The latest ad from Ryan Cole for his Unconventional Wealth newsletter has been pushing a lot of questions our way — and I can understand why.
He throws around examples of extraordinary wealth created from very small beginnings, of big-name folks who benefited from these “Queen’s Account” investments like Franklin Delano Roosevelt, Bill Gross, John Lennon, Mark Cuban, tennis player Maria Sharapova… and the list goes on.
And, of course, he talks about the man who, back in 2013, turned $5 into a million dollars using this same kind of thing. Crazy, right?
So, naturally, we want to know what this “Shocking Private ‘Account'” might be, and whether it’s worth considering. So I spent a little time digging through the ad to see if I could get you some answers — here’s a bit of the spiel to give you a taste:
“What I discovered shocked and excited me โ a private way to grow wealth thatโs completely outside the Wall Street machine.
“As far as I can tell, the ‘Queenโs Account’ has 4 major benefits.
- Can grow your money at clips way higher than the stock marketโฆ
- Has not gone down in value in over 60 yearsโฆ
- Can be used by you today, starting with just a small amount of money thatโs probably in your couchโฆ
- Allows you to pull your money out at any time (so youโre not โlocked inโ like you are with 401(k)s or IRAsโฆ and so that thereโs no waiting around for checks to arrive like Social Security).”
So what is the “Queen’s Account?” Well, I hate to break it to you… but it’s really just “stamp collecting”
And yes, as was teased in the ad Maria Sharapova does have one of these accounts — and she was forbidden from talking about it by her agent. But that’s not because it’s such a fabulous and lucrative secret, it’s because her agent didn’t want her to lose her sex appeal. When the stamp hobbyist magazines are calling and elbowing aside GQ or Maxim (are those still even around anymore) for the next photo shoot, your income goes down.
Unconventional Wealth teased stamp investing before, too, starting a little over two years ago when they pitched what they were then calling “guaranteed Phi Accounts” with 12% returns. At that time, I concluded that they were teasing the stamp investment accounts managed by Stanley Gibbons, the preeminent collectibles dealer in the UK, and readers discussed that here.
This time, that 12% guarantee and the guarantee not to lose money are conspicuously absent from both the ad and the Stanley Gibbons promotional material. But I assume that Cole is probably still pitching the same thing — unless you are actually going to become a stamp collector yourself, buying rare and valuable issues from dealers or at auctions and holding them for many years until their value increases enough to create a profit (for you and the dealer, since this isn’t a really open and liquid market), then the Stanley Gibbons accounts make more sense for those folks who aren’t inclined to enjoy the hobby of philately but who want to “invest” in these collectibles with some expert advise.
Gibbons offers a few different kinds of accounts, with different minimum investments, but they basically all do the same thing — you invest a certain amount, they buy stamps with it that they recommend and store them for you, and when you want to sell they sell for you. It seems that now, at least according to their marketing material on their website, most of their income from this comes from profit sharing — they don’t mention any management fees or commissions (though those may exist, too, I don’t know), but they do say that for short-term trades they take more than half the profit and for longer-term investments they take 30% of the profit when you sell.
I can see how that works out pretty well for Stanley Gibbons — it helps them to create a more liquid market, since they effectively control all of this stamp-focused money, and they get a cut of a market whose values they pretty effectively control. OK, maybe “control” is an exaggeration — but they seem to set benchmark prices for much of the stamp collecting world.
The idea is pretty compelling — alternative assets always appeal to a certain subset of investors who think there’s got to be something better than stocks and bonds and cash and gold. The best rare stamps have certainly continued to increase in value over time, though you’re not going to be buying the best rare stamps for your $15,000 investment (that’s the minimum), and Stanely Gibbons has been around for a long time and done well for themselves, and presumably for stamp investors as well since they claim that stamps haven’t lost value for decades.
But, as with all kinds of investing in collectibles for neophytes, you’re essentially committing yourself to an opaque market where everyone you’re transacting with knows more than you do. That’s not necessarily a recipe for success. The investing model with Stanley Gibbons is interesting, with them only apparently making a big profit from you if you’re successful and make a profit selling your stamps in the end, but they also get the value of adding you as a buyer in their marketplace, whether you win or lose. You can check out their different kinds of investment accounts here if you like, but it’s not something I’m going to run out and put money into.
