2021 Exit Strategy

[notfast]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

I’m going to come off as a huge dick but that’s OK.

Seems like you have roughly $400,000ish in cards based on the $1500/month 5% sell rate math.

If this is the case and you do not have any other way to survive financially for 7 years, you are not good managing your finances. Like at all.

Sell everything. Find a professional and get your future set up properly.

This is almost hard to believe because you’re saying you heavily invested in stuff that is now worth 25% of what you paid.

Either way, reinvesting in cards should not be an option.

[rhettyeakley]

Originally Posted by notfast

If this is the case and you do not have any other way to survive financially for 7 years, you are not good managing your finances. Like at all.

Not sure this type of response is necessary.

Phil came here for advice and has gotten some solid advice up to this point, not sure why you feel the need to mean about it. You knew you going to come off as a dick but went there anyways!?! Weird.

[Kco]

I see a lot of people on here saying cards/memorabilia are not an asset class/good asset class to have a chunky amount of assets invested in. I'd agree and disagree. High quality, High desirability items will whether downturns FAR better than run of the mill low grade items.

I have a portion of my collection I'd classify as "purely enjoyment" (think 10-15%). Thats where i collect players or teams I love and don't care all that much about the value change.

The other 85-90% is in high grade premium Vintage autographs/Memorabilia. It so happens that I also enjoy collecting those items, but I make no mistake that those are also investment vehicles. The good news there is most of those items are at or above value wise what I paid over the years, some substantially so. Think High Grade autos on Ruth, Mantle, Jackie Robinson, Clemente etc etc.

There are certainly blue chip areas of collecting to hold investments in, looking back at the last few financial downturns (including 2022), those items have remained very resilient, where as things like stocks, index funds, bitcoin etc have actually gone down further percentage wise and are still lower value today than anything memorabilia I bought and held in the same window.

[the-illini]

Originally Posted by notfast

I’m going to come off as a huge dick but that’s OK.

No, it’s really not ok.

[Peter_Spaeth]

Phil's situation as he describes it is one in which he cannot take risks. That changes the analysis completely in my view. If you can afford the downside risk, sure there are collectibles that are potentially great investments. And they are fine to own in a diverse portfolio. I hope I own some myself. But someone with no reserves on which to live should not be in collectibles exclusively or even to any significant extent and maybe not at all. The name of the game for Phil should be safety.

[Yoda]

Phil, so sorry to hear about your situation. If I was you I would sell off all your 50's RC and amass some capital that would produce income in a safe investment, money market, CDs etc. Your other cards you could sell at your leisure when the opportunity strikes. Good luck.

[Mark17]

Originally Posted by Peter_Spaeth

Phil's situation as he describes it is one in which he cannot take risks. That changes the analysis completely in my view. If you can afford the downside risk, sure there are collectibles that are potentially great investments. And they are fine to own in a diverse portfolio. I hope I own some myself. But someone with no reserves on which to live should not be in collectibles exclusively or even to any significant extent and maybe not at all. The name of the game for Phil should be safety.

It seems one of the early sentences in the original post has been forgotten: "A little background, I sold off my Negro League baseball memorabilia collection along with a smaller comic book collection back in 2021 at the peak of the market, of course, realizing strong prices for most all of those items."

So, apparently the OP built a collection, sold it at or near the very top of the market, and now is looking at having to give back some of those profits. My point is, considering all, he's probably still in pretty decent shape overall. So that's a good thing.

If the OP did an analysis of how much money is needed over the next 7 or 10 year timeframe, factoring in some anticipated inflation, then looked at how much his current collection could realize if sold tomorrow (and put into T-bills or CDs,) it would seem that would be the sensible, and non-exciting, thing to do.

I've found building a 1962 Post Cereal baseball set has been a lot of fun, and it's very budget-friendly. Once in awhile I'll pick up a T-202 common. So the OP could still participate in the hobby as a collector, just not as a serious investor.

[Peter_Spaeth]

Mark, I think he spent what he took in on cards, because elsewhere he offers a computation on what percentage of his cards he will need to sell each year to generate the income he needs to live on. He doesn't mention having anything else put aside for that purpose, either cash or other investments.

[Mark17]

Originally Posted by Peter_Spaeth

Mark, I think he spent what he took in on cards, because elsewhere he offers a computation on what percentage of his cards he will need to sell each year to generate the income he needs to live on. He doesn't mention having anything else put aside for that purpose, either cash or other investments.

Right. So if he spent what he took in on cards (which he sold at the top of the market) and now sells them for maybe 50% what he paid, he's in decent shape. If your collection goes from $100 to $200 then you sell and re-buy stuff which you then have to sell at 50%, you end up with your $100 back. Roughly.

Then we are both suggesting he puts that dough into a conservative cash-based, interest bearing savings account.

[Peter_Spaeth]

Originally Posted by Mark17

Right. So if he spent what he took in on cards (which he sold at the top of the market) and now sells them for maybe 50% what he paid, he's in decent shape. If your collection goes from $100 to $200 then you sell and re-buy stuff which you then have to sell at 50%, you end up with your $100 back. Roughly.

Then we are both suggesting he puts that dough into a conservative cash-based, interest bearing savings account.

Agree, his best course is to get all the way or mostly out of cards and into a conservative vehicle. But I don't think he's listening, he's just fine tuning which cards to sell first. You can't make the horse drink, as they say. I hope he reconsiders.