Advice for the New Collector

So you have developed an interest in coins, banknotes, medals or badges and want to know what to do next. Here are some tips from someone who has maintained an interest for over half a century and has seen many trends in collecting over that time. These tips I am sure will help you assemble a collection that will give you a lot of satisfaction owning. I know because I have not followed them as well as I could but seen others who have and the results that can be achieved.

  1. Collect because you have a genuine interest, not because you want to make a profit. The chances are that you won’t! That is for the real experts and a few professionals. Sure some numismatic items have shown solid  increases in price over the long term. They can be easy to buy but need some expertise to make any significant profit after the selling costs. There have been plenty of “bubbles” in the numismatic market and something that shows a steep rise in price is often liable to also crash. An example of a recent “bubble” was in rare Australian banknotes where a note that originally sold for about $5000 in 1997 was purchased around 2007 for over $60000 and offered for sale at nearly $100000. I don’t know if it actually sold for that but it was recently sold at auction for about $9000. This is a spectacular example and being at the wrong end of these situations, even on a much smaller scale may be avoided by using these tips. Purchasing coins mainly for their bullion value is really an investment in those markets and prices subject mainly to movements in those markets.
  2. Have a budget. There is an auction house in the US that turns over an average of US$1,000,000 a day in sales. You simply cannot buy everything and your budget will determine what you can realistically acquire. The simplest collections can be coins or notes taken from circulation or purchased from the bargain tray at your local dealer. Some collectors do this alongside a more expensive interest. If you want to spend more set an amount per month. That way you can build up a credit for that item that is expensive for you or if you overspend you know you have to pull back for a while.
  3. Have a plan. Decide on the area you are actually going to collect. The possibilities are countless. Many collectors start with some Australian issues eg tokens, pre-decimal or decimal coins or banknotes, badges and medals, military awards. As your interest grows items from other countries or eras in history can be a theme. There may be other areas that you can have an interest in but (at least initially) not a collection. It is often nearly as much fun reading about numismatic items and downloading the pictures.
  4. Make up a realistic wants list. To do that you need to DO THE RESEARCH! Look at the items that fit your plan, their cost (depending on condition) and availability. Look at historical costs and be a little wary if prices have escalated recently. It is most important to learn how your items of interest are graded and how that effects prices asked/sold. A lot of information is available on the internet but there are also lots of books that you simply must have and read before acquiring anything significant.
  5. Buy the best quality your budget allows. Be patient and selective. I think it is way better in the long run to wait for one high quality item than purchase numerous lower grade ones. For example it is a lot of fun assembling date sets or other sets but a better way is to find a quality example of the type. An alternative to collecting for example a nice Australian florin set with early dates fine or better would be to find one of each type in EF or better for the early ones and Unc for the latest.
  6. Establish a relationship with a reputable dealer. They have to make a living and need to be paid for their work but depending on your circumstances can save a lot of time and effort finding items on your wants list. Searching the net/Ebay can be fun and cheaper but “buyer beware” applies. There are plenty of fakes – both people and numismatic items out there so doing the research applies.
  7. Join a Numismatic Society. There are two main ones in Melbourne NAV and MNS and others in Geelong, Morwell and some other country areas. You can get advice and see what other collectors are in to. A subscription to Australian Coin and Banknote magazine also provides new about what is going on in numismatics and dealer/auction house contact details. Also there are lots of interesting articles, many about areas you may not have even heard of.

 

I hope these notes are of help. If you have any comments or opinions feel free to add comments.

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