Let's talk about money

[El Cazador]

23 minutes ago, Sulla80 said:

@Salomons Cat, a thoughtful post and thread.  Although they certainly retain some value, I treat coins like any other form of "entertainment" whether that is a movie ticket, sporting event, concert ticket or an airline ticket with hotel.  I can get quite a few hours of entertainment from one coin.  I do not have a defined budget other than "reasonable as entertainment".  Your 50/30/20 Budget offers a sound framework (especially with the assumption that "wants are broader than coins" - apologies to all for this potential heretical thought.  @Ryro's approach "avoid bodily harm" makes sense whether the risk of harm is from one's spouse, lack of food & shelter, or a determined debt collector.

The missing element to this thread: a photo of the coin of interest that you mention 🙂

Yes, “coin of interest” @Salomons Cat

[sand]

16 hours ago, Hrefn said:

@sand, kudos to you for sticking to a budget.  A budget is mental permission to spend, a pre-authorization in medical billing terms.  (It would be easy to just say authorized, but jargon is so dear to the heart of bureaucrats, whether commercial or governmental.). I am curious;  if you do not spend your budget amount for the month, does it carry over to the following month?

...

I am a buy and hold collector.  Is this really so uncommon?

Hello @Hrefn. Here are my answers, to your 2 questions.

1. If I don't spend my budget for a particular month, then I don't carry the money over to the next month. I always try to spend less than my budget, every month. If I spend way less than my budget for a particular month, then that makes me happy, these days.

2. I'm a buy and hold collector. If I remember correctly, I've only ever sold 3 coins, and they were all US coins. 2 of the US coins were upgraded, and the other US coin I didn't really like very much. I sold the 3 coins, at coin shows, which was easy to do. I have some coins, which I don't like very much. I may sell some of them, someday. But, it's not very many coins, and they aren't very valuable, and I didn't pay a huge amount of money for them. I don't think, that I'd get much money for them.

I agree with @ela126, when he said, that coin collecting can become an addiction. I think, that I've been addicted to coin collecting, at times. As @ela126 said, perhaps sometimes it's good to take a break from coin collecting. Perhaps it's good, to have multiple hobbies, because perhaps it lessens the danger of getting addicted to any 1 hobby. For me, coin collecting is less fun, if I believe that I've spent too much money on coins. Also, it seems like, sometimes peer pressure, such as on a coin forum, can feed a coin collecting addiction. It seems like, a coin forum can sometimes be an echo chamber, in which other members echo one's addictive thoughts. It seems like, it's a thin line, between fun and addiction.

But, as many have mentioned above, if 1 day you find, that you've spent too much money on coins, then you can sell some coins.

Edited October 6, 2023 by sand

[Phil Anthos]

I had to decide a long time ago that I would only buy coins I would still love in 30 years, otherwise my obsessive nature could ruin me. 

Being a budget collector I usually build a coin war chest which I add to when I can. My wife limited me to whatever change I came home with, so I started buying my coffee and getting all the change in quarters. I was adding $100+ a month this way! And with but one exception I've never spent more than $500 for a coin, and very few of those.

But I do dream a lot.  😉

~ Peter 

Edited October 6, 2023 by Phil Anthos

[ewomack]

I have loved coins, I love coins, and I probably will always love coins. But I really hate spending money on them. They represent mostly guilty pleasures and luxuries. I went through times when I knew, absolutely, that I had a serious coin addiction. If I returned from a coin show empty handed, I went into a temporary depression, or something very close to it. I often bought coins merely for the sake of buying them. The vast majority of those purchases now sit in the "regrets" pile. I still need to sell them. Instead of giving up the hobby altogether, which I didn't really want to do, I started tracking every purchase. Looking at the cumulative total periodically provided an early warning sign for over-spending. It worked. I also forced myself to become extremely picky. As others have said, if I don't think I will enjoy a coin in 5 years time or more (which isn't an easy thing to estimate, of course, but the exercise helps inspire a different kind of thinking), then I won't buy it. No more impulse buys. So no auctions. My most recent purchases took days, and one took weeks, of deliberation, research, and thinking before clicking the "buy" button. If the coin vanished in the interim that just made the situation easier. If I lost interest in the coin in the interim, which happens, then all the better I didn't buy it. Now a coin needs to "speak to me" in some kind of ineffable way for me to even consider buying it. This "speaking" doesn't always make sense, but I know it when I feel it.

