Build a Collection Without Going Broke

Unless your child has unlimited money and unlimited time, it's impossible to start with a great collection. It may take years to even get up to “good.” But he has to start someplace, and getting there is half the fun. In putting a collection together, there are certain rules for anyone—young or old—to follow.

• Buy what you like. The most important thing is to enjoy what you're buying. Whether the thing goes up in value or not, your child will like having it around. Some people buy an object with the expectation that it will someday be worth a lot of money, but this doesn't usually turn out to be the case. In fact, it's often true that if the money had been put into a stock mutual fund instead of the collectible object, the collector would have had more money in the long run. If you buy what you enjoy, though, you'll get pleasure from it throughout the years—something that can't be measured in dollars. And there's always the possibility that your item will be the one that does, in fact, appreciate.
• Buy the best you can afford. Quality always counts, and collecting is no different. Most seasoned collectors will tell you that it's better to buy one quality item than several inferior pieces. That quality item has a chance of appreciating, or at least holding its value, while the inferior pieces probably do not.
• Trade up. As your child's collection grows, she can weed out the things she doesn't treasure anymore. Sell those things and use the money to buy better-quality items for which she may have acquired a taste. One child who showed his collection of antique racing cars on the Antiques Roadshow explained that he could afford to buy a car for $1,500 by using the profits he'd made from buying and selling other cars in his collection. As with the stock market, however, it generally doesn't pay to be a day trader. If your child wants his collection to be an investment, then he should be prepared to buy and hold for the long term.

A-Hunting We Will Go

There's no telling where your child can find his next treasure—it may already be in your home or around the corner. The great thing about hunting for collectibles with your child is that it's a way to spend time together. A junior high school child may be loathe to be seen with a parent at a Saturday movie matinee, but she may gladly go garage sale shopping.

Here are some places to search for things to add to a collection. Where to look may depend on what your child is looking for:

• Antique stores. The sign says “antiques,” but don't let that term keep you out. The merchandise (and the price) may be well below the standards for Sotheby's and Christie's, the two largest auction houses for fine antiques.
• Antique and collectible shows. Shows are run on a regular basis at various locations throughout the country. On just about any weekend, it's easy to find one well within driving distance if you live near a city. Local shows are usually well-advertised in newspapers and with signs in the neighborhood.
• Flea markets. Less pricey than antique and collectibles shows, flea markets may carry the kinds of things your child is looking for. Flea markets usually are held at regular times at a set location (for example, every weekend, or the first Sunday of every month).
• Garage sales. Someone else's unwanted discards may be your child's treasure: Garage and yard sales may contain things well within your child's price range. Of course, there's no going back if you find there's been some mistake, so make sure your child knows what he's buying before he puts his money down.
• Thrift shops. Like garage sales, thrift shops may yield real finds if your child has the patience to weed through the piles of items on the shelves and knows what to look for. Look carefully at the condition of wanted items: Poor condition may mean a low price, but there's little chance that the value of the item will ever increase.

Of course, there now are online ways as well to find and buy collectibles to suit just about anyone's interests.

Buying Online

Growing in popularity are the online auctions for collectibles, where people can bid for items they see at online sites. For kids, there's nothing to keep them from participating in this buying venue other than controls you may place. Setting controls is a good idea, something that one mother had wished she'd used when she learned that her son, thinking it was only a game, had bid almost $3 million and had won bids of over a $1 million at online auction sites. Of course, your child also will need your help to pay for items he's bought (usually a check, but increasingly a credit card).

Be extremely cautious about any online purchases. It's virtually impossible to be sure of an item's quality or authenticity just by viewing it online. Keep these other warnings in mind as well:

• Buy from a dealer who's reputable to avoid rip-offs. Don't know a dealer's reputation? Start with inexpensive purchases until a level of trust has been established.
• Before buying, ask about the return policy if your child isn't satisfied. Most online dealers are very amendable to returns, although you'll probably have to pay the cost of shipping and insurance. The dealers also may be willing to adjust the price (for example, if something sold as “mint” turns out to be slightly damaged and you decide to keep it in that condition).
• Pay by credit card if the seller will accept it. If the item is not as represented and the seller won't take it back, you can refuse to pay the credit card charge.

Auction sites to check out include these:

• eBay is by far the largest auction site, with nearly a million items listed in more than 1,000 categories.
• Auction Universe is much smaller but may have things of interest for your child's collection. Click on www.auctionuniverse.com.
• Yahoo!Auction has a growing auction market. Click on auctions.yahoo.com.
• Excite has both an auction and a classified market for collectibles online at www.classifieds.2000.com.

Trading Up

One of the benchmarks of certain types of collecting—particularly of small or inexpensive items typically collected by children—is trading. One of the lines from the movie Big, in reference to the character's baseball collection, was “got it, need it, need it, got it.” This is how it goes, and it's not limited to baseball cards. All it takes to trade is two willing parties.

Trading, or bartering, is one of the oldest ways by which people acquired something they wanted or needed. It typically didn't require any cash; it took only two parts: the willingness to give up something else of value, and someone else to want that thing. Trading is a way for your child to cull unwanted items from his collection and replace them with more desired ones. Trading is particularly useful to kids because they don't need to pay money to get what they want; they use what they already have.

Trading teaches kids some important money lessons as well. The skills acquired in trading carry over well beyond their experience in collecting:

• Learning to fix value. Until your child gets a good idea about value, he may give up more than he gets. Much to the chagrin of their parents, many elementary school children have traded an expensive toy for a cheap one because they've wanted the cheap one. But it doesn't take long for kids to learn about the value of items they're collecting. Most 11-year-olds who collect baseball cards know what it takes in trade to acquire a Mark McGwire rookie card.
• Learning to negotiate. Generally, trading involves compromise by both parties to arrive at a final deal. Each side wants to get the most for what's being traded; your child can't always get the exact deal she's hoping for.

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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