collectibles

The Weekend Financial Wrap: Your Next Job, Your Home Values, and Your New Opportunity

March 20, 2021 By Max Erkiletian Leave a Comment

If you are unemployed, your chances of getting a job are improving; your house is probably worth more, and you now have an unprecedented chance to own a valuable collectible.

You may have thought the high cost of investing in collectibles, such as art, was too expensive. However, there is a new collectible market you can afford and it is booming. We are talking about NFTs.

What Are NFTs

An NFT (Non-Fungible Token) represents ownership of a unique item on a blockchain. They can be digital files, such as GIFs, JPGs, MP3s, videos, and more, representing art, music, sports cards, and other creative works.

NFTs have grown into a sizable market. Messari, an online database for the crypto industry, estimates NFTs sales for 2021 will exceed $1.3 billion.

This month digital artist Beeple (real name Mike Winkelmann) made headlines when his digital collage sold for $69 million at a Christie’s auction. The price tag not only set a record but signaled the arrival of NFT art in the mainstream.

NFT Opportunity

Don’t have a spare $69 million to layout on an NFT? Not to worry. The average price of an NFT is about $2,000. A few sales, such as Beele’s, drive the average up. Most NFTs can be purchased well under $1,000.

Some artists regularly sell NFTs for a couple of hundred dollars or less. Sports NFTs can go for six figures, but many can be had for under $10. Then there are brands. Taco Bell recently sold a drop of 25 product NFTs for $1.60 each. Within a couple of days one of those sold again for $20,000.

Hot To Buy NFTs

First, understand that when you invest in an NFT, you are actually purchasing a token that establishes your ownership. It’s like a title to your car.

Because they are part of blockchain technology, NFTs must be purchased on specific sites. Some of the most popular include:

Rarible – The world’s largest NFT platform. It sells mostly small pieces of digital art for hundreds of dollars and less.
OpenSea – Artwork here tends to be higher priced than Rable. It also sells trading cards and domain names.
VIV3 – Here you can find a variety of art in low to high price ranges and sports NFTs.

Bottom Line on NFTs

If you want a piece of the NFT market, look for quality and rarity. The best advice is to buy what you know. If you follow sports, but do not know anything about art – stick with sports reels and cards.

Your Home Equity Has Probably Increased

If you own your home, congratulations. One of your most valuable assets has probably increased in value. That is an additional resource that makes your financial life more secure.

Home equity is the amount you owe on your mortgage versus the current value of your home. Equity in the average home has risen 16.2 percent over the last year, according to CoreLogic, a real estate analytics company.

How To Determine What Your Home Is Worth

The traditional method for finding out your home’s value is to hire an appraiser. However, that is expensive and may only be necessary if you are selling.

There are several sites online for valuing your home. Some will ask for square footage, the number of bedrooms and bathrooms, and similar information. Others will simply ask for your address.

Among the best of these sites are:

Redfin.com

Eppraisal.com

Ownerly.com

Greater Financial Security

This jump in home equity means your financial position is more secure. If you need more funds to wade through the pandemic, you could tap some of that increased equity.

This uptick in equity could moderate the recent downturn in refinancing. However, you can also use a HELOC or home equity line of credit, to access the money in your home.

Of course, if you are financially sound, you do not have to use the increased equity in your home. You can do nothing and just breath easier.

Update Your Resume

If the pandemic has put you into employment hibernation, it is time to wake up.

Jobs increased 379,000 in February, according to the Labor Department. That brought the unemployment rate to 6.2 percent. That is a small decline of .04 percent. However, economists and business consultants predict a further decline in March.

How To Stand Out in the Job Market

Increased vaccinations and reduced COVID-19 cases mean the economy is beginning to reopen. That means more jobs. Look for our article next week, “How to Make Your Pandemic Lay-Off a Plus”, for more.

One of the best ways to make your application stand out is to role-play. Put yourself in the position of the hiring manager. Ask yourself what he/she is looking for. That should be evident in the job posting.

If a job post lists specific qualifications, highlight those in your resume and cover letter.

To really stand out, Do not follow the crowd. Go directly to the decisionmaker. Try to send your cover letter and resume directly to the hiring manager’s email. To find that email, you can search a couple of Chrome extensions: Clearbit and AeroLeads, or LeadFinder.

