Author Topic: Buying extremely high end things which should hold value?  (Read 6481 times)

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Buying extremely high end things which should hold value?
« on: February 24, 2019, 07:48:46 AM »
I find optics fascinating, particularly binoculars and telescopes, and am somewhat involved in the local astronomy scene.

I think optics are a unique asset, (and curious if others can think of comparables?) in the sense that they span the gap between art and engineering, don't deteriorate like a car through normal use, their quality is wholly qualitative with a tail that can extend forever.

To that end, what are people's thoughts on paying face-punch worthy sums for optics which are the best in their class, of limited production, always in demand on the secondary market, and of certain brands which although decades old have not only held, but increased in value?

I feel their is a world of difference between paying $30k for an amateur telescope, and $30k for a car. As the telescope is largely passive and will retain value/usefulness forever, and a car just sucks money via gas, insurance, and most massively depreciation - since next years model being shinier and newer is automatically lusted after. Not because it's particularly more useful, but because people want the ego points or whatever.

As I said, not sure if there is a comparable that ticks all the boxes. Art maybe, but in and of its self art isn't useful. Sports cards? Same thing. Any typical best in class consumer good today depreciates obscenely and is valued as scrap in 10 years. Old cars like a 97 Toyota are useful, will probably hold their value paid today forever (provided you look after it), but are hardly best in class. Prime real estate maybe? Holds value, best in class, but once gov'ts and cities see what it's worth, hands gets held out and the carrying costs via taxes (and transaction costs) make it increasingly less so. Rare books? Again, thanks to ebooks their functionality has been greatly diminished. I read one of the biggest haters of Napster wasn't the record companies, rather it was the people who invested thousands of dollars into rare recordings. Wanting to hear an obscure recording from a limited run release with a dozen copies in the country became as easy as copy and paste vs calling up a hundred record shops to track it down. Jewelry? Another form of art but with rare materials.

These sorts of purchases would naturally put a dent in the 'stache, but to that end I almost wouldn't see it as spending $30k, as *exchanging* 30k, which could be exchanged back at any time and the true real cost would be 4% of $30k/yr ($1200?! yikes!), I guess that's way less worse than a 30k car which has the same $1200 opportunity cost, plus the $30k principle that gets pissed away.

Anyways, thoughts? Or am I just trying to justify being a spendypants.





« Last Edit: February 24, 2019, 07:55:37 AM by Seadog »

blinx7

  • Bristles
  • ***
  • Posts: 254
Re: Buying extremely high end things which should hold value?
« Reply #1 on: February 24, 2019, 07:57:49 AM »
If you buy used and know the item won't depreciate, there is logic to your position.  Think about it this way:

Buy new product - $10,000
Sell product used - $2,000

Cost to you = 8k

Buy high quality used product - $5,000
Sell high quality used product - $5,000

Cost to you = zero.

I'm massively oversimplifying (the $5k could have been in the market, generating returns, so you lose that, and also the time costs of buying and selling) but you get the drift.  This is covered in more detail in the Early Retirement Extreme book by Jacob Fisker

But you need to be confident in pricing and in your assumption that the item won't depreciate (i.e., what if a new telescope comes out and the one you bought is now junk). 

And $30k seems like a lot for a hobby for me.  But all depends on your financial situation, goals, etc. -- I'm not as rulsey as some.
« Last Edit: February 24, 2019, 08:11:47 AM by blinx7 »

ender

  • Magnum Stache
  • ******
  • Posts: 4691
Re: Buying extremely high end things which should hold value?
« Reply #2 on: February 24, 2019, 08:07:26 AM »
Everyone feels like there is a world of difference between their expensive hobby and someone else's expensive hobby.


FINate

  • Handlebar Stache
  • *****
  • Posts: 1319
Re: Buying extremely high end things which should hold value?
« Reply #3 on: February 24, 2019, 08:18:14 AM »
Regarding decades-old optics that have held or increased in value: Have all high-end optics increased in value, or only specific makes? How confident are you about picking optics today that will be tomorrow's winner?

Also, this seems like a very niche market susceptible to fads and market whims. Are these worth more now because the economy is awash in big piles of cash and this is a way for rich people to brag in a way that's viewed as less boorish than a sports car or a super high end wine collection?

Finally, yes, $30k is a lot to spend on a hobby. Consider $30k invested in the total stock market for 20 years with 8% compounding return and this investment will grow to about $140k. If you have money to burn then fine, just know what the true cost is.

sol

  • Walrus Stache
  • *******
  • Posts: 8480
  • Age: 42
  • Location: Pacific Northwest
Re: Buying extremely high end things which should hold value?
« Reply #4 on: February 24, 2019, 08:30:26 AM »
About four years ago, I invested roughly $30k in a new hobby item:  solar panels for my house.  They were a fun technology toy, they added value to my house, and they have already repaid me their full purchase price in tax incentives and free power.  As hobbies go, they were financially less painful than most.