(Incidentally, Stanley Gibbons itself, which trades at SGI in London, was just about to make a nice run when I last covered this topic in January, 2013 — it went from 240 pence or so up to 375 before heading almost straight down over the last 18 months. Maybe if you’re not crazy about stamps, you’ll find that SGI appeals more… it’s not an obvious value, Bloomberg says they’re trading for about 50X earnings and have a 2% yield, but perhaps if stamp investing takes off they’ll benefit. Not currently holding my breath, but perhaps the Chinese investors burned by their stock market crash, real estate crash, and gold crash will be looking for a new place to put their money… maybe penny blacks?)
I’ve appended the original comments from our older article to this one so you can see some of the input from stamp collectors and other folks, just FYI. Please feel free to add your own thoughts with a comment below… and enjoy!
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I was an avid stamp collector in the 1940’s. Today, I can buy on e-bay US stamps from
1930 or earlier for less than their 1940’s cost. Isuues since 1950 are generally junk. Mint US issues are now sold at a discount from face value!, Net: Collecting older stamps is a fun hobby, but a dying one. Go to a stamp show. 95% of the prospective buyers are 60+ years old. Old stamps have no intrinsic value; folding or wetting them can halve what value they may have. A terrible investment!!!
I would like to find out about the Phi account. Thanks
I would like to find out about the Phi account that the Queen has and where to get the information from. Thank You
I signed up to Unconventional Wealth 4 days ago. Their website has been down continuously since that time. I will try and contact them by phone. If no joy I will need to involve my Credit card Company
What are the U-Accounts that Unconventional Wealth talks about
This reminds me of the chinchilla breeding investment my parents got involved in. Add that to the list of “uncommon” investment opportunities that went bust. There is no limit to the number of “uncommon” schemes these people can dream up to separate you from your money.
Rare stamps. That’s almost s bad as coin dealers sellingrare coins because most coin dealers can’t pass by the local police department without getting arrested. The stamp dealersare already inside. Yeah, I, biased; i have lost plenty to the guys who sell from the phone booths on 42nd street.
there is another note to add. The Queen’s stamp collection is mainly an inheritance from her father, King George VI who became the heir apparent and later ascended to the throne after his brother married a divorced American, Mrs. Wallis SImpson, and was ousted from the succession. He was a timid fellow and you can see a movie about him called The King’s Speech. Of course being a son of the king, and later a king himself gave George Vi some extra ways to get a hold of interesting stamps. But I suspect this is not part of the royal inheritance like the crown jewels and the art collection and the castles and their furniture. It is probably private like the Queen’s dresses and matching shoes and hats and all that stuff.
So how does Stanley Gibbons fit in? I have no idea. Do they advise Her Majesty on buying or selling fill in items for her inherited collection? Does she keep her stamps offshore lest there be another English Revolution? Does she use stamp funds to do things which are against the rules like bribing journalists or parliamentarians when something hateful or harmful to the royal family business is going on in Britain?
