"Taking money out of retirement funds to purchase cards"

Please don't.

People will do whatever they have to do to own a 52 Mantle. The luster of this has never been stronger. It has a cult-like following that has Zero ends in sight. I’ve had several collectors I’ve known who own this card tell me that they would rather live under a bridge than part with this card. Now that's God’s Honest Truth tell me how I’m wrong on this.

Here’s the thing- after taxes and auction fees, that seller only netted about $6M.

Basically half of the $12M+ that it sold for.

The taxes and auction fees will eat so much of your financial returns that if this is your approach to retirement, your returns will have to be astronomical to overcome those financial drags.

No way in hell the consigner paid auction fees on this

What about the juice? Do you think the consignor kept the bidder’s 20% premium?

I would imagine the consignor got part of that

What percentage would you estimate that they got? 25%? 50%?

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

OK. Let's assume the seller got 75% of the buyer's premium, and zero listing fees. You and I aren't going to get this deal when we sell our items. Last time I consigned with this AH, they kept the juice, and I paid 7.5% listing fees. But let's just roll with this generous assumption for now.

So the sale was for $10.5M, with a bidder's premium of $2.1M, total of $12.6M. If we assume that the seller keeps 75% of the bidder's premium, then the seller nets $12.075M.

Now to the fun part - paying taxes. The seller's basis was $50k, which is well known. The gain is therefore $12.025M.

The feds get 28% for capital gains on collectibles. Plus 3.8% for the Obamacare tax on capital gains. So 31.8% to the feds.

But wait, there's more!!

The seller, as I understand it, lives in New York. The top marginal rate for the great state of New York is 10.9%. I thought I also read that this seller also lives in New York City, which adds another 3.8%. So state + city gets you another 14.7%. And under the new tax law, it's not deductible on your federal return either. Brilliant!

So all-in, taxes are 46.5% on a gain of $12.025M, which gets you to taxes of $5.6M. Seller nets right about $6.425M after taxes. Even with very generous assumptions about who gets the juice, and no listing fees.

If the seller was in a zero tax state (and city), then that would help. The seller would net $8.2M in that scenario. Hopefully this seller moved to Florida last year, although I'm guessing that Governor Hochul will still work like the dickens to get NY's cut in that scenario.

But whether we're talking about $8.2M or $6.425M, it's still a lot less than $12.6M.

I've always said this, cards may in theory seem easy and profitable when the time comes to liquidate, until you see that tax bill, ugh. That being said a net of $6.425 million ain’t too shabby for a 30-year investment of $50,000. I'd take that return everyday of the week and twice on Sunday's !

If we could get that return on all of our cards, then there’s no doubt that we would all retire comfortably.

It seems the only way to make a gain like this is to spend big on an item or asset class that you have major conviction in for its long-term growth. It Could be anything, your business, real estate, stocks, crypto, or cards. This gentleman had the smarts and guts to pay the $50,0000 at the time. I believe at the time one recently had just sold, 91 or late 90 with Christie’s or Sotheby’s for $50,000 so I believe that’s how Rosen came up with his price to the gentleman for $50k.

This is a biased sampling predisposed to baseball cards, of course, and many have large investments into them that stand to gain from further growth that is promoted, but I’m a little surprised to see so many that think going all in on like this is a smart decision. It is going all in; if one is to the point that they are emptying 401K’s and IRA’s to pay for cards, they are not diversifying their portfolio. That’s an extreme step.

High end cards have skyrocketed since the opening of 2020. It’s fallen from the peak, but prices remain very high. Gambling your retirement that it will continue inexorably forward and continue to make huge percentage leaps is a very risky gamble. Retirement accounts are set up for very favorable taxation and stability, losing those tax benefits and taking the early withdrawal fees to invest in mass produced collectibles that are not set up for favorable taxation (if I sold a Mantle I’d owe close to 50% of my profit in taxes alone) is a titanic gamble. You don’t have to have your cards perform better than the stock market to profit from this, you have to beat it by a LOT.

One can gain a lot from large risk. Draining your retirement accounts to participate in the current collectibles fad is a large one. Whether it’s cards, crypto, beanie babies or GME, it can pay off big time. If I had bought into 52 Mantles and sold them now, or had bought more crypto in 2009, or drained my 401K to join the apes on WallStreetBets when they started the train on GME, I’d have made more than my index invested retirement accounts. There are also many such events where I would have gone broke if I followed the hype. Stocks may go up or down, but the market grows over time. If the market doesn’t grow over time, the US dollar collapses and your collectibles collapse too. Retirement accounts are set up favorably to enable responsibility and security for old age. I have a hard time seeing that risking a secure retirement in favor of going all the way in on baseball cards after a huge rush and pump is intelligent financial advice. Again, emptying retirement accounts to do it is very different from diversifying or putting some of one’s cash or income into it as a supplemental investment.

