Taking money out of retirement funds to purchase cards

[raulus]

Originally Posted by Johnny630

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.

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.