I dislike the question of whether someone is a hobbyist or an
investor because it assumes we must be one or the other.
Too often novice collectors and investors squander money buying
money because they disregard the beauty, history and value of numismatics.
Each month in online auction portals hobbyists spend thousands
winning worthless brass-token replicas listed as California
small-denomination gold coins. These fakes have plagued the hobbyist
experience for decades.
Beginning investors often pay over retail for junk silver and
bullion, failing to bid on rarities that continue to appreciate over time.
Anyone who buys coins as a hobby or an investment needs to spend
time studying numismatics as well as the marketplace (reading Coin
World, for instance).
Here’s why: At some point hobbyist collections are viewed as
investments, especially when family members inherit and then try to
I have seen heirs liquidating rare coins at a fraction of their
value to traveling “road shows” that advertise big payouts in local
newspapers and then leave town before the sellers realize a
collection’s actual worth.
True, investors never have to become hobbyists when dealing solely
in bullion. They believe it is easier to check daily market prices for
precious metals than waste all that time learning numismatics (or the
Dow, for that matter).
Their days are numbered, though, because metals rise and fall
dramatically. Ideally, a collector should be part hobbyist and part investor.
Most people define “hobby” according to the second listing in the
online Merriam-Webster Dictionary: “a pursuit outside one’s regular
occupation engaged in especially for relaxation.”
Unfortunately, some hobbyists dislike researching values and
varieties of coins and learning to grade them. To them, “research”
does not connote “relaxation.” In those cases, perhaps the origin of
the word “hobby” might define where their collections are headed.
According to the online Etymology Dictionary, “hobby” is derived
from the medieval word, “hobyn,” meaning a small horse. That led to
the term “hobby horse,” or child’s toy, and the meaning “an activity
that doesn’t go anywhere.”
What about the term “investor”?
The most common definition of “investor” is a person who uses
money to make a profit.
If we are both hobbyist and investor, we will enjoy collecting
coins and will profit doing so, educationally and monetarily.
I’m 80 percent hobbyist and 20 percent investor. What is your percentage?
Michael Bugeja, a coin collector since childhood, is a professor
at Iowa State University and also a member of the Citizens Coinage
Advisory Committee. He is a nationally known author, journalist and educator.