Even though I am a dealer who has a reputation as being very pro-collector, I hadn’t actually collected anything numismatic (with the exception of 19th century books and catalogs) for a number of years. Being a dealer and a collector simultaneously is very difficult and I certainly did not ever want to find myself in a situation where I was debating whether to sell a new purchase or to keep it for my collection. This changed around two years ago when I let myself get talked into collecting National Bank Notes. A dealer friend of mine had been an avid collector of Nationals from his home state for a number of years and his enthusiasm was contagious. I started to dabble and, before I knew it, I was hooked. Two years later, I am a confirmed Natty-holic.
So what have I learned in my reconnection with collecting and what sort of advice can I give to you, the collector? Following are a few ideas. Please note that although I am collecting paper money, I think the gist of what I am saying is applicable to coins as well.
Specialization Works For Me
I’m the sort of collector who would rather be very knowledgeable in a few areas than semi-knowledgeable in many. That’s why I decided to focus on just one specific state for my National Currency collection. I feel the same way about coins. I’ve written this a jillion times before but I am strong believer in the adage that being strongly focused as a collector makes you stronger at assembling a really great collection. Now, I don’t necessarily believe in being ultra-specialized. I could care less about varieties that are impossible to see without strong magnification and I am, in my own way, as much of a type collector within my specialization as I am a date collector. But every time I get bored and think that I should expand my collection to include another state or two, I realize that this is a bad idea and that I’d rather have a great specialized collection that a random group of interesting pieces.
Eye Appeal is Everything
If an object isn’t aesthetically appealing to me I don’t want it in my collection, no matter how rare it is. I’ve already been faced with situations where I have had the chance to purchase a very rare but very ugly note. In every one of these situations, I’ve chosen to pass on the note. Even though I plan on assembling a set that includes at least one piece from every town that issued notes, I am not yet in the mindset that I’ll buy something that’s ugly just because it is very rare. I would assume that, as my collection progresses, I will have to buy some pieces that are duds from the standpoint of appearance. But these will probably be among the last items I purchase and they will be made with a degree of regret. I have also reached the conclusion that, at this point in my collecting career, I would rather have a really pretty duplicate example of an interesting note (or coin) than a single example of a rare but unattractive issue.
Having an Expert In My Corner
While my level of expertise has clearly improved greatly since I’ve started my collection, I will be the first to admit that I am not yet an expert. While I think I have a pretty good eye, I am not yet sophisticated enough to detect very good alterations to notes. That’s why I’ve elected to have a really smart dealer be my representative at auctions. In my opinion, paying him 5% for his expertise is one of the best deals I can imagine. I’m certain he’s already saved me from myself at least a few times and he’s also encouraged me to be more aggressive on items that I should probably be buying but was figuring too cheaply. As a beginner, it’s really hard to collect without someone assisting you and I, for one, can heartily recommend establishing a good working relationship with one or two experts in your chosen specialization.
Older Is Better
In the field of paper money, you can neatly divide the body of all notes issued into two parts: large size and small size. When I first collected, I focused on small size notes. They were cheaper and more available. But as I looked at more notes and became more sophisticated, I gravitated towards large size notes. Using a very basic analogy, I came to see the division in notes as the equivalent of early coins (basically pre-1900) versus modern coins (post-1900). When I was a coin collector, I always preferred older coins and, in fact, never purchased any pieces struck after 1890. At this point in my collecting career I am willing to spend more money on older notes and to have fewer pieces in my collection. That said, I will buy small size notes but they have to have a very strong “coolness factor” for me to give them consideration.
Establishing a Comfort Zone
While I am very comfortable buying notes in the $500-5,000 range for my collection, I still do not feel comfortable enough to buy very expensive notes. A few months ago I was given the opportunity to purchase a small group of very rare (and expensive) notes that would have unquestionably taken my collection to the next level. But they were priced at levels that exceeded my comfort zone and I decided to pass on them. In retrospect, I wish that I had purchased at least one or two of them but, to be frank, I’m just not quite comfortable enough with my new collection to spend this amount of money. In another year or two, I probably will. And I think this is good advice for any collector. Establish a comfort zone for the first few years you collect and don’t exceed it until you feel that you are ready to do so.
Use the Best Resources Available to You
When I first started collecting coins as a child, information was hard to come by. You had to guess at how rare coins were and pricing was essentially a crapshoot. Today, there is a staggering amount of great information available to collectors in almost all areas. I quickly learned that for National bank notes, I had amazing resources available. To learn more about the notes, I bought Don Kelley’s incredible reference book. To get an idea of rarity, I purchased Kelley’s census information. And for pricing, I referred to the CAA/Heritage auction archives and Sandy Bashover’s Track and Price software. For coins, there is comparable—if not superior—price and rarity information available for nearly every series. In my opinion, the accessibility of this information has made collecting more fun than ever.
Make Some Collecting Friendships
Collecting tends to be a solitary pursuit but I’ve found that one of the real benefits from buying any sort of object is the friendships that you make in the pursuit phase. I have two close dealer friends who both happen to be collectors of National bank notes. Whenever a new auction catalog arrives in the mail, I know I can count on getting emails from both of my friends about the notes in the sale that they think I will be interested; just like I send them emails about the notes from their states that I think they will be bidding on. And after the sale is over, we inevitably compare our success from the sale. What’s really funny about this is that the three of us almost never talk about coins, even though we are all extremely successful in this arena. But when we meet up for dinner at a coin show, the talk inevitably turns to our collections. To me, this is an extremely satisfying part of collecting; maybe THE most, in fact.
Think Long Term
When I buy a note, I don’t worry about flipping it for a quick profit. I’m assembling my collection over the long term and hope to have at least fifteen to twenty years worth of effort into it before I even consider selling it. That’s not to say that I won’t at some time in the future analyze my holdings and make a decision to weed out the duplicates and the duds. But I’ve found that buying for the long term makes collecting alot more fun. I’m using funds that I don’t have to worry about for more pressing needs and I look at my collection as a long-term asset that is going to provide my family and I with some nice income when I’m old and no longer interested in it.
As I mentioned above, I’ve really enjoyed my foray back into collecting. I think it’s made me a better dealer and I’m looking forward to expanding my collections in the coming years. And who knows—maybe I’ll even start to buy coins again!