Are comic investments a better option than 401K's and Mutual Funds

[october]

Now that I'm older, it's still sort of the same line of thinking for me. I don't drink or smoke, so in place of those types of wasted funds (my term), I buy comics.

 

That is a damn good example.

 

I used to smoke, but gave it up 3 years ago, and now I get a weekly stipend equivalent to my butt budget that I save up and buy comics with. That's not *all* I spend, but it's amazing how many books I can get for the same $$$ that just went up in smoke.

 

It's true. I gave up smoking AND drinking every weekend. Now that I only go to bars 2 or 3 times a month I have at least $100 extra per week. Crazy how $5 beers, $7 packs of smokes, cover charges, cab rides, ect can add up to a ton of money very quickly.

[jmg3637]

the thing that most people miss when thinking about investments is the TAX implications on the return.

 

Because of all of the special tax benefits and leverage involved Residential Real Estate is almost always the best investment over the long term. I believe that more millionaires have been made in real estate than every other type of method.

 

You can get amazing leverage, write off your interest on the borrowed amount, and get to keep the first 500,000 profit tax free.

 

 

After realestate you should look to filling up your 401k, but ONLY if your compnay matches the contributions to some percentage. Many companies give 50% to 100% of the first 4 to 6% of your salary that you contribute. Since that is a 50-100% return in the first year on top of the tax savings, that is simply too good of a return to pass up.

 

After that the next thing to consider is, If there is a gain will you be paying tax on the gain. While I do not advocate it, I am sure that many here would not report and pay tax on their gains on selling a comic. First off most would not keep an accurate record of exactly what each comic cost to buy, let alone the cost of keeping the book ( bags/boards/boxes/storage facility/grading fees/ selling costs) in order to determine the realized gain or loss on each and every book sold. So if you do not end up paying tax on the gain that produces a significant extra gain over traditional investments like stocks, mutual funds and savings acounts where you will pay tax on the gain each year.

 

[namisgr]

But if one had to choose one over the other, is it advisable to put your money into investment books or 401K / mutual fund? or a little bit of both? Which is riskier? etc.

 

Your thoughts?

 

Your nest egg belongs most assuredly in the relatively low risk investments of diversified stocks, bonds, cash, and real estate, be they via mutual funds or another vehicle. The degree of risk is not even in the same universe as the risk of being invested predominantly in comic books. Case closed.

[action1kid]

Agreed !

[benz]

I wont invest big money on comic books. I would invest part of my money but not most of it. Maybe 10-20% of your disposable income. To give you an idea, I just invested 3 months ago in the US stock market and my returns are around 35% now while the comics that I bought 3 months ago have the same value or appreciated maybe 5%-10%. Bonds are a good investment opportunity too.

[the blob]

I used to smoke, but gave it up 3 years ago, and now I get a weekly stipend equivalent to my butt budget that I save up and buy comics with. That's not *all* I spend, but it's amazing how many books I can get for the same $$$ that just went up in smoke.

 

 

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You smoked comics

 

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Isn't the better question, "you paid for butt?" And if so, what kind of butt?

[joe_collector]

I can't believe there is a person alive who doesn't know that "butts" are slang for cigarettes.

 

My, what a sheltered group we are.

[the blob]

Yes, and in the joint you pay butts to avoid getting reamed in the butt. Or so I think I saw on Oz.

 

The key is to spend money on comics that you might otherwise spend on frivolities (JC's "up in smoke" or gay prostitutes example, whatever he was talking about, is a good one), not to avoid more liquid conventional investments.

 

I'm not saying "stealing" a nice Action 1 for $5K isn't a great "investment", but I don't think that's what we're talking about. Sure, if you pick the right books you may match or exceed what the S&P 500 or DJI does over some period, but liquidating them will be a lot more work/time and the costs will be higher (10-15% via Paypal/Ebay vs. a $9.99 commission on Ameritrade (albeit, if you're naughty, the tax consequences might be better). I just liquidated $32,000 in stocks and it took me all of 15 seconds. How long would it take you to sell of 32 $1000 books, even if they're primo stuff?

