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Is Investing in Collectibles Like Valuable Baseball Cards Worth It?

Like so many young boys my love affair with baseball cards began in Little League. Each week our coach would give us 50 cents or $1 to spend at the concession stand after the game. On weeks where we won and received a $1, I’d get a pack of cards and a cream soda, secretly hoping some of those might turn into a valuable baseball cards.

valuable baseball cardsIn those early days I didn’t have a lot of money so the collection grew slowly. I amassed only several hundred cards and kept them rubber-banded together in a shoebox. I shuffled through them a lot so the surfaces became dull and the edges worn.

Then in 1986, I scrounged up enough money to buy my very first complete set of Topps baseball cards. I also bought plastic card pages in which to insert each card and a three ring binder to hold all the pages. So began a decade of collecting the full sets and the update sets each year. By the time I ended college, I had amassed over 15,000 baseball cards.

Then guess what happened…

Marriage…grad school…buying a home…kids…career…more kids. Through all that the baseball cards I had enjoyed collecting spent years boxed up in the back of the closet rarely seeing the light of day.

My love affair with collecting baseball cards resurfaced about 10 years later in my early 30s. This time around though I wasn’t attracted to purchasing individual packs or complete sets. I wanted to focus specifically on valuable baseball cards – which can only be found by collecting those that are professionally graded.

This was a change in strategy and required me to understand what I was getting into and why I was doing it.

How Do You Define Investing in Collectibles?

The above question is tricky to answer in part because it depends on your definition of “collecting” and “investing.”

By definition, a collectible is anything you might be interested in accumulating. The concept of time is implied in this definition to the extent that you collect your treasured items over a period of time. In other words, the collection doesn’t happen overnight.

So a collector would be interested mostly in gathering items to store or display for the long-term. They may also buy and sell items in their area of interest but they will always have pieces they continue to hold. If they are only buying and selling – not holding – I wouldn’t consider them a collector.

When thinking about collectibles, would you see collecting as a means to invest money looking for a profit? Or to diversify your portfolio? Or would you define “investing” in collectibles as using your money, time and effort to accumulate something simply because you enjoy it?

How you answer those questions defines your attitude and approach to collecting.

There are those who see investing in collectibles as a way to diversify their investment portfolio with the hopes of making a positive return on their money. Forbes noted in a 2012 study conducted by Barclays that “global high net worth households hold an average of 9.6% of their wealth in collectibles.” That seems a bit high of an asset allocation for my taste but some clearly see it as acceptable.

(If you are interested in further reading, that same Forbes article goes on to show how certain collectibles like stamps, coins, art and wine have performed as a long-term investment against stocks, bonds and gold.)

For me, I see collecting as something that begins from the heart. I didn’t set out to collect valuable baseball cards to make money. I simply loved having cards of my favorite players.

I held the cards through my 20s because they were a connection to my childhood and the many memories of my playing days and going with my dad to Cincinnati to watch the Reds. I realized though that some of the cards may have value at this point – specifically if the player had reached a high level of success and his card (most notably the rookie card) was in excellent condition.

As I came back to the hobby in my 30s, I realized much had changed. Vintage card prices (approx. the 1960s and prior) had experienced a dramatic rise in price but those from other decades (the 1980s and 1990s sadly) had experienced a sharp decline in price. Some cards were worth hundreds of thousands of dollars. Others weren’t worth the paper they were printed on.

So my approach changed at that point and I did begin to look at collecting valuable baseball cards as an investment. I still have a love for collecting the card itself but it’s taken on an added dimension. I wouldn’t say I’m necessarily looking to make a profit from them but I’ll definitely take it in the long run if one comes.

The Upside and Downside to Investing in Collectibles

Whether your focus is valuable baseball cards or something else, it’s important to know there is an upside and downside to investing in collectibles. The baseball card market has seen dramatic upside in the last 30 years but it hasn’t all been rosy. Other collectibles markets face the same issues.

The Upside

1. Personal growth and fulfillment. In my mind, this is the biggest reason anyone should collect. There is great enjoyment in building that set or finding that hidden treasure you’ve been hunting for years. The practice of gathering items gives us a sense we are achieving something noteworthy, even if it so only to us.

Plus, collecting connects us to other people. I have an instant connection with the owner when I walk into his baseball card store. We share the same passion, which serves as a tool to facilitate communication and relationships.