One Million New Jobs

Ian Shepherdson, founder and chief economist at Pantheon Macroeconomics, issued a note earlier this month stating the economy “could easily see a one million” increase in jobs.

“The core story here,” wrote Shepherdson, “is that the re-opening of services will be the dominating factor in payroll numbers over the next few months.”

Indeed, leisure and service jobs lead to February’s employment rise. The foodservice industry alone accounted for 286,000 more jobs. Manufacturing and retail are expected to follow.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

When Insuring Valuables, A Homeownersâ€™ Insurance Policy Is Often Not Enough

January 12, 2015 By Guest Writer Leave a Comment

Your homeowners insurance may not cover all your valuables

By Melissa Neis

Valuables and collectibles – whether coins, fine china, musical instruments, jewelry or art – have special meaning for many and can evoke warm memories of travel and adventures, or reflect great passions and interests. But are these cherished possessions adequately insured from theft, loss or damage? The answer may surprise you.

Many people are unaware that their valuables are improperly valued or under insured. Typical homeowner’s insurance policies only protect your place of residence, personal liability and the general contents of your house, and limits for valued items typically range from $1,000 to $5,000.

If you rely solely on your homeowner’s policy, you most likely will face significant financial costs if your treasured items are lost, stolen or damaged. For adequate peace of mind, consider protecting your prized mementoes, collections and pieces with an affordable insurance option designed specifically for fine possessions.

Start By Appraising Valuables

The first step to insure ideal insurance coverage and policy limits includes working with a qualified appraiser to have an up-to-date value assessment of your possessions. Insurers require appraisals to validate an item exists, confirm the value, and serves as a description in the event of a loss.

An appraisal also can assist in asset management, estate tax returns, estate planning and in the distribution of assets. In addition, it can help establish equitable distribution of jointly owned items, determine a donor’s income tax deduction for charitable donations and prove the value of an object for sale or purchase.

When selecting an appraiser, consider a recommendation from a trustworthy source. Also, choose a qualified professional who is certified by a nationally recognized organization. The appraiser should have at least five years of field experience – the minimum amount necessary for membership status in a professional appraisal organization.

As you search, be sure to ask to see the appraiser’s curriculum vitae, a professional resume that will show the person’s expertise and experience.

In addition, ask the appraiser to clarify the fee structure in writing and to share a sample appraisal. Fees should be hourly, daily or a set rate and never commission-based, as that practice is considered unethical.

Once you have selected a professional appraiser, the process should feature the following elements:

1) Statement of purpose (insurance, donation, etc.)
2) Sworn statement of objectivity from appraiser
3) Full description and identification of objects or items
4) Condition of objects and their origin
5) Firm statement of value (not ranges or estimates)
6) Discussion of how value was arrived at with supporting documentation
7) Signature of appraiser

As markets fluctuate, so does the value of your pieces. Thus, it is recommended that you have your appraisals reviewed every three years.

Insuring Valuables

With the appraisal complete, the next step is to choose the right insurance coverage. As mentioned previously, basic homeowner’s insurance is not enough to cover your cherished valuables.

You will want to choose an insurance policy that offers broad coverage based on the item, value and location. Consider if items are transported and where. A broad insurance policy can be used to cover unexpected disasters and happening such as breakage, storm damage, smoke damage and mysterious disappearance.

There are two main forms of additional insurance coverage for your fine possessions. One is to insure each item individually with additional floaters to your home insurance policy. A floater covers one specific piece of personal property. The other option is to buy broader blanket coverage for each category of valuables, such as jewelry, antiques, art, wine or collectibles.

With the more expensive itemized option, you schedule, or list, each item individually, while with the less expensive blanket option, you select a total limit of coverage and do not itemize.

Despite the fact that it often requires appraisal of items, it’s in your best interest to itemize if you have a number of very expensive items.

For less expensive items, consider blanket coverage. If you choose blanket insurance, be sure to keep all of your information handy such as appraisals, bills and receipts for these possessions.

No matter which insurance option you choose, be sure to maintain an inventory along with proof of the value of all of the significant belongings in your house for the insurance company. If you didn’t schedule the items in the policy, you’d have to present this proof to the insurance company.

A sentimental loss is hard to replace. Insuring your valuables will provide peace of mind and protect the special things you’ve acquired and grown to love over the years.

