What Would You Do ????

[MR RAREBACK]

In 25 years I would think the mantle would be worth way more than the sp 500 investment

[Casey2296]

Originally Posted by MR RAREBACK

In 25 years I would think the mantle would be worth way more than the sp 500 investment

The Mantle number would have to be greater than $1,820,322 in year 25.

[oldjudge]

Originally Posted by Casey2296

The Mantle number would have to be greater than $1,820,322 in year 25.

What rate are you compounding at—the long term ROR on the S&P 500?

[Casey2296]

Originally Posted by oldjudge

What rate are you compounding at—the long term ROR on the S&P 500?

S&P annualized average return of 10.5% since 1957.

[pokerplyr80]

Despite a personal bias I have to agree with Ryan. The fact that stocks are down and cards are up probably make stocks the better choice. But if you could get a dead centered PSA 6 for 150k buy it. If you have one for sale I will take it. I don't think you'd even get a dead centered 5 for that today.

[EddieP]

,

[robertsmithnocure]

Originally Posted by EddieP

This is also not including dividends. $150,000 investment in an S&P 500 ETF like VOO will generate ~$2,000 in dividends annually which could then be reinvested into VOO or placed in a Money Market Account or in a High Yield Savings Account.

The Annualized Annual Return of the S&P 500 since 1957 is 10.67% and includes dividends.

[iwantitiwinit]

Very simple question, select the equity market. In my opinion, if the equity market goes up the value of the card may go up, if the equity market fails to go up, I doubt very much the value of the card goes up.

[EddieP]

.

[japhi]

Originally Posted by Casey2296

The Mantle number would have to be greater than $1,820,322 in year 25.

Was just going to say this, my number on the SP500 is 1.45MM over that span.

[Bigdaddy]

I look at it this way: would you want to invest in a single stock (the '52 Mangle) or a portfolio of stocks (the S&P 500)?

If time is on your side, most investment advisors would say to invest in the market as a whole instead of a single stock. If you gotta hit a homerun in 9 months, then a single stock is your only hope. Given that the client has 25 years, I'd go with the market.

[RCMcKenzie]

I would pay off the loan. Not advice, just what I would do.

[robertsmithnocure]

Originally Posted by RCMcKenzie

I would pay off the loan. Not advice, just what I would do.

That is not an option.

“Remember you only have these two choices what would you pick?“

[Fuddjcal]

Originally Posted by RCMcKenzie

I would pay off the loan. Not advice, just what I would do.

I did that years ago and NEVER looked back or regretted paying 1 penny of it.

[Johnny630]

My Friend Is Felling more and more optimistic about being able to pick up a PSA 6 52 Mantle for 150k at the National.

I told him forget it, the market is down be patient and from now until late July early August/National Time, put that money in Google, MS, UNH, Devon, and McDonald’s

[LincolnVT]

Some good points made here. Buying the right card or cards is critical. Many cards appreciate more than 5k per year…buying 6 of the right cards for 25k each might also be a fruitful investment option. I like cards much more than the market. Buy 6 of the right cards and enjoy 30k of appreciation per year!

PS — Cards or photos / memorabilia.

[BobC]

Great question, and one for which there is no perfect, correct answer. There are too many variables and unknowns involved, and it is impossible to even somewhat accurately predict where the stock market and card market will be even one year from now, let alone in 10, or even 25 years.

Johnny has given us some specific, factual details of his friend/client's current financial position and status, along with a few more tidbits regarding his family and situational timeline for certain financial/personal things occurring or being achieved. However, what not a single one of you has specifically brought up is the fact that no one has apparently asked Johnny's friend/client the most important question of all. Why?

Why is he asking for advice in this regard with just these two very specific and straightforward options? He must have some specific goal or plan in mind with this investment choice, but whatever it is, no one has apparently directly asked him. There must be some goal he is looking for in making the decision between these too very different investment options. We know he is looking to retire in 10 years, but is this investment supposed to be used to then help fund that retirement? That point is never made clear. Nor do we know about his spouse's work situation and potential savings/retirement. And what about other family and potential inheritances coming to this person? There are so many other unanswered questions to such a decision, it is impossible to give a truly good, helping response without knowing the "Why?" behind all this.