No more buying to impress other collectors, either. Some above also mentioned that forums can, for some people, feed a sort of "peer pressure" to buy and show off the nicest possible coins. I'm not saying that forums are trying to do this, I don't know, but that is definitely one impact that they can have on some collectors. It's something to be extremely careful about, especially when one sees posts of expensive coins, usually gold, receiving mounds of attention and congratulations and more modest examples receive only a few simple "likes." For those susceptible to these psychological situations - I have been - buy as if forums don't exist. Or, in other words, would you still buy the coin if you had absolutely no one to show it to?

All of these thoughts, and others, have kept my coin buying mostly under control in recent times. I still think I buy too many, but I know I would buy many more without keeping these thoughts in mind. I also never want to buy a coin that would prove a financial burden all by itself. As such, I could never spend $5,000 or $10,000 on a single coin, no matter how much I liked it. Something like that would end up locked away safe in a vault and likely never seen again. I would be too worried to bring it home. That's not fun at all, at least not to me (if purchased as a true investment, that's another story). To provide some kind of borderline for budgetary "safe" purchases, I've decided on a rough limit of somewhere between $250 to $300. Purchasing something above that amount feels too uncomfortable for a hobby. I can also easily shelter against that amount of loss were something to happen to the coin. Of course, I would go a little above that for the right coin, but it would have to be a blazing specimen. For example, I recently saw a coin on a dealer's site for $350 that I would love to buy, but it's over the specified limit and it's not "nice enough" for me to pursue, or so I tell myself. A few years ago, I would have already bought it, likely without having thought too much at all.

Coin buying can easily become addictive, just like any other collecting hobby. Rationalizations can cause further out of control buying. Threads like this help people like me stay within safe boundaries. It's good to revisit this topic once in a while, which this forum seems to do a few times a year.

Edited October 7, 2023 by ewomack

[Nerosmyfavorite68]

The 50-30-20 strategy is an excellent plan.

I'm pretty good about staying within a budget and not overspending on coins.  My coin buys are about 10% of my take home income.  I also semi-retired from my other hobby, freeing up money.  At least coin dealers don't ask me to participate in endless projects.

I've saved a ton of money and hassle by completely ignoring both coin auctions and ebay.  The last auction 'win' that I can remember was around the year 2000.  I'm not even sure if I won many coins; most of the ones I remember were remainder lots.  If it's not fixed price, I don't want it.  I thus have cost certainty and I can plan out upcoming buys.

[Steppenfool]

The most I've paid for a coin was £150, a price easily achieved on a receipt for a meal for two at a mid-range restaurant. All in all, I purchase coins somewhat sporadically and with money that I consider absolutely disposable. I think coins make up about 5% of my total budget.

Although, I have spotted a coin in one of tomorrow's auctions that I would love to own, and have stuck a £220 (!) proxy bid on it. I won't go a great deal higher than this, and the coin is probably worth a great deal more so I don't plan on winning either. It's what I call a FOMO bid, which is something I learned to do after watching many items slip away at prices Iower than I would have paid on eBay.

I would see a coin that I desire, but one that is not very high on my want list. Oftentimes I wouldn't bother bidding, thinking the coin will inevitably sell for much higher than I am willing to pay, and that the coin is not important enough for me to follow the auction. Later I would be going through my Watched List, see what the coin hammered for, and realise that I could have won with a very low offer, which would cause a bit of frustration.

