2021 Exit Strategy

[raulus]

Hi Phil -

Sorry to hear about your health troubles. That is no fun at all.

I'm still very much in the accumulation phase of my collecting, so I'm not much of an expert when it comes to liquidating.

If I'm reading your post correctly, it sounds like you have a relatively short horizon in terms of liquidating your collection, potentially as short as just a few years. In your post, you raised the possibility of dumping some of your current pieces in favor of buying others, I guess with the hope that you'll make more money in the process because the newly acquired pieces will do better over the next few years, at least compared to the ones that you sell today.

My personal observation is that short-term holds are often challenging, at least when it comes to trying to make money for those of us poor slobs who aren't dealers. Selling some Jordans today to buy 50s and 60s HOFers to hold them for just a few years might work out for you. Or it might not. Over such a short window, I don't think any of us have a really strong grasp about where the market will go, and whether you'll come out ahead.

Naturally, if you're able to successfully play dealer by getting high retail on everything you sell, and on the other hand buying everything at 50% of retail, then go nuts. You'll probably be just fine, assuming you can actually buy and sell at those prices.

But absent that sort of really nice setup where you can buy cheap and sell for high retail, I would be inclined to not try to trade in and out of pieces just to make money. My inclination would be to keep doing what you're doing - selling off pieces as it makes sense. Although I might tweak your approach slightly in terms of ordering. My focus would be to sell off pieces that are at or near their all-time highs first, and then get to the weaker pieces later. Selling into strength is usually a much better recipe for getting top dollar, and in the meantime if you're really lucky, maybe your weaker pieces will strengthen by the time you get around to selling them.

[Exhibitman]

https://adamstevenwarshaw.substack.com/p/selling-it

I am sorry for your situation, Phil.

As for what to do, no offense meant, but it sounds to me like you need a bit of a reality check. Selling off items to buy into a rapidly rising 'hot' market and not having a plan to take profits fast was NOT the right plan; it is a mistake that has been made repeatedly since the junk wax era. At this point, I don't think it makes sense to try using the same model to chase a different result. Your plan is inherently risky because card investing is a highly speculative, competitive field with terrible entry and exit costs and literally no bottom to a bad investment except the commons bin.

Your path, based on your statement of status, is to get out and stay out of the card business. Like a fat woman in a bikini, it is not for you (i can say that because I am a fat man who doesn't take his shirt off at the beach). You say you need the money to live. Any financial planner will tell you never to speculate with money you need. Whatever you get out, do not put it back in, bank it. And check with your CPA about tax losses that you might be entitled to claim on a soured investment.

Hoping for a massive bounce on the Jordans is folly. Just to get back to par would require a raging bull market and, frankly, there are enough Jordan cards out there to make that unlikely in your compressed time frame. Best bet would be to arrange a private sale (to avoid the transaction costs) with a retail collector. About the only thing I can think of is that if the cards are in Beckett holders, cross them to PSA. If they cross, that will be worth it.

[Peter_Spaeth]

I would seriously consider selling everything now and consulting with a financial planner about the best way given your situation to invest the proceeds. If these are vital resources, I would not leave your welfare to the whims of the card market.

[perezfan]

So sorry to hear of your health issues... such a bummer. The current inflation and gas prices are a killer, and it especially impacts the unemployed/under-employed and retired segments of the population who have limited earning potential. And even if the rate of inflation slows, the prices are never going back to what they were pre-pandemic.

I'd sell off the ultra-modern stuff first. While the market has dipped a bit, I think you should still get what you can. Quality vintage stuff is far more likely to retain its value... especially in tough times.

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

Hope this helps and best of luck!

[G1911]

Do not spend more than you can afford to lose on toys.

Do not ask a bunch of junkies and people with a vested fiscal interest in pumping a market with a history of giving horrifically irresponsible financial advice if you should invest in the same assets.

Do not count on a collectible with recent huge jumps to inexorably gain value.

Do not empty your 401K or take out loans to buy baseball cards.

Do keep some cash on hand. Do diversify your investments. Do seek financial advice from people without a conflict of interest. Do invest in things that the powers that be also rely on and will do anything it takes to keep going positively over the long haul.

