What percentage of your total net worth are you comfortable with OA being? 2 2

[ShallowDan]

A year-end to-do list resolution for me was finally tallying up my history of art purchases all on a single spreadsheet with the dates purchased and prices paid for everything in my collection.  I'm a comfortably middle-class guy who has been buying on and off for more than a decade and have always treated comic/illustration art as a hobby, taking a "buy what you love" approach to things, and generally only make purchases that I would still be okay with even if they were to lose half their value.

But after seeing everything all collated together, it stuck me that just looking at my buy-in price on things and comparing it to other assets, it all really adds up.  Just looking at the money spent, it's  somewhere in the 5-6% range of my total net worth.  And if everything is marked to market, it's definitely higher.  All of which has me thinking...

I'm not someone with a leaking roof, or have kids who are going hungry, or anything like that, and there are plenty of other hobbies where the money is completely gone once spent, but at the same time I do wonder if it's a good idea to have quite so much tied up in collectibles, even if the 401k is being funded and the mortgage is getting paid.  I've been trying to transition to playing with the house's money and selling things to fund new purchases, but most years still see more money going into this hobby than coming out of it.

I'm sure others have dealt with similar issues, and am curious how they've handled it.   Have you ever sold OA simply because it was too valuable compared to other assets you owned and it seemed like the prudent thing to do?  If so, were you happy with the decision or was it something you came to regret?  Is there a percentage of your total net worth that you'd be uncomfortable with OA being?

 

[malvin]

I've been there. Heck I am there.

I just ignored it

I love the OA, just selling it when I didn't need the money (and therefore nothing to put it in) didn't make sense to me. I try to trim/optimize/refine my collection, but each year I think it's still a net spend for me.

Malvin

[The Voord]

I've been collecting OA for 42 years and have sold a lot of art over the past 20 years to fund big lifestyle changes . . . for example, I paid off two mortgages early and also retired seven years earlier than my official retirement age, all funded by art sales.  Sure, I regret those losses over the past 20 years but, with me, it's about prioritizing my family, so that we all benefit in a very positive way.  Bottom line is that you can't (or shouldn't) take this stuff to the grave with you, so most collectors ought to have some kind of exit plan!  I'm still collecting OA (on a diminished scale) and still retain many core pieces . . . but eventually most things will have to go!

[Rick2you2]

Zero. For me, once I look at something as a potential source of profit, it no longer remains a hobby. I buy art to get away from reality, not to be looped back into another form of work by considering its future value. That also means I won’t spend a lot on any particular piece (say 5 figures and up). It loses its fun aspect to me. 

Edited January 17 by Rick2you2
Typographic error

[batman_fan]

I think my art and comic collection represents ~5% of my total net worth.  The bulk of my assets are in property, stocks, and mutual funds. 

Edited January 17 by batman_fan

[PhilipB2k17]

On 1/16/2024 at 10:12 PM, ShallowDan said:

A year-end to-do list resolution for me was finally tallying up my history of art purchases all on a single spreadsheet with the dates purchased and prices paid for everything in my collection.  I'm a comfortably middle-class guy who has been buying on and off for more than a decade and have always treated comic/illustration art as a hobby, taking a "buy what you love" approach to things, and generally only make purchases that I would still be okay with even if they were to lose half their value.

But after seeing everything all collated together, it stuck me that just looking at my buy-in price on things and comparing it to other assets, it all really adds up.  Just looking at the money spent, it's  somewhere in the 5-6% range of my total net worth.  And if everything is marked to market, it's definitely higher.  All of which has me thinking...

I'm not someone with a leaking roof, or have kids who are going hungry, or anything like that, and there are plenty of other hobbies where the money is completely gone once spent, but at the same time I do wonder if it's a good idea to have quite so much tied up in collectibles, even if the 401k is being funded and the mortgage is getting paid.  I've been trying to transition to playing with the house's money and selling things to fund new purchases, but most years still see more money going into this hobby than coming out of it.

I'm sure others have dealt with similar issues, and am curious how they've handled it.   Have you ever sold OA simply because it was too valuable compared to other assets you owned and it seemed like the prudent thing to do?  If so, were you happy with the decision or was it something you came to regret?  Is there a percentage of your total net worth that you'd be uncomfortable with OA being?

 

[Twanj]

1%

[tth2]

I'm the Mark Hammill guy in "Amazing Stories".  100% of my net worth is in OA and other collectibles and the vintage car they're all piled into.   