And they were STILL a terrible investment, compared to leaving that money in the stock market for the past four years.   If I had let it ride instead of pulling it out, it would be worth more like $50k today and I could still have bought solar panels this year at an even lower cost.  Instead, I went $30k in the hole with that purchase and then slowly worked my way back up to zero as I recouped my costs.  There's a big difference between getting back to zero, and having $50k worth of VTSAX at my disposal.

blinx7

  • Bristles
  • ***
  • Posts: 254
Re: Buying extremely high end things which should hold value?
« Reply #5 on: February 24, 2019, 08:38:20 AM »
About four years ago, I invested roughly $30k in a new hobby item:  solar panels for my house.  They were a fun technology toy, they added value to my house, and they have already repaid me their full purchase price in tax incentives and free power.  As hobbies go, they were financially less painful than most.

And they were STILL a terrible investment, compared to leaving that money in the stock market for the past four years.   If I had let it ride instead of pulling it out, it would be worth more like $50k today and I could still have bought solar panels this year at an even lower cost.  Instead, I went $30k in the hole with that purchase and then slowly worked my way back up to zero as I recouped my costs.  There's a big difference between getting back to zero, and having $50k worth of VTSAX at my disposal.

Yeah, but presumably you will continue to benefit no electricity costs even a recession.  So you are getting a lower guaranteed return rather than a higher more uncertain return.  I like to have a mix of both, reduces risk. 

I think you are selling yourself short on the benefit of your investment. 

blinx7

  • Bristles
  • ***
  • Posts: 254
Re: Buying extremely high end things which should hold value?
« Reply #6 on: February 24, 2019, 08:40:07 AM »
Seadog:

Could you finance your hobby by trying to find market anomalies?  Buying the telescopes low in one market, selling them higher in another? 

Or providing liquidity -- you buy the telescope from a motivated seller.  Then you list it for a higher price and wait, and use it as you see fit, until a motivated buyer comes along and buys it. 

Fishindude

  • Handlebar Stache
  • *****
  • Posts: 2040
Re: Buying extremely high end things which should hold value?
« Reply #7 on: February 24, 2019, 10:14:29 AM »
I am a big fan of Leupold and Swarovski binoculars, spotting scopes and rifle scopes.
You can generally sell them for pretty close to what you paid for them new and they have lifetime warranties.

Not to mention the quality is so far superior to the cheap Tasco, Bushnell, Simmons, etc. stuff on the market that there is no comparison.


reeshau

  • Bristles
  • ***
  • Posts: 491
  • Location: Dublin, Ireland
Re: Buying extremely high end things which should hold value?
« Reply #8 on: February 24, 2019, 11:05:36 AM »
If you buy used and know the item won't depreciate, there is logic to your position.  Think about it this way:

Buy new product - $10,000
Sell product used - $2,000

Cost to you = 8k

Buy high quality used product - $5,000
Sell high quality used product - $5,000

Cost to you = zero.

I'm massively oversimplifying (the $5k could have been in the market, generating returns, so you lose that, and also the time costs of buying and selling) but you get the drift.  This is covered in more detail in the Early Retirement Extreme book by Jacob Fisker

But you need to be confident in pricing and in your assumption that the item won't depreciate (i.e., what if a new telescope comes out and the one you bought is now junk). 

And $30k seems like a lot for a hobby for me.  But all depends on your financial situation, goals, etc. -- I'm not as rulsey as some.

The other aspect in terms of your theoretical transaction is the liquidity of the asset.  Look at a house: if it takes 3 months to sell, and you have to pay 6%, then breaking even is a bad thing.

OP, you seem to want to justify this as an investment, but talk about "holding value," rather than "appreciating."  Even in the latter case, without some kind of tangible output (like Sol's electricity from solar panels) the value is entirely subjective: there is a greater (or lesser) fool out there somewhere.

Don't be ashamed by your hobby, if that's what floats your boat.  But don't fool yourself into believing you have some kind of stored value in it, as some kind of backup emergency fund.  Anything discretionary will be cyclical as hell.

HenryDavid

  • Bristles
  • ***
  • Posts: 425
Re: Buying extremely high end things which should hold value?
« Reply #9 on: February 24, 2019, 11:21:23 AM »
All of these points about buying used, high quality stuff can be applied to every purchase, not just hobbies. Naturally.
You can often get last year’s state of the art thing,  now displaced by some new state of the art thing, for much less.
If you plan to keep it, why not?
And if you ever do stop using it, there’s a decent chance you can recover much of the cost.
It’s been years since we bought much of anything new. And our hiking, biking, c ooking, music, gardening etc. gear is high end. Sparks joy!

FIRE 20/20

  • Bristles
  • ***
  • Posts: 268
Re: Buying extremely high end things which should hold value?
« Reply #10 on: February 24, 2019, 11:44:30 AM »
If there are no ongoing expenses (do you buy additional insurance for this high-value thing that could be stolen?  Ongoing professional maintenance and cleaning?  Heating/cooling a room that might otherwise be closed off?), then I would just add it to my number.  I would completely ignore the sales value, because are you really going to sell the thing that allows you to pursue a hobby?  In other words, if my number was 40k for retirement living expenses and I was going to follow the 4% rule, my target 'stache would be $1M.  If I wanted to have $30k of optical equipment, then I'd up my 'stache target to $1,030,000.


