Four Cautions for Investing In Collectibles
If you're new here, you may want to subscribe to my RSS feed. Want more frequent updates follow me on Twitter. Thanks for visiting!
credit: dustpuppy
Everyone collects something: postcards from friends, teddy bears, paintings or stamps. But some of these collectible items can actually form the basis of an investment. But before you decide to sink your hard earned savings into some kind of collectible, do your research and check these cautions:
- You need a crystal ball to invest successfully in collectibles, because the value of collectible items is based purely on what other people are prepared to pay. Some think that nostalgia for items from the past runs in twenty year cycles, which means that right now all we want to buy is stuff from the 80s. But there are no hard and fast rules, and you might end up with a dust-gathering collection nobody wants.
- You shouldn’t try to invest in collectibles which are outside of your areas of expertise. Buy baseball collector cards if you know your sports; skip rare books if you never visit a library. You’ll only be able to do well out of such an investment if you’re in tune with what that niche of the community is thinking, what they’re buying and selling, and for how much.
- Be careful not to fall in love with your collectibles – unless you can financially handle the consequences of not selling them.
- Consider the tax implications of collectibles you might buy and sell. Each country has complicated tax laws about these kinds of assets and there are significant losses or gains to be had depending on aspects like whether you register the collectible in your personal name or a company name.
Tags: Collectibles | Collecting | Investment | savings | Tax
This entry was posted on Tuesday, April 29th, 2008 at 3:00 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
