Can you make money being a coin collector?

Can you make money being a coin collector?


Short answer.......No

You'll be so attached to your treasures that you'll be loathe to part with them......

 

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Sure, nearly every lot has been searched through -- but then those lots get inherited, or lost and discovered, or stolen (sorry, but we all know it happens) by people who don't understand what they contain. Sometimes they walk into a coin shop, and the dealer gets a deal. Sometimes they show up in an auction. Sometimes they show up in a Coinstar reject bin, or a teller's drawer (which starts the cycle over again).

I make occasional profits buying lots on eBay that contain interesting possibilities. Yes, there are people who pose as naive sellers; over time, you learn to recognize most. The biggest problem, though, is that there are plenty of other buyers using the same tactic, and by the time you finish bidding against them, your profit potential is usually minimized. Grabbing new Buy It Now listings can get around this, but it requires good and fast judgement (and while I have many strengths, speed of thought isn't one of them).

 

Sorry Doug, but when you speak of the possibility of what may happen when you sell the coin rather than what the coin will sell for at any given time, that is the intellectual/philosophical stance. The practical side is the $ amount that the coin represents.
If you keep the coin, you know you have the amount the coin is worth on the market, whether you choose to cash it in now or later is irrelevant as long as the price is there.
We have obviously had very different experiences in our numismatic lives, but a collection worth a quarter million dollars that cost you nothing due to selling off other coins you did not choose to collect cannot be considered anything other than profit, especially when you have already made a profit on those other coins.
Maybe collecting by buying coins at dealer prices does not make one money, but collecting in others ways sure can. It's not accurate to generalize all types of collectors as doing so by the same methodology.

PS: when talking about eBay sales, taxes are only mandatory when you do over $20k and 200 unique transactions per year on the same Paypal account.

 

Dosent mean you can work for free and the knowledge you gain will surpass any monetary gain you would receive.

 

Pretty sure that the IRS or any accountant would have a differing opinion on that.

Perhaps what you meant to say was that eBay/PayPal only report your revenue to the government if it exceeds those limits, and so you stand a better chance of successfully evading the taxes you owe if you stay below those limits.

 

In which case you owe 28% on the entire quarter million dollars. or $70,000.

 

I strongly believe that the IRS would differ with you on that point.

Taxes are due if you earn more than $600 on an enterprise. Then you would deduct your expenses, and the net amount is subject to taxes.


The taxes (in this instance, as a dealer) include Income taxes + Social Security (6.2%) and Medicare (1.45%) as a business.

 

I think Doug has nailed it in his responses. I mean even if you buy it with profit money - that coin still has a cost and you still need to track it. And as Frank mentioned - the IRS would disagree with you. Granted a lot of folk don't tell the IRS and get away with it but you never know when they audit you they might catch something. Those records might just save you some money.

 

The investor tells the collector
he's a fool for not taking profits.
The collector says what are you?
You paid a $1,000 more for a full
rivet on a shield, moron.

And then the wife sticks her
two cents in: "stop mumbling
to yourself and come to
dinner."

 

I am a newbie so I'll take a stab at answering the original question:
How could one make money being a coin collector?
Quick and simple answer: you buy coins in bulk and sell it back out with a margin. How much money you can make is all depend upon you investment in time and money. Like anything else, it is also depend upon your risk tolerance. Sometime high risk = high reward but more than often, it works the opposite.

Frankly, for me, I flip coins on the side to support my collection. I personally only buy coins I like. If it happen that the coin I buy become a flop, at least I get to keep it and enjoy it rather than stuck with a coin I don't like and it's a flop.

My early strategy is to buy multiple coins of what I like to save on "shipping" and then sell it back out with a small margin. This way it helps "pay" for coin I like.

 

my 2 cents. what we are seeing on this thread is make your best engineer the manager. it doesn't work out more often than not. reason those are 2 different skill sets. same thing with collecting and selling. 2 completely different beasts.

collectors more often than not take a bath when selling their collections. some proudly state that they got 50 cents on the dollar. with such a poor track record of the collector group what the op should think about is the collector group the best bunch of individuals to ask his question.

IMHO the best answer can come from the dealer group if they are willing to share their trade secrets and that is a big IF.

 

This is a really good response by GDJMSP. The vast majority of both the volume and value of the coins I sell are sold to other dealers. Oddly enough, many times I sell coins to dealers at the same price that I have offered them on my website to the general public. In some of these cases I have previously received feedback from clients that the coin was too much money on my site, yet it sells to another dealer at my asking price. Incredibly, on more than one occasion I have received feedback from a client that a coin was priced too high at X only to have me sell the coin to another dealer at X and then find out shortly thereafter that the client who gave the initial feedback purchased the coin from the next dealer at X+Y. The most likely explanation for this behavior, in my opinion, is that the collector realized he was wrong in his initial value assessment and really wanted the coin or that the collector has been sold on the "brand name" of the dealer and buys the brand.

 

dearest grandpa,

that is all very fine but most dealers have gone belly up (incl some extremely great members, which might seem impossible at first glance) while heritage is about to become a billion dollar company(800 m and counting). the formula you have suggested is great in theory but the op probably needs to know the big boys are doing other than investing big money

 

for some reason I cant edit my post to add

the question here isn't what b 2 b is doing. the question here is can there be a c 2 something. either a c2c or a c 2 b. if there can be then what can be learnt from the guys that are successful in the business space that could be transported to the collector space if anything at all.

 

GDJMSP:
I think the problem is people have
become used to billionaire
derivative traders in America,
and the "magick formulas" for
getting rich through algorithms
and algo computers.

When the derivative daisy chain breaks,
when their baboon turds can no
longer be marked to an LSD
trip, when things revert to the
mean, coin collectors who may
yarn for a secret equation will hope-
fully abandon that quest for the
not so secret wealth equation that
will still be in effect long after those
"talented" derivative traders are
super sizing your fries.

Equity= assets + liabilities

 

If you're talking about old rare coins. That's complicated because of cleaning, fakes, etc etc etc.

If you're talking about something simpler like Silver Eagles, or world bullion collecting, that's easy to make money in. There are very few factors involved.