Regardless of whether you prefer collecting antique jewelry, watches, stones, coins or even rare instruments, once you start spending big and withdrawing extensive sums of cash from of your bank account, it is perfectly clear that you intend to make a profit. Following are some tips on how to manage your valuable collection and maximize the return of your collectibles.

1. Don’t base your decisions on fading market trends

If you want your collection to provide revenues then you should avoid buying or selling based on current fads. Furthermore, if you’re just dabbling into collecting for profit, then you should never try to invest in what you think will be the next hot item, as you don’t have the experience. If you’re into collecting watches or antique jewelry for instance, then it is wise to stick to the brands that are constantly in demand and hence, providing more liquidity.

2. Leave your emotions out of this

Granted, besides making a profit, people enjoy collecting various items to achieve a certain status, they want to own a little piece of history or because they are attracted to a particular item or art piece. All the aforementioned secondary motivations involve emotions, which frankly will do more harm than good when collecting becomes your profession. To put it simply, once you allow your emotions to take a hold of you, you’ll be more likely to overspend and overpay – even to the point of financial ruin – just to reach your goal. Nevertheless, this doesn’t means that you aren’t allowed to be passionate about your work.

3. Become an expert on your collection

You simply can’t make correct decisions, if you are unable to differentiate between a fake and the real deal. Therefore, you should spend some time learning the ins and outs of the pieces of your collections and get to know your collectibles – especially those categories you intend to invest in – to the very detail. In the event that your schedule doesn’t allow you the time to become an expert in your collection, then at least find a pro who has no financial stake in it to help you.

4. Always be prepared for the worst

More often than not, when they purchase home insurance, people automatically assume that the coverage applies to the actual house as well as the entirety of items in it. In reality, 99% of the home insurance policies don’t include any coverage for collectibles. Even though buying separate insurance for your collection will cost you an arm and a leg, it is the best approach in this case. Alternatively, you could try to get blanket insurance with per-item limit, as you won’t be forced to reveal the precise items that you’re insuring and pay less.

5. Remember, you have to pay taxes now

Based on your previous financial transactions used to acquire or sell items from your collection, you could be perceived as an investor, dealer or a hobbyist in the eyes of the IRS. Unfortunately, once the IRS can include you in any of the aforementioned categories, it automatically means you’re up for paying taxes. Because there are various taxing rules that apply to each category, it is highly advisable to work them out with the help of a professional accountant.