I think optics are a unique asset, (and curious if others can think of comparables?) in the sense that they span the gap between art and engineering, don't deteriorate like a car through normal use, their quality is wholly qualitative with a tail that can extend forever.

What does this mean?  I would think that the quality for optics would be wholly quantitative - better optics should measure better, right?  And what does, "a tail that can extend forever" mean? 

blinx7

  • Bristles
  • ***
  • Posts: 254
Re: Buying extremely high end things which should hold value?
« Reply #11 on: February 24, 2019, 11:53:00 AM »
If you buy used and know the item won't depreciate, there is logic to your position.  Think about it this way:

Buy new product - $10,000
Sell product used - $2,000

Cost to you = 8k

Buy high quality used product - $5,000
Sell high quality used product - $5,000

Cost to you = zero.

I'm massively oversimplifying (the $5k could have been in the market, generating returns, so you lose that, and also the time costs of buying and selling) but you get the drift.  This is covered in more detail in the Early Retirement Extreme book by Jacob Fisker

But you need to be confident in pricing and in your assumption that the item won't depreciate (i.e., what if a new telescope comes out and the one you bought is now junk). 

And $30k seems like a lot for a hobby for me.  But all depends on your financial situation, goals, etc. -- I'm not as rulsey as some.

The other aspect in terms of your theoretical transaction is the liquidity of the asset.  Look at a house: if it takes 3 months to sell, and you have to pay 6%, then breaking even is a bad thing.

OP, you seem to want to justify this as an investment, but talk about "holding value," rather than "appreciating."  Even in the latter case, without some kind of tangible output (like Sol's electricity from solar panels) the value is entirely subjective: there is a greater (or lesser) fool out there somewhere.

Don't be ashamed by your hobby, if that's what floats your boat.  But don't fool yourself into believing you have some kind of stored value in it, as some kind of backup emergency fund.  Anything discretionary will be cyclical as hell.

I don't disagree.  I would note that, as hobbies go, there are more expensive and less expensive hobbies and all things being equal, less expensive is better.  Even better is a hobby that improves your life -- that's why I always like to try to cook new things as one of my "hobbies."  Sure is a lot cheaper than fancy binoculars.

But, if you want fancy binoculars, there are smarter and less smart ways to do it.  I've read ingenious threads where people have managed to self-finance their hobbies (e.g., car guys that instead of blowing $50k on a fancy car spend $15k on a strategic purchase and then fix it up in their spare time, drive it around, and then flip it for a small profit -- still probably not a whole lot of profit if you value the labor at market rates, but if you have fun doing it AND make money, then win-win).

palerider1858

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Buying extremely high end things which should hold value?
« Reply #12 on: February 24, 2019, 12:54:27 PM »
The saying "buy once, cry once" really is applicable to this discussion and holding value in general. I wasted so much time and money on substandard products as a consumer. I've learned now learned to either do without or pony up for the best. Resale value is a great incentive.

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 1425
Re: Buying extremely high end things which should hold value?
« Reply #13 on: February 24, 2019, 01:36:26 PM »
If you spent $30k on a telescope would you actually use it or be scared to? Would you insure it? What will you do to make sure that no one can damage it? Will you ever actually sell it or will this be something you pass down? If the plan is to pass down, how will you ensure that someone else will care for it, love it or even sell it for the value that you paid for it?

Or maybe you just say, screw mustachianism, I’ve got $30k to burn and life is short, I want this sucker and I’ll be buried with it!  Then go post in the thread on crazy things people want to buy now and enjoy your optics.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #14 on: February 24, 2019, 02:24:38 PM »
Regarding decades-old optics that have held or increased in value: Have all high-end optics increased in value, or only specific makes? How confident are you about picking optics today that will be tomorrow's winner?

Also, this seems like a very niche market susceptible to fads and market whims. Are these worth more now because the economy is awash in big piles of cash and this is a way for rich people to brag in a way that's viewed as less boorish than a sports car or a super high end wine collection?

Finally, yes, $30k is a lot to spend on a hobby. Consider $30k invested in the total stock market for 20 years with 8% compounding return and this investment will grow to about $140k. If you have money to burn then fine, just know what the true cost is.

This first came to light when looking for used high end camera lenses. I noticed that one i bought 8 years ago was literally on the second hand market for more than what I paid, and the new price hasn't changed in USD. Rather, because of the depreciation in the CAD vs US, in CAD mine is worth more than I paid!

I'm talking more about buying used, and holding to enjoy, safe with the knowledge that if needed, you can recoup at least your original investment. I think the difference between cars and wine is that if used as intended (driven, drank) then the value 8 years down the road will be maybe 40% of the car, and 0 for the wine bottle.

I brought this up because the vast, vast majority of things you buy, when used as intended, become worthless in a matter of years because of wear and the fact that so much of the value is derived from position (ie it's the newest model, ie new iPhone vs last years android which is functionally identical).

