Taking money out of retirement funds to purchase cards

[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.

[Johnny630]

Originally Posted by 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 IRAs 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 dumb enough to do this by already being heavily invested in 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 screencaps 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 prescription.

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.

[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.

[Lorewalker]

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.

[G1911]

Originally Posted by Lorewalker

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.