[GeoPoto]

If all your money is in cards (which is what it sounds like), my advice would be to liquidate 90% of your card holdings as soon as practicable and put the proceeds in some combination of CDs and/or bonds maturing within the next 15 years. With the residual 10% of your card holdings, do whatever makes you happy.

[Exhibitman]

High yield savings accounts are good right now too. The best ones are paying better than the current rate of inflation, at least until the next reset.

[oldjudge]

Hi Phil! I'm sorry to hear about your troubles. I think you have gotten some good advice so far. My only other suggestions would be to make sure you also discuss this with your family. Also, if you can set up at card shows I would think that you have mobility. Is there any type of part time work that you can do from home to supplement your cash flow? That might buy you more time for liquidating the cards in an orderly manner. Good luck!

[Kco]

Not knowing your financial needs on a month to month basis or your rough collection value, It's semi hard to answer the question of what you should do. Is your collection worth $1 million and you need $40k to live on? In that case, I'd sell a few pieces here and there to fund it. I do agree, the modern stuff would be the first stuff I'd sell off. Quality vintage has and should hold up over the medium and longer term. As for the STAR Rookie, they were hyped up and pumped up massively in 2022 artificially in my opinion. I'd take the money there.

[bcbgcbrcb]

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

[timber63401]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

Id sell $2000 worth a month if you need $1500 bare minimum. Stuff comes up. Good luck on whatever you decide. Its a tough decision no matter how you look at it.

[Peter_Spaeth]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

By only selling 5 percent of your collection a year, you are assuming the ones you don't sell retain their value (or go up). This is where you got burned before. If as you have suggested the cards are your only or principal asset that will provide needed future income for a number of years, IMO it's much better to put them into a better investment vehicle that will provide a more reliable return. Nobody rational would have an investment portfolio consisting of only or mainly cards. PS just my personal opinion.

[notfast]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

I’m going to come off as a huge dick but that’s OK.

Seems like you have roughly $400,000ish in cards based on the $1500/month 5% sell rate math.

If this is the case and you do not have any other way to survive financially for 7 years, you are not good managing your finances. Like at all.

Sell everything. Find a professional and get your future set up properly.

This is almost hard to believe because you’re saying you heavily invested in stuff that is now worth 25% of what you paid.

Either way, reinvesting in cards should not be an option.

[jimq16415]

Originally Posted by perezfan

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

I just went thru all that and agree about the disability attorney. They know what SS requires for you to be approved and they'll get the needed things from your doctor. If you get approved then SS pays your monthly amount (your projected amount if you retired at full retirement age) going back to when they determine you were disabled or when you first applied. The disability attorney takes 25% of that check, so if they don't feel you have a winnable case they won't take it. After that you'll owe them nothing. I think there's rules against them charging more. If you do get approved you're eligible for medicare in 2 years instead of waiting till you're old enough.

I also agree with selling the modern either way for what you can get. And don't buy more. Use the money you get to pay off higher interest stuff first.

Good Luck. It'll get better

[ALBB]

yes, sad story ,no doubt

I'm glad my collection is and has always been lower grade/ beat up/ for fun stuff.

Im sure it has $ value...but it was never something I needed to rely on for - " cashing out purposes " down the road

[JollyElm]

(Author's note: this is a blatant attempt to add a bit of humor to the proceedings, so any investment advice given should be taken with a bucketful of salt.)


My advice? Sell everything right now and put all of your money into buying as many of these cards as possible!! The Gregg Jefferies Rookie Card train is on the verge of leaving the station, and the next stop is Huge R.O.I. Town...so it's time to climb on board!!!!!

GreggJefferiesRookie.jpg



There are quite a few of us on the site going through serious and problematic health issues, so you're definitely not alone. It is tough, but we're all with you. Some people have offered some top notch advice so far, which is excellent. Hang in there!!!

[Casey2296]

$375,000 invested in dividend paying stocks, laddered Cd's, etc. paying an average of 5% yield gets you $1562.50 in monthly income. There are also income producing ETF's/funds that yield higher than 5%.

