Sunday, January 4, 2009

Banknote and coin collecting; for collection or investment?

Many of us like to keep something for an investment. Coin and banknote collecting is a hobby but many Malaysian nowadays join banknote & coin collecting just for investing. Most of them is a young teen who just started to have some job and don't know what to do with their money. Some of them looking for other kind of investment beside stock market, property etc. This is good for coin dealer like me but a bit sad story for my collector point of view.


Most people do collecting because of the historical significance the coin or banknote has. If you have read my later post Spanish coin; pillar dollar, on the pillar coin stated the words VTRAQUE VNUM which meant "both are one". An expression of Spain oneness with its colonies. Why do that coin been called as pillar dollar? Is this coin special or have a great history? This is a story that most collector like me is eager to know. For me, any banknote & coin collection have its own story to tell.



Some people do collecting coin and banknote because the looks and artistic beauty of that particular collection itself. I collect Bhutan banknotes as on my later post Bhutan Banknote; land of thunder dragon because of the thunder dragon picture on the banknote and the temple picture on top of a hill. It is also the same story for Suriname Banknote; land of birds. The beautiful birds picture in all Suriname banknote make me wonder if Suriname is known for its birds.

Many people do collecting because they start from circulation banknote and coin in their country. I am a Malaysian, that's why I collect Malaysian banknotes and coins. I collect any banknote and coin that related to Malaysia; Penang-coat of arms series, Sarawak, British North Borneo, Malaya & British Borneo and Straits Settlements banknote and coins. I still kept my first banknotes collection which is a Malaya and British Borneo $10 dollar or called duit kerbau because of the Buffalo on the paddy field. I bought them for RM30 and the price for this item is around RM200 right now. Some joy feeling that only collector like me can appreciate.
How about investment? What to look for if you want to invest in coin collecting? Investment is about risking your money and in the end you're hoping that your investment will give you profit, is it? The easy and safe investment is to collect silver and gold coin. Buy as many cheap silver coin you can find and keep it. Try to keep it for at least 5 years to make profit. The only thing you need to look for is how to test for Silver and Gold. Just consider that as a risk you need to learn and swallow during the learning process.

Some people gamble their money in buying and selling Iraq dinar which is not acceptable in some country yet. Their theory is that when that money is in circulation in the future, the price will goes up and everyone who buy them will be a millionaire. Good luck for everyone who invest their money in this scheme.

You also can check you banknote or paper money for replacement banknote. Replacement banknote is printed to replace a faulty banknotes and is a rare in circulation. You also can check for some rare Malaysia banknote and coin and read about it on my later post How to start collecting label. Tan Sri Ali Abul signature RM1 banknote and Malaysia 1971 10sen coin is some that is worth to invest for if you can get them at a cheap price. Some people also collect Freak banknote and coin and same prefix or different prefix solid number banknote.

If you like to do some investment in banknote and coin collecting in Malaysia, flea market and Money Changer shop is a good place to look for. I have been doing my hunting trips for my banknote and coin not because I want to invest but I don't like buying my items at an expensive price. Some banknote and coin dealer, do sale their item at a very expensive price then what the Standard Catalogue market value suggest. While some is selling them expensively because it is a running number banknote. I try not to buy my item from local coin dealer and do the hunting myself.

The new type of collector making collecting coin more adventurous. People who collect for investing will keep their item for a long time and thus making the value of some of coin and banknote increasing. What you want to do is your choice. Just make sure you have a good reference book about coin collecting and a book that you can easily bring to travel with you. They're many fake and scam coin and banknote out there. For collecting or for investment, both also have a risk of be cheated by a seller. Do check your investment wisely before you commit on them. Good luck.