Therefore, I have defined a FOMO bid as a bid that I make only to ensure the coin does does not sell for a price that I would be annoyed at when I check what it hammered for. I don't watch the auction, I don't wait to bid tactically, I simply stick my FOMO bid in when I first spot the coin and then don't think about it. FOMO bids are generally about 60% of what I consider a fair price for the coin. These are obviously much more effective on eBay compared to normal aucitons. I have only won with one FOMO bid since its inception, this small Constantine II that I bid £5 for and won for £1.29.

 

 

Edited October 7, 2023 by Steppenfool

[Salomons Cat]

Thank you all for your great comments!

@Steppenfool, these FOMO bids are an interesting concept. I would do it exactly like this if I was an investor or a coin dealer.
I've tried doing something like this once or twice but I had the feeling that I ended up with coins that I didn't want 100%. For some reason these FOMO bids don't seem to work for me so well; I don't know why.
I would probably reconsider the FOMO bid strategy if I had my own vcoins shop. But unfortunately I've read that you don't get rich with that 😄

On 10/7/2023 at 5:27 PM, ewomack said:

No more buying to impress other collectors, either. Some above also mentioned that forums can, for some people, feed a sort of "peer pressure" to buy and show off the nicest possible coins. I'm not saying that forums are trying to do this, I don't know, but that is definitely one impact that they can have on some collectors. It's something to be extremely careful about, especially when one sees posts of expensive coins, usually gold, receiving mounds of attention and congratulations and more modest examples receive only a few simple "likes." For those susceptible to these psychological situations - I have been - buy as if forums don't exist. Or, in other words, would you still buy the coin if you had absolutely no one to show it to?

I absolutely agree with everything that you wrote. "Likes" on social media tend to create addiction. There is already a bunch of research about that. This forum is designed to work in the same way: We get a notification for every "like" that we get - and even if we're not aware of it, such push up notifications already cause a tiny dopamine rush in our brains. That's why I turned them off in the account settings. I can only recommend that. I'm already a bit addicted to WhatsApp - too much social media addiction cannot be good.

@Sulla80 and @El Cazador wanted to see the coin of interest... well, here it is 😊 (arrived yesterday)

Edited October 21, 2023 by Salomons Cat

[panzerman]

Ancient/ World coins in high quality are steals compared to over hyped US/ Canadian/ coins. The top "10" most $$$$ coins are all USA/ except for a Umayyad AV Dinar AH77.

Back to topic/ I find I really love collecting coins/ and 67 Corvettes (which would be so much more fun to drive in Germany/ no spped limits on Autobahn/ here we have to obey 100km limit)

I have a simple solution to coin budget/ i just work full tilt for 8 months in my lawn/ garden service business/ I do all the work/ thus not many expenses/ and I can do the work of six employees/ thus make 300K in eight months. I then put 50K into my 67 vette fund/ 150K into nice coins. This year I have added 60 coins to my coll. Just bought this from MA-shops this morning.... England/ AV Half Sovereign ND (1549) "Mullet" mint mark/ Third Coinage/ Tower Mint/ Edward VI 1549-50

5.07g. 30mm.  .920   12h

Happy collecting!

[Ursus]

On 10/5/2023 at 4:00 PM, Hrefn said:

horses, boats, and large old houses are very effective money vacuums.  

I've got little experience with boats, but you're spot on when it comes to old houses. Plus they cost a lot of time: I've reached the point where crafts and woodworking have become less a hobby than a regular chore that is necessary to keep my 150-year old house from falling into disrepair... And you haven't even mentioned kids. Our firstborn daughter is due to arrive very soon, and I'm gobsmacked by how expensive baby stuff is!

As a result, my coin budget is way less than 20% of my income. On average, I have spent about 110€ per month on coins in the last two years. I can happily collect on this budget without turning my hobby into a financial burden. If it were otherwise, the whole thing would stop to be fun.

