What Would You Do ????

[Johnny630]

Asking for a high end client of mine….this is a good one and I really do not know how to advise …

What Would You Do ???

Say you had $150k cash to invest to hold for the next 25 years having had only two choices which one would you pick ?

1. A Killer Dead Centered 52 Topps Mantle PSA 5-6

2. 150k in the S&P 500 in his brokerage account.

Would also like to take into account the tax benefits of either or….hopefully Bob C can chime in with his wisdom guided by knowledge expertise and experience in the tax law field.


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

[D. Bergin]

Does he have a wife?

[Johnny630]

Originally Posted by D. Bergin

Does he have a wife?

No can’t be wife

[Rhotchkiss]

Good question. I say the stock market, but only bc it’s so beat up right now and top cards are so expensive. On the whole, I think the 52 mantle beats the stock market, but timing matters, and right now I think stock in top companies presents a better buying opportunity (“deal”) than blue chip cards, which are sitting at all time highs. .

Tax wise - under current tax code, the sale of stocks held for one year is a better tax result than the sale of a collectible held for investment.

[Johnny630]

Originally Posted by Rhotchkiss

Good question. I say the stock market, but only bc it’s so beat up right now and top cards are so expensive. On the whole, I think the 52 mantle beats the stock market, but timing matters, and right now I think stock in top companies presents a better buying opportunity (“deal”) than blue chip cards, which are sitting at all time highs. .

Tax wise - under current tax code, the sale of stocks held for one year is a better tax result than the sale of a collectible held for investment.

Very well said. I agree with you.

Thank You

[x2drich2000]

Originally Posted by Rhotchkiss

Good question. I say the stock market, but only bc it’s so beat up right now and top cards are so expensive. On the whole, I think the 52 mantle beats the stock market, but timing matters, and right now I think stock in top companies presents a better buying opportunity (“deal”) than blue chip cards, which are sitting at all time highs. .

Tax wise - under current tax code, the sale of stocks held for one year is a better tax result than the sale of a collectible held for investment.

100% agree, I would also add that we don't know much about the client other than they are "high end". I would assume the client has sufficient assets elsewhere but without knowing for sure I wouldn't act on that assumption. IMO it would be irresponsible to suggest the Mantle if the person doesn't already have a well rounded portfolio. From an investment prospective, the Mantle lacks the flexibility to withdraw a portion of the investment if needed. For that reason, without further info, I would take the stocks to protect the person when life happens to them.

[Johnny630]

Originally Posted by x2drich2000

100% agree, I would also add that we don't know much about the client other than they are "high end". I would assume the client has sufficient assets elsewhere but without knowing for sure I wouldn't act on that assumption. IMO it would be irresponsible to suggest the Mantle if the person doesn't already have a well rounded portfolio. From an investment prospective, the Mantle lacks the flexibility to withdraw a portion of the investment if needed. For that reason, without further info, I would take the stocks to protect the person when life happens to them.

The gentleman is 50 has 950,000 saved in his 401k, two kids in college one is full funded the other has half funded two years to go in school. He has 160k left on his mortgage, looking to retire in 10 years.

[parkplace33]

The answer is stocks.

The Mantle is great but stocks are better. With the market down, I see a prime buying opportunity.

[Casey2296]

Originally Posted by Johnny630

The gentleman is 50 has 950,000 saved in his 401k, two kids in college one is full funded the other has half funded two years to go in school. He has 160k left on his mortgage, looking to retire in 10 years.

Definitely the S&P in that scenario.

[butchie_t]

The wonderful method of compounding interest leans heavily towards the S&P.

[Smarti5051]

With about a $1M nest egg for retirement and about a decade to go (and assuming he some day wants to retire), I think the more prudent thing to do is either invest in VTI or pay off the mortgage. If he had $4M+ invested, looking to alternative investments for the sake of diversity would make more sense.

