Collecting Coins and Banknotes for Investment Purposes?

It has been a while since I last wrote a post. Minus the Van Tharp article series, which were all posted automatically, it has been about a week since I last wrote anything.

Today, let’s talk about Coins and Banknotes. Is there a way how one can profit from them? Apart from the usual FOREX trading, I believe that it is possible to profit from collecting coins and banknotes. Old coins and banknotes as well as the new ones. In fact, history tells us that is indeed possible. Returns of roughly around 13% per annum. Now, that’s not too bad at all! Of course, as with all other investment vehicles, future performance are never guaranteed.

On top of that, collecting coins and banknotes, in my opinion, gives you a sense of pride in owning a piece of history. It’s great for viewing pleasure too! Also, something to talk about during family parties eh?

Come to think of it, it’s an investment effort that can be treated as a hobby.

Two key problems that I see with collecting coins and banknotes are:

1. Subjectivity in pricing

Due to lack of freely available public information, determining the price of item can be rather hard. For shares, share prices are quoted on the exchange. For coins and banknotes, it is not traded centrally.

2. Liquidity

In terms of selling the coins and banknotes, it won’t be as easy as selling off shares.

Anyway, I’ve bought myself my very first piece of banknote yesterday for AUD10.00. It’s a FINE-condition 1 Ringgit Board of Commissioners of Currency Malaya and British Borneo. It’s from 1953. Peruse the photos below.

My next important task now will be to gather information on how to be a successful coins and banknotes collector.

Till next time folks..

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Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.

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About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.

Comments

  1. Hello, Investment may be counted on the gross or the net basis. Net investment is gross investment minus depreciation.

  2. It can be a bad investment to hold on to old treasures. You never know if 50 years from now they will be devalued. It is all a supply and demand concept I suppose.

  3. The same could be said to stocks as well. Nobody can predict where an individual company will be in the next 50 years, let alone the next day. Yup, it’s all supply and demand.

    Talking about supply and demand for old treasures, a single banknote might have a catalogue value of $10,000, but if nobody wants it, then you won’t be able to make money from it. Say, an Australian banknote that is worth $10,000 that nobody wants in Brazil.

  4. That is true, very good points.

  5. Hi!
    When come to this, I think the best thing is to do your marketing properly. In this world nowadays, you can sell anything that people want to buy.

    See You around.

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