I mean a Penny Black to stop all those pictures of royals dressed as Nazis or the details of the life of Lady Di might have been a good idea, but HM doesn’t seem to have used her stamps for that good purpose
One thing must be kept in mind when trading any item with intrinsic value as opposed to say gold, silver, platinum, diamonds, etc.. An item with intrinsic worth is entirely based on your ability to find a buyer for your rare stamp and who is willing to pay fair market value or more (in the US stamp value is generally guided by the prices listed in the Scott’s Catalog. This is the Bible for US stamp collectors. I’ve been a stamp collector all my life. When I was younger, I looked at pre-1933 US commemorative stamps and salivated because their cost was waaaay beyond my budget. Older now (much older) and I have purchased some of my favorite commemorative stamp sets. If you deal with a reputable stamp seller , and if you take the time to establish a relationship with them, you can gain access to some incredible deals. When I buy stamps however, I don’t look at them as an investment. As I do when I buy precious metals, I buy quality pre-1933 commemorative stamp sets as a hedge because the record of stamp value is simple: No US commemorative stamp has ever gone down in value unless it is spoiled. Once you have your stamps graded by a legitimate and certified appraiser, it will be sealed in a museum quality quality pouch. Do not monkey around with the pouch because if the seal is broken the stamp must be regraded (costs for grading are based on stamp value; the higher the value the higher the cost to grade). Never buy an investment grade stamp that is not properly graded. The typical hold after purchase on the stamp is 18 months. Typically, a reasonable profit would be around 15%. I bought a stamp with an error on in. Only 50 exist in the world and the dealer I was working with had all 50. I bought one. Decided that I didn’t like it all that much and returned it. Dealer told me to hold it for a week and they were attending a show and would sell my stamp for some profit. So, I paid $1500. for the stamp, held it for 10 days and made $65. I had nothing for shipping and handling. The hot market for US commemorative stamps in Hong Kong. I am getting ready to sell my collection of 8 stamps of the 1915 Pan Pacific Exposition. I paid $4800 for the set last year. The expected price in Hong Kong could be over $30,000. Why such a jump? The stamp set just turned 100 years old this year plus the set has always been a favorite stamp among serious collectors, and lastly, the set was printed in 2 sets of 4 stamps. The first four are the most valuable. I have the second set of four stamps properly graded XF 90 Mint 2 OG; 2 OGnh. The older set that I have is highly unusual. In fact, Several stamp dealers have researched the set and told me that it is the only one of its type in the world. The 4 older stamps are affixed to an air mail envelope. One of the stamps has the plate number along the left edge. The stamps are in excellent condition and the postmark does not detract from the quality of the image. No one has a clue what this set might be worth. I paid the speculative price of $2000. One dealer who sells in Hong Kong suspect this set alone might sell for $15k to $20k. I bought is less than 6 months ago. Combined with the second set of four the 8 stamps could sell for over $30,000. I have not held either set for more than a year. I paid $2800 for the second set. I have $4800 into the stamps. If I sell now, I could make a profit of (conservative estimate $25,000. I’d say that was a pretty good return on my original investment. Likewise, I bought the 5 stamp 1904 Louisiana Purchase on speculation (the set was not graded but I did a sort of self grading and I’ve wanted it since I was a boy. What the Hell. I paid $2,800 in 2009. At the time Scott’s gave a low estimate of $9,000 on the set in 2009. If I go with a conservative estimate of say $9,000 (presumes no appreciation since 2009 and my grading estimate is reasonably on the mark), I make a profit of $7000 on a 6 year hold of $2800. BUT…there is a part of me that wants to keep these stamps since I know they will only appreciate. Buying quality stamps is like buying fine art, rare books, rare coins…value is highly subjective. I also collect books and stamps are very much like books but unlike books, the stamp business is highly organized and if you find a reputable dealer and buy the right stamps…. A good place for beginners to start is with stamps with errors or EFOs (errors, freaks, and oddities). You can often find entry level stamps with a reputable dealer for $1500. My advice is simple. Don’t buy stamos as an investment. Buy them as a hedge, like fine art, rare books, or rare coins (gold and silver). Buy what appeals to you and if what you buy is graded don’t mess with the seal! All the art in my home is limited edition prints and I have dozens of prints not displayed. We probably have $50k in limited edition prints. From time to time I look at value. Most of what we own has gone up in value. Nothing has lost value, which is the point of buying quality art work. We will probably never sell what we have because we really like what we bought. But quality art like quality collectibles of any stripe retains value over time. That statement is valid for virtually any widely collectible item (you couldn’t even begin to guess what the oldest Avon perfume bottle are worth!). Hope this post was helpful.
When Kerry was still a US Senator, he and his wife sold some collectible at a profit, and on their US tax-return for that year, it came to light that they did not know about the 28% maximum tax on profits from the sale of collectibles. Someone at a high level of government did not know! How do you like that??!! Collectibles are not taxed identically with capital assets, which the Mr. and Mrs. Kerry had to learn the hard way. I wonder if they had to pay a penalty and interest, or if they got a big-shot exception made?