Imagine a scenario where five years from now the 401K is worth $400K because of a major recession and he is a few years away from retirement (or worse, gets forced into retirement due to a bad economy). He still has 5 years on a mortgage, $400K in a 401K he can't touch, and he is trying to sell a very expensive piece of cardboard to a market where most of his customers have just lost 50%+ of their net worth. At least VTI would push out some dividends and he could liquidate small amounts in an emergency.

With that said, is he a big sports card collector? If so, the psychological benefit of acquiring and owning a "grail card" could tip the balance closer to even. But, if that card represents 10%+ of his net worth, then you could have additional costs of storage and insurance. So, unless he is as crazy as most of us on these boards, I don't think it is smart from a financial "investment" standpoint.

I also wonder about the timeline posed in your original question. You say he is 50. You also say he is looking for an investment to "hold" for 25 years. That puts him at 75 when he is looking to potentially liquidate the card. 75 is far from guaranteed to anyone. I am not there yet, but it seems like there is less value in a stockpile of money when you are 75 than when you are 60-65. At least in the stock market, you can liquidate smaller portions of your investment over the years for experiences and things that make your life more enjoyable or easier.

[mrreality68]

Originally Posted by Rhotchkiss

Good question. I say the stock market, but only bc it’s so beat up right now and top cards are so expensive. On the whole, I think the 52 mantle beats the stock market, but timing matters, and right now I think stock in top companies presents a better buying opportunity (“deal”) than blue chip cards, which are sitting at all time highs. .

Tax wise - under current tax code, the sale of stocks held for one year is a better tax result than the sale of a collectible held for investment.

+1 agreed in addition the stocks gives you the flexibility down the road to take out of the market to potentially Persue the Mantle down the line and still have some or all of your original investment in the market with the growth covering your future card collection/investment

[Seven]

Originally Posted by Johnny630

Asking for a high end client of mine….this is a good one and I really do not know how to advise …

What Would You Do ???

Say you had $150k cash to invest to hold for the next 25 years having had only two choices which one would you pick ?

1. A Killer Dead Centered 52 Topps Mantle PSA 5-6

2. 150k in the S&P 500 in his brokerage account.

Would also like to take into account the tax benefits of either or….hopefully Bob C can chime in with his wisdom guided by knowledge expertise and experience in the tax law field.


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

I think you cannot go wrong with the S&P 500. It's reliable, has weathered recessions and has stood the test of time. It out performs hand picked portfolio's by hedge funds. It's impossible to predict what the country and economy is going to look like in 25 years but I think it's definitely the better of the two options. I don't think if you asked anyone here on the board 25 years ago what the hobby would look like today, they'd be able to picture what's going on.

[molenick]

I have two children, one of whom cares about my collection and one of whom does not. In my will, I am leaving the collection to them both to do with as they may. But I see now that this might be a problem if one wants to keep it largely intact as a memory of their dad and one wants to sell it. They could try and split it in half, but while many items can be priced via a price guide, some are harder to price because of lack of comps or because they are not cards.

On the other hand, leaving an investment portfolio is pretty simple. It is sold off and divided equally.

But I am not about to sell the collection to finance the portfolio (or vice versa)…even though lately it has been more fun looking at the collection rather than shrinking numbers on a screen . Poor kids are just going to have to make do with inheriting my collection and whatever is left of my investments.

If he wants to buy and enjoy the card, then I am not sure where the investment advice comes into play. He should just buy and enjoy the card (it sounds like he is doing very well and this purchase would not impact him financially). And, as has been said, the more years of personal enjoyment he gets out of it, the more it becomes a personal item.

But I also don’t recommend the one card idea, especially if he wants to leave the children something they would want to keep as a memory rather than sell (if the idea is to sell it, then one card makes more sense, as does investment advice).

As has been mentioned, one card for two children could raise issues down the road. I like the two card idea, even if it may not be possible to get two cards exactly the same. Will the children quibble because they each have a similarly graded Mantle but the centering is not exactly the same? Maybe, but I think leaving one card to two people has more potential for problems.

Whether Mantle cards are a better investment than the S&P500, I will leave to others to discuss. I think it is amazing that this is actually a legitimate debate.

And the answer to “What Would You Do?” is to try and get into this guy’s will.