Why I Don’t Recommend Investing In Collections

estate sale

Jun 5

Earlier this year, I was in a long conversation with a friend about an estate sale we were working on. I was elaborating on all the collections we were continuing to find and how much time we were investing in researching the worth of each item.

You may remember this sale. 225 salt & pepper shakers. 180+ Barbies (in box). 75 Christmas Village/Houses.

My friend was listening intently, quite intrigued that people amass collections such as these.

He interrupted my story with a very matter-of-fact question that stopped me in my tracks.

“Do you think people should invest in stuff like that?”

Pause. “Well….” I began to answer yet he continued.

“If you were advising a young person, would you encourage them to invest in collections of stuff or not? Based on your research and knowledge of market value.”

It didn’t take me long to form an answer.

“No.”

Let’s evaluate why I do not recommend investing in collections.

Collections of stuff take up space

They also incur a storage cost. You may find yourself paying a storage facility to store the precious wares which only diminishes your return on investment.

If you don’t put them in a storage unit, then you have to put them somewhere. In your home. Possibly your garage or attic. That also comes at a cost to you.

Collections require maintenance

By maintenance, I mean they require consist watch and care to ensure their original condition is protected.

Remember in this blog post I walked through what makes an item collectible and valuable. The condition of a vintage item plays a huge role in whether it will retain its value and/or appreciate.

Collections Appreciate Very Slowly

For example, most of the Barbies in our estate sale collection were purchased for $40-$60 retail. At the time of the estate sale, 90% of them were worth $10-$20 resell.

There was a small grouping that were worth $100+.

If I buy a Barbie in 1995 for $40 and can resell it for $100 in 2023, then I grossed $60 over 28 years. However, if I subtract out the storage cost, the maintenance cost, and the cost of inflation, I’m looking a significantly lower return on my initial investment of $40.

..If they Appreciate At All

There have been many a collection that we have sold at a fraction of the cost to our client. Tom Clark Gnomes immediately come to mind.

What I Would Recommend To A Young Person

To anyone looking to invest in something I would recommend stocks, precious metals, and mutual funds.

Collect gold, silver, and stocks. They take up WAY LESS room and their appreciation is much greater than a large grouping of Barbie dolls or salt and pepper shakers.