Collecting for Fun and Profit

Collecting has been around forever. People like to save things. The wealthy have been collecting antique paintings, porcelains, and furniture for generations. Today, however, collecting isn't limited to the rich. It seems that everyone—young and old, rich and poor—is getting into the act.

As with putting money into a bank or investing in the stock market, collecting has become another way for some people to increase their wealth. In this way, collecting is a form of investing. The idea is to buy an object today and hold onto it long enough until it appreciates in value.

Collecting is multifaceted. For kids, collecting can offer several benefits:

• Fun. There's the enjoyment of pursuing collecting as a hobby. Instead of sitting in front of the TV or playing video games, your child can be looking through pocket change to start a coin collection.
• Educational. Collecting can be a learning experience. Kids who collect stamps, for example, learn all about countries throughout the world. One boy who loved Godzilla toys got so into collecting Japanese toys of that ilk that he eventually pursued Japanese studies as his college major; he plans to work for an international company doing business in Japan when he graduates.
• Low-cost. Collecting can be an inexpensive way to start a high-priced collection. Kids can collect things they like for little or even no money and then can watch how the value of things changes over the years. For example, premiums from McDonalds and Burger King that cost a kid nothing can be worth a lot in the future (maybe even the near future). McDonalds gave away special Beanie Babies as part of their Happy Meals for kids; as you may know, Beanie Babies have become a division of collectibles unto themselves. Recently, the complete McDonalds Beanie Babies collection was valued at more than $100 (remember they cost nothing above the regular cost of the Happy Meals).
• High-return potential. While there's no guarantees with collecting, baby boomers who had saved their baseball cards or D.C. comics from the 1950s would be sitting with quite a valuable collection today. A 40-year-old Barbie in mint condition in the original box is worth about $10,000 today!

Getting Started on Collecting

You may not have to suggest collecting to your child: She may already be a collector of Barbie dolls, costume jewelry, or coins. Kids love to save things—no great news to a parent who has complained of piles of stuff in the child's room. But you may want to offer direction and support for your child. Here are just some of the things you should point out to your child before she becomes addicted to collecting:

• Know what she's getting into. As with the stock market, your child should know about what she's buying before she puts her money down. Learning about collecting is explained in Build a Collection Without Going Broke.
• Understand the responsibility that comes with collecting. If she's investing her allowance or wages in her collection that she hopes will increase in value, she had better learn to take care of it properly. Most collectibles lose value very quickly if damaged in the slightest.
• Put limits on how much money to put into a collection. It's easy to get carried away, but collecting, like saving, should be an item that's budgeted for. Having only a set amount to spend at an antiques show will certainly mean that some things are beyond her grasp, but it's a bad financial habit to start spending beyond the budget for items and then falling short of cash to pay expenses.

Before your child decides to spend time and money pursuing a collecting passion, it's a good idea to know more than just a little about what she's collecting. This will help her define what she's looking for and avoid getting taken (for example, spending too much to buy something that, with a little research, would have been revealed as overpriced or a fake).

Also read a book on your child's area of interest. There's probably a book out there (or at least a chapter in one) for just about anything your child could conceive of collecting. As the old saying goes in collecting circles, “Buy the book”—and read it before starting. It's the only way to protect against getting ripped off by sellers who try to deceive or who don't know what they've got. Also check out general price guides, such as Kovels Antiques and Collectibles Price List 1999 (it's revised every year), Schroeder's Antique Guide, or Price Guide to Flea Market Treasures by Harry L. Rinker. Page through specific books as well; for instance, A Guidebook of U.S. Coins by R. S. Yeoman is called “the redbook” and serves as a guide for coins collectors.

More Ways to Learn About Collecting

Learning about collecting coins or old lunch boxes isn't limited to books. You can get information in other ways about the items your child is interested in.

• Join a club. There are clubs for collectors of all kinds, and they're not hard to find. Ask a dealer, look in a book on the area of interest, or search the Web. Clubs are important to collectors of all ages for several reasons. Not only are they a social avenue to connect with people of similar interests, but they also offer valuable information about the collectibles. Most clubs have newsletters that detail what's happening, and schools may have stamp or coin clubs. Most schools also let kids start new clubs if they can show there's enough interest schoolwide.
• Watch TV shows about collecting. The premium show on collectibles is the Antiques Roadshow on PBS. People bring in old family heirlooms and other “treasures” for appraisals by the experts in their fields. Watching the show can demonstrate to your child how easily even a grown-up can fall for a fake.
• Go to antique stores, antique shows, and flea markets. Your child doesn't have to be a buyer to enjoy the viewing at these places. He'll get to see what's out there and will be able to talk with dealers and other collectors about his area of interest. There are usually shows and flea markets going on somewhere in the country every week.
• Search the Web. Today, the Internet is being used by collectors in a number of ways. Some collectibles clubs have Web sites that inform members of what's happening and help you connect with others of the same interest. For example, there's the Original Beanie Babies Club, with more than 6,900 members, at members.aol.com/BongoAmy/. Ralph and Terry Kovel, perhaps the best-known experts in the field of antiques and collectibles, offer online advice, information, and even a price check option at their Web site (www.kovels.com). Collectibles are now also being sold on the Internet through auctions and classified ads (explained in Build a Collection Without Going Broke).

Excerpted from The Complete Idiot's Guide to Money-Smart Kids © 1999 by Barbara Weltman. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

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