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(Thought about posting in "investing," but seems general enough for here instead.)
I am amused regarding something I realized about my dearly departed dad recently, many years on.
While a truly good man, and thrifty enough to live well into his 80s with a decent portfolio (managed by a firm standing since 1881, or 70 years in current configuration), my dad could *not* spot a good investment in jewelry, watches, coins, or other non-financial instruments to save his life. While a middle class man who bootstrapped from working class Boston Irish, he spent his life in $150 suits, $50 watches, and shoes one too many polishes down the pike. And he was dead convinced that was living the high life, bless him.
I'm trying to break that pattern, and spot *good* investments in items like jewelry, watches, cars, etc. I have a decent portfolio elsewhere, btw: the above is tip of the spear, a sidebar I don't expect to raise me more than $100K by the time I retire out of a $2M portfolio (estimate, in a few years).
Mentioned because as I sort through and catalog the heirlooms, I'm realizing most are worth melt-down value. Yes, folks: don't invest in Liberty Dollars (value: melt down of the silver, about $17/each). Or Waltham or Elgin watches (pretty much worthless, other than...you guessed it). Or coin sets from the bank in the 1970s and 80s.
It isn't easy to spot a solid investment, don't get me wrong. Chance plays a part, but I'm reasonably certain observation of megatrends and what the rich will pay for something in the future is much more important.
I've done a tad better, with Rolex watches (appreciating); if I could get a Patek Philipe for less than $30K I'd do-same (Asians are buying up every luxury watch not nailed down, apparently, for the moment at-least). Ditto property and stocks, knowing something undervalued when I see it. 996 Turbo, not so much, they made too many but it's a sleeper and performance bargain supercar nor was I hit too hard on trade-in.
The difference may be in scale. The old man's "Seiko" watch from the 1970s probably cost him $75 in 1975 dollars. Value today, full restoration (which I had done in 2008) maybe $500. JPN made just too many of them and probably still does. They are worthless pot-metal but many do keep great time, for entry-level automatics. Yet had he invested say $750 in a Rolex back then, with a bit of luck that bad boy may be going for $10K these days (certain models definitely have that return, or even more).
My dad left a decent estate, due more to brute-force frugality than anything else, but his real estate and portfolio holdings in-particular were well-considered. The bulk of the rest, from furniture to aforemeintioned jewelry and other (junk) is just that: boat anchors, a waste of metal. I'm not mad, just astounded at what they chose to keep in the family as "heirlooms" for 100+ years is near-worthless.
How did your parents do, have you moved it forward or are you still learning about "good" investments (perhaps not in stocks and land, something else)? Thoughts on spotting true collectibles, worth saving for (perhaps) ten years and seeing appreciation?
@OP- my dad was as cheap as they come. He bought a 79 Beetle Conv, last year of US versions and was convinced it was going to be the Shelby Cobra of collectibles despite the millions produced. He died 10 years later and I tried to "like" the car but it was simply a terrible car to drive. It had low miles on it (24K) and I sold it for about $1500 more than he paid for it new.
Been hypothetically moving and trying to think what I would take vs. dispose of. Honestly I'd like to buy/build another new house and furnish it with all new stuff. I don't have heirloom furniture and honestly after 10-15 years everything is out of style so why burden your heirs with stuff that heck you probably don't even want, nevermind them inheriting it!
On watches, I think they are fading out of style. A stainless Rolex I bought new in 1991 for $1356.80 today is about $3800 new. So while it has kept its value, I certainly would never buy another one simply because I don't see the value in any watch anymore. $1356 in just about any growth fund for 27 years would be easily multiples of what the watch costs today.
I'd think certain guns/ammo, gold/silver coins would be the easiest stuff to store/pass to heirs with the least amount of hassle. Cars do go up in value but after storage/insurance/maintenance they quickly can dip into negative returns especially considering the upfront costs/initial depreciation.
I've helped several people liquidate their inherited vintage guitars. $$200-$300 guitars by Gibson, Fender, Gretsch, and Rickenbacker from the late 50's-early 60's regularly fetch $3000-$30,000 now. Some Martin acoustics and Gibson electrics can bring six figures. It's quite a thrill to open up a case and tell someone that their dad's old guitar is worth ore than their car....or house!
The time to sell is now though before all the baby boomers have passed on. They drove the prices up and the demand from younger generations simply will not be there.