Melissa Neis is vice president of Chicago-based Parr Insurance Brokerage, an independent insurance agency founded to protect high-net-worth individuals and families nationwide with customized insurance coverage. Through national and global carriers, Parr Insurance provides coverage for high-value homes, automobiles, valuable articles, and collections.

(Photo courtesy of michel)

Stuff Is Almost Never a Good Investment

June 24, 2013 By Jennifer Derrick 7 Comments

I had a small chuckle at a yard sale the other day. The seller had tons of Beanie Babies for sale. All of them had the “tag protectors” on the tags and a few were in those little plastic display cases that were made especially for the preservation of Beanie Babies. When I commented on the sheer volume of the Beanies (there were hundreds), the seller said, “Yeah. I got caught up in the frenzy. I thought that I could get enough of them that I could pay for my kid’s college tuition. You know, they’d appreciate and I could sell them. It didn’t work, obviously, because my kid is in college now and here we are.”

I should say it didn’t work. Most of them were priced at $0.25 – $1.00. Even if I assume/estimate that there were three hundred Beanie Babies there, she probably couldn’t have made more than $200 at her sale, and that’s if she managed to sell every last one. That might buy the college kid a couple of textbooks. Given that Beanies retailed for between $5 and $7, we could take an average price of $6 and figure that she spent around $1,800 to amass that collection. (Assuming that she didn’t pay grossly inflated prices on the secondary market, but this is just a quick and dirty example.)

Let’s also assume that she spent most of that money in 1997, which was around the peak of the Beanie Baby craze. It’s now sixteen years later. Had she invested that money in a savings account/CD with a 2% rate of return, it would now be worth $2,471.01. At 5%, it would be worth $3,929.17. And had she put it into some winning stocks and earned 10%, that money would now be worth $8,270.95. Even if she’d just stuck it under her floorboards, she’d still have the original $1,800. None of this is enough to pay for a college education, but it’s a heck of a lot more than the $200 she might have earned at the yard sale.

This happens a lot. People get caught up in the frenzy of a trend and become convinced they can turn their “stuff” into a mega-profit. But in almost all cases, they’d be better off investing the money in more traditional investments.

The problem is that collectibles only become valuable after many years have passed. And most people aren’t willing to hold on to the stuff for that long, or it gets damaged. Beanies might be worth something in another fifty years, or they might not. The collectible market is fickle. For something to become valuable, it needs to be in good condition and so scarce that acquiring it is very difficult. Beanies are still easy to get on eBay and at yard sales. Fifty years from now, the number of mint condition dolls will have decreased through attrition and they might be worth something. But chances are that most of the original purchasers of those dolls will be dead and thus not around to reap any of the profits (if there are any).

This is the reason why most people who “hit it big” in the collectible/antique market are two, three, or even more generations removed from the original purchase. They clean out great-grandma’s house and hit it big with some piece of china or artwork because there simply aren’t any more of them on the market. Maybe all of the originals have been lost or damaged or, in the times before mass production, there just weren’t that many made. That can make something rare and valuable.

In our age of mass production, things are made in such large quantities that even “limited editions” aren’t that limited. It takes years before the supply dwindles to the point of scarcity. It isn’t very likely to happen in the ten to fifteen years you have before you have to send your kid to college or you want to retire. And it’s a mistake to assume that a hot trend today will still be a hot trend when you need to turn a profit. People didn’t think the interest in Beanies would ever die, but with the exception of some die-hard collectors, they’re just another casualty in the trend wars. Like Webkinz, Cabbage Patch Kids, and Giga Pets and all the other trends that were supposed to be valuable. The trend passed and along with it went the money.

People always ask, “What can I buy that will become collectible?” The truth is, there’s no way to know. Today’s seeming sure thing is tomorrow’s piece of junk. Trying to future cast the collectible market is harder than forecasting the stock market. Collectibility depends on so many factors, the most fickle being willing buyers. You may have the last one of something in existence, but if no one wants it, it’s worthless.

Banking on stuff to pay for your retirement, health care, or kid’s education is a mistake. If you’re temped to get caught up in a trend or start hoarding stuff that you think might become collectible, chances are that you’ll be better off if you put that money in some sort of investment product. Even if it’s a simple CD or savings account, your returns will be greater than the future selling price of your stuff. Sure, you might get lucky, and you might win the lottery, too. But the odds aren’t in your favor. If anyone ever reaps a profit from your stuff, it will probably be your descendants, not you.

(Photo courtesy of Lord Jim)