Taking money out of retirement funds to purchase cards

[G1911]

Originally Posted by bmattioli

Ask this to any sane financial advisor..

You did in 7 words what it took me 3 paragraphs to get at. Brevity is best

[Peter_Spaeth]

Originally Posted by bmattioli

Ask this to any sane financial advisor..

Yes, but financial advisors are not necessarily that familiar with collectibles. A superb one I know is constantly surprised at prices I point out to him.

[BobC]

Great points by a lot of people, especially Nicolo/raulus. He's right on the money in regard to the various tax implications. It is definitely nice to have another CPA/taxperson on the forum that gets it, and so I'm not the lone voice talking many times. LOL

As Nicolo already opined, I would also not recommend pulling money out of retirement accounts, be they 401Ks, IRAs, or Roth IRAs, to go out to buy cards as investments. The tax costs and potential hits to retirement savings can be brutal. Granted, the Rosen/Mantle example is an out of the park home run example of how a card investment would well be worth it, but for every potential deal/investment like that, how many more are there that don't even come close, or could end up in a losing situation? Just think back to the junk wax era, and a possible repeat with all these modern collectors of the shiny new stuff.

But as another poster also mentioned, you have to look at each individual person's own unique situation and tax/retirement position before making such a decision also, along with their age, states/cities they get taxed in, and a myriad of other factors. Still, I would not think it makes sense to ever pull money from any type of retirement account just to buy a card. For many of us, myself included, I did not buy cards with the initial intention of looking at them as retirement assets. I figured it was a hobby, and if one day I could basically get back out of it what I had put in, I would be happy, As we've all seen though, especially with the recent surges in card values, those us that have been collecting for years have the somewhat pleasant result in that our collections have increased in value to the point where it is pretty much impossible to not treat them as an additional retirement/asset class now to some extent. As such, I personally think of the pre-war/vintage cards, especially of HOFs and superstars, as sort of the blue-chip investments on the stock market side of investing. And the shiny new stuff is more like the speculative investments that may, or may not, hold up and retain their value over the longer term, let alone giving their owners decent returns.

Having said that, if you are in a position to acquire a "white whale" card you may not see again for years, and/or otherwise cannot afford to just write a check from existing available funds for, I guess it can't hurt to review one's current retirement situation and investments and see if it would be possible to either borrow or pull-out funds from retirement accounts to make that special acquisition. As long as it looks like it will not negatively affect one's overall retirement planning and position. If one were doing it strictly for investment purposes though, I would not suggest pulling retirement funds out to simply make such an alternative investment. And I would be sure to try and calculate any potential tax or other related direct costs of pulling/borrowing such funds out of my retirement account(s), and factor that into the overall cost(s) I would spend to acquire that "white whale" item. Taking those additional costs into consideration may be that little extra deterrent many need to convince them not to do the loan/withdrawal from their retirement funds in the first place, even if it is a "white whale' item.

In any event, I would definitely not suggest ever taking money out of a Roth IRA account for such an investment as in cards. especially if there is any alternative source available. Taking a non-taxable investment and turning into a taxable investment to me is like adding insult to injury. LOL

I am wondering if at some future date, someone attempts to get items such as cards declared as a true investment asset/class, and pushes to possibly have them considered as an allowable retirement investment in say self-directed IRAs. I can already see some players in the industry, such as some of the current Vault operators, in the not too distant future possibly trying to enable people to fractionally invest in certain blue-chip vintage cards (T206 Wagners, T206 Cobbs, Goudey Ruths, '52 Topps Mantles, etc.) and maybe even assist them in setting up their own self-directed IRAs for them to do so. We've already seen and discussed how some of these Vault operators are offering people the ability to take loans/margin on their vault holdings, just like investment firms do with people's stock accounts. How big of a leap do you think it would be for these same Vault operators to then push the idea of possibly looking at cards as an actual type of retirement investing asset as well? Annual IRA contribution limits ($6,000/yr under 50, $7,000/yr over 49 in 2022) are much lower than annual 401K contribution limits. But get enough like-minded people and start adding their IRA account balances up, and I can see a Vault operator acting on their behalf to maybe buy that Wagner/Cobb/Mantle they otherwise couldn't afford individually. That way you not only wouldn't have to worry about taking money out of one of your retirement accounts to make such a card investment purchase. And for the Vault operator behind such a concept, they could actually promote the idea that the IRA contribution could possibly end up being tax deductible, based on a person's own specific tax and retirement investing situation.

