Justifying a Big Purchase

[frankbmd]

Originally Posted by Mark17

I look at it this way:

People need to find enjoyment in life, and often that costs money. Some people like to travel, or hit a casino once in awhile, while some will drop some dough at the local watering hole once or twice a week.

Some people take cruises, stay at nice hotels or eat out at good restaurants a couple times a week, or go to a movie theater every weekend. Some people will spend a hundred or more dollars per game attending sports events...

And so on. Here's the thing - the hobby that gives you pleasure does not involve spending money; it involves putting your money into something that will likely hold its value.

All of the other examples I gave above result in money being spent and gone. Your example is the opposite - it involves money being preserved. I'd say, not only go for it, but go for it and feel great about your decision because not only does it give you pleasure, it is also a wise move.

What you say makes some sense, but I don't agree that you cannot lose real money in the hobby. There are members here that remember bad advice they received regarding some of their own purchases.

[Mark17]

Originally Posted by frankbmd

What you say makes some sense, but I don't agree that you cannot lose real money in the hobby. There are members here that remember bad advice they received regarding some of their own purchases.

Of course you can lose money buying a baseball card. But the other hobbies I mentioned are guaranteed money expenditures. How many baseball, football, basketball, or hockey games have you attended, where you get back any of your money later on?

[raulus]

Originally Posted by Mark17

Of course you can lose money buying a baseball card. But the other hobbies I mentioned are guaranteed money expenditures. How many baseball, football, basketball, or hockey games have you attended, where you get back any of your money later on?

That's precisely what I keep telling my wife.

It's an investment, not an expenditure!!!

"You keep spending money on baseball cards..."
"Correction. I keep investing money in baseball cards."

[SyrNy1960]

I had an opportunity to buy an item I really wanted, with a cost of $10,000+. I had the money, but hesitated for a bit because of the amount. I bought it and never regretted it. I’m so glad I didn’t pass on it due to price. I knew if I didn’t buy it, I would have regretted it. Enjoying it every day!

[AndrewJerome]

Mark S, I agree completely. People spend thousands on vacations and other things with zero possibility of getting any money back. But for some reason it’s viewed as risky to buy pre-war cards that have historically held value and often appreciated nicely. I have never understood the logic.

Andrew

[bnorth]

Originally Posted by AndrewJerome

Mark S, I agree completely. People spend thousands on vacations and other things with zero possibility of getting any money back. But for some reason it’s viewed as risky to buy pre-war cards that have historically held value and often appreciated nicely. I have never understood the logic.

Andrew

I have spent several thousand on every trip to Europe and would never in a second trade any one of those many trips for a baseball card.

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

This is a great thread.

[Snapolit1]

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

Pretty absurd statement me thinks. If I buy a quality vintage card at a nice AH like LOTG or Heritage for $30,000 and have to sell it, I will get back less than $15,000? No. That's a very unlikely outcome. Not impossible but pretty unlikely. I track a few hundred vintage cards, and very very few of them have dropped 50% in value. Actually probably zero of them.

And there wouldn't be any tax liability if you bought a card and sold it for a huge loss, so I'm not sure what that means.

I haven't sold one vintage card at a 50% loss and don't know anyone who has. Maybe I've lost 10-15% but that would be the most. And on 95% of my sales I have made a profit.

[bnorth]

Originally Posted by Snapolit1

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

Pretty absurd statement me thinks. If I buy a quality vintage card at a nice AH like LOTG or Heritage for $30,000 and have to sell it, I will get back less than $15,000? No. That's a very unlikely outcome. Not impossible but pretty unlikely. I track a few hundred vintage cards, and very very few of them have dropped 50% in value. Actually probably zero of them.

And there wouldn't be any tax liability if you bought a card and sold it for a huge loss, so I'm not sure what that means.

I haven't sold one vintage card at a 50% loss and don't know anyone who has. Maybe I've lost 10-15% but that would be the most. And on 95% of my sales I have made a profit.

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

[G1911]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Another factor for many buyers is the sales tax. Every card I buy costs me more than 10% extra to pay off my county. To flip it, I need to make more than 10% of the previous sale just to cover my initial actual bill.

[Rhotchkiss]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Ben, for a $30k(ish), you are not paying a seller’s premium. In fact, you should get a portion of the buyer’s premium. And you have no tax liability if you sell a card at a loss- you have no income, only partial recovery of basis which was after tax dollars and which is not taxable. So, your loss is likely your cost (including taxes and shipping), minus the hammer + whatever portion of the BP you may be able to negotiate.

[Snapolit1]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

1. No one in their right mind pays a seller's commission consigning a $25,000 card. If they do, frankly, they are uninformed.

2. There is no tax ramification of me buying a card for $30,000. Or a million dollars.

3. If I sell something for more than I bought it for, only then do I owe taxes. And then, by definition, I haven't lost money on the sale.

4. If I bought a nice vintage card for $30,000 and had to sell literally tomorrow, ok, maybe I sell it for $28,000 or $27,000 in the next auction, WORST case scenario.
That's no doubt where the runners up landed. And I've lost maybe 10%. Nowhere near 50%.

5. If you paid 7% sales tax, tell the AH you want 107% of the hammer. Exactly what I've gotten from one of the major AH's many times.

[gonefishin]

I have had a "Sportscard Fund" separate from all my other income. It consists of money that is set aside to purchase items for my collection, items to resale, etc. It funds itself. At times the fund is full - other times not so much.

As long as you can afford it without adversely affecting monies you live on, and it's something you desire and covet, purchase the card. If you have doubts or concerns, my advice is not to.

NEVER, NEVER purchase cards that you can't afford to buy with cash! That's just me.

Good Luck with whatever you decide.

[rjackson44]

Never buy anything you can’t afford ,never ..you will regret it sooner then later ,,

[bbcard1]

I can live fine without. 1952 Topps Mantle, but I have a friend who is a huge fan and is working on a set. I started finding him nice ones when they were about $14k an he couldn't bring himself to pull the trigger. The man is a successful attorney and won not have really noticed it. He regrets it now.

[Jewish-collector]

Like I said to someone last month at the Net54 meetup in Dulles, "Sometimes you just gotta say WTF" and do it.

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[Bicem]

That's a no brainer, will just keep appreciating. Nice grab.

[Yoda]

Be bold on your purchase but make sure it is a mainstream card. Rarities often prove to be illiquid when selling.

[theshowandme]

Originally Posted by Yoda

Be bold on your purchase but make sure it is a mainstream card. Rarities often prove to be illiquid when selling.

Thanks

[kmac32]

It’s all relative. I have some low grade E121-120 Ruth cards that I bought maybe 15 years ago for $500 and cards in the same condition are listed at $8000 to $10000 now on eBay. No way would I have ever thought these cards would be worth that kind of money. If it is something more mainstream like the Ruth cards, it will probably go up in value so consider it an investment.