Is Ignorance Really that Blissful, or Could it Cost You?

by Matt B

Every once in a while, customers at the bank will bring in a piece of money worth more than face value. If they bring it to me or one of my co-workers that does not know better, I keep it. This phenomenon does not happen very often, but when it does, you bet I take advantage of it.

A few months ago, a woman in her 40’s brought in 60 one dollar Peace and Morgan silver dollars. One of my co-workers pointed them out to me and immediately, I told her that I wanted them. When she asked why, I told her that I believed that they were worth more than 1 dollar each. Most of the coins were from 1921, a few were from the decade before, and there were three from 1887.

My co-worker did not hesitate to allow me to buy the coins. To her, they were nothing more than clumsy coins to keep track of with her other money. To me, they were nothing less than an opportunity. Her ignorance allowed her to see these coins as a nuisance, while my opportunism viewed them as an invitation for profit.

One of the other employees asked the woman who brought in these silver dollars why she did not take them to a coin or antique shop to see if they were worth anything. She told him that she did, and that they told her that they were worth $1 each.

-One of two scenarios actually happened.

1) The customer did not actually take these coins to a shop of any kind.
This scenario is likely. If she was in a pinch for cash, she probably figured, “Hey, why not just take these $1 coins to the bank and get a quick $60?”

2) She did take these coins to a shop, and they had enough inventory of these items.
If she went to an antique shop, there is only a slight chance of this scenario occurring. If she went to a coin shop, there is almost no chance that this happened.

After splitting them with two of my more intelligent co-workers, I got my hands on 35 of these coins. I did not have much interest in keeping them as I felt that there was a number of other places that my money would be better spent (like debt). I took the coins to both an antique shop and a coin shop. Before going, I researched the coins’ resale values. At the time, coins in excellent condition were selling on sites like Ebay for $15-50. Because these particular coins were not in the best shape, I also researched the melt value of the coins, knowing that the majority metal in them is silver. At that time, the fair market melt value for the coins were $14.30.

Upon presenting them at the antique shop, the clerk left to get the owner. He informed me that they had been seeing an influx of these coins as of late and that he was willing to buy them for $11 each. I knew what they were worth, and politely declined his offer. I estimated with relative certainty that if I chose to do the legwork myself, I could get more per coin if I sold them myself online. After he realized that I would not take such an unfair offer, he changed his mind and let me know that he could make it $12 per coin. Again, I declined. He really tried to get them for as little as possible, and I commend him for that. Unfortunately for him, I was not in a bind and did not need the money badly, giving me the upper hand in negotiations.

The next day, I took the coins to a local coin shop. I really did not want to list the items myself and deal with selling them online, and I let the shop employee know that. I think he realized quickly that I knew the fair market value for the coins, so he presented his offer. $14 per coin. I was happy to take this deal. For me, the trade of not having to list and ship these items myself was worth the .30 per coin (the difference in the offer and the melt value).

Due to the ignorance of another, I spent $35 for a return of $455.

$35 (original investment for the coins)
x $14 per coin
=$490 – $35 investment

If you are bad at math, that is a 1400% return on investment. All gained due to the ignorance of another.

Opportunities similar to this one present themselves far more than we realize. There are a million different ways to turn a small investment into a sizable one. The ability to recognize them is a gift that can be learned. Some may possess it to a greater extent than others, but everyone knows the value of something and can quickly turn it around for a quick and easy profit. Cars, houses, properties, collectibles…the list goes on and on. People who learn to see the hidden value, or recognize that someone else is completely oblivious to the obvious are the ones who profit. So I ask again, is ignorance really that blissful?

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the weakonomist May 11, 2009 at 7:19 am

While it is true ignorance can cost you, it does not mean the ignorant are not blissful as a result.

My grandmother recently disposed of her late husband’s stamp collection and made some nice coin from it. Did she get the best deal? No because she didn’t know what she was doing. But she did get some money, and is all the happier to clean our her closet. Bliss.

Miranda May 11, 2009 at 8:31 am

It’s better to be informed, I think. So good job to you, on taking an opportunity. And doing research so you could get the best deal.

Heyagainlando May 11, 2009 at 3:08 pm

Good point weakonomist, ignorance is not necessarily blissful, nor is being wealthy…it was just the best wordplay I could come up with!!

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