We've joked about it before here on the Net54 forum, but what if all the members did get together and kick in some money to then go out and purchase a card(s) that none of us would likely ever be able to afford on our own? I've owned fractional interests in things before, like a thoroughbred racehorse, so why not the same with say a T206 Wagner, or high-grade '52 Topps Mantle? And then take it a step further and try to get it as a retirement account asset. To my knowledge, that would not be allowable right now, but things do seem to be changing a lot as we move forward.

[BobC]

Double post.

[raulus]

Originally Posted by BobC

And then take it a step further and try to get it as a retirement account asset. To my knowledge, that would not be allowable right now, but things do seem to be changing a lot as we move forward.

Thanks BobC.

Under current law, collectibles are prohibited in 401ks and IRAs. See IRC Section 408(m). So Congress would have to change the statute. Based on the fiasco of having crypto in 401ks, I don't expect they'll be motivated to make any changes here.

[BobC]

Originally Posted by raulus

Thanks BobC.

Under current law, collectibles are prohibited in 401ks and IRAs. See IRC Section 408(m). So Congress would have to change the statute. Based on the fiasco of having crypto in 401ks, I don't expect they'll be motivated to make any changes here.

And exactly why I said MAYBE in the future. LOL

They do currently allow somewhat non-traditional things like precious metals to be held in IRAs, which definitely falls into Warren Buffet's non-productive asset category. That is the same category cards would fall into, non-productive assets. So you never know. if enough people start pushing it as an alternative asset for retirement account holdings, they may get Congress to okay it one day. At least it is a tangible, physical asset, unlike Bitcoin and other such completely intangible investments/assets.

[Peter_Spaeth]

Originally Posted by BobC

And exactly why I said MAYBE in the future. LOL

They do currently allow somewhat non-traditional things like precious metals to be held in IRAs, which definitely falls into Warren Buffet's non-productive asset category. That is the same category cards would fall into, non-productive assets. So you never know. if enough people start pushing it as an alternative asset for retirement account holdings, they may get Congress to okay it one day. At least it is a tangible, physical asset, unlike Bitcoin and other such completely intangible investments/assets.

Bob, what's the difference between an IRA where you "own" physical gold or just owning an ETF in your account like GLD? And in the case of the former, where is the actual gold and who has possession of it? It's a weird concept to me, although I guess I was vaguely aware of it as an option.

[BobC]

Originally Posted by Peter_Spaeth

Bob, what's the difference between an IRA where you "own" physical gold or just owning an ETF in your account like GLD? And in the case of the former, where is the actual gold and who has possession of it? It's a weird concept to me, although I guess I was vaguely aware of it as an option.

Yeah, I know. Not really a huge difference, but to me at least, the fact there is a physical asset that eventually backs something up, like an actual piece of gold, makes a big difference as opposed to say Bitcoin, where there is literally nothing physically backing it up. Even when you own a share of stock in a company, you technically own a piece of the actual physical assets that company owns.

[raulus]

Originally Posted by BobC

And exactly why I said MAYBE in the future. LOL

They do currently allow somewhat non-traditional things like precious metals to be held in IRAs, which definitely falls into Warren Buffet's non-productive asset category.

I'm sure you saw the case with McNulty v. Commish, where the couple got hammered for holding gold in their IRA and storing the gold at home. They were keeping about $411K in gold at home. Apparently it was based on some brilliant idea on the internet from a shop selling gold online. The couple made a few other missteps, and ended up paying over $300K in taxes and penalties on their IRA of about $700K.

In terms of any gold held in your IRA, basically you can't have unfettered access to the gold, because the law requires independent oversight by a third-party fiduciary. So even if Congress amended the statute to permit cardboard to be held in retirement accounts (a pretty big if), barring a change to the independent oversight from a third-party fiduciary requirement, you couldn't keep your cardboard at home to have and hold and enjoy.

Naturally, as you noted, the vault approach would seem to likely solve the sticky wicket of needing independent oversight by a third-party fiduciary, although I guess we can debate how much oversight you're getting from a vault, and the more cynical among us might even question the fiduciary aspect.

