Financing A Stamp Collection On A Tight Budget
By John M. Hotchner

If it’s true that there is no such thing as a free lunch, then stamp collecting is subject to the rule. One of the reasons that our hobby is not embraced as a serious pursuit by young people (by which I mean those from 10 to 50), is that it costs money, and those are the years when potential collectors usually have other, more pressing uses for relatively scarce dollars. Later in life, the kids are grown and on their own, housing needs are not so much a drain, the outflow of dollars associated with the 9-5 job is mitigated by retirement, and those who have planned for retirement often have disposable income that can be devoted to a wide range of pleasurable activities that were harder to justify when younger.

But speaking as one who started as a young teenager and never quit (and we are a distinct minority) I want to pass along the ways I developed to feed my stamp collection in the post- college years when dollars were scarce. How scarce? My first job in the U.S. Foreign Service paid the magnificent sum of $5,194 per year! Though I had steady promotions, they were eaten up by marriage and establishing a home, four children in five years, and the expenses thereunto pertaining. Note, I’m not complaining. I would not have done anything differently. But there was not much left over for hobbies. I doubt things have improved markedly for today’s youngsters.

The first lesson I learned was that I couldn’t/shouldn’t spend family money on stamps. So, where would money come from? As a teenager and at college, I spent most of my lawn mowing/snow shoveling money on stamps. The result was that, as I began my work life, I had a decent collection that was expansive compared to what I actually wanted to get more deeply involved with. So, at the local stamp club, I began to sell off what I didn’t need, and that money went into a separate stamp fund. I used it to buy material for my specialty collections (Christmas seals and AMG material mostly), but also bought collections at auction.

Auctioneers and dealers, I learned, usually bought col- lections, took the best material out to sell as individual stamps or small lots, and that made their cost and a short-term profit. The leftovers went to auction as collection remainders that often realized no more than 5-10% of Scott Catalogue. I found I could break those collections down into smaller lots for my club auction, where members would be happy to buy at 20-25% of Scott. And since I had been a collector for a while, and knew how to watermark, perforate, tell papers apart, etc., it became a game to identify better items that the collectors and dealers had missed. Since I had time and limited money, I could use the former to rectify the latter.

I also found that buying collection remainders was a great way to fill album holes because 80+% of most countries’ stamps were low to moderate priced stamps that dealers would skip over in arriving at their buying price, and in making up higher priced lots to sell. In those early years, I began collecting several of the countries I visited, and got them to perhaps 70% complete from collection remainders.

Meanwhile my stamp account was getting healthy enough that I could buy the occasional better stamp or set for my serious collections.

Another thing I learned is that discretionary money means just that. I could buy lots of cheap stamps and fill a bunch of album spaces, or expensive stamps in poor condition to do the same. But something my father told me registered. He said that cheap stamps will almost always remain cheap. And damaged stamps, unless great rarities, will also remain cheap. So, I made a decision to spend my money on good stamps in Fine or better condition, and the occasional rarity if in sound condition and it looked good from the front.

I was not thinking of myself as an investor, and still don’t. But I am mindful of the fact that at some future time, my heirs will be selling my collection, and the better the stamps and the better their condition, the easier they will be to sell. And it pleases me to know that, unlike greens fees, concert tickets, and fine wines consumed, all of which have no value once the event is passed (though the money will have bought wonderful memories), my collection will have value to those who come after me.

In my early years, stamp clubs were essential to me; not only for selling, but for buying and trading. We’ll get to the latter in a moment. But just as I was selling excess material, other club members and sometimes their heirs, were also using the monthly club auctions (and some clubs had sales book systems as well) to do the same.

Club auctions were then, and remain, a bargain-hunter’s paradise. Sellers don’t expect to get full catalogue. The club auction, as compared to other methods of selling stamps (and covers), is fast, low on paperwork and commissions, and the income is immediate.

These days sellers can also use eBay, APS Stamp Store and the like, but for the bread-and-butter material that every collection needs, the club auction remains a staple.

Now, let’s talk about trading. In some sense this seems to be a lost art, but it was for me, and remains, a great method of acquiring material, and there are no taxes involved since no money is changing hands!

Again, your local club, and national societies where you meet others with your interests, are a key to trading. There are several methods: trading according to catalogue value; stamp for stamp or cover for cover, and if mint stamps are involved, face value for face value.

You can, and most people do, trade duplicates. But what is essential is that you are getting something you really want, and to do that, you may decide to trade material that is in your collection for something that you want even more. An example: In my Christmas Seal collection, I began collecting everything I could get my hands on. Eventually, I found I liked the 1934 design best, and found it to be a worthy challenge to gather material to illustrate its history, production, use, and the items used to market it.

Another collector had material I wanted. He would not sell it. But I had some 1913 material he wanted, and though I liked it, it was not as important to me as the 1934 items he had, so we swapped. In cash value, he probably got the better of the deal. But I’d make that trade again in a heartbeat. The point here is that trading can sometimes go in unusual directions, and so long as both collectors involved are happy, it is a good trade.

One final thought before I close. Sometimes I saw items — both with dealers and collectors — that were available, and that I wanted, but were in the “I could never afford that” category. If we are a prisoner of our own thought processes, most of us interpret that concept as “I could never have enough money at one time to pay for item X”, and that may well be true.

But I learned early to offer a down payment, with a promise to pay off the remainder owed on a schedule, over a reasonable amount of time. I have never had a seller turn me down. And I have never defaulted. That is because of two things:

1. Having made that contract, I am motivated to sell material so that the money would be there when I needed to write a check. I might mention that I met someone at the local club who was happy to pay me to do his washing and cataloguing. What he paid was far short of minimum wage, but it was welcome and useful.
2. Sometimes, the reaction “I could never afford that” does not arise from a lack of money so much as from how you have chosen to allocate what you have. Several times I have found that I could afford something I wanted badly if I were willing to reallocate how I had planned to spend what I had. It was a matter of deciding what I wanted more, and exercising some level of flexibility.

The bottom line to this discussion is that being young with financial responsibilities need not mean that you can’t be a stamp collector. It does mean that you have to look for ways in which you can generate income to have a nest egg to be able to purchase material you want and need. And you need to use resources you have available like your local stamp club, the knowledge you have accumulated, and time. With moderate expenditures you can have a lot of fun and build a satisfying collection.

Should you wish to comment on this column, or have questions or ideas you would like to have explored in a future column, please write to John Hotchner, VSC Contributor, P.O. Box 1125, Falls Church, VA 22041-0125, or email, putting “VSC” in the subject line.

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