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Rare Collectibles: Making Money Off Stamps
From antique silver spoons to license plates and toy train sets, collections that start as a hobby can quickly grow to become a valuable asset.

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For some of us, our hobbies can be more than just a way to pass the time-- they can also end up earning a pretty penny. In a four-part series, we take a look at how to cash in on your rare collections.

Inverted Jenny, PF Slideshow

What Makes a Stamp Valuable

Experts lists rarity and scarcity coupled with demand and the country of origin as the makers of highly-valuable stamp.

The first official U.S. stamps, the 5-cent Ben Franklin and 10-cent George Washington, can bring in at least $500 depending on the condition. While these stamps are classics, there are much more valuable stamps on the market.

According to Ken Martin, executive director of The American Philatelic Society, “A great story can create demand.” The Inverted Jenny, a 24-cent stamp issued in 1918 of which only one pane of 100 was found, displays an airplane that was accidently printed upside down after the bi-color stamp went through the printing press twice. According to Robert A. Seigel Auction Galleries’ website, a single Inverted Jenny sold in 2007 for $977,500.

Ben Franklin z Grill Stamp, PF Slideshow

The Health of the Stamp Market

“When the market tanked in 2008, we were a little concerned. But, we found that stamps in pristine condition increased in value. We attributed that to people pulling money out of stocks and putting it into rare collectibles,” says Rick Penko, auction manager Spink Shreves Galleries, an auction house that specializes in stamps.

Penko mentions that there is renewed interest in postal history, such as stamps still on envelops from the 1840s to early 20th century and that Asian countries, such as India and China, are becoming stronger stamp collecting markets.

The past decade also saw a highly-acclaimed stamp trade. In 2005, PIMCO founder Bill Gross traded a block of four Inverted Jenny stamps, worth nearly $3 million, for one Benjamin Franklin Z Grill, a one-cent stamp issued in 1868 that featured a Z-shaped embossed pattern of small indentations intended to discourage reuse of stamps. Only two of these stamps are believed to exist. The other Ben Franklin Z-grill is owned by the New York Public Library.

British Guiana 1c Magenta, PF Slideshow

What Appraisers Want

At Stanley Gibbons, a company that specializes in stamp retailing services such as valuations and auctions, stamp experts consider factors like gum, color, margins, perforations and quality of cancellation when assessing a stamp’s value.

“To qualify as an ‘investment-grade stamp’, the stamp must be in ‘fine condition for the issue concerned’. What constitutes ‘fine’ differs greatly between stamp issues, taking into account everything from the size of the margins and quality of the perforations, to the condition of the gum, to how clearly and centrally a postmark has been stamped,” says Keith Heddle, investment director at Stanley Gibbons.

“It is easy for a novice, or even an experienced collector, to misidentify a stamp. A subtle difference in color could mean you have a rare 'error of color' or just a poor quality faded stamp. The date-stamp may be particularly rare, thus elevating an ordinary stamp to something extraordinary and therefore making it valuable. But, even small flaws such as a crease, a 'thin' or a 'short perf' [when a perforation tip is not as long as it should be] could vastly devalue a stamp.”

The Penny Black, PF Slideshow

How to Know the Value of Your Stamps

“In the U.S. the bible for stamp collecting is the ‘Scott Standard Postage Stamp Catalogue’,” recommends Martin of The American Philatelic Society.

If someone is interested in having their personal condition valued, Alex Birman, owner of stamp appraisal company County Stamp Center suggests collectors attend a local stamp show and talk to a dealer to get a ballpark figure of what the collection might be worth.

“I tell people, if they are thinking about a professional appraisal, they should go in expecting the collection to be worth at least $4,000 because it is a costly process,” says Birman.

More sophisticated international collectors could use The GB30 Rarities Index, a tracking index created by Stanley Gibbons. The index lists “Great Britain rare stamps available on the open market, and gives a snapshot of the market for scarce items,” advises investment director Keith Heddle.

Cash in a Chest

Check Out the Rest of the Rare Collectibles Series

Rare Collectibles: Making Money Off Vintage Cars

Rare Collectibles: Making Money Off Stamps

From antique silver spoons to license plates and toy train sets, collections that start as a hobby can quickly grow to become a valuable asset.

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