[basesareempty]

I am Old School and am in the market for the ups and downs but with the current down turn in the market and what appears to be an impending recession at best, I have often thought what if I took out a company sponsored 401k Loan where I pay the amount back through payroll deductions with 6% interest that also goes to my account. I then could use the loan to pay off a vehicle, credit cards, buy tangible assets( cards, gold or silver) or whatever? 6% return in the current market is not to bad considering I’ve lot about 22% in the last 18 months or so???

[soxinseven]

Originally Posted by ullmandds

If he did not get half of the buyers premium I say he did himself a disservice

This.

[autograf]

Originally Posted by basesareempty

I am Old School and am in the market for the ups and downs but with the current down turn in the market and what appears to be an impending recession at best, I have often thought what if I took out a company sponsored 401k Loan where I pay the amount back through payroll deductions with 6% interest that also goes to my account. I then could use the loan to pay off a vehicle, credit cards, buy tangible assets( cards, gold or silver) or whatever? 6% return in the current market is not to bad considering I’ve lot about 22% in the last 18 months or so???

We took about $30K from a 401k right before the HUGE downturn in 2008/2009 for an adoption. Then paid it back over a 5 year period with the 6-7-8% interest, so it worked out pretty well ultimately. The rest of the money in the 401k was growing strongly during that period but we didn't lose the base amount on the $30K since we'd pulled it out. Just a matter of timing. Not sure that it would be that easy to really PLAN it to turn out well.............

[Yoda]

Tom, did the kid(s) turn out to be a good investment? And perhaps that is them behind you in the photo. Philippine American maybe?

[x2drich2000]

One risk to consider with a 401k loan is what happens if you lose your job or want to move on to a different job. Many plans will require you to either pay the loan back in full very quickly or will consider the loan a disbursement subject to the tax and penalties discussed previously in this thread.

[jingram058]

Just proves what I learned about this Pre-War forum. The regulars here are the "beautiful people". They don't have to worry about such things as "money" or "jobs" or "what will my wife and kids say if I buy a $25K baseball card"; they own the joint and $25K is mere pocket change for picking up whimsical baseball card trinkets. Way beyond what we used to call "suits" back in the day. They don't need to worry about such things as retirement, as they already live the beautiful life. If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

[ullmandds]

Originally Posted by jingram058

Just proves what I learned about this Pre-War forum. The regulars here are the "beautiful people". They don't have to worry about such things as "money" or "jobs" or "what will my wife and kids say if I buy a $25K baseball card"; they own the joint and $25K is mere pocket change for picking up whimsical baseball card trinkets. Way beyond what we used to call "suits" back in the day. They don't need to worry about such things as retirement, as they already live the beautiful life. If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

my life is a constant state of stress!!!!

[obcbobd]

Originally Posted by jingram058

Just proves what I learned about this Pre-War forum. The regulars here are the "beautiful people". They don't have to worry about such things as "money" or "jobs" or "what will my wife and kids say if I buy a $25K baseball card"; they own the joint and $25K is mere pocket change for picking up whimsical baseball card trinkets. Way beyond what we used to call "suits" back in the day. They don't need to worry about such things as retirement, as they already live the beautiful life. If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

I'm not sure you can put people into buckets such as "beautiful people" or suites as easily as you might think. Everyone is different. There's they guy making $75K a year with a big mortgage who is buying a $20K card on credit. Then there's they guy making $200K a year, no mortgage who won't pay more than $500 for a card because he doesn't believe in spending that much on a piece of cardboard. And then there's everyone else who is probably in between.

I always figured anyone who had a big $10-20K card, back when that meant a Goudey Ruth or T206 Cobb, must be a multi millionaire. I was certainly wrong.

And as far as "beautiful people" - have you ever been to the National or a big show. We (and I certainly include myself) are far from "beautiful people" :-)

[raulus]

Originally Posted by jingram058

If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

Gotta know your limits. And then have the courage to stick to them, no matter how sorely you are tempted to go crazy, throw caution to the wind, and just go for it.

