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Collecting in an Uncertain Economy
by Bob Brooke
 I
don’t know about you, but I find the information on the current status
of the economy confusing. On one hand, the Federal Government tells us
that the economy is booming and on the other, many of us don’t see it
when we go to buy groceries or fuel. So what’s exactly going on and how
does that affect how you can continue collecting antiques and
collectibles?
The price of just about everything has gone up over the last two years
and that includes antiques and collectibles. In fact, often the price of
an antique piece may be higher than it’s actual worth. Higher costs have
hit dealers as well as collectors, so they’re passing them on by raising
the price of what they sell to some extent.
 The
antiques and collectibles market fluctuates constantly. The antiques end
of it consists of several tiers—garage sales (the bottom tier), flea
market (the next tier up the ladder), the antique shop (the third in
line), the antique show (the fourth in line), and the antique auction
(the top tier). While there are differences in those individual
categories, it’s the top two tiers where the biggest difference lies.
 You
won’t find prices have increased too much in the lower two tiers. But
costs to run an antique shop—rent and utilities---have risen
dramatically, as they have with other businesses. Fees dealers pay for a
space at antique shows have also risen because the promoter’s cost have
risen, but more likely because the promoter can get away with it.
Lastly, the final bidding amounts achieved at some antique auctions
these days are dazzling. Some items in high-end auctions have sold for
over 10 or more times their estimate. That’s because many of these
auction houses now sell through a network of online sites, giving them a
global audience.
So how can you stay ahead of inflation and still collect what you love?
First and foremost, learn all you can about what you collect. The more
you know, the less you’re likely to impulse buy. A lot of beginners just
collect things without really knowing what the market is for them.
 Traditionally,
antiques books and publications have offered collectors a vast source of
knowledge. However, competition is keen in some categories, so you need
to know as much as possible to avoid getting scammed by fakes. Today,
online sites and ezines, such as The Antiques Almanac, offer an
additional source of information on a wide variety of antiques and
collectibles.
Now your antiques and collectible dollars must compete with grocery,
fuel, and healthcare costs. The best way to still collect what you love
is to set a budget amount and avoid impulse buying.
 Take
a good look at what you already have. Create an inventory of your
collections and make a note of items you’d like to own. Being on the
lookout for items missing from your collections will help you stay
focused when antiquing, either in person or online. By only watching out
for those items you need to enhance your collection, you’ll tend to
avoid buying every interesting item or bargain you discover along the
way.
I collected voraciously for years, then I noticed that items for some of
my collections had either become scarce or had drastically risen in
price. This slowed down my purchases to a fraction of what they were,
but I’m still on the lookout for those special pieces that will add to
my collections.
 Another
way to fight inflation is to sell off some of the lesser quality pieces
in your collections to help fund new purchases. This way you aren’t
really dipping into crucial living funds. But even selling antiques and
collectibles requires patience. Don’t expect to sell things immediately.
Taking your items to dealers to sell them isn’t a good idea, either,
because you’ll only receive a fraction of what they’re worth. In fact,
you may not even get back the money you paid for them.
To know just how much you’re gaining or losing, it’s important to keep a
record of when you purchased an item and what you paid for it. You
should always try to sell an item for at least what you paid for it. If
you can get more, consider the extra amount as interest in your
“antiques saving account.”
 And
speaking of a saving account, consider opening a special high-yield
savings account to fund your antiques and collectibles purchases. With
the higher interest rates imposed by the Federal Reserve, some banks are
now offering high-yield savings accounts. Most of the ones that do are
online. But even if you don’t have a high-yield account, a regular
savings account designated specifically for antiques purchases is a good
idea. Deposit a set amount of money into it each month, much like the
old Christmas Club accounts of years gone by. And deposit any money you
make selling any items from your collections into this account. Only
spend what your account lets you afford. It may take a few months to
build up enough cash in your account to allow you to make purchases. But
this way the money you spend on antiques and collectibles won’t come out
of your household operating funds.
 Another
possibility is to ask antiques dealers who know you if they would accept
payments over time—usually a few weeks or several months—for costlier
items you want to purchase for your collections. The least they can say
is no, but if you’ve bought from them in the past, they may consider
your proposal.
Remember, the longer you hold onto items, theoretically the more they’ll
be worth, but this isn’t always the case. Generally, you need to keep
items for at least 10 years after you purchase them for any appreciation
to occur.
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