Certainly the returns on this one item are pretty spectacular, even after taxes and auction fees. Even if the auction fees were priced at normal prices that you and I will pay on our items.

But do you really need to hit a home run every time to retire comfortably? My experience when you get both cheeks into every swing is that you're not going to connect every time.

Just for fun, let's say that this $50k was instead invested in a Roth back in 1991, with the S&P 500, reinvesting dividends.

For those of you who will observe that $50k is above the annual contribution limits for a Roth, then let's assume that he pulled $50k out of his Roth to buy it, since pulling cash out of your retirement account to buy cards was the original impetus for this string. For those of you who are tax historians and who will retort that Roths didn't exist until 1998, I guess we'll just have to enter the land of make-believe to attempt to compare apples to apples. Since we're all buying cards with after-tax dollars, and since Roths are available to us today, this seems like a reasonable comparison.

According to the returns that I'm showing for such an investment, the seller would have about $925K in that hypothetical Roth today, all of which would come out tax free.

Not the home run that he got from buying the 311 Mantle. But still a very nice return on investing $50k in a relatively boring asset class. And for most of us, I'm guessing that $925K in a Roth would put us well on the way towards retirement.

But by golly, if you've got the next Rosen Mantle, then go nuts and do whatever it takes to buy it.

I wouldn't go that far but consider this objectively: you can purchase an asset that has a 40+ year track record of price increases well above inflation. Which is more reasonable, to assume that the price of the item will shift downward over the next ten years, or to assume that the price will increase over the next ten years? I'd go with the former. I know that past performance is no indicator of future performance, but a track record is all we have to go with when it comes to hard asset investments.

I bought a lot of cards a long time ago not because I thought they were good investments but because I enjoyed them. The fact that they are turning out to have been a good investment too is a bonus. Confronting today's prices, there are not many cards I would buy, but the 1952 Topps Mantle is one of them, because of all the factors we have been over ad nauseum on this board. Name a single postwar card with comparable recognition and status of the Mantle. Not possible. The interest in the card transcends collectors. Non collectors are impressed with it, same as a T206 Wagner. That tells me all I need to know about the long-term prospects for the card. There are likely to be short term corrections, as with any asset, but the market trend is upwards over the long term.

And cards are really fun to own, damnit!

Thread needs a card image

https://photos.imageevent.com/exhibi...box%20view.jpg

This situation was not an average collector saving up all his money, selling some cards, borrowing money, etc,... to buy this Mantle for $50,000. As I understand it, the consigner is very wealthy. So, whatever the payout to him (after the taxes stuff), probably isn't going to change his life at all.

Good points.

If we took every baseball card and its prices in 1991 and tracked their value compared to now there may be just as many losers as winners.

Then you have to look at condition. People were buying vintage cards at NM to Mint prices back then when in reality 90% of those cards would be graded at 4-7.

For example, in the early 1990's, Eddie Murray RC's were going for $40-$50 and 90% of those were most likely in the 4-7 grade range.

So it really isn't fair to say that a PSA 10 Eddie Murray goes for 15K now and look how much money you would have made.

How many $40 Eddie Murray rookies were bought in 1991 that would now be $15 cards in their raw state, or $35 in PSA 5 condition(then when you minus grading fees, still $15-$20)? I would say the vast majority.

So in totality, the Murray RC, if viewed as a stock by looking at EVERY card, even if you include the handful of $15,000 PSA 10's that sold, that Eddie Murray RC stock may very well still be even or have gone down since then. $40 in 1991....and still a $40 stock in 2022 with no dividends ever paid.

That isn't even counting all the sets like 1990 Leaf that were $150-$300 sets in 1991-ish and are worth about $50 now.

Then you have the trash from the junk wax era that ALL lost big value.

Pre-war has done very well though compared to 1991. I would say it is up across the board in that segment.

I consider card collecting a hobby, not an investment per say.

That being said, it's likely a better financial investment than my other hobbies (going out to dinner, drinking beer, live music, travel, etc.), at least in terms of any long term financial payback.

Unless anyone wants to pay me to tell stories about that time I drank beer and saw that band after that really good dinner out... :D

Retirement
 

I like the diversifying approach. I have real estate, 401k, IRA, savings, and baseball cards. The cards are not part of any of the other investments. I don't borrow from one category to fund another, even though that's allowed.

Watching the stock market drop lately makes me glad for that diversity. Prewar baseball cards have been steady in holding their value, while some cards have jumped up better than the other investments. It's hard to find another investment where something is worth 10x what I paid.