Confession: I went crazy once. But only once. The #1 set registry set for my man Mays was coming online, with crazy rare stuff for sale. I could have bankrupted myself buying all of it. Instead, I focused on the pieces that I couldn’t find anywhere else, got many of them, and figured I would pick up the rest later. It still cost me an uncomfortably high amount, and I’ve never come close to spending that much in a single auction since. And as luck would have it, many of the items that I didn’t get at that auction have come up for sale in the years since, but I’ve had to pay double or triple to get them now. So I guess you could say that I’ve been using the other guys to finance my purchases from the original auction, but at a very high interest rate, which comes due when I finally buy the items off of them years later.

[BobbyStrawberry]

Originally Posted by jingram058

Just proves what I learned about this Pre-War forum. The regulars here are the "beautiful people". They don't have to worry about such things as "money" or "jobs" or "what will my wife and kids say if I buy a $25K baseball card"; they own the joint and $25K is mere pocket change for picking up whimsical baseball card trinkets. Way beyond what we used to call "suits" back in the day. They don't need to worry about such things as retirement, as they already live the beautiful life. If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

And remember to celebrate the latest absurd record-breaking prices, or you are a nothing but "a hater"!

[raulus]

Originally Posted by raulus

Confession: I went crazy once. But only once. The #1 set registry set for my man Mays was coming online, with crazy rare stuff for sale. I could have bankrupted myself buying all of it. Instead, I focused on the pieces that I couldn’t find anywhere else, got many of them, and figured I would pick up the rest later. It still cost me an uncomfortably high amount, and I’ve never come close to spending that much in a single auction since.

What’s a confession without a picture of my biggest pickup from that auction?

[G1911]

Originally Posted by jingram058

Just proves what I learned about this Pre-War forum. The regulars here are the "beautiful people". They don't have to worry about such things as "money" or "jobs" or "what will my wife and kids say if I buy a $25K baseball card"; they own the joint and $25K is mere pocket change for picking up whimsical baseball card trinkets. Way beyond what we used to call "suits" back in the day. They don't need to worry about such things as retirement, as they already live the beautiful life. If that is not the case, how then can you explain the constant, endless parade of big, big dollar cards with no mention of any stress or anxiety in picking them up?

Well apparently it’s because they empty their retirement accounts to buy cards

[BobC]

Originally Posted by raulus

I'm sure you saw the case with McNulty v. Commish, where the couple got hammered for holding gold in their IRA and storing the gold at home. They were keeping about $411K in gold at home. Apparently it was based on some brilliant idea on the internet from a shop selling gold online. The couple made a few other missteps, and ended up paying over $300K in taxes and penalties on their IRA of about $700K.

In terms of any gold held in your IRA, basically you can't have unfettered access to the gold, because the law requires independent oversight by a third-party fiduciary. So even if Congress amended the statute to permit cardboard to be held in retirement accounts (a pretty big if), barring a change to the independent oversight from a third-party fiduciary requirement, you couldn't keep your cardboard at home to have and hold and enjoy.

Naturally, as you noted, the vault approach would seem to likely solve the sticky wicket of needing independent oversight by a third-party fiduciary, although I guess we can debate how much oversight you're getting from a vault, and the more cynical among us might even question the fiduciary aspect.

Right you are Nicolo. I've mentioned on the forum before how the easiest way to determine the difference between an investment and a collection is where one stores/keeps their items. Investments in a vault or safe deposit box, collectibles on the walls/shelves of your office or man cave.

On the occasions where someone starts a thread about showing off their man cave/collectibles at home, I've mentioned how someone not wanting their items to be considered as collectibles instead of possibly being investments some day, maybe shouldn't be posting images on a public forum of all their stuff on the walls or shelves of their office/home. For all we know, there is an IRS agent who had been a forum member for years. LOL

[Johnny630]

Originally Posted by raulus

what’s a confession without a picture of my biggest pickup from that auction?

wowzer i love that card dude

[Republicaninmass]

Originally Posted by BobbyStrawberry

And remember to celebrate the latest absurd record-breaking prices, or you are a nothing but "a hater"!

Celebrate???? No way, you have to pump them higher! Saying it was a steal and people will kick themselves years from now

[BobbyStrawberry]

Originally Posted by Republicaninmass

Celebrate???? No way, you have to pump them higher! Saying it was a steal and people will kick themselves years from now

[Oscar_Stanage]

this is a terrible idea. have you heard of anyone draining their retirement account to buy art? no it is not the same thing as buying stocks.

