Hands up if you hate old crockery? Well, here's an admission. I collect Crown Lynn pottery. The better pieces of the pottery from Crown Lynn's West Auckland factory that we all loved to hate as children, now sells for thousands of dollars.
One piece, a Wharetana humidor made in 1953 for the Queen's visit to New Zealand sold for $7,000 on Trade Me recently. Sadly I wasn't the vendor.
Collecting has been embedded in our psyche since pre-history. But these days savvy collectors make money from their obsessions. Buttons, old telephones, and ancient Amstrad computers are among the huge variety of collectible items. Money can be made from all of them.
But you’re not going to make a fortune by raiding the bach for a few old cups and saucers. Despite the odd quirk such as Wharetana Ware and New Zealand Railways cups and saucers, most old stuff is worth only a few bucks a piece, if that.
The best way to make money from hobby investing is to anticipate the next curve. For example, most of us will remember those ugly old Feltex rugs of the 1950s depicting Rotorua, the Auckland Harbour Bridge and other iconic scenes. These days they can fetch $2,000 or more at up-market auctions houses such as Webbs Auctioneers.
The catch when it comes to hobby investing is that unlike shares or rental properties, hobby investments don’t pay a dividend or rent and your purchases are not tax deductible. The good news is that you won’t pay capital gains tax unless the Inland Revenue Department classes you as a trader.
If you're more serious than me about making money from collecting there are a lot of issues to consider. They include:
- Do you have sufficient capital to buy museum-grade artefacts?
- Have you the time and money to take care of your collection?
- How will you increase your knowledge?
- Is there a market for the items you want to collect?
- Do you have the time horizon to wait for them to appreciate in value?
- Will you be able to let go of items when the capital value goes up sufficiently?
- Do you have the cash to fund insurance?
- Are you prepared for the long-term commitment?
In my opinion unless you’re planning on keeping a collection in storage [which would eat up the capital gain anyway], it’s best to choose items you find attractive as well as potentially good investments.
Finally, I have to say that my Crown Lynn hobby investing is just really a hobby. I'm not willing to pay thousands of dollars for a piece of Wharetana ware or a Frank Carpay "Handwerk" vase. I just dream of chancing upon investment-grade pieces at a garage sale for a few bucks.
Have you made money from collecting?