Can You Really Make Money “Investing” in Collectibles?

My husband loves collectibles. He has bought nearly every action figure associated with the Lord of the Rings movies. For his birthday last year, he insisted that I get him nothing; instead, he opted to buy a high-end Batman statue/figure. He’s already decided to forgo Christmas in favor of a Darth Vader statue from the same company.

One of his justifications for spending on collectibles is that it’s sort of an “investment.” After all, collectibles can be worth a lot of money down the road, right? (Personally, I don’t care if he spends on them, as long as he keeps it to what we can afford, but he likes to have a rationalization for his spending.)

Unfortunately, how much a collectible is worth later doesn’t depend on its popularity now, or even its “cool” factor. Whether you collect sports cards, movie cards, action figures, or Beanie Babies, here are some things to keep in mind before you “invest” in collectibles:

Is It Mass Produced?

The reality of any collectible is this: The more there are, the less valuable it is. Rarity matters when it comes to collectibles. There’s a Magic the Gathering card that goes for more than $800 in some circles — because it’s rare. And the label “Limited Edition” may not be enough to determine rarity. In some cases, there are still millions of “limited edition” collectibles produced and sold.

Some of the collectibles my husband has are rare. Consequently, they are likely to go up in price. He has one international LOTR scene set that has already doubled in “value” since he bought it. But just because it’s worth more now doesn’t mean that it will still be worth as much later.

Someone Needs to Be Willing to Pay

What happens when the market drops out? At the height of the Beanie Babies craze, people were paying insane amounts of money for little plush toys. Unfortunately, the market dropped soon. Eventually they stopped being the “must have” toy. Now you can get them for less than $5 on eBay. While some versions are still expensive, the demand in general just isn’t there — and that means that they are no longer as valuable as they once were.

This is a possibility with any collectible that you purchase. If you plan to purchase a collectible for investing purposes, you need to consider demand, and realize that you will only get what someone, somewhere is willing to pay.

Keep it in Good Condition

Because my husband is a collector, he cringes at my son’s habits. My son loves Legos, and Lego sets. He has quite a few Star Wars and Harry Potter themed sets. And mini-figures (including some that go for more than $20 apiece). Of course, my son is a 10-year-old boy. He opens the boxes and puts together sets. Some of the older sets have even been mixed around. Mini-figures are missing heads and arms. My husband knows that the Lego sets won’t be worth as much later on as a result.

If you expect to make money later on, you need to keep your collectibles in good condition — preferably in “mint” condition. If you can manage to hit on a rare item that people will want later, and if you can keep it in near-perfect condition for a few years, a collectible can be a decent investment.

What do you think? Do you view collectibles as investments?

5 comments to Can You Really Make Money “Investing” in Collectibles?

  • Over the years, my wife collected Teddy Bears which turned out well. Since we downsized, we just do not have the room for collectibles anymore.

  • One of my fans collected smurf figurines when she was younger and sold the lot for 3k. I’d say for her, it was worth it. Never know these days what you can sell and make a fortune from.

  • ForryShaa

    As per my point of view collectibles, like art, or stamps or comic books do not have a measurable fundamental value. Certainly, they provide enjoyment to some people who love to examine them. But the only way to make money investing in collectibles is to find someone who is willing to pay more for them than you did. So, you, or an adviser you use, better have intimate knowledge about what drives peoples’ preferences for the collectible you are considering. If you have expert insight, it might be rewarding. But, “don’t try this at home……….but it’s a suggestion only….:)

  • I do collect some Gloomy Bears (Japan character) it is not popular as it seems. But I still collect them even though It is not sellable here in Philippines. But it’s pretty expensive though, but I’m still craving to put them up on my cabinet and stare to them in amazement. But my sister always tells me. “I hope you could sell them after you got bored staring on your babies”. And yeah, I think she’s right.

  • I saw a tv show the other day about a lady who had spent over $250,000 buying collectable shoes. They brought in an appraiser to determine the value of the collection, which she was sure was worth over $500,000. After the appraiser explained that the value of the collection was hindered by the fact that the collectables were mass produced and made solely as a collectable she kicked him out of the house. After a rant to the camera about how the professional appraiser didn’t know what he was talking about, the collection was appraised at $10,000.

    I think it’s possible to make money with collectables, however not with any mass produced items. Even with handcrafted or limited supply items, it’s still a gamble more than an investment.

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