[Dr. Balls]

On 1/17/2024 at 5:37 AM, Rick2you2 said:

Zero. For me, once I look at something as a potential source of profit, it no longer remains a hobby. I buy art to get away from reality, not to be looped back into another form of work buy considering its future value. That also means I won’t spend a lot on any particular piece (say 5 figures and up). It loses its fun aspect to me. 

This is a really great philosophy - and one that I've been thinking about a lot recently, with some changes to my hobbies coming soon, I think. I've kept notes on how much I paid, how much I sold, etc and it's become less fun for sure - more like a business transaction or investment. I think I want to just "invest" in "investments" and keep myself from thinking my hobby is some sort of source of future income.

I really enjoy my art, and I always have - but I was still hooked on comics. I think I've come to that age where it's time to just have one hobby I enjoy for enjoyment's sake - not because I can realize a profit (which is usually a loss anyway ). Thanks, Rick for posting this, it makes me feel like there's someone else out there who has found a way to enjoy something without quantifying it against the money spent on it.

And to answer the OP, I'd say my comics and art represent 5-8% of our net worth - which I think is too high. I want to get it down to 3% max and keep it there. I feel that 3% means that I can stop fussing about value and just sit back and enjoy the stuff on my wall.

Edited January 17 by Dr. Balls

[Benedict Judas Hel]

On 1/16/2024 at 9:12 PM, ShallowDan said:

What percentage of your total net worth are you comfortable with OA being?

I have net worth?!

Edited January 17 by Benedict Judas Hel

[adamstrange]

On 1/17/2024 at 10:10 AM, tth2 said:

I'm the Mark Hammill guy in "Amazing Stories".  100% of my net worth is in OA and other collectibles and the vintage car they're all piled into.   

This is the way.

[comix4fun]

On 1/17/2024 at 8:12 AM, batman_fan said:

I think my art and comic collection represents ~5% of my total net worth.  The bulk of my assets are in property, stocks, and mutual funds. 

[comix4fun]

On 1/16/2024 at 9:12 PM, ShallowDan said:

 

But after seeing everything all collated together, it stuck me that just looking at my buy-in price on things and comparing it to other assets, it all really adds up.  Just looking at the money spent, it's  somewhere in the 5-6% range of my total net worth.  And if everything is marked to market, it's definitely higher.  All of which has me thinking...

 

 

Using an arbitrary percentage of net worth to determine what you keep in your collection is something that I think is counterproductive both financially and spiritually. 
The better questions are: Do I have a better plan for the funds created by removing pieces from my collection? Am I removing something that will bother me if I am never able to replace it with something comparable? Does my family need the money from the sale? etc. 

Because, if you're pulling and selling art to get below a magic percentage you could wind up costing yourself in money and enjoyment. If someone would have slashed and burned their collection to amass cash in 2019....they'd likely be on suicide watch seeing what's happened to the value of those pieces and their cost of replacement today. They would NOT have beaten those returns in any other traditional investment most likely and they would be out the pieces, probably permanently when the price escalation is factored in. 

Someone's personal cash position, combined with their investment position, and taking into account their true cost basis for their art collection (dollars in vs. out vs. net cost of pieces retained) is probably a better way to get comfortable. I've been collecting a long time. Nearly 30 years. Somewhere around 2010 I got the net $0 cost of the pieces in my collection. Since then I've bought and sold and mostly retained artwork instead of letting it go. As my personal net worth grew (outside of artwork) I had less reason to cull pieces for cash or to simply invest elsewhere. At present for the pieces I own, I am probably in at about 4-5% of their total current worth in total cash outlay. 

I've gotten some bananas offers for some of my pieces but, at the end of the day, I'll be moving something I love to put cash into something that's likely to underperform the artwork at best or provide me dramatically less joy at worst. 

I wouldn't use a percentage of net worth approach unless there's some massive debt or future cost nut on the horizon that needs covering and there's no other way to do it. 

[batman_fan]

On 1/17/2024 at 10:35 AM, comix4fun said:

Dollar bills is right, people have seen parts of my collection so they know my net worth could get you a used Hyundai and a super sized Big Mac meal.

Edited January 17 by batman_fan

[newshane]

Can you afford to completely part with 5% of your net worth? 

If so, carry on. 

If not, reconsider what you're doing. 

