$700,000 coin collection: what it means for your investment strategy

Angus Kidman 19 July 2016

Penny450240

Got a spare million or so? There are some rare Aussie coins up for grabs.

Next week, the Dr George Fenton Collection of Australian Commonwealth coins 1910-1964 will be auctioned at the State Library of NSW. Auctioneers Noble Numismatics estimate the collection will sell for at least $700,000.

The set includes some very rare Australian coins, including a 1930-dated penny (valued at $75,000) and a high-grade 1920 penny. Fenton began the collection in the 1950s as an 11-year-old, sorting through coins to find rare dates. The collection focuses on pre-decimal coins, meaning nothing from 1966 or beyond.

There are two lessons we can learn from this. The first is that any long-term investment strategy takes time. Fenton began his collection six decades ago. If he'd only started collecting last year, it's very unlikely he'd have seen a return on that scale. You might decide to invest in a proof issue of the new Australian $5 note when it appears later this year, but it will be decades before there's any increase in value for that purchase.

The second is that while $700,000 sounds like a lot of money, that doesn't necessarily mean the investment will prove profitable. These aren't just face-value coins that have been put aside, though that it how Fenton started his collection. The most valuable inclusions are unusual collector items, and would have been expensive to acquire even decades ago. While their value may well have increased over time, we don't know (and never will know) whether Fenton would have made more money by putting the same funds into shares, or paying off his mortgage faster.

That said, shares won't necessarily give you the same enjoyment as building up a collection; the research involved is a pleasure in itself. I wouldn't advise collecting coins as the backbone of anyone's financial growth strategy. But if you enjoy the activity for its own sake, there's a chance it will eventually pay off.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

Picture: Noble Numismatics

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