As is becoming increasingly well-known, peer-to-peer lender Unbolted offers wholly non-discriminatory secured asset loans, with customers placing a valuable possession under the platform’s control for the duration of the loan as collateral for their borrowing requirements. Since stamps and coins are amongst the high-value possessions we consider collateralising as security for our loans, we thought it might be worth exploring this asset class a little further here.
Avid stamp collectors often don’t consider their meticulously archived collections as financial investments, but should an urgent borrowing need arise in the context of a temporary cash flow problem, they could literally save the day.
Take the example of US husband-and-wife philatelists Geoff and Jessica Mosher. They paid just 10 cents for a stamp that caught their attention at a local collectibles shop. To their nuanced and experienced eye, it had an interesting look. Shortly after, their interest proved right: they sold it for $200. That’s a return of 199,900 percent.
At a time when interest rates in money market funds are at unprecedented lows, tangible assets such as stamps are becoming increasingly attractive not just to collectors, but to investors too. They may not be a get-rich-quick investment (unlike the Moshers' lucky break, you often need to hold on to stamps for 10-15 years to achieve a solid rate of return), but there’s little doubt that they offer a more promising rate of return than some of the more traditional investments.
The Moshers, for example, see their collection as both a hobby and an investment. Geoff told CNBC news that he could never bring himself to sell his entire collection, but he was happy to sell off individual ones that have value.
Much the same is true for coin collections, interest in which has grown markedly over the past five years. According to Timothy O’Fallon, senior numismatist at Gibraltar Coins, it's set to escalate further over the next 5-10 years, again largely due to the fact that more people are looking toward alternative investments in an effort to protect their wealth from the damaging impact of quantitative easing and low interest rates.
Last year, Intelligent Partnership’s Alternative Investment Report designated stamps and coins as a serious investment class, insulated from the kinds of problems that affect equities. These unconventional investments in collectibles, described in the report as “passion assets” because of the enthusiasm of their collectors, have systematically outperformed many traditional sources of return.
There has been unprecedented interest in this sector, particularly stamps, as reflected in the jaw-dropping $9.5m an anonymous collector paid for a British Guiana magenta stamp at an auction in 2014. That sum was over twice the highest price ever paid for a single stamp.
The global philately market is now worth a staggering $3bn a year (and rising), and there are an estimated 60 million collectors worldwide, a third of whom live in China.
If you have a stamp or coin collection, and you find yourself in a situation where you need a quick injection of cash, you’d be well-advised to explore the possibility of a short-term secured asset loan from p2p lender Unbolted.
