We’ve all heard it said: “This item is rare, so it must be valuable.” But is that actually true? The simple answer is: not necessarily. While rarity can certainly be a factor in determining value, it isn't the only one. In fact, an item can be incredibly rare but still lack significant monetary value. This seeming contradiction can be explained by one key concept in economics: DEMAND.
The Interplay of Rarity and Demand
Economics teaches us that value is largely determined by the interaction of supply and demand. The law of supply and demand tells us that when something is scarce (i.e., when supply is low), its price tends to increase, but only if demand exists. Simply being rare isn’t enough—there must also be a market of people willing to pay a premium to acquire it.
Let's break this down further. Imagine an old book written by a local poet and printed by a small-town press in the 1920s. This book might be one of only three remaining copies in the world. By definition, that makes it rare. However, if no one is particularly interested in that book, if it’s not linked to a famous author, or if it doesn’t have cultural or historical significance, the demand for it is close to zero. As a result, its market value will be negligible, despite its rarity.
This principle aligns with a core concept in economics called utility. Utility refers to the satisfaction or benefit derived from consuming a product. If a rare item doesn't fulfill a desire or need for potential buyers—if it has no utility in their eyes—then it won’t fetch a high price. In other words, rarity must be matched by demand to translate into value.
The Importance of Market Demand
A classic study in economics, the "Theory of Value" by Carl Menger, sheds light on why rarity alone is insufficient to generate value. Menger argued that value is subjective, depending on individual preferences and social context. Essentially, an item can be rare, but if it doesn't align with what people want, it won’t be valuable. This idea underpins much of modern economic thought on pricing, even when it comes to collectibles or rare objects.
For example, consider the case of 19th-century baseball cards. Some cards are extraordinarily rare because few were produced, and even fewer have survived in good condition. However, what gives these cards value is the high demand among collectors—driven by nostalgia, historical significance, and the social prestige of owning a piece of sports history. If interest in baseball were to decline drastically, the value of these cards could also plummet, despite their rarity.
On the flip side, you might come across items that are not particularly rare, yet they carry a high price tag because they are highly sought after. Think of items like limited-edition sneakers or popular branded merchandise. These items might not be rare in an absolute sense—tens of thousands might exist—but because the demand is so intense, their prices can skyrocket.
Why Rarity Doesn't Always Equal Value: A Case Study
Let’s take a look at an illustrative example: Beanie Babies. During the 1990s, certain Beanie Babies were considered rare, leading to skyrocketing prices as collectors rushed to get their hands on them. But when the fad died down, so did the demand. Today, even the rarest Beanie Babies often sell for a fraction of their former price because collectors have largely lost interest. This demonstrates that rarity alone isn’t a reliable predictor of long-term value. It’s demand—and the stability of that demand—that ultimately determines what someone is willing to pay.
Lessons from the Art Market
Another real-world example comes from the art world. Art by an unknown painter, no matter how rare, may not hold much value if it doesn't resonate with collectors. On the other hand, artworks by renowned artists like Van Gogh or Picasso fetch millions, not simply because they are rare, but because there’s an established demand driven by collectors, museums, and investors who view these pieces as cultural or financial assets.
In academic terms, the art market is a classic case where scarcity intersects with what’s known as "veblen goods" —goods that derive their value not from their intrinsic characteristics but from the social status they confer upon the owner. These markets demonstrate how demand can be influenced by factors like cultural trends, investor sentiment, and social signaling, often outweighing rarity as a value determinant.
Conclusion: Rethinking the Value of Rarity
So, does rare mean valuable? Not always. Rarity might catch our attention, but without demand, it doesn’t translate into monetary value. An item is only as valuable as what someone is willing to pay for it. To truly understand an object's value, we need to look beyond its rarity and consider the broader economic context—how much utility or satisfaction it provides, whether it’s in demand, and whether that demand is likely to persist.
The next time someone tries to convince you that an item is valuable simply because it’s rare, remember this: without demand, even the rarest items might just be collecting dust in an attic, because nobody actually wants them.
A recent visitor wrote, "I appreciate all you folks do, but I can't help wonder—how does iGuide make money?"
