Justifying a Big Purchase

[bnorth]

Originally Posted by Snapolit1

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

Pretty absurd statement me thinks. If I buy a quality vintage card at a nice AH like LOTG or Heritage for $30,000 and have to sell it, I will get back less than $15,000? No. That's a very unlikely outcome. Not impossible but pretty unlikely. I track a few hundred vintage cards, and very very few of them have dropped 50% in value. Actually probably zero of them.

And there wouldn't be any tax liability if you bought a card and sold it for a huge loss, so I'm not sure what that means.

I haven't sold one vintage card at a 50% loss and don't know anyone who has. Maybe I've lost 10-15% but that would be the most. And on 95% of my sales I have made a profit.

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

[G1911]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Another factor for many buyers is the sales tax. Every card I buy costs me more than 10% extra to pay off my county. To flip it, I need to make more than 10% of the previous sale just to cover my initial actual bill.

[bnorth]

Originally Posted by G1911

Another factor for many buyers is the sales tax. Every card I buy costs me more than 10% extra to pay off my county. To flip it, I need to make more than 10% of the previous sale just to cover my initial actual bill.

Great point on the extra sales tax. I found it strange but ebay even charged me tax on an item I recently purchased from the UK.

[ClementeFanOh]

Great, a compelling topic is once again off the rails. The poster is NOT
interested in 'flipping it" and said as much. Save that nonsense for another
thread or- here's a thought- start another thread. "Seek life elsewhere"!

Trent King

How often can you get on point commentary and a GI Jane reference in one
short message?

[G1911]

Originally Posted by ClementeFanOh

Great, a compelling topic is once again off the rails. The poster is NOT
interested in 'flipping it" and said as much. Save that nonsense for another
thread or- here's a thought- start another thread. "Seek life elsewhere"!

Trent King

How often can you get on point commentary and a GI Jane reference in one
short message?

If one is spending what constitutes a lot of money for them, the ability to turn back into cash if they need too should be considered. 0 of my cards were bought with the intent to sell, but if I really need to, it's good that I can flip them and keep a roof over my head. If you're putting a lot of money into an item, you could factor in what happens if your life regresses.

I guess you haven't had a meltdown for a couple months though, so go ahead. You're due for another tantrum.

[Mark17]

Originally Posted by G1911

If one is spending what constitutes a lot of money for them, the ability to turn back into cash if they need too should be considered.

One can never turn a vacation, attending sporting events, movies, going to restaurants, bars, the circus, and so on "back into cash" at all.

The point isn't to try to calculate the percentage profit (or investment retention) of a hypothetical card, in a possible future sale. The point is, of all the ways people can find enjoyment in life while laying out cash, buying cards is far more fiscally prudent than most. And therefore, I would suggest, something that should let the OP's mind rest easy in that decision.

[G1911]

Originally Posted by Mark17

One can never turn a vacation, attending sporting events, movies, going to restaurants, bars, the circus, and so on "back into cash" at all.

The point isn't to try to calculate the percentage profit (or investment retention) of a hypothetical card, in a possible future sale. The point is, of all the ways people can find enjoyment in life while laying out cash, buying cards is far more fiscally prudent than most. And therefore, I would suggest, something that should let the OP's mind rest easy in that decision.

I am not disagreeing with you whatsoever. Any card is a better return than going to a bar.

I think one should factor in, if they are spending more than say 5% of their cash on a cardboard picture of a dude, what they could turn that back into if they needed to, and the likelihood they will gain or lose. If you end up needing cash, how much you can get back is very relevant. That it is a better return on investment even if craters than wasting money on booze or food or circus trips isn't the only comparison.

[Mark17]

Originally Posted by G1911

I am not disagreeing with you whatsoever. Any card is a better return than going to a bar.

I think one should factor in, if they are spending more than say 5% of their cash on a cardboard picture of a dude, what they could turn that back into if they needed to, and the likelihood they will gain or lose. If you end up needing cash, how much you can get back is very relevant. That it is a better return on investment even if craters than wasting money on booze or food or circus trips isn't the only comparison.

You don't know what the card is, the OP says it won't be sold for a very long time, you and Ben are speculating about whether there's sales tax, you're assuming auction house fees, etc., etc. With so many unknown variables, including what the economy will look like down the road, why try to pretend you can make any reasonable guess at what the unspecified card might sell for after an unspecified interval? This is where I think you took this thread off topic.

[G1911]

Originally Posted by Mark17

You don't know what the card is, the OP says it won't be sold for a very long time, you and Ben are speculating about whether there's sales tax, you're assuming auction house fees, etc., etc. With so many unknown variables, including what the economy will look like down the road, why try to pretend you can make any reasonable guess at what the unspecified card might sell for after an unspecified interval? This is where I think you took this thread off topic.