[MutantKeys]

[Anfield Fox]

Nicotine > comics

[ComicsAndCode]

Yes, and in the joint you pay butts to avoid getting reamed in the butt. Or so I think I saw on Oz.

 

The key is to spend money on comics that you might otherwise spend on frivolities (JC's "up in smoke" or gay prostitutes example, whatever he was talking about, is a good one), not to avoid more liquid conventional investments.

 

I'm not saying "stealing" a nice Action 1 for $5K isn't a great "investment", but I don't think that's what we're talking about. Sure, if you pick the right books you may match or exceed what the S&P 500 or DJI does over some period, but liquidating them will be a lot more work/time and the costs will be higher (10-15% via Paypal/Ebay vs. a $9.99 commission on Ameritrade (albeit, if you're naughty, the tax consequences might be better). I just liquidated $32,000 in stocks and it took me all of 15 seconds. How long would it take you to sell of 32 $1000 books, even if they're primo stuff?

 

You bring up a good point when you mention the time required to liquidate a comic book! When I sell books, sometimes I forget to factor in how much my time is worth.

[Comicdey]

I can't believe there is a person alive who doesn't know that "butts" are slang for cigarettes.

 

My, what a sheltered group we are.

 

I can't believe there are people out there that need a gremlin at all times for implied kidding or sarcastic humor.

[SolitaireOne]

Now that I'm older, it's still sort of the same line of thinking for me. I don't drink or smoke, so in place of those types of wasted funds (my term), I buy comics.

 

So, while I won't compare investing in comics to one's 401k, I would say they are a better use of your money than arcade games, smoking, drinking, and other expendable income targets.

 

An excellent point, though I do enjoy delicious booze now and again, I don't smoke or have a gambling habit -- yea me! I pay my taxes and bills on time, throw 12% of my pay into my 401K, I am invested in the regular "Bulls and Bears" too, own my truck outright, carry no debt AND still managed to buy a house last fall!

 

You've deffinately got to take care of first things first and THEN go ahead and have playtime. Comics, for me at least, are simply that... playtime. If I can make a buck or two in the meantime that's simply a bonus!

[Bronty]

Here's an example - sell a pile of comics (that you bought years ago for $10K) for $1K and try to apply that $9K capital loss against your capital gains on stocks or other investments for the year.

 

Actually the tax rules in Canada are pretty good vince. Assuming you're not carrying on a business, and speaking in general terms only, a book that you bought for $100 and sold for $1000 you pay zero tax on. The converse is also true (buy for $1,000, sell for $100, you get no capital loss but given the way prices have gone lately its very much in the collector's favour.

 

And yeah, you can't apply your comic losses against your stock gains, but you can deduct them against your comic gains to bring the gains down to zero (no further).

 

All in all its a pretty good deal for collectors. I agree that they certainly aren't investments though.

[shadroch]

If comics are not investments,which seems to be the majority view here,why are people paying five and six figures for them? When you can't even read the ones that have been slabbed?

Speaking for myself,I wouldn't drop a few hundred,let alone a few thousand on a comic I didn't have a very high degree of confidence that I'd be able to at least get my money back on.I certainly aren't spending $10,000 on an Avengers 1 because I like the cover more than the $10 Avengers 129.

Just like I'm not going to buy Marvel over GM just because Marvel has a prettier stock certificate.

[shrunkenhead]

Roth First, 401K too, other financial investments, hard assets, land, then comics.....

 

Yep. I would put gold in there too (though I guess that may be filed under "hard assets"). And before comics, natch.

 

Also, I may sound like a goofball, but I do believe that investing selectively in nanotechnology will pay microsoft/google-style dividends in the next two decades.

[CycleGirl]

If comics are not investments,which seems to be the majority view here,why are people paying five and six figures for them? When you can't even read the ones that have been slabbed?