[Exhibitman]

it is a weird zeitgeist in this country right now, and the feelings expressed on this board in this thread reflect it. On the one hand, we (purportedly) celebrate unfettered capitalism and individual wealth building, but there is also a ton of vitriol for those who emerge at the top of that system and use their money to buy the best toys. Seems to me you can't hold both positions at the same time, or the cognitive dissonance is overwhelming. If you are a free-marketeer, it is not logical to be angry with the winners in that system. After all, the tenets of capitalism would indicate that those of us who cannot afford to buy $25K baseball cards are the losers and that those who run the table financially are deservedly enjoying the fruits of their labor. I'd ask those who are critical of the financial high flyers in the hobby to explain just what they think is the solution? Do we tax the wealthy and redistribute their money so that no one can buy a $25,000 baseball card? I'm curious to hear the answers, if you have any. Or are you just exercising the most precious of American rights, the right to complain?

And no, I am not conflicted in the slightest. If I was able to, I would wave my magic wand and tax the snot out of the rich to pay for social programs and infrastructure, but I can't, so I play the cards I am dealt, and that means working the system as best as I can for my own benefit rather than wasting my time being pissed at those who make more money than I do. Hate the game, not the players. I think I heard that somewhere...

[Exhibitman]

Originally Posted by Oscar_Stanage

this is a terrible idea. have you heard of anyone draining their retirement account to buy art? no it is not the same thing as buying stocks.

Yeah, like Wall Street has such a pristine record of honesty.

Honestly, we can all go in circles over this forever, but the truth is that all this investment crap is the same, just a way to make some money into more money, if it works out. Doesn't matter what form it takes (as long as it is legal); it is all about the Benjamins, and the rest is just marketing and hot air. There is no hierarchy of 'goodness' among investments and there are no absolutes; the suggestion is a fallacy. It just depends on the deal. If some idiot offered me a T206 Wagner at 10% of the going price I would happily drain my retirement accounts to make the deal and screw the taxes, conventional wisdom, etc.; I will make it up on the back end when I flip the card, preferably during the same tax year. Conversely, if someone offered me enough money for my collection, I would not only sell it without a second thought, I would help carry it to their car if they wanted.

Losing both my parents in less than three months this summer really made me think about this stuff. The only things we have that are truly valuable are time and health. Why waste an iota of time or energy being judgmental, envious or resentful?

[BobC]

Originally Posted by Exhibitman

Yeah, like Wall Street has such a pristine record of honesty.

Honestly, we can all go in circles over this forever, but the truth is that all this investment crap is the same, just a way to make some money into more money, if it works out. Doesn't matter what form it takes (as long as it is legal); it is all about the Benjamins, and the rest is just marketing and hot air. There is no hierarchy of 'goodness' among investments and there are no absolutes; the suggestion is a fallacy. It just depends on the deal. If some idiot offered me a T206 Wagner at 10% of the going price I would happily drain my retirement accounts to make the deal and screw the taxes, conventional wisdom, etc.; I will make it up on the back end when I flip the card, preferably during the same tax year. Conversely, if someone offered me enough money for my collection, I would not only sell it without a second thought, I would help carry it to their car if they wanted.

Losing both my parents in less than three months this summer really made me think about this stuff. The only things we have that are truly valuable are time and health. Why waste an iota of time or energy being judgmental, envious or resentful?

Great points and well said.

But if you ever did luck out on a deal like that for a T206 Wagner, try to make sure hold onto the card for at least one full year before selling it. That long term capital gains federal tax rate is currently capped at 28%. Selling it in less than one full year gets you short term capital gain tax treatment, which is treated more like ordinary income (think W-2 wages) with a max federal tax rate of 37%. If you end up profiting $1M on such a deal, waiting a little longer to sell the card could easily mean an extra $90K in your pocket.

[jamest206]

Why do I keep reading this click bait post😭😭😭😭😂😂😂😂😂. Come on y’all!!! Just go buy the damn card you want. BTW you can bet your ass I’ll be at Mile High a week from now. Top row or bust!

[Leon]

Originally Posted by Exhibitman

Yeah, like Wall Street has such a pristine record of honesty.