One more example I thought of was high end musical instruments. You buy a 30 yo Fender guitar or Stradivarius violin, not only do you get to enjoy the spectacular function of it which eclipses most things made today, just like you would a brand new Porsche, but most likely the value will at least hold, compared to what you paid.

In the broad sense, I guess I'm thinking of 'tools'. Tools where entire value comes from function, and where function does not depreciate with use. 

And for the record, I'm not actually in the market for a $30k telescope, it's just that's about the limit of what I've seen advertised on the used market, generally it's what they bought it for new, and generally it gets snapped up quick.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #15 on: February 24, 2019, 02:30:21 PM »
About four years ago, I invested roughly $30k in a new hobby item:  solar panels for my house.  They were a fun technology toy, they added value to my house, and they have already repaid me their full purchase price in tax incentives and free power.  As hobbies go, they were financially less painful than most.

And they were STILL a terrible investment, compared to leaving that money in the stock market for the past four years.   If I had let it ride instead of pulling it out, it would be worth more like $50k today and I could still have bought solar panels this year at an even lower cost.  Instead, I went $30k in the hole with that purchase and then slowly worked my way back up to zero as I recouped my costs.  There's a big difference between getting back to zero, and having $50k worth of VTSAX at my disposal.

This basically goes against the whole premise. Are they just as functional as when you bought them, and will last forever if looked after? Are the physics of solar panels already to the point where only marginal improvements can be made, highly subject to the skills of artisan craftsmen and the top of the line ones you bought years ago still in the top 1% on the market? If so, why wouldn't you be able to sell them for at least what you paid?

I guess my point and question is that so many people buy things with the assumption the residual value is going to be zero (cars, pants, food), and the only consideration is the price they bought it for. When that residual value is not zero, it significantly changes the equation.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #16 on: February 24, 2019, 02:38:06 PM »
I am a big fan of Leupold and Swarovski binoculars, spotting scopes and rifle scopes.
You can generally sell them for pretty close to what you paid for them new and they have lifetime warranties.

Not to mention the quality is so far superior to the cheap Tasco, Bushnell, Simmons, etc. stuff on the market that there is no comparison.

This is my whole point. You buy $100 binos, you use them, horrible aberration and colours, and after a decade they're worth precisely zero. You've had shitty seeing, lost $100, + $4/yr forever. Conversely, buy $1000 binos, amazing seeing, and you can likely sell them for at least $900 at any point. There the cost was essentially the same $100, + $40/year of ownership lost opportunity, *minus* $36 forever.

In this case although the sticker price of the good ones were higher upfront, the long term cost, even ignoring the superior function they provided you along the way, might work out similar.

I've never had the fortune to look through Leupold or Swarovskis but I do like Zeiss, and found some 30+ yo microscope eyepieces at a thrift store that could be adapted to telescopes, are as good or better than 98% of the market today, and still sell for hundreds of dollars each. 

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #17 on: February 24, 2019, 03:09:03 PM »
All of these points about buying used, high quality stuff can be applied to every purchase, not just hobbies. Naturally.
You can often get last year’s state of the art thing,  now displaced by some new state of the art thing, for much less.
If you plan to keep it, why not?
And if you ever do stop using it, there’s a decent chance you can recover much of the cost.
It’s been years since we bought much of anything new. And our hiking, biking, c ooking, music, gardening etc. gear is high end. Sparks joy!

Absolutely. I never specified hobbies, it was just a hobby item that I used as an example. The maximum price I will pay for anything, is the price I can expect to sell it for tomorrow. This means probably 95% of new consumer goods are off the table, because they lose like half their value as soon as they leave the shop. I buy fancy hiking boots to protect my feet when in the woods. If I can get that function from barely used $5 thrift store Merrells 1 year old, then their value new is $5, + whatever value you assign to the perk of getting to use them for the first 20 km.  I certainly do not assign the value of those first 20 km at $195, and the last 980 km at $5, but some people do. I'm fine with that.

Blinkx, absolutely I agree! but any hobby needs tools, and my point is that you may actually be better off buying used high end chef's knifes and cook ware, enjoying it for all it's worth, and be better off than buying typical department store crap that will be worth zero in a few years. Decades old knives and skillets are already as depreciated as they'll get. All value is from pure function. That function will endure.
« Last Edit: February 24, 2019, 06:07:01 PM by Seadog »

LoanShark

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Buying extremely high end things which should hold value?
« Reply #18 on: February 28, 2019, 02:56:22 PM »
I get that rationale...I'm the same way with watches. I've been collecting for 15-years and have bought/sold dozens. If you buy "right" (i.e. in good condition and used) they tend to not depreciate and even may appreciate in some instances. Yes, there's opportunity cost of allocating that capital elsewhere, but it's a fun hobby that is liquid and doesn't "lose" money, generally.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #19 on: March 02, 2019, 06:09:40 PM »
I get that rationale...I'm the same way with watches. I've been collecting for 15-years and have bought/sold dozens. If you buy "right" (i.e. in good condition and used) they tend to not depreciate and even may appreciate in some instances. Yes, there's opportunity cost of allocating that capital elsewhere, but it's a fun hobby that is liquid and doesn't "lose" money, generally.