I don't think you actually read my post. Nowhere did I say or imply that I know what this card is, what it mights ell for. I never said a word about auction houses (who I have never recommended using and spoken against) whatsoever. I said these are things the OP, who does know the card and I would hope the market, should consider. I think sales tax is part of the calculation that wasn't listed in the total expidenture previously.

A card that you think will grow, even if you don't plan to sell, is a better buy when we are talking a signifiant amount of your capital than a card that is rare but with few buyers and which it may be difficult to get a good return on if you need to get capital back in the future. I am surprised this is controversial and it is obviously not off topic to the question about the wisdom in spending large amounts on a card.

[JollyElm]

On your deathbed, you always regret the purchases you DID NOT make.

[ClementeFanOh]

1911- if by “meltdown” you mean the ability to follow a directly stated line of thought, then sure. You can call it a “melt down”, Socrates. It just strikes me as amusing that the self proclaimed Professor of Dialectics can’t stay ON POINT. Don’t worry, I know you’re never wrong and, if you are in danger of being called out for being a clown, will try to institute your own rules to rescue your failing point. Seen it before 1911- you do you!! Trent King Original point still stands- make the buy!!

[ClementeFanOh]

Mark17- thanks for your lucidity. Get ready for a furious tap dance by resident psycho 1911 though. He’s such a fun guy, not a colossal bore at all! Trent King

[G1911]

Originally Posted by ClementeFanOh

1911- if by “meltdown” you mean the ability to follow a directly stated line of thought, then sure. You can call it a “melt down”, Socrates. It just strikes me as amusing that the self proclaimed Professor of Dialectics can’t stay ON POINT. Don’t worry, I know you’re never wrong and, if you are in danger of being called out for being a clown, will try to institute your own rules to rescue your failing point. Seen it before 1911- you do you!! Trent King Original point still stands- make the buy!!

We have the question "What do you tell yourself in moments like this? How do you handle the mental gymnastics?" about putting a significant amount of capital into a card purchase. My post that one should consider their return if they need to convert it back into capital, as it is a significant amount of their capital, is directly on topic and answers the question.

Your post, #54, continuing your personal vendetta, which you hijack a thread every 2 or 3 months to do, last time bitching that I was not in support of lynching people, is not on topic to the question whatsoever and provides 0 answer.

Never change!

[JLange]

In situations like this I have come to rely on my own sense of rarity / scarcity. I have put my eyeballs on 100s of thousands if not millions of items at this point in my collecting life. I know if i’ve seen something once or twice or a thousand times. I scale it in terms of time - does this item come around once a week, month, year, or perhaps only once every decade. I buy everything I rarely see because I don’t know if I will get another bite at the apple or not. I have no regrets with these scarce purchase decisions so far. If someone knows better than you how scarce this item is, and how infrequently it is offered for sale, then maybe check in with that person, otherwise trust your own instincts here.

[ClementeFanOh]

1911- hilarious, you did exactly what I said you would. I’m stunned, truly. You can’t stay on point, but you are infallible so obviously someone else is at fault. Do you practice this outhouse-level fluffery on 8 year olds? Wait, on second thought don’t answer that- I just don’t care. Many commenters who manage to stay on point- despite being clearly inferior to your giant intellect- have espoused the opinion that the poster should buy. THAT was the point. Fini… Trent King

[Rhotchkiss]

The card has “blown you away”. You can “pay for it in cash” and it “doesn’t impact your ability to pay any current or future bills”. Honestly, I don’t get the hesitation. Sounds like you can afford it and it’s something you really want. Buy it

Personally, I have many more regrets about things I did not buy than things I bought. Good luck. Please let us know how it shakes out

Sincerely,

A Junkie and an Investor (and a collector)

[Rhotchkiss]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Ben, for a $30k(ish), you are not paying a seller’s premium. In fact, you should get a portion of the buyer’s premium. And you have no tax liability if you sell a card at a loss- you have no income, only partial recovery of basis which was after tax dollars and which is not taxable. So, your loss is likely your cost (including taxes and shipping), minus the hammer + whatever portion of the BP you may be able to negotiate.

[gonefishin]

I have had a "Sportscard Fund" separate from all my other income. It consists of money that is set aside to purchase items for my collection, items to resale, etc. It funds itself. At times the fund is full - other times not so much.

As long as you can afford it without adversely affecting monies you live on, and it's something you desire and covet, purchase the card. If you have doubts or concerns, my advice is not to.