 

[Hrefn]

Boats are fun, but they should be rented, not purchased.  Where I live, cars should be able to get through deep snow and go off-road.  Houses could be rented also, but home ownership also functions as an enforced type of savings and an inflation hedge, so on balance it makes financial sense.  Until you decide to extend and remodel the kitchen, a couple of bathrooms, redo the heating, electric and plumbing systems, reroof the house, granite countertops, slate tiles in the entranceway, plexiglass windows for the screened in porch to turn the area into a 3-seasons room, paint the exterior, etc., etc. ad infinitum.  Plus, foundation work, the mention of which should inspire all home owners with a deep sense of dread.  Buying a two hundred year old house entails costs.  

House repairs brought collecting to a standstill for about 2 years, and I even liquidated some very nice coins which I would have trouble replacing today.  The picture below is taken at a scale of $5000/cubic meter/month, or one tremissis per square foot.  

[Ursus]

52 minutes ago, Hrefn said:

House repairs brought collecting to a standstill for about 2 years, and I even liquidated some very nice coins which I would have trouble replacing today.  The picture below is taken at a scale of $5000/cubic meter/month, or one tremissis per square foot.  

Hey, are these my tools?! I've got the same DeWalt orbital sander and the smaller version of the Makita belt sander. Good, chunky and reliable stuff.

I absolutely feel you. It's one thing to buy an old house, but it's a completely different and far more difficult as well as cost intensive thing to remodel it. Below are the various stages of my living room over the course of the last year. It took a lot of money and elbow grease to get to the third picture.

(And please, be so kind to give me a trigger warning if you plan on ever mentioning foundation work again – that's the stuff of my nightmares!)

Edited October 21, 2023 by Ursus

[Limes]

On 10/5/2023 at 6:44 AM, Salomons Cat said:

Do you have any rules when it comes to buying coins, or do you decide for each individual one if you can afford it or not?

Interesting thoughts and questions, even though its not new years resolutions time! Thanks for sharing. 

To answer your questions: yes and yes. My main rule is to keep the total amount of coins in the collection low (not value per se, but thats another issue). Currently Im at 127. Ive sold quite a few (mainly cheaper) coins over the years, and will keep doing that I think, continuously refreshing the collection. 

I dont adhere to a budget strictly, but I do keep an eye on it. I make sure to cover expenses first, savings second, and what is left I can spend. My collection focus is small too, which helps with the total amount of coins and expenditure. 

My per-coin-max increased over the years. My most expensive one is a budget Domitian aureus, my cheapest something like 60 euros (ex fees and so on). I dont have a max per coin. 

I like to think Im not an addict. But the comment by @ewomack made me think. I agree with it. There is some sort of pressure coming from forums, or e.g. the podcast from Berk, showing all these fantastic issues. Especially when the 'cheaper ones' still costs hundreds of dollars. But, its also part of human nature, to be sensitive to that, and it takes a strong mind to not be influenced by it. So, good comment! 

[Rand]

While I usually voice myself on the risks of collecting hobby addiction, pointing out the positives to prevent the thread from becoming too gloomy is helpful.

Close neurobiological links exist between feeling happy and the compulsion to seek further stimuli. It is hard to put the costs on feeling happy! I am not aware of robust research on the matter, but if the hobby helps mental health, money used to build a collection in happness are better spent than money spent for treatments in misery.

While forums and seeking likes may trigger irrational behaviours, the forums are excellent ways of communicating with same-minded people and the sense of belonging to a social group.

I do like the thrill of bidding, the desire, almost lust, for getting new coins. I feel sad when older friends dispose of their lifetime collections. This tends to be a grim sign.

Being a specialist collector, letting coins pass may be more difficult as many varieties are unique and may only appear once in my lifetime. The coin I desire most was last (and only once publicly) sold 40 years ago. For this reason, it is not uncommon for me to bid many times the estimate. However, the other side of specialist collecting is that when the amount of material on auctions depletes the allocated collection budget, there is plenty of joy in working on the database and literature and putting together historical puzzles.