Exactly!

My big concern with that is that old mechanical watches are no longer the best in their field. A $3 quartz beats the time keeping ability of a $5000 Rolex any day of the week. No different than a $20 camera phone in 1 second beats Michelangelo over a day in terms or speed and accuracy of image reproduction. That isn't to say those things have no value, but the value seems more subjective as pieces of art, vs function.

A $5000 guitar - best of the game in 1960, is still probably pretty close to the best of the game in 2019. Optics too. Time keeping certainly if cesium or quartz never came about. Within the scope of "mechanical timekeeping", absolutely, but what's to ensure that and 'timekeeping' as a whole don't get intertwined?   

Malkynn

  • Pencil Stache
  • ****
  • Posts: 885
Re: Buying extremely high end things which should hold value?
« Reply #20 on: March 03, 2019, 05:07:38 AM »
About four years ago, I invested roughly $30k in a new hobby item:  solar panels for my house.  They were a fun technology toy, they added value to my house, and they have already repaid me their full purchase price in tax incentives and free power.  As hobbies go, they were financially less painful than most.

And they were STILL a terrible investment, compared to leaving that money in the stock market for the past four years.   If I had let it ride instead of pulling it out, it would be worth more like $50k today and I could still have bought solar panels this year at an even lower cost.  Instead, I went $30k in the hole with that purchase and then slowly worked my way back up to zero as I recouped my costs.  There's a big difference between getting back to zero, and having $50k worth of VTSAX at my disposal.

This basically goes against the whole premise. Are they just as functional as when you bought them, and will last forever if looked after? Are the physics of solar panels already to the point where only marginal improvements can be made, highly subject to the skills of artisan craftsmen and the top of the line ones you bought years ago still in the top 1% on the market? If so, why wouldn't you be able to sell them for at least what you paid?

I guess my point and question is that so many people buy things with the assumption the residual value is going to be zero
(cars, pants, food), and the only consideration is the price they bought it for. When that residual value is not zero, it significantly changes the equation.

I highly doubt that assumption. In fact, I think a lot of people over estimate the resale value of high end goods: art, jewelry, designer clothes and shoes, etc.

Just ask me how much I could get for my used engagement ring and a $5000 original painting above my bed...maybe 15% of purchase price if I was lucky...

I think most Mustachians carefully contemplate the lifespan and ability to resell most things we buy. This definitely isn't a new concept.

Sure, most crap will degrade and be worth nothing, but I doubt anyone in this community would look at major purchases without first researching how much value they hold.

Many discussions about luxury cars have talked about this. Almost every hobbyist I've ever spoken to has had a keen awareness of the resale value of their hobby-related purchases. Every watch collector I've ever known can tell you down to the cent what each watch could resale for.

Evaluating lifespan and how well something holds value is kind of a key concept when buying things...I don't think it's uncommon at all.

bwall

  • Pencil Stache
  • ****
  • Posts: 523
Re: Buying extremely high end things which should hold value?
« Reply #21 on: March 07, 2019, 05:05:27 PM »
Classic cars are a hobby with the potential for appreciation. But, like all hobbies you have to know what you're doing.

If you had lots of money in the early 2000's, you could have purchased a used McLaren F1 for around $1m and change. Now the fair market value is north of $13m and trending upwards.

There are plenty of cars today where you can park $1m and expect to see appreciation over the years. But, you gotta enjoy looking at bent metal, otherwise why bother?

the barefoot badger

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Buying extremely high end things which should hold value?
« Reply #22 on: March 11, 2019, 09:56:07 AM »
I've noticed that my husband's hobby purchases, while expensive, seem to hold their value or at least be extremely saleable when he is done with them.  He's very involved in several large forums and a club or two, and it's a common hobby.  I would ask myself if there is a market at all for my high end purchases before 'investing' in something I could never actually sell again.  Is a telescope like a diamond, which also doesn't degrade but will probably "lose" 50% or more of its value if you try to sell it?  Or more like a classic car, which is expensive to begin with but if kept in perfect condition will probably rise in value or at least hold.  Do you know enough to know?  I inherited about five boxes of camera related items from my Dad.  five boxes worth perhaps $100, and one lens worth over $1300.  He had fun but I'm betting this came out even or worse.
« Last Edit: March 11, 2019, 09:58:37 AM by the barefoot badger »

Versatile

  • Stubble
  • **
  • Posts: 118
Re: Buying extremely high end things which should hold value?
« Reply #23 on: March 12, 2019, 06:39:49 PM »
I know guys with $3000 optics on their guns but they shoot at ranges of 1,000 yards plus in various competitions. I'm sure these scopes hold their value just fine.

I think it comes down to holding value whether anything is worth buying at those price ranges. I personally own thousands of dollars worth of tools that not only work very well, look good, but they also make me money when I want to do a job. Many of them I bought second-hand at steep discounts (thank you Craigslist).

And its o.k. to own ridiculously nice (expensive)things as long as it isn't excessive.

