Can someone explain personal equity?

[NeedsExplanations]

Hello there.

I need help- fast. I will explain to you my situation, and my question, and I really hope that someone out there can provide the answers I need. I am brand new to this forum, but I figured it's the place to be, considering what my questions are. Please, please, PLEASE read over my entire post...I really need your help!

Alright. My name is Veronica. I am an eighteen year old girl who has never had to deal with anything financial. I don't even have a credit card yet. I've been poor my entire life, and the most I understand about personal financing is: Go to work, get a paycheque. I'm really rather clueless.

My grandmother passed away a few months ago, and I didn't find out until last night, but she left me an inheritance. In her youth, she was a writer, a speaker and a psychic. It's not cash she left me, it is her HUGE collection of jewellery she collected during her career. All of the pieces are antiques, and long story short, this jewellery collection is worth a lot of money.

The collection isn't entirely mine though. I'm fairly certain my mother and I are dividing it right in half. Now, our current financial situation is way past desperate, so I know we'll be going to a jewellery shop to have it appraised, and I'm 98% certain she will choose to sell her share. I believe she would rather have the money than the diamonds.

Anticipating this, I am looking into equity before we go to the appraisal. From the brief research I have done, the worth of these jewels counts as personal equity. If I choose not to sell my share, can I use my equity to immediately re-purchase what my mother has JUST sold, thus keeping the entire collection together and doubling the equity?

It truly does have more to do with the sentimentalism of it all than just "equity increasing!" It's been in my family for a long time, and I have the same gifts my grandma had in life. I'm following in her footsteps, and I just feel the collection shouldn't be divided, and it sure shouldn't be sold as seperate pieces.

Am I on the right track here? Is there anyway I can use the equity from my jewellery to keep the collection together? I'm intelligent in anticipating the moves other people will make and coming up with plans to get my way, but as I have stated, I really don't understand how most of this money stuff works.

For anyone who can really break this down for me please, please explain it as though you're explaining to a child- help me understand so that when the jewellery box arrives, I have a clear understanding of what to do.

You have no idea how much I appreciate your help (well, if you've read my post, I'm certain you do!)

Also, since these pieces are antiques, does this mean that their value will go up every year?

[maat55]

As far as a lender is concerned, you are wishing to borrow money to buy jewelry using jewelry as colateral. My guess is that not very many lenders will lend for this type of loan to an 18 year old.

You would be better off trying to persued your mother to sell to you direct. I'm no expert on jewelry, but I assume it is considered a comodity in the financial comunity. Lenders will want significant proof of value to start.

On a personal note, in what way do you consider them sentimental? In reality, it's just jewelry. I can see there being a specific sentimental value to one or two pieces, but not the collection as a whole. The question is: would you buy this collection for the price you will try to borrow, if it was not owned by your grandmother? Another question you should ask yourself is: If I were starving, would I sell some of this collection to buy food?

As an investment, you are probably going to loose on this deal. Before you attempt to buy this, you should spend considerable amount of time researching jewelry as an investment.

I present these idea's to you to make you aware that it's common for youth to make decissions based on emotion, rather than good sense. Good luck with your dilemma.

Here is an explination in Wikipedia.

Personal Equity Plan - Wikipedia, the free encyclopedia

[disneysteve]

I've been poor my entire life

our current financial situation is way past desperate

Given these two statements, is keeping all this valuable jewelry really such a good idea? It sounds like this gift from your grandmother could be used to give you a great new start in life and lift you out of poverty. What a wonderful legacy that would be for her. Perhaps you should consider holding onto a few favorites pieces for a remembrance and selling the rest.

As for borrowing against the value of your share, I'm not sure how one would go about doing that. A lender would need some type of assurance that you wouldn't borrow money and then run off and sell the collateral. Plus, you are only 18 which makes it more difficult.

Good luck.

[Joan.of.the.Arch]

Perhaps taking the jewelry to a pawn shop is what you are thinking about. At a pawn shop, you can drop off your jewelry and leave with money (not its full value). If you want, they make a promise not to sell the jewelry for some given period of time--like two weeks. If you return with the money plus some amount of interest to pay them, you can get the jewelry back. If you do not return the money plus the interest (or what ever they call the fee), they are free to sell it at any price to anyone they want.

Say, you have sold the the pawn shop a ruby ring and they gave you $20 for it but you agreed to repay $35 if you want it back within two weeks. Then your situation fails to improve and you cannot get your ring out of pawn as you don't have the $35. After that two weeks, the shop is free to resell it. They might sell it to another dealer and you'd never see it again. They might add it to their collection to sell to buying customers. Maybe you'd go in to the shop day after day and see it on display with a $125 price tag on it. At that point, if you want it back, you would have to pay $125. Your chance to get it back for $35 is gone. Then one day you go in, and you see the the ring is totally gone. Someone else in your town has bought it.

Personally, my advice is to outright sell everything , except perhaps one piece as a remembrance of your grandmother. However, if it really is antique, make sure you take it to a jeweler who deals in antiques, perhaps one who is willing to auction it or otherwise sell it on commission if its value is truly higher due to being antique and somehow special. But brace yourself. No all antique jewelry is anymore valuable than a piece bought at a department store today. And if it is not valuable for its craftsmanship, rare desirable design and such, it is probably going to be worth a lot less than you imagine. Jewelry resells for much less than it retails. Um, right now there are rings at a certain store advertised for $99 which are normally $400. Yet, the seller is still going to make a profit. Someone who bought that ring when it was $400 may be really shocked to take it to a jeweler or pawn shop and find herself told it is worth way less than $99--for a ring that had cost her $400.

[scfr]

I agree that it sounds quite unlikely that you will find a way to finance keeping all of the jewelry yourself. Even if you did, you would have to insure all of it and probably pay for a safe deposit box to store it, which would end up costing you out-of-pocket.

Have you thought of ways you could preserve the sentimentality of the jewelry while also going ahead and letting go of it physically? As others have suggested, I love the idea of keeping just one or two pieces that mean the most to you. (Perhaps there is a piece that you could one day use as your engagement ring?)

What if you had nice photos taken of you wearing the jewelry before selling it? Down the road, you could look at the photos and re-live the memories of the jewelry.