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Making Coins and Your Budget Mix
By David C. Harper, Numismatic News
September 26, 2013

This article was originally printed in Numismatic News.
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It’s budget time for various boards and organizations that I serve on in the Village of Iola. If you like working with numbers, which many collectors do, putting a budget together is a fascinating exercise. It is an exercise that every collector should undertake for their own hobby purposes as well.

Do you know how much you spend each year on your coin collection? You should, if for no other reason than to keep peace in the family. Every dollar you put into coins can be interpreted by others as a dollar not available for something they might like. Knowing the exact amount makes it easier to explain and it eliminates the impression that collecting is some sort of haphazard, impulsive activity that costs large sums of money from time to time that might have better gone toward a new kitchen floor or refrigerator.

Many collectors I have met over the years do a little vest pocket dealing to help them generate the funds necessary to pay for coins they want to buy. However, that is not something everybody would want to undertake.

My point is to pick a number, any number, and then stick with it for the 12-month period beginning Jan. 1. Having a number in mind is a promise to others in the family that here is what will be spent and no more.

It shows you are not some sort of out-of-control spender.

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On the other hand, how many times have you agonized over a purchase simply because you can’t quite justify the cost at that specific moment?

If you have a budget, it will make the decision easier. Is the possible purchase price within your budget? Then go ahead and make the purchase. If it isn’t, don’t make the purchase. Either way, you have removed the source of feeling any possible guilt. You should then be able to enjoy what you do buy all the more.

Buying coins as an investment is another aspect to consider. It is not really part of your hobby budget.

In recent years we have seen the proliferation of Individual Retirement Accounts that include gold and silver bullion coins. These should not be treated as some sort of all or nothing bet. Too often, this approach can lead to huge losses because decisions are based on worst fears rather than careful planning.

If you want to make an investment in bullion, or coins, it is best to figure out what percentage of your investments should be devoted to them.

In the case of bullion, professionals have suggested 10 percent. That seems like a pittance when prices are rising rapidly to dizzying heights, but it is reassuring if you are remembering purchases of the last two years that have now sunk below their acquisition costs.

The key in all investments is diversification and to make contributions regularly. Yes, I know this can seem tedious, but if you won’t do this for yourself, who will? Besides, now that you have read this, you can be assured that the topic won’t come up for another year.

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• See what guides and supplies our editors recommend for keeping up with your collection.


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