NEVER, NEVER purchase cards that you can't afford to buy with cash! That's just me.

Good Luck with whatever you decide.

[Snapolit1]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

1. No one in their right mind pays a seller's commission consigning a $25,000 card. If they do, frankly, they are uninformed.

2. There is no tax ramification of me buying a card for $30,000. Or a million dollars.

3. If I sell something for more than I bought it for, only then do I owe taxes. And then, by definition, I haven't lost money on the sale.

4. If I bought a nice vintage card for $30,000 and had to sell literally tomorrow, ok, maybe I sell it for $28,000 or $27,000 in the next auction, WORST case scenario.
That's no doubt where the runners up landed. And I've lost maybe 10%. Nowhere near 50%.

5. If you paid 7% sales tax, tell the AH you want 107% of the hammer. Exactly what I've gotten from one of the major AH's many times.

[bbcard1]

I can live fine without. 1952 Topps Mantle, but I have a friend who is a huge fan and is working on a set. I started finding him nice ones when they were about $14k an he couldn't bring himself to pull the trigger. The man is a successful attorney and won not have really noticed it. He regrets it now.

[bnorth]

Originally Posted by Rhotchkiss

Ben, for a $30k(ish), you are not paying a seller’s premium. In fact, you should get a portion of the buyer’s premium. And you have no tax liability if you sell a card at a loss- you have no income, only partial recovery of basis which was after tax dollars and which is not taxable. So, your loss is likely your cost (including taxes and shipping), minus the hammer + whatever portion of the BP you may be able to negotiate.

Originally Posted by Snapolit1

1. No one in their right mind pays a seller's commission consigning a $25,000 card. If they do, frankly, they are uninformed.

2. There is no tax ramification of me buying a card for $30,000. Or a million dollars.

3. If I sell something for more than I bought it for, only then do I owe taxes. And then, by definition, I haven't lost money on the sale.

4. If I bought a nice vintage card for $30,000 and had to sell literally tomorrow, ok, maybe I sell it for $28,000 or $27,000 in the next auction, WORST case scenario.
That's no doubt where the runners up landed. And I've lost maybe 10%. Nowhere near 50%.

5. If you paid 7% sales tax, tell the AH you want 107% of the hammer. Exactly what I've gotten from one of the major AH's many times.

Thanks guys. I don't swim in the deep end of the pool so I didn't know. Maybe i should have read one of Bob's epic posts on taxes.

I do feel it is important to know about selling a card that is expensive to the buyer even if they don't plan on selling.

[rjackson44]

Never buy anything you can’t afford ,never ..you will regret it sooner then later ,,

[Rhotchkiss]

Originally Posted by bnorth

Thanks guys. I don't swim in the deep end of the pool so I didn't know. Maybe i should have read one of Bob's epic posts on taxes.

I do feel it is important to know about selling a card that is expensive to the buyer even if they don't plan on selling.

Ben, just to be clear, the other post you quote is not entirely accurate. While there is no state or federal income tax consequence on a purchase, Most people must pay state sales tax when they buy a card, which should be added to cost/basis for determining gain or loss.

I live in Maryland and the sales tax is 6%. I factor this into every bid I place. On a $30k card, the sales tax is $1800!! Ouch

Steve is 100% correct that Federal tax liability may accrue when you sell a card, but only if you sell for a gain.

[Mike Eisenbath]

I'm in a similar spot as the OP. Though possibly for much less money, it would be my largest single-card purchase, a significant HOFer that I want to get eventually and will keep for life. The quandary (maybe sgared by the OP) is that pulling the trigger will limit my ability to buy some other cards on my want list for a while. I'd love owning and looking at the big-ticket item, but it would be tough sitting on the sidelines for a while.

I love birthdays because I can have my cake and eat it, too. Doesn't always work easily in the hobby.

Eise


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[nineunder71]

I guess I go against the grain here, but since you started with....give me some encouragement?

I would say that you are not ready to purchase this card. You need to wait until you can pull the trigger without having to ask for a boost


Just my thoughts, good luck

[Peter_Spaeth]

If you had to have it, you would have just bought it, not asked the Board I think?

That should tell you something.

[nineunder71]

Agreed!

Originally Posted by Peter_Spaeth

If you had to have it, you would have just bought it, not asked the Board I think?

That should tell you something.

[nineunder71]

The hesitation is the issue, the OP should not buy, imo

Originally Posted by Rhotchkiss

The card has “blown you away”. You can “pay for it in cash” and it “doesn’t impact your ability to pay any current or future bills”. Honestly, I don’t get the hesitation. Sounds like you can afford it and it’s something you really want. Buy it

Personally, I have many more regrets about things I did not buy than things I bought. Good luck. Please let us know how it shakes out

Sincerely,

A Junkie and an Investor (and a collector)

[BobC]

Originally Posted by bnorth

Great point on the extra sales tax. I found it strange but ebay even charged me tax on an item I recently purchased from the UK.

