opportunity to buy with what comes along, always having regard for value for money.
Buying well is always a good first step in a long term investment strategy. This principle applies to lots of other things besides coins.
A financial advisor once said to me:
'It is good for a limit of about 5% of your total investments to be in the area of coins stamps bullion or fine arts.'
Another piece of advice from him:
'ALWAYS kiss your wife sweetly before you go to sleep every night. Divorces are expensive'
When buying OR selling, hasten SLOWLY!
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Valued Member
New Zealand
72 Posts |
i have heard of some clever people that are able to judge what coins are worth in the future. a coin that's cheaper now is worth a lot more in the future and they can see that, that is a great investment idea but you need to be able to judge what the trends will be. I am hoping my collecting of vintage beer cans will be worth something in the future, no real value now but at some stage they will skyrocket
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Pillar of the Community
United Kingdom
837 Posts |
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I am hoping my collecting of vintage beer cans Fascinating stuff  , cans like yours will definitely appreciate in value over time its just a question of by how much .... Are they cans from around the world or just from NZ? Edited by DaytR
10/28/2014 6:28 pm
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Bedrock of the Community
United States
11951 Posts |
Everyone you talk to ... Or read, will have a little different idea on investing
It can take years to figure out what works for you.
IMO stocks are good, and they be the only way for a average guy to
reach the higher end of weathly.
But you can read that the market is in for a big collapse.
James Rickards book "The death of Money" sort of a scary topic.
So what do you do?
I know a few very rich men that have been moving a lot of money into gold.
Of course it helps to have a lot of money to start with.
So what does the common guy do (me), try to do a little of everything.
Stocks, CD's, IRA's, Roth IRA's, cash savings and company investment options.
I do know people who have been putting silver and gold away since the 70's. A couple of them have accumulated least 200k in bullion, Much more
than they bought the gold and silver for.
Now ..coins for investments. I think once a collection reaches a certain value, say over 30k (different amout depending on your income), then it
become more of a investment.
Rare coins should go up in value, but as with any investment there is no
guarantee. Also gold and silver, will go up and down, so buy low sell high.
Just remember ... You have to do something. Spending all your money on having fun, will not make you a rich person.
Some coin dealers make a good living. They do that by knowing what they can sell a coin for, and buy it for less. So the trick to making money on coins, is to buy them at the right price. If you buy coins this year at market price, then need money next year and sell to a dealer, you will lose money.
So you have to buy coins at the right price ...
If you learn as much as you can about coins, so you know what you are looking at, you may be able to cherry pick coins that you can sell for more than you pay. Look for opportunities to buy collections from individuals, learn what dealers pay ... And buy the collection in those price ranges.
As with stocks, buy gold and silver when there are big drops in price.
When gold and silver are at lowest prices... Buy as much as you can.
Problem is ...knowing when they are at bottom.
Again ...just my opinion
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Bedrock of the Community
United States
20753 Posts |
A good and simple method to determine just what your doing for a future investment is to pretend you need money NOW. If your money is in coins, you would have to find a way to liquidate them fast and end up loosing value. If your money is in bonds or stocks but through a place like TDA, one phone call or email and they are sold. BUT now wait for the check and that may take some time. However, you don't loose value unless your in a 401K where they penalize you for early withdrawals. Any hobby you have, such as coins, stamps, cars, etc. should be considered a hobby and not an investment. Trying to sell off coins if your not a dealer, could be very costly. My suggestion is put about 40% in Stocks, 40% in cash in a bank, 40% in bonds, 40% in Mutual funds and only use the rest of coins. |
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Pillar of the Community
United States
1158 Posts |
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I do know people who have been putting silver and gold away since the 70's. A couple of them have accumulated least 200k in bullion, Much more
than they bought the gold and silver for. Not sure how much exactly that works out to be, but some rough calculations: $200k = about 163 ounces of gold Average price of gold over the past 40 years is about $450 $450 * 163 ounces = about $74000 invested 74,000 over 40 years is $150 a month $150 a month into $200k is 4.5% return S&P 500 has averaged 10.2% over the same period which means $150 a month over 40 years is $925,000 Of course making historical calculations is easy, but there's just not as much long term potential for growth in PM. |
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Replies: 29 / Views: 4,171 |
Posted 10/22/2014 2:37 pm
