The profit potential of collecting

The investment potential of banknotes has been evident over the years. Some items have seen a growth in value of 10,000% since the end of the last war! American Confederate States notes, for example, could then be bought for about 25c each in the USA. Now, they are hard to find for 100 times that amount. Even the indiscriminate collector can expect profit in the long-run, for most banknotes tend to rise in value. Scarcity and demand are the chief factors that govern market values, and banknotes are only produced in limited numbers, so when production of each note ceases, the existing examples can only become increasingly scarce and therefore increasingly valuable.

Sometimes banknotes soar in value due to some historic or newsworthy event. For example, various European banknotes greatly increased in value where they were replaced with the new Euro currency. Hong Kong notes doubled or even tripled in value around the time of the Chinese take-over. Many alert collectors and investors anticipate these rises in value and realise big profits be buying up the notes before they rise in value. Remember the recent volcano in Monserrat? One month, Monserrat notes were just as desirable as any other East Caribbean State banknote. As soon as the volcano rendered the island uninhabitable, shrewd dealers and collectors world-wide bought every Monserrat note they could obtain, knowing that it was unlikely that any more would be printed.

If a banknote collector ever fall s hard of heel, he has a valuable nest egg in store, which he can sell at one of the specialist collectors’ auctions – often at an amazing profit. Many collections however, are passed on within the family – to a son, a daughter or a grandchild. Indeed, a banknote collection makes a superb family heirloom, for besides being a thing if monetary value, and a gold-mine of interesting information, it also conveys the spirit of the compiler.