To simply assume Johnny's friend is looking to make a purely financial decision based on which of the two options will be worth the most in 10 or 25 years, may not be what his true goal is, even though that may be what many of you feel is implied by Johnny's question from his friend/client. As someone else kind of alluded to, maybe this person possibly has a collector/nostalgic interest in getting a Mantle card as well, which may factor into the decision. It is possible his true goal is to own a '52 Topps Mantle at some point and he's trying to figure out if it made more sense to buy one now, or put that money into the S&P 500 and make even more over the next so many years so he can eventually buy his '52 Topps Mantle, and still have even more money leftover in his stock investment. Let's ask him first WHY he is making this decision, and then go from there.

As to the tax side of the question, Ryan and a couple others already hit upon the basics of it, but that is too simplified of an answer. Assuming Johnny's friend would buy either the Mantle card, or S&P stocks, and then hold them for over a year, the eventual sale of either will be considered as a Long-Term Capital Gain. Under the current tax laws in place, the LT Capital Gains from selling stock are capped at a maximum federal tax rate of 20%, whereas because the Mantle card would likely be considered as a collectible item, the maximum federal LT Capital Gain tax rate on collectibles is capped at 28%. But the answer isn't that straightforward and simple because those are the MAXIMUM tax rates that can be charged. Who knows what Johnny's friend/client may be making and showing as taxable income in 10 or 25 years from now? Also, we can't accurately predict how much gain would result from the sale of the stocks or the Mantle card years from now, which would have a direct impact on how much taxable income they would have in the year of their sale. Chances are that if the taxable income of this person isn't too high, there will end up being little, if any, difference in what tax rate the LT Capital Gains from the sale of either the stocks or Mantle card would be. And I can't tell you specific numbers because everything is subject to change in regards to the tax laws and rates.

One possible tax advantage to getting stocks over a Mantle card is that at the time someone does decide to sell, you only have the one Mantle card, so the entire gain from its sale will all hit in one single tax year (unless you agree to work out an installment sale with the buyer, which may not be possible if you sell through an AH or online). However, if you invest in stocks instead, depending on your tax situation when you finally decide to sell, you don't necessarily have to sell all your stock at the same time and can elect to spread the sale over multiple tax years, thereby lowering the LT Cap Gains you would otherwise have to report in one single year, and possibly lower your overall tax liability as a result.

The best thing to do in a situation like this is to first, find out WHY the person wants to make such a decision, and what their OVERALL GOAL is from it. Then you simply spell out for them all the different options and the pros and cons for making a choice either way, remind them that tax laws, rates and personal and financial situations and circumstances not can, but will most definitely change when you're talking 10 to 25 years out, and then let them decide what they are most comfortable and happy with as their choice.

Everyone is different in their thinking and circumstances, as well as their aversion to risk and personal goals. Basically, all everyone else posting answers to Johnny so far are most likely giving their opinions as to what THEY would do. But none of you are Johnny's friend/client, and really have no clue as to how he really thinks and feels. All of the points, comments and suggestions everyone has made are great and completely valid, just not necessarily right for this other person.

[Johnny630]

Originally Posted by BobC

Great question, and one for which there is no perfect, correct answer. There are too many variables and unknowns involved, and it is impossible to even somewhat accurately predict where the stock market and card market will be even one year from now, let alone in 10, or even 25 years.

Johnny has given us some specific, factual details of his friend/client's current financial position and status, along with a few more tidbits regarding his family and situational timeline for certain financial/personal things occurring or being achieved. However, what not a single one of you has specifically brought up is the fact that no one has apparently asked Johnny's friend/client the most important question of all. Why?

Why is he asking for advice in this regard with just these two very specific and straightforward options? He must have some specific goal or plan in mind with this investment choice, but whatever it is, no one has apparently directly asked him. There must be some goal he is looking for in making the decision between these too very different investment options. We know he is looking to retire in 10 years, but is this investment supposed to be used to then help fund that retirement? That point is never made clear. Nor do we know about his spouse's work situation and potential savings/retirement. And what about other family and potential inheritances coming to this person? There are so many other unanswered questions to such a decision, it is impossible to give a truly good, helping response without knowing the "Why?" behind all this.