It's fine to buy collectibles, but buy what you like: you may have it a long time. I've been collecting certain interesting items for more than sixty-five years. The value has risen greatly. However, I don't sell what I collect. For investment I buy securities, commodities, and their various derivatives. It's a liquid market unlike collectibles. I've done well because I have learned how to invest–and I am still learning
I own a pistol that I bought for about a thousand dollars twelve years ago or more. The seller didn't know what he had. It's actually a rare, possibly unique, prototype. Learn about what you collect. Enjoy the pleasure of ownership. The pistol would probably fetch close to 100k at auction, but I'd rather have the gun than the money.
Just an observation, the younger generation doesn't seem to have any interest in collecting. When I was young, my friends and I didn't collect, but only because we didn't have the money to buy. As we got older and had the money, we bought the collectibles that we had wanted. The kids with no desire to collect aren't going to suddenly want collectibles when they get older, because it isn't stuff that they always wished they could have.
I figure real estate is pretty safe. Everyone must live somewhere and the population is still growing. Although, real estate should be in an area where people want to live if you are using it as an investment.
As for other collectibles, collect what you love and enjoy it. If you make money, great, but don't count on it.
(Thought about posting in "investing," but seems general enough for here instead.)
I am amused regarding something I realized about my dearly departed dad recently, many years on.
While a truly good man, and thrifty enough to live well into his 80s with a decent portfolio (managed by a firm standing since 1881, or 70 years in current configuration), my dad could *not* spot a good investment in jewelry, watches, coins, or other non-financial instruments to save his life. While a middle class man who bootstrapped from working class Boston Irish, he spent his life in $150 suits, $50 watches, and shoes one too many polishes down the pike. And he was dead convinced that was living the high life, bless him.
My dad left a decent estate, due more to brute-force frugality than anything else, ... I'm not mad, ?
So sad..your Dad set you up with a decent inheritance and you are 'amused' at his investment choices, and you 'are not mad' at him?
I've helped several people liquidate their inherited vintage guitars. $$200-$300 guitars by Gibson, Fender, Gretsch, and Rickenbacker from the late 50's-early 60's regularly fetch $3000-$30,000 now. Some Martin acoustics and Gibson electrics can bring six figures. It's quite a thrill to open up a case and tell someone that their dad's old guitar is worth ore than their car....or house!
The time to sell is now though before all the baby boomers have passed on. They drove the prices up and the demand from younger generations simply will not be there.
This is so true, actually the depreciation has already set in..Younger gen would rather have a new PRS than a vintage Gibson LP Gold Top
Best joke I hear among the Baby Boomer 'musicians' is;
'When I die, I hope my wife doesn't sell my guitars for what I told her I paid for them.'
Actually, the younger musicians love vintage stuff too, just not the typical blue chip Les Paul, Strat, etc models. They like the quirky electrics from the 60's and 70's, Japanese made stuff, and entry level Gibson/Fenders (Melody Makers, Duo Sonics, Mustangs, etc). A new PRS Custom 22 is almost $4000 now. 20-somethings can have an arsenal of guitars for less than that these days.
The vintage market peaked in early 2007 and hit a deep valley a few years after that. Prices have since been slowly on their way up but the writing is on the wall: when the baby boomers go, so will the $15k-$500k guitars.
Yeah, what you say is true..jack white and the Black keys made the younger guitarists go out and buy all those plastic Airline guitars, Kays, and Monkey Ward Harmonys too. prices soared.
But Jack just turned his back on that stuff (for the time being anyway) for his new tour and band and is sporting an impressive array of some high end stuff ..some of it till quirky though.
I have a pretty extensive and eclectic collection of guitars...mainly because I keep every piece of gear I ever bought since my first electric guitar a 1961 Danolectric (Silvertone) U-1.. it is still one of my 'go to' guitars. I don't flip trade nor sell..have given stuff away to some kids who have limited resources but musical promise.
I was in that boat as a teen, and some people in the music biz were good to me.
I have Mustangs, LP jrs., Framus' Norlin era SGs..but have some high end Ric 12 strings, a 1966 Fender XII, crapload of tellys and Strats. USA and MiM. a 66 hofner Violin bass...
Lots of vintage amps too..Blackface Silverface, no Marshalls but. few Musicmans.
I try to keep a running tally of their approx value for my fam in case I buy the Farm
...
It can get time consuming..
about 10 of the items are already designated to certain family members and friends.
I do want to buy one more piece of gear tho, A brand spanking new Rick jet-glo 4001.
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