Daisy

  • Handlebar Stache
  • *****
  • Posts: 2026
Re: Buying extremely high end things which should hold value?
« Reply #24 on: March 12, 2019, 11:36:20 PM »
I bought a $3000 mattress just about 10 years ago. It had a great built-in warranty. Well this year I found the mattress had a sag and the company fully honored their warranty and just sent me a new one with a new 10 year warranty. I feel now that the original purchase was worth it. This mattress should last a lifetime.

BTW, 10 years ago I wasn't as "frugal" as I am now. I would probably think twice before spending so much on a mattress these days. But I have to admit it was worth it!

sol

  • Walrus Stache
  • *******
  • Posts: 8480
  • Age: 42
  • Location: Pacific Northwest
Re: Buying extremely high end things which should hold value?
« Reply #25 on: March 12, 2019, 11:44:35 PM »
I bought a $3000 mattress just about 10 years ago. It had a great built-in warranty. Well this year I found the mattress had a sag and the company fully honored their warranty and just sent me a new one with a new 10 year warranty. I feel now that the original purchase was worth it. This mattress should last a lifetime.

BTW, 10 years ago I wasn't as "frugal" as I am now. I would probably think twice before spending so much on a mattress these days. But I have to admit it was worth it!

Ummmm, really?  I'm pretty sure they would have to send you at least six or seven new mattresses before they started losing money on that sale.  Mattresses aren't exactly complicated pieces of machinery.  They contain no expensive materials, and are easy to manufacture.  There is no reason they should ever cost $3,000.

But if you really like lifetime guarantees, I'll sell you a brand new Honda Civic for a million dollars.  It comes with a lifetime warranty, too.  Whenever it wears out, for the rest of your life, I'll replace it free of charge.

Linea_Norway

  • Walrus Stache
  • *******
  • Posts: 5141
  • Location: Norway
Re: Buying extremely high end things which should hold value?
« Reply #26 on: March 13, 2019, 03:57:33 AM »
As the owner of 2 telescopes and 2 pairs of binoculars, I should chime in.

I think that if you buy new cheapish stuff that doesn't satisfy your hobby, you will always long for something better. Buying good quality (that you can afford) is something you will have pleasure off when performing the hobby. Buying top of the bill stuff if unnecessary.

But you know what it is with astronomy and not being FIREd yet? Every time the sky is clear and there is little wind, it is on a Sunday evening. Or any other weekday. In the weekends the nights are often clouded. So you often start the week as a train wreck with too little sleep. Astronomy would be a so much better hobby if you could just stay up all night on any day of the week. If you invest a small fortune (30K) in a telescope, you will postpone your FIRE.

But as stated in one of the first answers, buying good quality stuff used is the best way to go. Then you have the good stuff for a low price. In my local astronomy club, there are several people who have large telescopes on fancy mounts, who bought them used. They are very happy with their choice. One other guy as a huge Dobson telescope, new and handmade for him. I think he spent 7000$ on it. I have looked through it and that scope is totally amazing, but should have a focus reducer. Currently it doesn't get completely sharp for my (slightly faulty) eyes. He is not completely happy with his scope. He now wants a slightly bigger scope... Obviously he doesn't care about the cost.

When I bought my scopes, I didn't know anyone personally who had this hobby. I was afraid of buying a scope used, because I thought I wasn't personally capable of checking the second hand quality. I was also afraid of having to collimate. I ended up buying a 5" Maksutov and an EQ3 mount (both new). Maksutovs are supposed to be good quality and sharp. The default 30mm finder worked very badly. I did at some time buy a more sturdy tripod for the mount, for half the price in an astroboot. After a year or so I found out that I wanted something bigger. Then I bought a C8 (new), only the scope. I use the C8 on the EQ3 mount. This is far from optimal and I can move the scope while the mount is locked, but I am too much of a cheapskate to invest in a new EQ5 mount. And with this current weight I can still carry the total scope myself (take it outside or back into the house). The EQ5 is much heavier. I have a search for an EQ5 on a site with second hand stuff. But in Norway there is very little on sale.
My conclusion is that I should have bought a larger scope to start with, or any good scope second hand. The first scope should probably have been second hand, as you can often sell it again at (almost) the same price. This is the way to find out if you actually like the hobby.

For the moment I keep the Maksutov, as my solar filter fits on it. And because I can bring it along on a camping trip (when I use a sledge). It is my grab and go scope, if I put it on a photo tripod and a flimsy travel mount.

I have also invested in a lot of extra equipment that make the hobby more pleasant to perform, such as a click lock system for changing eyepieces, as well as another click-lock to move them sideways. I got a 50mm RACI finder, as well as a (simple) red dot finder and a good sky atlas (IDSA) (that atlas was a gift from FIL). And a motor to move my EQ3 mount long with the rotation of the earth (this motor does of course not work on an EQ5 mount). These improvements, as well as the sturdy legs are totally worth it to me.

For eyepieces and that kind of equipment, I buy stuff that is "good enough" decent quality. You can totally go nuts on spending with this hobby. I also didn't go for the 2" eyepiece thing, because with 2" everything is so much more expensive. The normal 1,25" stuff works good enough...