Not sure if your card holdings have that much value, this is just an example.

[bcbgcbrcb]

Don’t worry, I had my share of Jeffries rookie cards back in the late ‘80’s. Just one question, is your’s the Tiffany version or just regular Topps? I know better than to buy that junk wax stuff now, only looking for the premium cards.

[glchen]

Phil, I'm definitely very sorry to hear about your health situation and wish the best for you on that front.

Financially for your questions, I think a lot of the posters have already given their advice. From my side, the first thing I thought of, was first to make sure that you maximized your tax benefits through all of this, if it were relevant. It may not have much of an impact if you don't have much of an income these days. However, if you did have capital gains that you needed to offset with capital losses, make sure to take those things into account.

The next thing was imagining what I would do in your situation. First, this could happen to anybody, so I wouldn't beat yourself up too much on this. In hindsight, everything is 20/20, so obviously now, everyone can say that you should have just invested all of that money that you made from selling your Negro league cards and bought Tesla or Nvidia stock. Back then, no one had a clue, and lingering too long on it will only hurt your mental health. Just accept the situation and move on.

As others have said, I'd first take stock of what your expense are each month, which you said in a later post are around $1500. First sell a little more than that, so that you are comfortable and not stressed out about the situation too much. When we are under too much stress or mental pressure, that will usually be when we make mistakes with your investments and financial decisions. So first sell enough so that you are not under this pressure.

For what to sell first, I would use your hobby knowledge. I only collect Ruth/Gehrig cards, so I know all of those cards very well, and am not close to being any kind of expert at HOF Rookies. But with your knowledge and expertise, I would first sell those cards that you think would be least likely to go up in the next couple of years, that is, you would expect those cards to have the worst ROI from their current market levels (not from the price you purchased them at). Even though what you said was that you mainly focused on the major HOFers and stars and not the minor ones, my guess would be to sell the least well known or in demand cards first. For example, keep the Mantles and Jackie Robinson's and sell the Karl Malone's and Tim Duncan's. Some cards for a player may be more likely to go up than another for the same player. For example, Goudey Ruth's are usually more in demand than Ruth's strip cards even if some of the strip cards may be much rarer. The cards with better eye appeal are usually more well liked and in demand by collectors, so even in the strip cards, the W516's are much more in demand than the ugly W512 strip cards for Ruth. Again, these are just examples, and I'm deferring to your expertise here.

Next, once you have a basic nest egg where you're not too worried about paying your rent and your bills for the next few months, put together a longer term plan. For example, for your health, determine what your reasonable capabilities are? Can you spend 7-8 hours per day, scanning through ebay, looking for deals where you can make certain profits, re-listing and flipping cards or other things? In order to do these things, you need to have a spending budget and a plan. I usually make a profit, selling cards on ebay, but for me, it's like a secondary hobby to support my card collecting. It's not something where I feel the pressure to make money to support my livelihood. For myself, if I don't make any money or even lose money, it's really not a big deal, but it's not the same situation as you.

For example, the normal thing to do, would be to put most of your cards on ebay with a high BIN price, perhaps even about your purchase price, and then see if anyone bites. You never know. But that way, you will get the price you want. However, with that approach, you may not get any sales for months, and that won't put food on the table. So you would need to put together a strategy that works for your situation.

Finally, for your last question, I think the 1985 Star Michael Jordans can easily shoot up in the future. I'd personally try to hold onto them, but again, you know your situation the best, so you'll have to make that decision as part of your overall strategy.

Good luck, Phil, and definitely wish the best for you.

[Rhotchkiss]

Originally Posted by Casey2296

$375,000 invested in dividend paying stocks, laddered Cd's, etc. paying an average of 5% yield gets you $1562.50 in monthly income. There are also income producing ETF's/funds that yield higher than 5%.

Not sure if your card holdings have that much value, this is just an example.

I agree with this ^^^.

I have no clue what you own or what it’s worth, but in your situation, I would convert cardboard to cash and consult with a financial planner. I think it’s fine to keep collecting lower price cards, but, unfortunately, I feel your days investing in cards are likely at an end and you need cash flow and a much less risky/volatile asset