From one man's hobby, an industry grew.

When Jim Cook started collecting coins in the summer of 1973, it quickly struck him that the hobby could turn into a lucrative business.

He started out small, delivering coins personally by car. But he soon built up business with a strategy that would make him a millionaire many times over: telemarketing.

Cook's company, Investment Rarities Inc., went on to become the base for a Minneapolis industry that now includes about 30 firms. Some 1,100 salesmen have worked the phones at IRI, he said, and many have gone on to start or work for competing firms as the business grew in the Twin Cities.

Cook, 72, said most are honest, but he acknowledged that there are unethical sales tactics in the industry. He's sued some former employees for allegedly stealing his customer lists and says some have swindled his clients.

At IRI, he said, he tries to keep a close watch on his current stable of about 50 salesmen in Bloomington. "You have to be careful what you say. You can't just promise gains," Cook said. "We try to run it like we were regulated."

Cook's looking comfortable these days as he takes visitors through his eclectic, multi-million-dollar collection of posters, glass, comics, sculptures and whatever else strikes his fancy.

He says some salesmen have been with him 30 years and that the top 20 at IRI made between $100,000 and $350,000 last year. "Our customers are up $3 billion, net," he said in an interview.

Former investor Harry Meltz, 96, alleged in a lawsuit that Cook illegally converted business assets to his own purposes and paid a huge salary to his wife, who did no work for the gold business and used the funds to start a string of day spas. Cook denied the claims and settled the lawsuit.

Cook says he's in a tough industry. He says he now runs background checks on potential employees to screen out felons, though he said he has made exceptions. Over the years, he said, he's had to fire between 300 and 400 salesmen who either didn't perform or who crossed the line by lying to customers.

"The failure rate in this business is about 90 percent every 10 years. It's ridiculous," Cook said. "Twenty-five years out of 40 years, we've lost money. Plenty of those years I couldn't take a paycheck, or I had to scramble to pay employees."

Some competitors criticize Investment Rarities for charging a relatively high mark-up, but Cook offers no apologies.

Cook says his markup on bullion coins is between 2 percent and 15 percent, and for rare and historic coins, called numismatics or semi-numismatics, 15 to 25 percent. Some dealers charge 40 to 50 percent markups or more, he noted.