For binoculars, I bought a very old second hand Russian 50mm Tento, from someone I trusted from a forum. My other binoculars are a very small Nikon, which my DH bought new on extreme sale once. I got it for my birthday. Nice to put in my backpack. The Tento works fine, but is heavy. I should have gotten binos that fit on a mount. The Tento does not have a screw fitting for that. The Nikon binos are too small for astronomy. They work well for bird watching on a trip.

use2betrix

  • Handlebar Stache
  • *****
  • Posts: 1625
Re: Buying extremely high end things which should hold value?
« Reply #27 on: March 13, 2019, 06:14:58 AM »
In 2013 I bought a brand new Ford F-250 for $56k. In 2017 I sold it, 4 years and around 75k miles later. I sold it for $40k. It depreciated at about $333/mo, or it retained about 71% of its value.

The used market for good diesels is typically pretty high. I had a 40’ fifth wheel that my wife and I lived full time in, so we used it to tow. For two of those years, my employer paid for 100% of my fuel, so I didn’t have those added expenses.

There are absolutely new cars nowadays that hold significantly better value than others. If we move back into a trailer (likely) I would have a hard time justifying used over new.

While it’s still not mustachian, I always get a laugh around here when so many people are like, “you know you lose 50% as soon as you drive it off the lot..” Not for the right vehicle you don’t.

Malkynn

  • Pencil Stache
  • ****
  • Posts: 885
Re: Buying extremely high end things which should hold value?
« Reply #28 on: March 13, 2019, 06:18:15 AM »
While it’s still not mustachian, I always get a laugh around here when so many people are like, “you know you lose 50% as soon as you drive it off the lot..” Not for the right vehicle you don’t.

I would say it's not true for most vehicles, otherwise barely used vehicles would be an amazing deal, which they just aren't.

Ever tried to buy a slightly used Honda Civic????

use2betrix

  • Handlebar Stache
  • *****
  • Posts: 1625
Re: Buying extremely high end things which should hold value?
« Reply #29 on: March 13, 2019, 07:33:29 AM »
While it’s still not mustachian, I always get a laugh around here when so many people are like, “you know you lose 50% as soon as you drive it off the lot..” Not for the right vehicle you don’t.

I would say it's not true for most vehicles, otherwise barely used vehicles would be an amazing deal, which they just aren't.

Ever tried to buy a slightly used Honda Civic????

Agreed, some of the better, reliable vehicles hold their value much better.

I typically see the worst resale vehicles are the higher end European cars. 3-4 year old BMW’s and Mercedes are often wayyyy under MSRP, those are not the vehicles I would want to own while not under warranty..

Interesting that like the newer Camaro ZL1 can be hand brand new for way under MSRP, and gently used ones get knocked off even further. Bang for the buck, they are a killer deal price wise, not MSRP wise.

While a very similar car, the Mustang GT350, has a very high resale value, and they’re very hard to find under MSRP, if much at all. Similar to the new Ford Raptor - very hard to find under MSRP, some are selling for over MSRP, and the resale on used ones is also very, very high.

Malkynn

  • Pencil Stache
  • ****
  • Posts: 885
Re: Buying extremely high end things which should hold value?
« Reply #30 on: March 13, 2019, 08:15:37 AM »
While it’s still not mustachian, I always get a laugh around here when so many people are like, “you know you lose 50% as soon as you drive it off the lot..” Not for the right vehicle you don’t.

I would say it's not true for most vehicles, otherwise barely used vehicles would be an amazing deal, which they just aren't.

Ever tried to buy a slightly used Honda Civic????

Agreed, some of the better, reliable vehicles hold their value much better.

I typically see the worst resale vehicles are the higher end European cars. 3-4 year old BMW’s and Mercedes are often wayyyy under MSRP, those are not the vehicles I would want to own while not under warranty..

Interesting that like the newer Camaro ZL1 can be hand brand new for way under MSRP, and gently used ones get knocked off even further. Bang for the buck, they are a killer deal price wise, not MSRP wise.

While a very similar car, the Mustang GT350, has a very high resale value, and they’re very hard to find under MSRP, if much at all. Similar to the new Ford Raptor - very hard to find under MSRP, some are selling for over MSRP, and the resale on used ones is also very, very high.

Yep, some expensive cars are magnets for people who want the experience of buying a fancy new car. Others are more for "car people" who may actually enjoy buying from another "car person" more than from a dealership.

With all luxury goods, the ones that lose their value the most are the ones where the demand is from people who want the experience of buying them new and find the process of buying used unsatisfying, ex: jewelry (diamonds in particular), most designer clothes, a lot of "prestigious" cars that aren't actually all that special, art, furniture, fine china, crystal, etc, etc...

The physical properties of an item actually have little impact on the resale value. It mostly comes down to the experience of buying that item and how much buying used detracts from that experience.
If the product requires a certain level of knowledge to be appealing to someone, it's more likely to hold it's value because the used items will be sold mostly by like-minded people of similar interests and knowledge. It's fun to buy high end wood working tools off of a fellow hobbyist, or a Rolex off of another watch guy.