Speaking for myself,I wouldn't drop a few hundred,let alone a few thousand on a comic I didn't have a very high degree of confidence that I'd be able to at least get my money back on.I certainly aren't spending $10,000 on an Avengers 1 because I like the cover more than the $10 Avengers 129.

Just like I'm not going to buy Marvel over GM just because Marvel has a prettier stock certificate.

 

Comic books as an investment? Yes. but.....

 

My advice: fund that 401k!! put money in your Roth IRA every year - better yet, every month! Those ought to be the foundation. Don't invest more in comics than you can afford to lose.

 

For me, comic books ARE an investment, but not a particularly smart one. I look on it as a sort of "mad money" investment. I truly believe that by buying wisely and holding for a long time, that these books should grow in value. That being said, I am well aware that my books might not grow in value at all. I'm certainly not counting on their growth to fund my retirement or my kid's college educations. I have other investments for that.

 

I buy comic books because I've loved them for a long time and because they are valuable. And it's not just the art, the stories, and the lore of comic book history that fascinates me. It's also the way that they have increased in value over the years. It's fun to think about how you could have picked up an Amazing Fantasy #15 for a few bucks back in the 60s or 70s and now have something worth more than a house. That's cool. It's also cool to pick up a book and say "This is the 2nd highest graded of this book and it's worth over $500..." Many times I point out an auction to my husband. Something like "OMG! There's an eight-point-five Fantastic Four #1 on Ebay this weekend!!" Then I'll try to predict how much the book will sell for and maybe I daydream about being one of the bidders on that particular item. Generally my husband will politely gasp or say "Wow!" He doesn't really get it.

 

The fact that key and/or high-grade issues are recognised by the collecting world as having that kind of value adds to their mystique and prestige. The possibility that they may continue to grow in value adds to the excitement and fun of the hobby. I do look at my SA books and allow myself to hope that they will grow in value the same way that GA books grew in value between the 80s and now. However, if they don't, I haven't invested more than I can afford to lose. Besides, I'll continue to enjoy owning them. They will always have value to me.

 

This may seem odd, but the very fact that I'm at a point in life where I can afford to buy these rare, key books, reminds me of the financial success that I've attained over the years. Back when I was a struggling college student, I was certainly aware that there were books worth thousands of dollars out there in the world. I knew that I couldn't afford them, but even at that time, I thought "how cool it would be to be able to own comic books like that!" Now that I can, I'm lovin' it!

 

If this essay resonates with any of you, let me know.

 

All the best,

CycleGirl

 

[BassGMan]

Yes, I've looked at comics as "investments", but I categorize them into "fun investments". In otherwords, I am not counting on the proceeds of the sale of my comic book investments to cover anything but more fun investments, collectibles or fun things/activities. If anything, I'd say that flipping comics with the intention of flipping comics is a much better "investment" than the long term buy and hold of "investment grade" comics. I'm not saying that you cannot look at comics as "real investments", but personally I would not count on any comics or collectibles to fund or partially fund my retirement or future living expenses. If one WAS to seriously invest in comics however, I'd only suggest doing so if you were able to buy them at a screaming good deal and not at any kind of current market values.

[jkrk]

If comics are not investments,which seems to be the majority view here,why are people paying five and six figures for them? When you can't even read the ones that have been slabbed?

 

 

 

 

There is a place for collectables in one's portfolio. The question I would ask is : How much of one's net worth is wrapped up in collectibles? In times of vast liquidity collectables sour in price. During times of economic contraction they're tough to move at any reasonable price. It's easy to take a long view on holding collectables but staying power might interfere with many collectors goals. High tide won't last forever. Low tide won't either. Navigating cycles sucessfully will always be the trick.

 

I won't even delve into the debate on the future of the comic book hobby.

[shadroch]

Have you tried selling a house in Las Vegas lately?Or on Long Island?

Not exactly a sellers market just now.

I'm certainly not advocating putting all your retirement money in any one catagory,but collectibles certainly have a place in the properley funded basket.