Honestly, we can all go in circles over this forever, but the truth is that all this investment crap is the same, just a way to make some money into more money, if it works out. Doesn't matter what form it takes (as long as it is legal); it is all about the Benjamins, and the rest is just marketing and hot air. There is no hierarchy of 'goodness' among investments and there are no absolutes; the suggestion is a fallacy. It just depends on the deal. If some idiot offered me a T206 Wagner at 10% of the going price I would happily drain my retirement accounts to make the deal and screw the taxes, conventional wisdom, etc.; I will make it up on the back end when I flip the card, preferably during the same tax year. Conversely, if someone offered me enough money for my collection, I would not only sell it without a second thought, I would help carry it to their car if they wanted.

Losing both my parents in less than three months this summer really made me think about this stuff. The only things we have that are truly valuable are time and health. Why waste an iota of time or energy being judgmental, envious or resentful?

Sorry for your losses, Adam. That is so sad and in such a short amount of time.
I am right in step with you on investments et al.... Everything I have of value is an investment, good, bad or indifferent. I get a lot of joy at looking at my cards, not so much my IRAs....

Back to the subject. I will take money out of savings, or an IRA, if the opportunity presents itself. But it won't be to make 10%!
.

[Exhibitman]

Originally Posted by Leon

Sorry for your losses, Adam. That is so sad and in such a short amount of time.
I am right in step with you on investments et al.... Everything I have of value is an investment, good, bad or indifferent. I get a lot of joy at looking at my cards, not so much my IRAs....

Back to the subject. I will take money out of savings, or an IRA, if the opportunity presents itself. But it won't be to make 10%!
.

Thanks. It's been...interesting.

[theshowandme]

This is such an insane concept to me

[Exhibitman]

Well, with every stock index down substantially this year, maybe not so insane...

[G1911]

Originally Posted by theshowandme

This is such an insane concept to me

It seems like an insane concept, because it is

[Leon]

Originally Posted by Exhibitman

Well, with every stock index down substantially this year, maybe not so insane...

My cards have done better than my stocks!! And I have mostly Apple and Amazon...
.

[sb1]

Having done well in both cards and the stock market over the last 30 years, I came to the conclusion when looking at my daughter's brokerage account which we opened when she was 16, that if I had invested every nickel in Apple we would be almost 2x's ahead.

[G1911]

I can't wait to see the screen caps of people's closed 401K accounts as they pull it out, take that massive tax hit, and put it all into baseball cards. The people who think this makes sense have had several weeks to put their money where their advocacy is

[rats60]

Originally Posted by G1911

It seems like an insane concept, because it is

Losing money in the stock market is better than making money with baseball cards?

[G1911]

Originally Posted by rats60

Losing money in the stock market is better than making money with baseball cards?

The vast majority of 401K accounts make money, not a loss. It's really, really, really hard to put your money into a 401K for many years and produce a net loss. It takes serious mismanagement and stacking horrible decisions to do so. The tax structure has been gone over.

But if you believe a 401K or an IRA is bad and pulling money out of retirement accounts to YOLO on cardboard is wisdom, do it. I eagerly await the screen caps of people putting their money where there mouth is and closing their retirement accounts, taking that massive tax hit, and spending it all on baseball cards. Surely they will come any minute now to show us doubters and actually do it.

[rats60]

Originally Posted by G1911

The vast majority of 401K accounts make money, not a loss. It's really, really, really hard to put your money into a 401K for many years and produce a net loss. It takes serious mismanagement and stacking horrible decisions to do so. The tax structure has been gone over.

But if you believe a 401K or an IRA is bad and pulling money out of retirement accounts to YOLO on cardboard is wisdom, do it. I eagerly await the screen caps of people putting their money where there mouth is and closing their retirement accounts, taking that massive tax hit, and spending it all on baseball cards. Surely they will come any minute now to show us doubters and actually do it.

You have lost ~20% in the market this year. There is no guarantee that it is going up anytime soon. Many experts think it is going down more as the economy gets worse.

Yes, the tax structure has been gone over. There are ways to take money out, depending on the type of retirement account, without penalties. If none of these fit the individual needs, then it probably isn't wise.