Team,
So many interesting comments. This month I broke down and actually went through all the coins in my collection which I mostly inherited. Hadn’t looked at the coins in 30 years. It was fascinating to discover some that I thought were valuable really weren’t while others were far more valuable than I realized. Had to buy new and up to date books. Have a large stamp collection from my aunt, brother and father which I haven’t had the energy to tackle yet. Leaving my comic books which I haven’t looked at in 20 years. With all three though no matter what the book value might be still requires a buyer.
V/R
Tom
Love your logical thinking & your blog. I have read about a few people who have made millions in stamps. Each bought at discounts in stamp shows and sold as their own retailer, usually in a quick turnaround. What is the lesson here? Expert knowledge & a lot of time invested. Not sure many of us want or are motivated to invest the time! Again, love your blog.
There is an even better collectable — antiquities. Every Mediterranean country other than Israel has banned the export of antiquities for more than 40 years so the only ones legally available are those deaccessioned from museums or sold by heirs of collectors or by those who need money! As a result, there is an acute shortage of these beautiful pieces and the major auction houses, like Southeby’s and Christie’s in NYC that once held two day auctions twice a year now hold half-day auctions. To cite one example of the rise in value, I donated a piece to a museum – its appraised value was six times what I paid for it five years earlier and that is not exceptional. I do know what I am collecting – I am active in numerous archaeological societies and fund two projects in Egypt now but anyone can easily learn what is of value (or work with a dealer who will charge a small commission to advise you). Of course, if you sell any for a profit, the profit is ordinary income no matter how long you held it (true for ALL collectables but a charitable donation does cut your income taxes by its appraised value!). AND – they look great in your home too!!!!
Collected as a kid. Mint condition, first day covers etc. Now the dealers say $200 without even opening the album. Where can I go to get real value? I think I should donate to the Smithsonian?
The more things change the more they stay the same, or as wise King Solomon said, “there is nothing new under the sun” in other words, no matter how many decades pass, there will always be scammers distorting things to trap the unwary or ill-informed. I still have boxes of beautiful stamps that are nice to look at, but only diligent and well informed students of this specialty will ever make any money at stamp collecting.
Another collecting craze I am surprised has not come up is “collector plates” also sold as “rarities” so decades ago I bought 2 of plates I personally liked, one to display and one to sell for a profit.The prices quoted in the after market sounded pretty appealing, but actually finding a buyer at those prices was difficult if not impossible. Ended up giving my extra plates to my children, never did find a buyer for even the most desirable issues.
My idea of investing in stamps is buying a bunch of forever stamps now, then waiting a few years and selling them at a 10% discount of what the post office is selling them for, assuming that stamp prices have gone up ~15%. They ARE good forever, so might as well XD!!!
https://www.ted.com/talks/yuval_noah_harari_what_explains_the_rise_of_humans
Explains what a stamp is worth. Also what $1.00 is worth. And whether you could sell either to a monkey.
Thanks for the link – entertaining and thought provoking. But it’s slightly misleading to suggest that a dollar isn’t worth anything because you couldn’t sell one to a chimp (or rather, trade one for a banana).
When in college in 1959 one of my professors collected burned out light bulbs. His teaching method was on the goofy side also, but everyone got an A if they turned in a burned out light bulb by the end of the quarter..
If you are a genuine stamp collector, in say 19C issues, you will make money. Even scarce 20C issues. But you must be a collector first and foremost, for the pleasure (or compulsion).
I recall speaking with another in the late 1970s, when we actually lamented about having to put our collections, bought at reasonable prices, into bank storage because of a price boom. Buying what are desirable stamps, as a collector, will always profit. You need to know about condition, have a UV lamp to detect removal of hand cancellations or franking, as well as a keen eye and good magnifying glass. But, I emphasise, this is because you want the stamp in your collection. If at a later time, one can upgrade to a superior specimen, or even begin collecting another category of stamps, you will profit.
But investing in stamps, as a “collectible” is fraught with not only risk, but lack of pleasure in the items themselves.
Sincerely, Phil
Stamps are not, for United Kingdom purposes, treated as investments and therefore Stanley Gibbons is not subject to regulation by the UK Financial Conduct Authority!!