When it's time to sell, all will be subject to taxes for me. I'll sell gradually to fund retirement I suppose.

Ask this to any sane financial advisor..

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

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.

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.

Double post.

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.

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.

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.

401k
 

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???

This.

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.............

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?

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.

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!!!!

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" :-)

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.

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

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

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

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

wowzer i love that card dude

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

:D

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.

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...

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. :)

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!

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.

This is such an insane concept to me

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

It seems like an insane concept, because it is :D

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

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.

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 :rolleyes:

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.

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.

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.

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.

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.

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.

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.

Amen!!!!

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.

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.

I believe in being diversified...which I am. I think Wall St has a greater appeal to most because it is widely held and there is an absolute value for a share of stock which there is not for a 65 Mantle.

It appears card market moves closely mirror Wall St. If Wall St is down so are your cards.

Diversity is good.

The other big greater appeal is that there is nothing protecting baseball cards at all. Nobody will do anything if the market collapses. It relies on the hype to survive and grow.

If the stock market collapses, not has a bad year and downturns for a brief period as the cycle always goes, but actually collapses, the US dollar loses its value, cards are worth nothing, and civil order and structure will quickly collapse with it. The state and our institutions will go to extreme measures to keep it up in the worst scenarios. The downside risk is a lot less when every institution and person, whether they own stock or not, is so heavily invested in this not happening to the market.

All that really matters in life, is how many Ty cobbs you have ;)

Agree!! I will say the major pumpers Gary Vee PWCC Ect are not average guys who have to move their retirement account monies out and go all in with funds to cards. Those guys already have the money and big money. They may want the average guy to deplete their 401ks moving the funds into cards but people who are smart, like the guys here aren't going to do that and the people that are don't have enough money in their 401s anyway to make a difference. A fool and their money are soon parted. If you're wise you can still invest in cards and your retirement account.

Many don't have the smarts to invest wisely in cards just as many don't have the stomach to invest in the stock market.

Fair points, Jeff. i am particularly hostile to Wall Street but i see little else out there. All assets have their ups and downs, pros and cons.

I invest in the usual stuff but also in cards....but in the latter only with the proceeds of what I sell. Definitely makes it a challenge but also a boatload of fun.

I try not to forget that not everything is about making money (there's also women and weed, for example). Cards are (I hope) more than an investment for the denizens of this board. As Burdick said, a card collection is: "a magic carpet that takes you away from work-a-day cares to havens of relaxing quietude where you can relive the pleasures and adventures of a past day—brought to life in vivid picture and prose."

https://photos.imageevent.com/exhibi...0Zernial_1.jpg

Gus agrees.

To be fair, I have no doubt that the game is rigged and try to proceed accordingly. I once told a financial planner friend that a stockbroker is one of only two professions that get paid on the way in and on the way out. He didn't disagree.

My biggest issue with doing this is that I would not want to sell a card. Especially if I grew an emotional attachment to it. Most of my collection, I do not look at as investments.

Retirement funds could be savings, which is only paying a max of 2.3% YMMV. I could see using a small portion of savings to buy a few cards, rather than staring at number in a screen. The hobby has been a place of camaraderie for decades, as well as a magic carpet as Burdick wrote. You cant put a price on that!

This thread has morphed from "retirement funds" to major stocks, indexes, 401ks, and the like. I see there caveats and pitfalls of all. In cards, like anything else

Be greedy when others are fearful. Be fearful when others are greedy. Where say you, are we on that scale?

When the shoeshine boy is giving tips to buy prewar HOFers...

You have that right Jeff. The system is somewhat rigged against the average normal person. From companies and people that seek out where Wall Street and stock exchanges put their computers and servers, so they can place their own computers and servers just across the street to try and get trading info and price updates mere milliseconds before everyone else, to investment firms acting as underwriters and handling IPOs and letting their stockbrokers selectively pick and choose which favored customers and clients to initially offer such shares to. Even when you decide to purchase (or sell) a stock, remember, that order is not instantaneously executed, and is potentially subject to various decisions and options by brokers, third market makers, and others that may be involved in the process, and also making money off your transaction as well. And whether you place market orders or limit orders can have a great impact on this process. Though the SEC has rules and laws in place to provide more transparency and try and ensure brokers and others are always giving customers the best executions possible of their stock orders, there are still ways for brokers and others involved to work the system to their advantage, sometimes over that of their customers.

By the way, what is the other profession........doctors? On some level then I guess you could also possibly include Auction Houses that charge seller's commissions AND buyer's premiums.

Prostitutes.