Una and the Lion

Thinking ahead SINCE last month’s Editorial “Comment” I have received a number of (not for publication) letters and emails explaining the reason why you, the readers, collect coins and I was quite surprised at how many of you admit to collecting as some kind of investment. You see coins both as a way of saving and, you hope as a way of making money in the future too. Indeed, a few of you pointed out that the reasons we all sought out the Victorian and Edwardian coins from our change when we were children weren’t necessarily as noble as we might make out today. We weren’t searching for die varieties and rare dates for the sake of it—we were searching for such coins in order to sell them on, make a profit, supplement our pocket money. We rarely kept the valuable coins—we had our eyes on what we could buy with the money we made from selling them to “real” collectors. True, many of us kept our own small collections and that has grown into an adulthood hobby, but all too often we were guilty of selling on the rarities, kidding ourselves that we were doing it in order to fund our collecting in other ways—after all why keep a 1905 shilling from your change if the sale of it can buy a number of other coins AND leave some money for other things too? As we grew and started earning money, we were happy to keep the 1905 shillings, and indeed, eagerly sought out the rarer coins, but as children? Let’s be honest we probably started by looking out for specific coins to make a bit of cash on the side. Today’s boom in collecting modern coins has, to a certain extent, been fuelled by the same desire—every week it seems we are being bombarded with stories of errors that are fetching £1,000s on-line (some actually do make some significant sums) or of “rare” 50 pence pieces that “could be worth a fortune”. One company has even produced a “rarity index” showing the relative scarcity of each coin by minting numbers and it is often reproduced in newspapers and website articles, whipping up interest in what a coin may be worth. This seems an ideal boost for the hobby but the problem is that whilst the index is accurate, relatively speaking, what it doesn’t tell you is that although the 50th Anniversary of the Health Service Coin of 1998, with a mintage of just over five million is indeed far scarcer than the Samuel Johnson 50p of 2005 (with a mintage of 17.6m) it isn’t actually rare, and thus isn’t ever going to really be worth more than 50p—certainly not if it has come from your pocket or your purse. Nevertheless, that doesn’t stop the ever-hopeful who are forever contacting us trying to find out whether their Suffragette 50p really is as valuable as they think (it isn’t, there were just over three million minted, the only 50 pence pieces worthsignificantly more than face value are the “underwater” swimmer from the Olympic Set where the design was later changed to show her face clear of the wavy lines, and the Kew Gardens 50p—but even with that one there were still 210,000 and eventually all who want one will have one and the price will drop). The fact that people think of coins in this way: as ways of making money, inevitably leads on to viewing them in a similar way as we mature as collectors; we can’t help but see our coins in terms of what they might be worth, not because that is the primary reason for collecting but just because we are conditioned to think that way from an early age and such thinking is reinforced by the media. Indeed, how often have we justified a large purchase by telling ourselves (or just as often our loved ones) that what we are buying won’t ever lose its value, in fact will probably only increase in worth? With such a mind-set, thinking our collection as an “investment” is inevitable and indeed in some cases will lead to people buying solely for that reason. I understand that, it makes sense that we really couldn’t justify large expenditure without considering the future. A few lucky people can of course, but for most of us we can’t be quite so blasé about spending huge sums on a hobby—style it as an investment and it’s a different matter entirely. That’s all well and good and I wish all of you collecting as an alternative investment only the very best of luck. I would add only this: none of us have a crystal ball, none of us know what the future will bring, what “return” our investment might give us; coins might well be a perfect investment that will pay off handsomely in years to come, but they might not. So just in case they aren’t and they don’t—don’t forget to enjoy your hobby too. Have fun with your collecting, approach it with a smile as well as an analytical financial mind. That way, no matter what happens in the future, you’ll never really lose out at all.