Do You Invest in Collectibles?

Do You Invest in Collectibles?

A recent survey by Spectrem’s Millionaire Corner found that only 20% of millionaire investors own items which could be classed as “collectibles”. Nevertheless, that’s still slightly higher than the number who choose precious metals as an alternative investment, which is just 18%.

The attraction of collectibles, of course, is that it can be a way of combining a hobby with an investment; how many of that 20% collected coins, stamps or sports memorabilia when they were children?

Coins and currency, in fact, seem to be the preferred collectibles among those millionaires who acknowledge investing in collectibles: a quarter of them go for coins and currency. But the survey showed that two other factors which determine which collectibles are favoured by whom, are the size of a person’s wealth and their age.

The survey divided those interviewed into three groups: Mass Affluent (net worth between $100,000 and $1 million); Millionaire (net worth between $1 million and $5 million); and Ultra High Net Worth (net worth between $5 million and $25 million – all figures not including primary residence). The higher the net worth, the more likely that the millionaire invests in collectibles: 27% of UHNW, against 15% of Mass Affluent investors. And it is also the UHNW group that prefers art: 27%, as opposed to 18% of the Millionaire group and 17% of the Mass Affluent.

After the 25 per cent investing in coins and currency, art is the next most popular collectible, with 18% saying that that is their chosen form of collectible investment. A further eight per cent invest in automobiles, and seven per cent choose antique furniture or sports memorabilia. The smallest group – three per cent – said that they invest in collectible toys and books. (Curiously, wine did not feature as a collectible investment.)

Age certainly plays a role in collectible investments; it would be interesting to return to the sample interviewed for the survey in ten or 20 years’ time to see whether their tastes have changed. As it is, coins and currency were particularly favoured by the 45-54 age group, with 29% collecting money. Among the younger millionaires – 21% of the under-44 age group – put their funds into automobiles; while the same percentage of the over-65s choose art. It is the younger age group again, up to 54 years of age, where around 11-12% invest in sports memorabilia.

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