To simply assume Johnny's friend is looking to make a purely financial decision based on which of the two options will be worth the most in 10 or 25 years, may not be what his true goal is, even though that may be what many of you feel is implied by Johnny's question from his friend/client. As someone else kind of alluded to, maybe this person possibly has a collector/nostalgic interest in getting a Mantle card as well, which may factor into the decision. It is possible his true goal is to own a '52 Topps Mantle at some point and he's trying to figure out if it made more sense to buy one now, or put that money into the S&P 500 and make even more over the next so many years so he can eventually buy his '52 Topps Mantle, and still have even more money leftover in his stock investment. Let's ask him first WHY he is making this decision, and then go from there.

As to the tax side of the question, Ryan and a couple others already hit upon the basics of it, but that is too simplified of an answer. Assuming Johnny's friend would buy either the Mantle card, or S&P stocks, and then hold them for over a year, the eventual sale of either will be considered as a Long-Term Capital Gain. Under the current tax laws in place, the LT Capital Gains from selling stock are capped at a maximum federal tax rate of 20%, whereas because the Mantle card would likely be considered as a collectible item, the maximum federal LT Capital Gain tax rate on collectibles is capped at 28%. But the answer isn't that straightforward and simple because those are the MAXIMUM tax rates that can be charged. Who knows what Johnny's friend/client may be making and showing as taxable income in 10 or 25 years from now? Also, we can't accurately predict how much gain would result from the sale of the stocks or the Mantle card years from now, which would have a direct impact on how much taxable income they would have in the year of their sale. Chances are that if the taxable income of this person isn't too high, there will end up being little, if any, difference in what tax rate the LT Capital Gains from the sale of either the stocks or Mantle card would be. And I can't tell you specific numbers because everything is subject to change in regards to the tax laws and rates.

One possible tax advantage to getting stocks over a Mantle card is that at the time someone does decide to sell, you only have the one Mantle card, so the entire gain from its sale will all hit in one single tax year (unless you agree to work out an installment sale with the buyer, which may not be possible if you sell through an AH or online). However, if you invest in stocks instead, depending on your tax situation when you finally decide to sell, you don't necessarily have to sell all your stock at the same time and can elect to spread the sale over multiple tax years, thereby lowering the LT Cap Gains you would otherwise have to report in one single year, and possibly lower your overall tax liability as a result.

The best thing to do in a situation like this is to first, find out WHY the person wants to make such a decision, and what their OVERALL GOAL is from it. Then you simply spell out for them all the different options and the pros and cons for making a choice either way, remind them that tax laws, rates and personal and financial situations and circumstances not can, but will most definitely change when you're talking 10 to 25 years out, and then let them decide what they are most comfortable and happy with as their choice.

Everyone is different in their thinking and circumstances, as well as their aversion to risk and personal goals. Basically, all everyone else posting answers to Johnny so far are most likely giving their opinions as to what THEY would do. But none of you are Johnny's friend/client, and really have no clue as to how he really thinks and feels. All of the points, comments and suggestions everyone has made are great and completely valid, just not necessarily right for this other person.

Thanks Bob, always appreciate your input !!

My friend/client whom I caddy for, his main goal is to enjoy the card and pass it along to his kids whom also enjoy baseball and collecting cards, mostly more modern but baseball, Trout and Soto . He asked me because he knows I have some very nice mantle cards. I don’t think the $150,000 spent on the mantle card would break him, plus so cool that he wants to give it to his kids when he passes. I’m leaning on telling him the S&P500 maybe grave two other mantle cards of lesser value to pass along to his kids.

[BobC]

Originally Posted by Johnny630

Thanks Bob, always appreciate your input !!

My friend/client whom I caddy for, his main goal is to enjoy the card and pass it along to his kids whom also enjoy baseball and collecting cards, mostly more modern but baseball, Trout and Soto . He asked me because he knows I have some very nice mantle cards. I don’t think the $150,000 spent on the mantle card would break him, plus so cool that he wants to give it to his kids when he passes. I’m leaning on telling him the S&P500 maybe grave two other mantle cards of lesser value to pass along to his kids.

