There used to be a great difference between coin collectors and investors. The collector looked at coin accumulation as a hobby and educational pursuit which was not defined by the money invested. The investor, on the other hand, was driven primarily by profit. Today such distinctions have become a thing of the past, because the differences between the two groups are blurred.

This happened because investors noticed a trend. Collectors were sweeping up the profits. But why? Could there be something in their approach to buying coins that was different? As investors studied collectors they became more intrigued with collector "fundamentals". Collectors were the first to build meaningful sets of coins. And in many cases these sets were sold for more money than the individual coins might fetch.

There were other important dynamics working for the collector that went unnoticed: A collector was more focused on the nature of the coins in his collection. So when he sold the collection represented a theme, and was not just a group of unrelated coins.

Collectors were also willing to add time to investment plans. An invaluable ingredient to the concept of building wealth through coins in sets. This is true because the best sets contain coins which are not easy to locate, so the collector learned to be patient. In fact some of the finest collections in the world were assembled over decades. The most quoted is probably the Harold Bareford gold collection which was put together in the early fifties for $13,800. Not an altogether small sum in those days which represented the cost of a modest home. Still the collection was sold in 1978 for $1.2 million. A typical deal? Not really, but you get the idea for history indicates such well- designed sets can bring extraordinary returns.

So do set builders always profit? Of course not, but a carefully planned collection can often bring more money. And even if the set is not worth more than the individual coins you still win. A set draws more attention so liquidity can be dramatically increased.

In addition the process of building is more fun even if you are not a collector because the historical relationship between the coins becomes more important.

Building great sets also increases investment discipline. Learning to invest systematically is perhaps the greatest feature of what we call the "collector approach".

Investors often buy heavily when the market is rising, and sit on the sidelines when he market is flat or falling. In fact just the opposite approach is the key to successful investing. A collector systematically adds to his holdings in "up" and "down" markets thus allowing him to "cost average".

So is building a set more complicated? Actually such an approach is easier as you will soon learn in our next section.