The quick answer? Money doesn't matter! Or, to put it another way, making money isn’t the reason we’re here. Our mission is pretty straightforward: we’re here to help people discover the value of their things.
After decades of working in the collectibles industry, we’ve had the privilege of seeing how meaningful it is for people to discover the monetary value of the items they cherish. Whether it’s a treasured family heirloom, a unique collectible, or a one-of-a-kind find, we believe everyone deserves access to accurate, honest information. That’s why iGuide exists. It’s a resource—one that’s rooted in real market data, not guesswork.
We didn’t create iGuide with the aim of building a business for profit. Instead, we see it as a way to give back and help others, sharing the insights we’ve gained over the years. We’re driven by the belief that knowledge, especially when it comes to something as personal as your heirlooms or collections, should be available to everyone.
So, if you’ve ever used iGuide to check the value of a cherished item, or maybe even learn a little history behind it, that’s all the reward we need.
For us, it’s about sharing our knowledge, not making money.
Our story begins with a poor kid from Mississippi who turned his fascination with "old stuff" into a business while still a teenager in the 1970s. With $400 borrowed from a local coin shop owner (who knew him as a regular customer and saw something special in the young man) Jon built a successful business in antiques and collectibles. As business grew, he expanded into publishing books and price guides for fellow collectors. But Jon was never one to rest on his laurels — he had a vision for something new and unique.
An early "electronic publisher"
In the late 1990s, he registered iGuide.net as a web domain and began migrating his vast database of collectibles knowledge to the fast-growing Internet. Over time, Jon's dream of creating a "new kind of price guide" unlike any other began to come into focus. With bespoke appraisals and cutting edge data analytics, his vision for a pricing engine took shape. The iGuide team worked tirelessly to challenge the status quo and push the envelope of what accurate pricing data means. And now, after years of research and hard work, iGuide.net has emerged with a new brand of innovation and creativity in the world of pricing knowledge. While our techniques may be new, our dedication and passion for accuracy is unrivaled. Join us as we continue to push the limits of what it means to be a knowledgeable collector — the journey is just beginning.
About our founder
Jon has been involved in the antiques and collectibles industry since the 1970s. He started his business as a teenager, owning a rare stamp business called "Rarities, Inc.", and opened his first retail shop at age 18. He has been buying, selling, and appraising rare coins and collectibles for decades, even before the Internet.
Warren is an internationally recognized expert in the field of antiques and collectibles, having authored numerous price guides, including "Warren's Movie Poster Price Guide," "The Official Price Guide to Paperback Books," and "Wizard: The Guide to Comics." He served as the senior price guide editor for Wizard Magazine, Toyfare Magazine, and Inquest magazine from 1993 to 2003. Prior to that, he was the senior editor of The Overstreet Update, a price guide for collectors of rare comic books.
In addition to his books, Warren has also provided certified appraisal services for many important collections, including the Movie Memorabilia Collection of Michael Wayne, son of legendary actor John Wayne. He has worked as a consultant for Heritage Auction Galleries of Dallas, TX and others.
Warren is the founder of several companies in the collectibles industry, including 2nd Markets Corporation, Soldster, and iGuide. These platforms provide services for buying, selling, and appraising antiques, art, coins, old currency, knives, movie memorabilia, rare comic books, vintage collectibles, and memorabilia of all kinds.
Jon graduated summa cum laude from Bryan College with a degree in Business Administration: Informational Management, and magna cum laude with a degree in Computer Science. He is a member of The Project Management Institute and The American Society of Appraisers.
Provenance, essentially the history of ownership, is a vital element in assessing the authenticity, value, and historical significance of a collectible. Whether it’s a painting by an Old Master, a rare coin, or a limited-edition trading card, a well-documented provenance adds layers of credibility and allure, enhancing the item’s appeal to discerning collectors. In a market where authenticity is paramount, provenance provides the backbone for genuine historical and monetary worth.
The Role of Provenance in Fine Art
In the art world, provenance serves as a chronological trail leading back to a piece’s origin. This record often begins with details about who commissioned or created the work and continues through each owner, sale, or exhibition it has encountered. Collectors and historians rely on provenance to verify a piece’s authenticity, detect forgeries, and place it within the broader context of art history. This can make all the difference when evaluating its cultural and financial value, especially if the artwork was owned by notable collectors, displayed in prestigious exhibitions, or featured in historic sales.