2. The Profit. As demand for a collectible grows, the more chance there is to make a profit on that product.

Other things play a role here like the age of the item, its creator/manufacturer, how unique it is and its present condition. But I’d say nothing drives prices like demand. If people want an item the price will increase and collectors can cash in on that trend.

3. To Diversify. A third upside to investing in collectibles is that you are able to diversify into other assets. Seasoned investors who already have a healthy allocation of stocks may look to spread their money around into other investment categories. This could include bonds, real estate, commodities and even collectibles. As noted earlier, many of the world’s wealthy investors seem to viewing collectibles in this way.

The Downside

1. Emotion. Collecting is fraught with emotion to the point that our actions can get entirely out of hand. If we want an item badly enough we will go to any lengths to secure it, even if that means overpaying.

Furthermore, we can get so involved in collecting that it begins to negatively impact other areas of our life. You are reaching a danger zone if your collecting is taking precedence over the budget or family relationships.

2. Value fluctuations. This is the biggest downside to seeing collectibles as an investment. The value of items is very much subject to the whims and tastes of the buying public. What’s hot today may not be tomorrow. Anyone remember Beanie Babies?

Baseball cards experienced this during the 1980s and 90s. For decades the manufacturer Topps had been the only game in town. Through a series of events, new companies like Fleer, Donruss and Upper Deck were allowed to produce cards. Suddenly, the baseball card market was saturated. Due to overproduction, prices plummeted to the point that most cards from that era are now worthless. You really can’t give them away.

3. Liquidity. This is a huge issue that any investor in collectibles should consider. Collectibles are an illiquid asset meaning they are not easily transferred or sold. Like a house, you need a buyer. If none exist, then you are stuck with the collectible.

Advice For Investing Money in Collectibles

Investing in valuable baseball cards or any collectible can bring loads of enjoyment and, if you are fortunate, maybe a little profit. If you are going to head down that route and start your first collection consider this advice:

1. Keep from wagering the budget money. A whole host of expenses should be funded in your monthly budget before you allocate money for collectibles. Food, clothing, shelter, utilities, transportation are higher on the priority list. Don’t use the $1,500 for the mortgage payment on a piece of art you’ll be hanging on the wall.

2. Non-interference with family. Your collection should not interfere with family matters. Yes it’s fun and you enjoy it, but you can’t be gone to showcases every weekend and miss your kid’s lives. Furthermore, it would be unwise to spend on collectibles if that money could be better used elsewhere (like career training, needed vacations, kid’s college, etc.)

3. Avoid using money you’ll soon need. If you know a big expenditure is right around the corner then you should be saving for that not using your money on collectibles. In addition, finding that one item you’ve been tracking for years is not an excuse to take money out of the emergency fund.

4. Invest in real estate and the stock market first. I would be real hesitant to pour money into collectibles if I had no other investments. The better investment vehicles would be the stock market and even real estate (i.e. buying a home). They have both shown a stronger track record of providing significant and consistent returns over time.

5. Know the niche market. You’ll have to know the collectible’s market in which you are investing. This includes knowing current prices, trends, how to spot a forgery and any other issues surrounding your focus. The best way to know the market is to study and read about it and to…(see #6)

6. Be routinely engaged. The Internet has made it incredibly easy to engage with people. If you can’t get away to showcases, it’s still possible to connect with people online. Find forums dedicated to your niche and websites (like Ebay) where you can routinely track what’s happening.

7. Find Bargains. Bargains can still be found in the collectibles market. First you have to know what a real bargain is and then you have to know where to look. Garage and estate sales are some of the best places to find them. But deals can even be found at more formal events.

Several years ago I bought an ungraded baseball card at a local card show for $35. Because I had read and studied the standards of how cards are professionally graded, I could see this particular card might grade very high.

I took a chance and sent the card off to be graded. Upon it’s return it had received a grade of 10 (the highest possible) from Professional Sports Authenticators (PSA). To my delight, it’s now worth significantly more than $35.

8. Specialize in rarity. This piece of advice would apply mainly to those who are truly looking to make a profit from their collectibles. An item has more chance to appreciate in value if it is scarce. If making a profit is your focus then buying bulk lots of 1980s baseball cards makes no sense. You’ll lose money on that transaction.

9. Keep them secure. This can be tough depending on the collection. Some items like valuable baseball cards or stamps can be kept in a fire safe or a safety deposit box at your local bank. But how do you handle things with size or that you might want to display like art or antique furniture?

I’d say at a minimum this means making sure your collection is insured. Make a record of your inventory for insurance purposes in case it’s stolen or destroyed. If the collection has real value it may mean beefing up your home security with alarm systems and surveillance cameras.

