The first collectible craze that I was old enough to be aware of was the Beanie Baby mania of the 1990s. I knew one woman—a mother of two little boys who couldn’t have cared less about stuffed animals—who made it her mission to own each and every one of the Beanie Baby line, and often resorted to downright crazy behavior to get the harder-to-find animals. She justified her collecting habit in two ways: the toys were for her kids, and as long as she kept the stuffed animals in pristine condition, they would be worth something someday.
Unfortunately, a quick Google search (or even a look around at local garage sales) will show you that with a very few exceptions, Beanie Babies are now worth next to nothing. So much for my friend’s good investment.
While pretty much anyone outside the craze could have predicted that Beanie Babies would not become a hotter commodity than they already were, there are some collectibles that do increase in value. The question is, how do you tell the difference between a passing fad that will eventually become clutter in your home, and something that will someday be worth big money? Here are some things to consider when purchasing collectibles:
Part of the problem with Beanie Babies as an investment is the fact that they are nothing more than cloth and stuffing. Yes, they were insanely popular at the time, but their inherent value is fairly low. Unless you have a reason to believe that people will continue to value them highly in the long term, jumping on a fad is a tough way to invest.
On the other hand, things that are already considered valuable, like original artwork by a famous artist or a signed first edition by a literary genius, are going to be expensive to buy in the first place, even if they do continue to go up in value.
Finally, some things that are low in inherent value—like baseball cards, for example—can become incredible investments. The baseball card collector who kept his Babe Ruth rookie card in mint condition before anyone knew what heights Ruth would reach would certainly be pleased to know the incredible prices collectors will now pay for that card. But it’s important to remember that other cards featuring non-famous players that came in the same pack might be worth very little these days.
Ultimately, however, the value of the collectible needs to be important to the collector. The reason Beanie Babies had such a stunning fall is because many people who didn’t give a hoot about the toys were buying them up in order to sell them. So if you care about the piece you’re buying, then it doesn’t really matter what it will be worth in the long run, because you’ll be glad to own it.
Predicting Future Value
The tough thing about using collectibles as an investment is that it requires you to look into the future. All those children collecting baseball cards in the 1930s (and comic books in the 50s and 60s) could hardly predict that one day the things they bought with their weekly allowance could be worth hundreds, thousands, or more. Otherwise, they all would have kept them in sealed boxes, rather than using the cards as noise-makers on the spokes of their bicycles.
But part of the reason why these items are worth so much now is because very few people did keep them, let alone in perfect condition. It’s next to impossible to know what collectors in the future will value—although it’s always a good idea to keep your collectibles in excellent condition and to hold onto rare items.
The Bottom Line
Collecting items should be something you do because you love what you’re purchasing. Buying things because they will be an investment is not only an insult to the collectibles—someone out there would really love them—but it’s also a poor money-making strategy.
Do you have a collection? Is it for fun or is it an investment towards the future?
Editor’s Note: I have a rather large baseball card collection from when I was young. Some of them are worth a nice amount of money and some are virtually worthless. My friend J$ from Budgets Are Sexy has a coin collection and this is something that will almost always be a good investment.
Emily Guy Birken
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