Taking money out of retirement funds to purchase cards

[Republicaninmass]

I believe you can withdraw without penalty from a traditional 401k without penalty if you replace it within 90 days.

So many kids over on blowout using credit cards to buy modern boxes from panini, grade the cards on their credit card, just to flip and pay the card off before interest accrues. A dangerous game of hot potato.

But cards only go up

[Peter_Spaeth]

And stocks can only go up too.

[DHogan]

Medical bills for my wife took all of our savings.

[Exhibitman]

Originally Posted by DHogan

Medical bills for my wife took all of our savings.

I am really sorry to hear that. The family financial pillage that occurs in this health care system model is appalling. I hope you both are well and have long, prosperous lives to rebuild.

[Luke]

Anyone who did this between 2000 and 2019 outperformed the market massively if they bought blue chip cards. I wouldn't do it now, but it has worked in the past.

I know the OP is talking about people pulling money out of retirement accounts, but in a way we are all doing this with our collections. Every dollar you spend on baseball cards is a dollar you could have plowed into a Vanguard fund. I'm sure there are people who just invest every extra dollar, and to them the way we spend on cards probably looks crazy.

[Sean]

I borrowed a few times from my 401K to fund card purchases. I always paid it back. And I have a couple cards that matter more to me than the earnings that I missed out on in the market while paying off the loans. I don't know if it made financial sense to borrow, but the cards mean more to me, so it makes sense in that regard anyway.

[rats60]

Originally Posted by Sean

I borrowed a few times from my 401K to fund card purchases. I always paid it back. And I have a couple cards that matter more to me than the earnings that I missed out on in the market while paying off the loans. I don't know if it made financial sense to borrow, but the cards mean more to me, so it makes sense in that regard anyway.

I have borrowed to buy a card too. I have borrowed from my retirement, not for a card, but I wouldn't hesitate in the right situation.

I am always amazed at these threads and the negativity towards cards as investments. I have been doing it for 38 years and making easy money. I have constantly heard these negative comments from those not in the hobby, they just don't know. From people that should is just shocking. Sports cards have outperformed the market for 38 years and by a lot. I am not ready to get out yet.

If you are happy with mediocre returns in the markets, then make that choice. I have investments I'm the market too. Why so negative towards those doing better with cards? For those in the market, you have made zero the last 3 years. Why would you be surprised at someone moving investments from something not currently making them money to something that is?

[glynparson]

It’s not as crazy and some seem to be acting. In fact do what you are comfortable doing. Many people have made a lot of money on cards and other collectibles. If you go with blue chip items it’s not near as risky as some of the scared people pretend it is.

[Snapolit1]

Originally Posted by Exhibitman

I am really sorry to hear that. The family financial pillage that occurs in this health care system model is appalling. I hope you both are well and have long, prosperous lives to rebuild.

Incredible how a completely broken medical system destroys the retirements of good people who worked hard their entire lives and saved, yet every time a politician says we have to reform the way medicine is dispensed in this country he or she is shouted down, mocked, belittled . . . . It's just mind blowing.

[Johnny630]

If you bought and have continued to buy over the past 5 years higher-end/grade-centered non-oddball Ruth, Cobb, Jackie, Mantle, and Mays you have never lost. You have won, with a high percentage of winning big. Limited supply with large demand. People always want them and the people that have them don’t want to let them go unless you pay to the moon.

I invest in those names and grades I collect what I love. Collection of Cards and an Investment Section of Cards.

[Directly]

Yep--Spend it all before the Nursing Homes can get it--for six years of care it cost my late mother-law around $460,000, her nursing care insurance policy did help!

[Republicaninmass]

Originally Posted by Peter_Spaeth

And stocks can only go up too.

Exactly the same sentiment. It's scary. Many factors also resemble the housing boom that led to the financial crisis.

[Peter_Spaeth]

Originally Posted by Republicaninmass

Exactly the same sentiment. It's scary. Many factors also resemble the housing boom that led to the financial crisis.

Who knows, but all asset classes have their own set of risks especially short to medium term. IMO this bright line distinction between the stock market and cards is not necessarily right.

[raulus]

Originally Posted by Peter_Spaeth

Who knows, but all asset classes have their own set of risks especially short to medium term. IMO this bright line distinction between the stock market and cards is not necessarily right.

I don't think there's anything wrong with having a portion of your assets in nontraditional investments like collectibles. And I think we're all on board with that idea. Hell, if I'm honest, especially based on the runup in values the last couple of years, about 25% of my assets are tied up in cards. At the same time, I max out my contributions every year to my retirement accounts.

But taking cash out of your retirement accounts to buy collectibles is folly.

[x2drich2000]

Originally Posted by Republicaninmass

I believe you can withdraw without penalty from a traditional 401k without penalty if you replace it within 90 days.

So many kids over on blowout using credit cards to buy modern boxes from panini, grade the cards on their credit card, just to flip and pay the card off before interest accrues. A dangerous game of hot potato.

But cards only go up

Assuming you're right about replacing the money in 90 days, that's still a dangerous game. Come day 91 Uncle Sam isn't going to care what you were doing with that money.

However, this does touch on another point to consider. As I understand it, once you take money out of the retirement fund, you're going to struggle to put it back in down the road. In the Roth example, if you withdraw the contributions, you can't put those back in later. You can make new contributions, but you're still limited to the yearly maximum and can't go over it. So in 1, 5, 10 years, when cards are no longer a "good" investment, you're stuck with those funds being outside the retirement umbrella.

[Johnny630]

I had a chance 3 years ago, late 2019 to buy a SGC 6.5 311 Mickey Mantle for $82,000 Cash. It was beautiful but had a little toning/browning of the borders. I could have done it with my ROTH Def Comp but didn’t do. It’s all good I missed it, 100% looking back it would have been very smart but hey you win some you lose some. Tomorrow is another day to learn and be productive :-)

[raulus]

Originally Posted by Johnny630

I had a chance 3 years ago, late 2019 to buy a SGC 6.5 311 Mickey Mantle for $82,000 Cash. It was beautiful but had a little toning/browning of the borders. I could have done it with my ROTH Def Comp but didn’t do. It’s all good I missed it, 100% looking back it would have been very smart but hey you win some you lose some. Tomorrow is another day to learn and be productive :-)

Sometimes it's better if you don't win big the first time you pull the slot machine, because then you get cocky and keep pulling it until you lose everything.

[Johnny630]

Originally Posted by raulus

Sometimes it's better if you don't win big the first time you pull the slot machine, because then you get cocky and keep pulling it until you lose everything.

Agree Fully !!!