Ahhhh, now see, that was the info we were all missing. LOL

So, this isn't truly a financial decision alone for him after all. In that case, I'd still go through all the various options and their pros and cons. I'd still mention all the various things others have said on this thread, as they are all valid and relevant for your friend and his ultimate decision.

Having said all that, maybe press your friend a little further on what he may want his kids to do with the Mantle, or multiple Mantles, he was hoping to give to them. If he has more than one child he wants to pass a '52 Topps Mantle card on to, that is super. But, does he want/intend for them to then keep it/them, or does he expect they may end up selling them, or what? He may want to talk about this to his kids first, if so inclined to possibly find out what they may think about all this. Of course, if he intends for this to be a surprise, asking them about it in advance is kind of a buzz kill, right? LOL

Sounds like your friend is in pretty good financial shape to me, at least for what his expectations are, so that is less of an issue for him. Now thinking about kids, and having multiple kids, that raises an entirely different set of possible issues and concerns. He can buy the one Mantle for himself for now, but then what happens when he leaves it to his children as sort of a group inheritance? Who keeps it, what do they do with it, maybe one wants to keep it and another sell for financial or other reasons, and what if they are on unfriendly terms years down the road (which can happen with siblings), and on and on? Having just one '52 Topps Mantle to pass on can complicate issues for his kids that he probably didn't/wouldn't want or intend. So, buying just one really nice Mantle may not be the best idea for him and his family after all. So what about him buying a lesser, but of equal quality/value, '52 Topps Mantle for each of his kids so they can have and separately decide what each of them want to do with it. Parents generally want to do right by their kids, and also not appear to be playing favorites. Which is another potential problem with buying a '52 Topps Mantle card for each of his kids to inherit. Although they would likely be lesser quality/condition than a graded 5-6 version, your friend will also probably want however many Mantles he does end up buying to all be as exactly identical in condition and value as humanly possible. That way he doesn't make it look like he's favored or given one child a better inheritance than the other. Buying S&P 500 stock interests makes it easier for him as he simply divides the shares evenly among his kids, and no one feels hurt or underappreciated. The real difficulty in this instance though may be in finding exactly similar, in condition and appearance (and value), '52 Topps Mantle cards for each child.

Assuming, as you noted, part of his plan is to also own a '52 Topps Mantle for his own enjoyment and pleasure first, and having the resources to acquire one now, I would think it may be best for him to go out now and get the Mantle(s) he wants, before something does change to affect his finances and decision. I would expect that Mantle cards, especially '52 Topps Mantles, will continue to increase in value over time, regardless of how much of a ROI they provide, and how they would otherwise compare to a ROI from investing in the S&P 500. And the longer he owns the card(s), the more meaning they will eventually convey to his children when he leaves them to them. So the sooner he gets one (or more), the sooner (and longer) he gets to enjoy it for himself. And in the end he knows he can still be leaving something valuable, as well as meaningful and personally important to him, to his children. Leaving shares of stock to one's children can be a great financial boost to them, but is very impersonal and without much sentimental value or importance.

Buying S&P 500 stock can end up giving a much better return to him and his family over time than buying a '52 Topps Mantle card(s), but then again, it maybe won't end up being the better investment than Mantle cards over a specific period of time. So there is no certainty that one choice, cards versus stocks, is better than the other. But if he really wants to leave something personal and of value to him to his children, in the hope that they will cherish and appreciate and find meaning in it, and maybe pass it on to their own children down the road as well, the one and only certainty is that shares of stock aren't going to be providing that. Leaving them shares of stock and telling them in his will to go out and buy themselves '52 Topps Mantle cards with some of the money from selling the stock is in no way, shape, or form as meaningful as leaving them '52 Topps Mantle cards that he once personally cherished and owned. That, to me, may be the biggest difference of all among all your friend's options in making his decision. It seems that in the end, tax and investment factors may just be secondary concerns, at best, in what he wants to do. Good luck, and tell your friend to count his blessings in that he is in a position to even have such a decision to make.