This thread was started because the OP heard people were doing it, but we don't know the specifics. I doubt they are coming here to post because most are negative about cards as an investment. Most of my retirement is already in my collection and I am way ahead of where I would have been if I had maxed out retirement account, so I am already good.

[Republicaninmass]

I just cant imagine getting to retirement and needing funds from cards. The value is Pretty much a wild card until you book a profit. Your 500k jordan can be 180k a year later. The auction ends 2 days after a massive crash in stocks or crypto. Anything could happen even to the old blue chip cards.


Same with a retirement account in volatile stocks. Only is a profit when you sell.

This is why most financial advisors say to scale back risk as you get closer to retirement, or start taking dividends per month.

Personally, a very small allotment in cards is probably fine, but no more than 10% at retirement. This is coming from someone who used my 401k shortly before the financial crisis to buy signed cards, and sold 1 month ago. I can't say I timed the market, but I am now able to deploy back into retirement when the stock market appears to be cooling off and for some odd reason cards are still hot.


If i was a YOLO FOMO type, and had decades before I needed the funds, it may have been different. However, with 1 yr CDS approaching a 5% return with 0 risk, I cant hold cards as possibly appreciating assets.

[Johnny630]

I feel that inflation has peaked and will be coming down substantially over the next several months and year along with US equities (S&P, Dow&Nadaq) rallying now through the end of the year and well into next year. All this talk about retirement accounts being down 20-25% so far this year was a great time for me to add a higher percentage in. Looking forward to the future in my retirement account along with the cards :-). All is looking good to me.

[GeoPoto]

If you are assuming the painful monetary measures taken and forecast to be taken by the Federal Reserve are adequate to eliminate inflation's ability to kill stock and bond market returns, I would caution you to be careful. Inflation will not be mastered until the monetary discipline is coupled with fiscal reforms that will be much more painful and difficult to implement. This was true in 1970, and today's political environment is much more hostile to painful fiscal prescriptions than was the one that existed then. You should expect that recovering control over inflation will become a protracted process that could destroy stock market returns for a decade or more. I hope I am wrong, but as a survivor of the 1970's, that will come as a pleasant surprise.

[carlsonjok]

Originally Posted by rats60

You have lost ~20% in the market this year. There is no guarantee that it is going up anytime soon. Many experts think it is going down more as the economy gets worse.

Unless you are a year away from retirement, what your retirement account is doing now is irrelevant. And, if you are a year away from retirement, you shouldn't be so heavily invested in equities that you took anywhere near the full 20% hit.

But, to state what ought to be obvious, there is a huge difference between stocks and cards as investments. Stock represents fractional ownership in the underlying company and, thus, a claim on the cash flows of the company by way of dividends. Unless you are investing in SPACs, you are investing in companies that sell goods and services and, ideally, make money. Cards don't do any of that. Maybe you make a huge profit when you sell it or maybe you start the next in a long line of "someone got a great deal on that" threads. But, as long as you hold the card, it is no different than that 5-pound bag of sugar in your pantry that you pull out once a year to make Christmas cookies.

[Exhibitman]

Originally Posted by carlsonjok

Stock represents fractional ownership in the underlying company and, thus, a claim on the cash flows of the company by way of dividends. Unless you are investing in SPACs, you are investing in companies that sell goods and services and, ideally, make money. Cards don't do any of that. Maybe you make a huge profit when you sell it or maybe you start the next in a long line of "someone got a great deal on that" threads. But, as long as you hold the card, it is no different than that 5-pound bag of sugar in your pantry that you pull out once a year to make Christmas cookies.

i disagree, Jeff. That's the fiction Wall Street sells. Common stock gives the owner nothing real unless he holds a sufficient % of the issue to demand a board seat. Otherwise, Joe Investor owning 100 shares of Megabig Corp. doesn't hold a claim on jacksquat. Most companies do not pay dividends and the ones that do can terminate them at will. It is basically a bet on increased price, same as a card. The real owners of these companies are their creditors. if the company goes belly up the shareholders are the last to be paid, and usually get nothing for their shares. The only difference between most stocks and cards is that entry and exit are a lot easier with stocks. Now, with all of the different venues for card sales, exiting has never been easier. It still costs a lot more than a stock trade, relatively speaking, and takes longer, but that is consistent with any hard asset investment.