Also, the main issue with collectibles is liquidity. Keep that in mind. 

The fact that you're even asking about this tells me that you are already anxious about your spending in this regard. 

You tell yourself that you would be okay if it lost half its value. Are you lying to yourself about that? 

Edited January 17 by newshane

[batman_fan]

On 1/17/2024 at 11:59 AM, newshane said:

Can you afford to completely part with 5% of your net worth? 

If so, carry on. 

If not, reconsider what you're doing. 

Also, the main issue with collectibles is liquidity. Keep that in mind. 

The fact that you're even asking about this tells me that you are already anxious about your spending in this regard. 

You tell yourself that you would be okay if it lost half its value. Are you lying to yourself about that? 

Just curious, why do I have to part with 5% of my net worth?  Are you suggesting that portion of my net worth could go to zero?  Isn’t that a potential risk regardless of where you have your money?  Liquidity is an issue with lots of investments.

[shadroch]

I had a different approach.  I banked on my comics/arts/coins as one leg of my retirement and had no problem having 15-20% of my net worth invested in them.  When prices hit unexpected peaks I sold almost everything.  Recently, I've switched to dealing in late copper to modern books and have managed to turn pennies into nickles.

[Bronty]

I have a different approach as well in that I really don't care what the percentage is.    I'm more concerned with having enough value outside of collectibles that retirement will be comfortable.    After that, the remainder can be in collectibles if I choose.    So I look at it more like... there's a minimum amount of 'real world' assets I want to have.    After that, its a free for all.    So, I look at it more in absolute dollar terms than percentage terms.    Sure, a percentage falls out of that, but the percentage is in no way part of my thought process.

[thethedew]

All else being equal, if the value of my OA collection dropped by 50% overnight, and I could still afford to keep my collection, I would not care about the paper loss one jot.

[ShallowDan]

On 1/17/2024 at 6:34 AM, The Voord said:

I've been collecting OA for 42 years and have sold a lot of art over the past 20 years to fund big lifestyle changes . . . for example, I paid off two mortgages early and also retired seven years earlier than my official retirement age, all funded by art sales.  Sure, I regret those losses over the past 20 years but, with me, it's about prioritizing my family, so that we all benefit in a very positive way.

I definitely think that if anything in the collection entered that sort of life-changing territory, I'd happily cash out.  For better or worse, that not a problem I expect to ever deal with.  My tastes are fairly niche.

 

On 1/17/2024 at 12:57 PM, comix4fun said:

Using an arbitrary percentage of net worth to determine what you keep in your collection is something that I think is counterproductive both financially and spiritually. 
The better questions are: Do I have a better plan for the funds created by removing pieces from my collection? Am I removing something that will bother me if I am never able to replace it with something comparable? Does my family need the money from the sale? etc. 

Because, if you're pulling and selling art to get below a magic percentage you could wind up costing yourself in money and enjoyment. If someone would have slashed and burned their collection to amass cash in 2019....they'd likely be on suicide watch seeing what's happened to the value of those pieces and their cost of replacement today. They would NOT have beaten those returns in any other traditional investment most likely and they would be out the pieces, probably permanently when the price escalation is factored in. 

I think this aligns fairly well with my gut-feeling on everything.  Frankly, if I were to sell something just for the sake of selling it, the funds would likely just end up sitting in cash (which as you say, would have been an even dumber "investment" in 2019-2023, and definitely would bring less enjoyment).  

 

On 1/17/2024 at 1:59 PM, newshane said:

Can you afford to completely part with 5% of your net worth? 

If so, carry on. 

If not, reconsider what you're doing. 

Also, the main issue with collectibles is liquidity. Keep that in mind. 

The fact that you're even asking about this tells me that you are already anxious about your spending in this regard. 

You tell yourself that you would be okay if it lost half its value. Are you lying to yourself about that? 

In the past I've comfortably lost money when selling.  I've never taken a 50% haircut that I can recall, but there's definitely stuff that I've sold at a loss, but that was usually a matter of selling something from the bottom of the collection to buy something that I really wanted and trying to do it the responsible way.

Part of the inspiration for the topic was a conversation I had with a friend after finishing up the spreadsheet.  He'd asked what I'd been doing all day Sunday and after I explained the project, he asked how much I'd spent on everything when it was all totaled up and immediately responded "sell that $#iT"   But he admittedly has no appreciation of the finer things in life!

Edited January 18 by ShallowDan