But above all…

10. Enjoy Collecting!

After all, isn’t this what it’s really about?

I’ve had so much fun through the years collecting valuable baseball cards. Granted, my focus has shifted within the niche but the excitement of purchasing cards still remains.

My Pursuit of Valuable Baseball Cards

I’m currently working on finishing a professionally graded set called “Hall of Fame Players – Post War Rookies.” Pretty specific, I know. I’m only about 33% done and it may take me years to complete. I have many vintage baseball cards in the set yet to buy and those can get rather pricey.

As I said though, for me it’s not about making money. I’m pursuing this because it occupies my time and I enjoy it, just like I did when I was young.

Questions: Do you have any valuable baseball cards? Do you collect anything? If so, what is it and how did you get started? Do you view investing in collectibles as a wise move to make money? What other advice would you give to those investing in collectibles? Anyone else have worthless 1980s and 90s baseball cards taking up space in your closet?

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Comments

  1. I’m ashamed to admit how many baseball cards I have. 🙂 I too collected cards back in the 80s and was one of the first things I thought of to do with my money whenever I received any. Unfortunately, the market just became glutted and drove the price way down. My Dad actually gave me several hundred of his cards when I was a kid. Most of them were not in very good shape, but a few were and sold many of them – which only inspired me to buy more because I saw the potential. But, one that I still kick myself for today was selling a near mint condition 2nd year Nolan Ryan card. I won’t even look up the value of it now as I know I’ll get mad at myself.

    My longwindedness aside, I think it’s fine to collect things and even good on many levels, as long as it’s kept in balance with other priorities and you do it wisely. I really don’t collect anything now, but if I did I’d want it to be something I knew plenty about and something I could enjoy. I still wonder what was in those stale old sticks of gum and what made us want to get it. 🙂
    John recently posted…How Making Excuses Stops Your SuccessMy Profile

    • “…as long as it’s kept in balance with other priorities…” You are right John…that’s really the key. We are not spending the needed budget money on collectibles.

      I just finished reading “In Mint Condition” by Dave Jameison. Fascinating look at the history of baseball card collecting. I didn’t realize in the beginning the cards were actually a way to push gum sales. The whole trade centered around gum manufacturers, which Topps was.

  2. DARN! I have a ton of 80’s baseball cards and comic books still in the basement. I was planning on giving them a good 20-30 years to increase in price before I cashed them in. Looks like I’ll have to wait a little longer …
    MyMoneyDesign recently posted…Where to Park Your Rainy Day Savings for Growth Without Much RiskMy Profile

    • Yeah…sadly I’m not sure if 20-30 years will even do anything for some of those sets. However, you may have some single cards in there that have some value if they are in mint to near-mint condition. I had a few but as a whole, most of those complete sets don’t bring much. 🙁

  3. We don’t really have any collectibles. We try to always get a special memento when we travel but nothing that really fits “collectible”, I guess. Like anything, I think it’s very personal but I definitely agree that if you intend for it to be more investment than hobby, it shouldn’t be your only investment and be prioritized after your general investments and real estate. Collectibles, unless something truly rare and valuable, fluctuate a bit too much. Plus, as you mentioned, there is typically a much stronger emotional tie, which can make it harder for you to sell.
    Shannon recently posted…Getting Financially Real: My Mom Reclaims Her Money PowerMy Profile

    • “…there is typically a much stronger emotional tie, which can make it harder for you to sell.” That really is a huge issue. People even have that same challenge when it comes to individual stocks. They fall in love with it on the way up and refuse to sell on the way down because they are emotionally tied to it. Love that we are emotional beings but sometimes they really do get the best of us.

  4. I actually always admire people who have collections because I have moved so much in my adult life that I am the anti-collector or the anti-hoarder. With every move, I purge so many things that I essentially just have a box of things that are important to me and that I care for. I can’t imagine caring for something like a collectible for 20+ years, but I salute those who do it and enjoy it.
    Shannon recently posted…Music Mondays – A Matter of TrustMy Profile

    • “…With every move, I purge so many things…” Haha, I know…I kept thinking that maybe I should purge them. 🙂 I’ve moved four times in my adult life and lugging those boxes of cards around was a pain at times.

  5. I guess my hubby will never know because his mother threw away all of his baseball cards from when he was a kid in the 50s. She saved napkins from birthday parties he attended, but the baseball cards she threw away because she hated sports! Funny thing is, his brother thought hubby had all his cards, and hubby thought his brother had them. She’d thrown away the bother’s as well!