Sales/use tax doesn't matter on where an item comes from, it is all based on where it is going to.

[Kidnapped18]

As long as you are comfortable with the purchase price I say go for it!
Card is scarce and pre-war --- check
Card has blown you away --- check
You can afford the card --- check
You plan on keeping the card for awhile --- check

We all work and have an income to enjoy things in life
Go get your card and enjoy it

[bnorth]

Originally Posted by BobC

Sales/use tax doesn't matter on where an item comes from, it is all based on where it is going to.

Thanks, Bob, Now I feel stupid because as someone who had to pay different tax rates depending on the city I was selling in I should have known that.

[theshowandme]

I appreciate all the feedback

Card has been purchased

I’ll share when it comes in


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[SyrNy1960]

Originally Posted by theshowandme

I appreciate all the feedback

Card has been purchased

I’ll share when it comes in


Sent from my iPhone using Tapatalk

You won't regret it! Congrats!

[Rhotchkiss]

Originally Posted by theshowandme

I appreciate all the feedback

Card has been purchased

I’ll share when it comes in


Sent from my iPhone using Tapatalk

Awesome, congrats! Enjoy. Can’t wait to see what you got (the card that launched a thread with over 80 replies)

[theshowandme]

Screw it, here it is.




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[theshowandme]

Originally Posted by Rhotchkiss

Awesome, congrats! Enjoy. Can’t wait to see what you got (the card that launched a thread with over 80 replies)

Appreciate you very much sir! Seeing your showcase as well as Andrew's, Howard's, and many others at the meetup last month has inspired me to level up my game!

[Rhotchkiss]

Nice card, and you know I fully back the subject/player! Great pick up. And thanks for the kind words

[mrreality68]

Originally Posted by theshowandme

Screw it, here it is.




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Fantastic and Congrats

[ClementeFanOh]

Well done! Great card. Trent King

[nineunder71]

Awesome Card, Congrats!!

[ValKehl]

Originally Posted by theshowandme

Appreciate you very much sir! Seeing your showcase as well as Andrew's, Howard's, and many others at the meetup last month has inspired me to level up my game!

Don, congrats on taking your game up to a new level. I doubt you'll ever regret this acquisition of The Flying Dutchman.

[Andrew1975]

Great card, congrats! You will not regret that purchase.

[theshowandme]

This thread has been fantastic. I posed the same prompt across Blowout, Twitter, and Reddit to see how each community would react. All had positive reactions with some bad apples, but what do you expect...

I'd say that the Net54 community has blown me away the most with the feedback and encouragement.

Appreciate all of you

[BobC]

Originally Posted by bnorth

Thanks, Bob, Now I feel stupid because as someone who had to pay different tax rates depending on the city I was selling in I should have known that.

Yeah Ben, and great point about even different cities. The sales/use tax laws vary by state. Five have none, the remaining 45 do, and then among the 45 that do some also have additional county/local sales taxes that get added on top. In Ohio where I'm at the sales tax rates vary by county. The state itself has a flat 5.75% sales tax rate across the entire state, and then the local/county authorities tack on what they can. Cuyahoga County, which encompasses Cleveland, has the highest combined rate in the state at 8.0%. If you live in a state like that, if possible, you could try to set up a P.O. Box or other address you get you mail delivered to in say the next county over that has a lower sales tax rate. Would definitely work if buying off Ebay as they charge sales tax based on the mailing address. But doing so would technically not be legit, and also the amount of savings would be nominal, at best, and likely eaten up by the cost of renting the P.O. or other mailbox, along with the gas and other related costs and additional time spent from having to drive a ways to pick up your mail. Probably more trouble than it is worth doing. Now if you have a close relative or really good friend that lived in that next county over....................

[theshowandme]

It’s here




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[ksfarmboy]

Great card, congrats!

[Jewish-collector]

Like I said to someone last month at the Net54 meetup in Dulles, "Sometimes you just gotta say WTF" and do it.

beer chug.gifbeer chug.gifbeer chug.gifbeer chug.gifbeer chug.gif

[Bicem]

That's a no brainer, will just keep appreciating. Nice grab.

[MantleMarisFordBerra]

Wow, very impressive! Congrats!

[Yoda]

Be bold on your purchase but make sure it is a mainstream card. Rarities often prove to be illiquid when selling.