Turning Hobbies into Cash

How Collections Can Pay Off

Turning Hobbies into Cash
May 26, 2014

Are you a collector? If so, you live for the thrill of filling in gaps in your collection and stumbling upon that incredible deal – whether it is for antique silverware at an estate auction or an undervalued rare doll at a local flea market. But do you think of your collection as an investment? Should you think of it as one?

Using hobbies as a source of cash requires a slightly different mindset than collecting as a pure hobby. Here are a few areas requiring mental adjustment.

  • Understanding the Market – As a buyer, you already have a baseline understanding of your collectible's market, but sometimes the seller's perspective is very different. For example, is there any reason to believe your collectibles will appreciate or depreciate in the short term?

    Talk to other sellers and do online research to determine proper pricing and recognize trends and value. Specialized pricing guidelines are available for just about anything you can imagine.

  • Removing Emotion – Can you really sell that antique doll handed down from your grandmother, or the rookie card of your favorite baseball player? If you can, will you be able to place a realistic price on it?

  • Authenticity – You may not care if you can prove your autograph of Marilyn Monroe is authentic. A buyer will care very much.

    There are many good resources and references online to help you judge authenticity and direct you to professionals in your chosen collectible field. There are also a lot of bad resources and fake "experts," so check reviews of all sources thoroughly.

  • Condition Assessment – All collectibles are condition-sensitive, and one of the hardest things for collectors to do is to assess objectively the condition of their beloved collection.

    For items like coins, stamps and sports cards, there are objective guidelines and professional grading services. Other fields may require you to find online examples for reference. Visual examples are about the only way to stay objective, and even then, it may be difficult.

  • Scarcity – The baseball card industry almost killed itself in the late 80s and 90s, cranking out cards as if they were Argentinian pesos from that same period. The results were pretty similar. It took the card industry about seven years to recover fully.

    Most modern collectible producers cannot help themselves and cannot restrict supply enough to maintain value. For cash value, stick with earlier, scarce issues. For older collectibles, scarcity is not usually an issue – but just because something is scarce does not mean it is valuable.

  • Avoiding Hype – Collectibles follow the "ketchup rule" – the more lavish and numerous the adjectives are, the worse it usually tastes. Items heavily labeled/promoted as "Limited Edition" or "Collectible" are the equivalent of generic "Extra Fancy Ketchup" at a cheap diner. Feel free to buy these things if you enjoy them, but do not consider them investments.

  • Cyclical Nature of Trends – Things tend to wane and bottom out in popularity after about a ten-year period. For example, who knows how many Beanie Babies are sequestered in attics? Eventually, nostalgia sets in and the real, lasting value is determined. Keep track of long-term trends and be patient.

Whatever you collect, take the time to do diligent research before you start to sell. Look for professional organizations, trade magazines and Internet groups. They will help you properly value your collectibles and find the best places to sell them – whether it is on eBay, local shows or other means.

Finally, if you cannot bear to part with a piece of your collection – don't. There is nothing wrong with the many joys of simply being a collector. If you want better credit cards to grow your collection, check out MoneyTips' list of credit card offers.

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