[carlsonjok]

Originally Posted by Exhibitman

i disagree, Jeff. That's the fiction Wall Street sells. Common stock gives the owner nothing real unless he holds a sufficient % of the issue to demand a board seat. Otherwise, Joe Investor owning 100 shares of Megabig Corp. doesn't hold a claim on jacksquat. Most companies do not pay dividends and the ones that do can terminate them at will. It is basically a bet on increased price, same as a card. The real owners of these companies are their creditors. if the company goes belly up the shareholders are the last to be paid, and usually get nothing for their shares. The only difference between most stocks and cards is that entry and exit are a lot easier with stocks. Now, with all of the different venues for card sales, exiting has never been easier. It still costs a lot more than a stock trade, relatively speaking, and takes longer, but that is consistent with any hard asset investment.

I was wrong about one thing. I figured it would be BobC who would point out that shareholders are last in line in bankruptcy. Of course liquidation represents a threat to stock investments. Pointing out what happens in the extreme isn't particularly illuminating. I mean, if it was, I'd counter with the historical performance of Greg Jefferies rookie cards to make a general statement about sports cards as an asset class.

As for the rest of your comment, it all depends on how you define "few" and "nothing" The estimate I saw is that approximately 37% of exchange traded stocks (NYSE, NASDAQ) pay dividends. Certainly, that isn't a huge number, but over one in three is not how I would define few. How many sports cards pay dividends? Additionally, when you look at long term returns, stock markets return anywhere from 7.5% to over 12% annually (depending on what time frame you chose and whether you DRIP.) That is not nothing. Not to me anyways. I've compared my lifetime earnings to my investment portfolio and I am satisfied with my investing choices (my career choices may be a different matter.)

As far as your comment about small investors having no claim since they aren't significant enough to sit on the board, I think you are conflating the separate, but related, issues of investor relations and corporate governance. But we are (or maybe more specifically, I am) straying far from the topic at hand.

In the end, everyone is free to invest their money any way they see fit. If you want to invest in sports cards, I wish you the best. It isn't for me. I prefer my investments to be associated with assets that generate income even as I hold them passively and long term. And, if anyone asks me for my advice, that is what I would tell them.

[raulus]

Originally Posted by carlsonjok

In the end, everyone is free to invest their money any way they see fit. If you want to invest in sports cards, I wish you the best. It isn't for me. I prefer my investments to be associated with assets that generate income even as I hold them passively and long term. And, if anyone asks me for my advice, that is what I would tell them.

Amen!!!!

[G1911]

Anyone can do what they want. My biggest issue is that the pumpers aren't doing what they advocate though.

Stocks are down ~20% this year. Cards are too, from their Covid highs. Some cards are not, just as some stocks are not. Not a single financial advisor will advise clients to close their 401K's and IRA's and put the money, after they lose a ton of it to the Feds, into baseball cards. There is not a single person who doesn't stand to make a huge profit if people were actually dumb enough do this by already being heavily invested into cards that will advise it.

It's just self-serving pumping BS. If you believe going all the way in on cards after huge price spikes is wise, then do it yourself. Close all your retirement accounts. Drain your cash assets (which unlike your 401K, you don't have to take a gigantic tax penalty to spend on cards) and YOLO everything on baseball cards. Do it. Post screen caps and show it. Nobody actually will, because it's just pumping for others to dump their money in so these folks holding right now can make money off it if the hype train keeps going up forever.

The Gary Vee worshipping, r/wallstreetbets subscribing breed of new collectors that get so much disdain in vintage land are at least fairly honest about what they are doing. Beware the doctor who won't take their own prescription.

[Republicaninmass]

Originally Posted by carlsonjok

it all depends on how you define "few" and "nothing" The estimate I saw is that approximately 37% of exchange traded stocks (NYSE, NASDAQ) pay dividends. Certainly, that isn't a huge number, but over one in three is not how I would define few. How many sports cards pay dividends? Additionally, when you look at long term returns, stock markets return anywhere from 7.5% to over 12% annually (depending on what time frame you chose and whether you DRIP.) That is not nothing. Not to me anyways. I.

Hence why stating at a 5% 0 risk CD has to be tempting for "card holders" and stock holders alike. I was right on many of my contrarian plays, wrong a one big one.