Coin Collecting as a Retirement Investment

Hopefully this is in the right area.

I'm curious to hear what others think about including coins as an investment for your retirement. Currently I'm about 15 years from retirement, and my wife is about 20. We both have 401 K's invested in stocks and mutual funds that seem to be going no where fast....in fact this year has not been a good year at all. Not sure if it matters, but our home will be paid off before we reach retirement.

Instead of putting 10K into our 401K accounts this year, i'm thinking of buying coins/silver with the money. Possibly $5K in silver coins/bullion, and $5K in higher grade slabbed coins (only graded by PCGS or NGC).

I've been doing some research and it appears that you can get some nice higher grade silver dollars, halves, etc on eBay (and other places) for about 75% of what the listed value is.

I realize none of you have a crystal ball, and everyone just has their opinoins, but I guess my questions would be.....

Would slabbed coins be a pretty good long term investment, in which you could expect that over a 15 to 20 year period you could expect at least a decent return? I realize there will be ups and downs, but long term is what I'm worried about.

I would think silver might be harder to predict, but if you bought silver today at around $34. oz ($24-$25 per $1. coin value).....could you expect it to maybe at least double at some point in the next 15 to 20 years?

Is buying and selling not the best strategy....maybe you need to buy and sell for a profit (hopefully), and then re-buy on dips?

Any other "strategies" for buying coins for retirement?

Please no arguments like you get on some of the stock boards....just a nice, good discussion about the ups and downs of the subject I'm asking about.

Thanks to all.

 

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Can't give you much information except that if you're buying common coins for bullion purposes, it is not wise to buy them slabbed, unless the price is about the same as the ungraded coin. This applies espcially to American Silver Eagles. For buying high grade, key date coins, though, slabbed is the way to go.

Someone correct me if I'm wrong about this.

 

I have found I can lose money in both the 401K and coins at about the same rate. When the stocks in most 401K's lose money there is a corresponding decrease in the coin market also. When both are good there are increases. The coins flex with available discretionary income levels has been my observation.

BTW 401k retirement funds can not be put into coins and get the tax breaks basically they only allow paper bullion holdings for the tax breaks.

 

Welcome to CT! :welcome: It is probably a good idea to have a certain percentage (10-15%) of your assets in precious metal bullion or PM ETFs. However, most will agree that coins are better collectables than investment vehicles. Talk with a reputable financial advisor and see what is the best way to proceed given your individual situation. Good luck! :smile TC

 

5dollar, I understand exactly what you're saying, but, as an example is it a "good buy" (in your opinion) to buy a silver eagle that has been slabbed and is rated MS-70 as a collectible coin as opposed to just for the bullion value?

 

I am collecting for retirement (granted I'm more like 40 years away) but just looking over numbers it shows that in 10+ years seems to make a pretty good profit and seems like the worst that will happen is you get your money back(or at least close to it) which is better than a lot of other retirement things right now. but thats just my option.

 

JustMeJim, in the last 15 years if you had been purchasing AGEs on a regular basis you would have made a lot of money. If instead you had been investing in the S&P 500 you would have made nothing and in fact you would be at a loss now.

My advice to someone 15 years from retirement is to do everything you can to get out of debt first. For most people this means paying off their mortgage as soon as possible. When you do this, people will come out of the woodwork to tell you this is a bad idea, but these people are either trying to sell you debt, or are themselves trapped in debt and want validation they are OK. Misery love company and the vampire banksters want you in a situation where they can suck your blood until they put you in a coffin. If you are looking to buy a home, only buy as much as you need and not as much as you can finance. This is the trap they want you in.

When my SO and I were in our mid 30s we purchased a home that we could only afford on a 15 year loan and we paid it off in 10 years. This alone was the best financial decision that we could have ever made in our lives. Once this house was paid for, the banksters (BofA) were dismissed and the money that would have been spent on interest went into savings. It's been a blessing. I was laid off 6 months ago by a corporation who sent my job to India, but because of these decisions, it basically was a non-issue for me.

I would also advise to take advantage of any matches that your employer makes to your 401K, but only if the investments are flexable enough to allow some investments that are not subject to the criminal activity that is taking place on wall street. Activity that is going on with the complicity of the people who are supposed to be regulating it. Do a google search on MF Global or read ZeroHedge.com if you want to understand this better.