For example, discovering that a painting once hung in the salon of an iconic collector or was exhibited at a landmark gallery event can substantially boost its market value. Such documented lineage also serves as proof of the work’s originality and place in the artist’s oeuvre, qualities that elevate it far above similar yet undocumented pieces.
Provenance in Collectibles: Coins, Trading Cards, and Beyond
Beyond fine art, provenance remains invaluable for other collectibles, such as rare coins, trading cards, and high-end memorabilia. While these items may not carry the same cultural gravitas, they often hold deep sentimental and financial value for collectors. In these cases, provenance can verify authenticity and offer insights into rarity and condition, both of which directly impact an item’s market value.
For instance, a coin that passed through the hands of notable collectors or survived intact through different historical periods acquires added significance. Similarly, a trading card that has been graded for quality and comes with a documented history—perhaps of its purchase by a famed collector or a feature in a key auction—often commands a premium. Collectors take pride in owning items with a rich history, as these pieces come with stories that deepen their connection to the collectible world.
Provenance as a Protective Measure Against Forgeries
In a market vulnerable to counterfeits and reproductions, provenance offers a safeguard. By documenting an item’s history, it becomes easier to identify anomalies, such as sudden gaps in ownership, that might suggest foul play. For buyers, especially those investing significant sums, a well-documented provenance acts as a measure of confidence, reassuring them of their investment’s authenticity. Reputable sellers, too, rely on provenance to uphold trust and integrity in their offerings.
Conclusion: The Timeless Value of Provenance
Whether it’s a work of fine art, a rare historical document, or a collector's coin, provenance is more than a record of ownership. It is a timeline that reveals an item’s legacy, enriches its story, and safeguards its place within its respective market. As collectors seek items with both intrinsic and extrinsic value, provenance becomes the key to understanding and preserving the authenticity and significance of collectibles across time and trends.
For many years, iGuide.net and 2nd Markets Corporation have envisioned a secure, peer-to-peer trading system for real assets that eliminates the high fees and burdens of traditional third-party middlemen like auction houses and online marketplaces. These third-party layers often take as much as 40% of the value of every transaction. This is unfair and unacceptable in the 21st century. By combining digital authentication, accurate appraisals, and blockchain technology, we propose a streamlined, transparent and open source framework for peer-to-peer trading without the burden of middlemen.
The Evolution of CUSIP: A Blueprint for Identifying Financial Assets...and Beyond?
In the mid-20th century, financial markets faced a growing problem: the sheer volume of securities being traded created significant inefficiencies in tracking, clearing, and settling trades. The solution came in 1964 with the creation of the Committee on Uniform Securities Identification Procedures (CUSIP). This system introduced a nine-character alphanumeric code that uniquely identified financial instruments such as stocks and bonds. By standardizing identification, CUSIP streamlined financial operations, reduced errors, and paved the way for automated trading systems.
The success of the CUSIP system demonstrates how a standardized, universal identification method can solve complex organizational problems. It ensured that every financial instrument had a unique "fingerprint," allowing traders, brokers, and clearinghouses to handle securities with clarity and efficiency. Today, CUSIP numbers are indispensable, underpinning modern financial markets and enabling seamless global trade.
However, while financial instruments now benefit from universal identifiers, a similar challenge exists for tangible assets of value such as fine art, watches, rare coins, sports cards, and other real assets. These assets lack a standardized system for universal and unique identification. Without such a system, the market for these items remains fragmented, with authentication, provenance, and valuation often disputed or unclear.
The Challenge of Identifying Tangible Assets
Unlike stocks or bonds, tangible assets are physical objects, each with unique characteristics and histories. A rare coin may have subtle variations in minting, while a piece of art might carry provenance documentation or distinguishing features. Currently, these details are recorded in disparate systems—appraisal reports, certificates of authenticity, or private databases—which are neither standardized nor universally accepted. This fragmented approach creates inefficiencies in buying, selling, and valuing these items, often leading to disputes or fraud.