    • Oh my gosh Kathy…how unfortunate. Even in good condition many of those cards are valuable now. My uncles had a similar experience from collecting cards from the 50s and 60s. They were thrown away during a family move. They still get sick thinking about it.

  6. For the most part I think collecting things should be viewed as a hobby. There’s really no guarantee that the collection will be worth anything when you want to sell (Beanie Babies anyone?). I’m a sucker for holding on to my collectibles, though, and honestly will probably still have my sports cards the day I die. I can’t help but think one day they might be worth a lot. Problem is, it might be long after I’ve gone.
    DC recently posted…3 Important Steps to Take to Reach RetirementMy Profile

    • “…collecting things should be viewed as a hobby.” That’s more or less how I’m approaching it DC. But I still want to be wise with the money I’m spending. I guess I’m just more conscious now about spending money for something that has no value whatsoever.

  7. I still have my basketball card collection from when I was a kid. It was a big thing back in the day. I have some baseball and football cards as well but focused on basketball. I used to hear stories about how much some cards really skyrocketed in value (Michael Jordan rookie card or something) and thought that I could set my future self up by doing the same thing. I paid $10 (a lot at the time for me) to buy a Shaq rookie card. Not sure how much it’s worth but I think many cards in that time period have been devalued because they printed so much. As an adult, I think collectibles are silly…fun for kids though. I don’t see them as an investment, I’ll stick to stocks and real estate.
    Andrew recently posted…Are You Afraid to Take the Leap?My Profile

    • “…many cards in that time period have been devalued because they printed so much.” Yes, sadly that is true Andrew. The card market was really saturated through the late 80s and 90s. Your Shaq rookie card (if it’s an Upper Deck SP) would be worth around $160 if graded at a Gem Mint 10 (perfect card). Any other manufacturer or card grade isn’t worth that much.

  8. Just about every type of collectible I’ve ever been part of has seen the value spike and then drop off, largely because supply saturates the marketplace after the popularity takes off. Regardless, I still have most of the stuff and I have no regrets…largely because I only collect things that I like. The ‘value’ is not the monetary value but instead because I like it.
    Money Beagle recently posted…How I Keep Brown Bagging FreshMy Profile

    • “…I only collect things that I like.” That’s good MB because you will always enjoy it no matter what happens to the value.

  9. I think like anything else it’s a persona choice and if it’s done responsibly hey, why not. I’ve just never been into collecting anything because I’ve never had a lot of space in places I’ve lived and never had anything stand out to me as something I’ve wanted to collect…except I guess magnets for my fridge of places I’ve visited. But that’s definitely not worth any money.
    Tonya recently posted…Why Races Aren’t a Waste of MoneyMy Profile

    • “…it’s a persona choice and if it’s done responsibly…” Those are two big keys. It won’t be for everyone because it simply doesn’t fit their personality. And it has to be done responsibly. I sort of went overboard when I initially got back into collecting in my 30s because I was so excited about it again. I had to reel it back in and slow down because I was spending too much on it.

      Incidentally, what’s the coolest magnet on the fridge of a place you’ve visited?
      Brian recently posted…Is Investing in Collectibles Like Valuable Baseball Cards Worth It?My Profile

  10. I have a few friends that collect things and I just can’t get into it. First it seems you are spending money, but yet the money is just sitting on the shelf or on the wall until its worth more. I have a major problem with this for I need proof and not the ideal that an item is going to be worth something one day. Also some people go overboard and have to many of one item and it normally looks a little creepy and wasteful. So with that being said, I am not a collector of anything.
    Petrish recently posted…Women’s Bad Relationship with MoneyMy Profile

    • You bring up some very legitimate issuse Petrish. You are spending money and that item is just sitting there…most likely for years. So as a collector you have to be OK with that.

  11. I don’t think there is anything wrong with collecting valuables. I just wish people would be more realistic about the items they are collecting for “profit.” I remember when people bought Beanie Babies thinking they would be worth a ton of money one day.
    Holly recently posted…Yes, I’m Getting a Tax Refund (and 4 Reasons I Don’t Care)My Profile

    • “…be more realistic…” Agreed Holly. The lack of realism comes from the trend of the moment. If the item is hot right now (similarly like a stock investment) we think it will always be so. That is often not the case. I remember people being crazy about Beanie Babies. Only a very select few of those have appreciated in price.

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