Once you have taken these steps then you should consider setting aside some money for PMs. IMO, gold is the king, but silver is also acceptable in moderation.

 

Even for collector value, MS 70 coins are frequently frowned upon, especially ASEs, because they can have very large premiums, and have been known to drop dramatically in value. If you want an ASE for collector value, consider getting a proof version.

 

Welcome to the forum.

Generally speaking, rare coins are not a good investment. If for no other reason, due to the buy-sell spreads involved. Often, the value of the coins will have to increase by 10% or (much) more, just for your investment to break even.

And investors who are non expert regarding values, markets, grading, etc., are at a huge disadvantage.

With respect to EBay and other venues - buying something at 75% of it's listed value is not necessarily a good thing. In fact, in some cases, that could be a burial. Often, listed values are way off, and different coins can sell at very different prices, relative to those which are published, and even compared to others of the same date and grade.

 

What I've been looking at, as far as prices are the PCGS site for PCGS graded coins and the NGC site for NGC graded coins. In addition to those I've been referencing a site called NumisMedia (I have no idea how reputable this site is) for coins graded by either grading service.

I then kind of take an average, or if they are pretty close I take the lowest of the 2. Not always but sometimes if you watch alot of auctions you are able to get a coin at 75 to 80% of the value listed...sometimes less.

Are the PCGS and NGC sites pretty accurate as to the value of their graded coins?

 

Those sources are good ones, relative to many others, but are still inaccurate in many cases, sometimes by wide margins. And if you rely on them (rather than acquire extensive knowledge about grading and markets) too heavily, you are almost certain to get burned.

 

"Are the PCGS and NGC sites pretty accurate as to the value of their graded coins?"


Short answer would be No. In most cases they are full retail and in some cases real sales of items can be as low as 25% to as high as 250% of the listed prices.

 

About the only thing that actually seems to be getting less available and is forever needed, is land and renewable fresh water. I do go along with Fatima on getting debt free first and earliest. Unless your job has a sponsored matching 401-K plan, go for the Roth instead, it will pay better in retirement. You can control the composition reasonably and inexpensive if you use a company such as TDAmeritrade or other. Only use credit cards if you can afford to pay several months ahead on a "payback" card. I use my Costco Amexp card for everything, except a few charges that VISA is required, and have paid no fees or charges in years. Once you have debt under control, buy gold and silver coins that please you. If they please you, they will probably please others if you sell. So buy some land where it rains a lot and creeks and streams are abundant ( preferably in a resort.vacation area). Ahhh, to be young
Jim

 

Yup, done that. And have had two major floods in the last five years........

 

Just to follow up.....
My debt is virtually non existent. Home will be paid off in 5 years or so. From time to time we have one or two car payments....depending on if we've recently purchased a new one or not. We use credit cards each month but normally the balance is paid off each month.

Wife contributes maximum to company (matching) 401K, and has a decent balance. Each year I put close to the max into IRA's (which one depends on if I need the tax deduction or not).

This year I am considering something different...thus the reason for starting the thread. By no means are we rich, but I feel pretty comfortable that things are under control.

I appreciate all of the great answers and advice, but I'm mainly just trying to learn the best way to invest in coins/bullion, or if it's even a good investment to make.

 

Collect coins. Don't invest in 'em. Follow Marks' and Dougs' advice.......

 

Agreedddddddddddddddddddd!! Especially If he has no Knowledge about rare coin.. It is better to Buy a Lottery ticket than spend your money on MS 70 of any coin graded by any TPG. Rare coins is only for a Hobby of a King and not for Investment purposes unless you have such knowledge and vission of positively gain of what you are buying...

By the way, Welcome to COIN TALK...

edwinrd117 :thumb::thumb::thumb::thumb::thumb:

 

I'm just thinking it's one of those - IF YOU HAVE TO ASK then NO.
Study learn and try to decide in a year or 2 IMO

 

Hmmmm.....Well I am studying and trying to learn. I have been researching for months, and decided to come and ask some "experts".

How does one learn, other than to read, research, and ask questions??????

Just a question for you. Did you just wake up one day with all the knowledge you needed to collect or invest in coins/bullion? Or did you not ask question, read, research, etc?