A "CUSIP for Tangible Assets": Solving the Problem
Just as CUSIP revolutionized the financial markets, a similar system could transform the world of tangible assets. Imagine a standardized "fingerprint" for personal property—each item assigned a unique identifier that records its details, history, and current market value in a universally accepted format. This "CUSIP for tangible assets" system would unify the market, enabling seamless transactions, clear provenance, and real-time valuation.
The process could work as follows:
1 Appraisal
An expert evaluates the asset to determine its authenticity, condition, and value.
2 Authentication and Certification
Unique characteristics are documented, and the asset is certified by trusted authorities.
3 Assignment of Token
A unique identifier—akin to a CUSIP number—is assigned to the asset and recorded in a digital ledger or blockchain, ensuring its immutability and accessibility.
Innovating Tangible Asset Identification
At iGuide, we recognize the need for such a system. As part of our ongoing research and development initiatives, we are exploring and refining concepts for such a CUSIP-like framework for real assets. We suggest the process begins with comprehensive appraisals, followed by authentication and certification, culminating in the assignment of a unique digital token recorded on a blockchain.
This innovation could empower collectors, buyers, and sellers with a secure, transparent, and universally accepted system for identifying and managing their valuable assets. By combining technology with expertise in appraisals and market data, iGuide.net hopes to be at the forefront of efforts to revolutionize the way real assets are identified, valued, and transacted.
In the same way that CUSIP brought order to financial markets, a "CUSIP for tangible assets" system could do the same for the world of collectibles and valuables—ensuring trust, efficiency, and clarity in every transaction.
Asset banking involves strategically managing and leveraging valuable assets, both tangible and intangible, to safeguard, grow, and utilize wealth effectively. Unlike cash deposits, which can be limited by insurance thresholds, asset banking allows individuals to diversify their holdings and capitalize on the inherent value of their possessions.
Asset Types
1. Real Estate Land Long-term investment, often appreciating over time.
Expensive Homes A popular method for the wealthy to "safe park" capital. However, property taxes and maintenance costs can erode the capital invested over time.
2. Personal Property Fine Art Sought-after as a hedge against economic downturns.
Collectibles Rare items like vintage cars or historical artifacts hold value and often appreciate.
3. Precious Metals Gold Coins and Bullion Universally recognized as a stable investment.
Silver A more affordable entry point into precious metals investing.
4. Financial Assets Stocks and Bonds Traditional investment vehicles for growth and income.
5. Digital Assets Cryptocurrency Digital currency that offers high growth potential but is volatile.
NFTs (Non-Fungible Tokens) Unique digital collectibles tied to art, media, or virtual goods.
Why Asset Banking?
Asset banking provides benefits that go beyond traditional savings accounts, particularly for individuals with substantial wealth:
FDIC Limits With FDIC insurance covering only $250,000 per account (or $500,000 for joint accounts), asset banking becomes essential for safeguarding larger amounts of liquid wealth.
Income Assets like rental properties or stocks generate steady income streams.
Collateral Assets can secure loans or lines of credit.
Risk Management Spreading wealth across asset types reduces risk.
Hedge Against Inflation Assets like real estate and gold often increase in value as inflation rises.
Growth Assets such as stocks and collectibles appreciate over time.
Revenue Generation Renting or selling assets can produce income.
Difference from Shadow Banking
While asset banking focuses on the strategic use of personal and tangible wealth, shadow banking refers to non-traditional financial intermediaries (like hedge funds or private equity firms) that operate outside regulated banking systems. Shadow banking is often criticized for its lack of transparency, whereas asset banking emphasizes secure and informed asset management.
References
U.S. Federal Reserve
Information on FDIC insurance limits
The Art Market 2024 Reports on fine art investment trends.
World Gold Council Data on precious metal performance.
Blockchain.com
Cryptocurrency valuation insights
Summary
Asset banking is a critical strategy for individuals and institutions seeking to manage significant wealth beyond the confines of traditional banking. It provides flexibility, security, and growth potential through diversification into real estate, collectibles, precious metals, and digital assets. However, accurately evaluating these assets is essential to making informed decisions.
iGuide is a leader in valuation of collectible and tangible assets, providing real market data to ensure your asset portfolio reflects its true value. Accurate appraisals are the cornerstone of successful asset banking, and iGuide delivers the expertise and tools needed to succeed.