Meanwhile, it's much more exciting to buy a designer purse from the bright and shiny designer purse store with the exquisite service and smell of new leather wafting about compared to off of the floor of a consignment shop that has that distinct musty old-human-detritus smell.
Buying used engagement rings makes people think of divorce and death...not fun...hence little resale value despite diamonds being literally the item in the world the least likely to ever have any affects of age or use.

Daisy

  • Handlebar Stache
  • *****
  • Posts: 2026
Re: Buying extremely high end things which should hold value?
« Reply #31 on: March 13, 2019, 09:56:15 PM »
I bought a $3000 mattress just about 10 years ago. It had a great built-in warranty. Well this year I found the mattress had a sag and the company fully honored their warranty and just sent me a new one with a new 10 year warranty. I feel now that the original purchase was worth it. This mattress should last a lifetime.

BTW, 10 years ago I wasn't as "frugal" as I am now. I would probably think twice before spending so much on a mattress these days. But I have to admit it was worth it!

Ummmm, really?  I'm pretty sure they would have to send you at least six or seven new mattresses before they started losing money on that sale.  Mattresses aren't exactly complicated pieces of machinery.  They contain no expensive materials, and are easy to manufacture.  There is no reason they should ever cost $3,000.

But if you really like lifetime guarantees, I'll sell you a brand new Honda Civic for a million dollars.  It comes with a lifetime warranty, too.  Whenever it wears out, for the rest of your life, I'll replace it free of charge.

OK, opinion noted.

I do love my mattress. It helps my back. When I sleep on bad mattresses I get back pains.

BicycleB

  • Handlebar Stache
  • *****
  • Posts: 1098
  • Location: Live Music Capital of the World
  • Older than the internet, but not wiser... yet
Re: Buying extremely high end things which should hold value?
« Reply #32 on: March 13, 2019, 10:38:04 PM »
@Seadog, I think your proposition that one can replace investment stash $ with extremely high end things "which should hold value" is either flawed or a tautology.

If you have the magical ability to know that what you buy will hold value, then of course financially you are only losing the investment returns of other investments (presumably 4%/year, 100%/18 years, etc). That's the case where it's a tautology. Given the magical ability you suggest, I wouldn't replace stash $ money with it, I'd just feel safe buying as much as I wanted after I'd set aside my stash.

IRL, I admit that your particular passion SEEMS safe-ish. If thieves no longer exist, anyway. And if manufacturing has ceased to improve. But who knows whether these things will occur? Who knows whether the market itself will stay the same? This is the case that seems flawed. Again, I wouldn't bet the stash on it.

Life is short, lenses are fun. Buy some. Just make sure if they spontaneously combusted and you lost their value, you'd still be FIRE. (No fire-related puns intended.)

PaulMaxime

  • Stubble
  • **
  • Posts: 190
  • Age: 55
  • Location: San Francisco, CA
  • Absolute power doesn't corrupt, it reveals.
Re: Buying extremely high end things which should hold value?
« Reply #33 on: March 14, 2019, 10:56:51 PM »
About four years ago, I invested roughly $30k in a new hobby item:  solar panels for my house.  They were a fun technology toy, they added value to my house, and they have already repaid me their full purchase price in tax incentives and free power.  As hobbies go, they were financially less painful than most.

And they were STILL a terrible investment, compared to leaving that money in the stock market for the past four years.   If I had let it ride instead of pulling it out, it would be worth more like $50k today and I could still have bought solar panels this year at an even lower cost.  Instead, I went $30k in the hole with that purchase and then slowly worked my way back up to zero as I recouped my costs.  There's a big difference between getting back to zero, and having $50k worth of VTSAX at my disposal.

So this is something I struggle with personally - I mean buying something I want that will provide utility for me and may have some return vs leaving the money in my brokerage account to grow.

It definitely could be taken to the extreme, like not eating a meal because saving the money is cheaper or not running the heat in your home in the winter (just above freezing I suppose) but that seems like mental illness to me.

At this point in my life I'd rather have money in my investments than almost anything else. But I'm approaching FIRE and I think it's going to be really hard to draw down on what is a very decent sized 'stash.

Just made me think.

So IMHO the solar panels was something that gave you joy and you even got some return on the purchase so that's a win for sure. Not everything needs to be a market investment. You can't run your house on a number in a brokerage account.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #34 on: March 15, 2019, 06:36:19 AM »
@Seadog, I think your proposition that one can replace investment stash $ with extremely high end things "which should hold value" is either flawed or a tautology.

If you have the magical ability to know that what you buy will hold value, then of course financially you are only losing the investment returns of other investments (presumably 4%/year, 100%/18 years, etc). That's the case where it's a tautology. Given the magical ability you suggest, I wouldn't replace stash $ money with it, I'd just feel safe buying as much as I wanted after I'd set aside my stash.

IRL, I admit that your particular passion SEEMS safe-ish. If thieves no longer exist, anyway. And if manufacturing has ceased to improve. But who knows whether these things will occur? Who knows whether the market itself will stay the same? This is the case that seems flawed. Again, I wouldn't bet the stash on it.

Life is short, lenses are fun. Buy some. Just make sure if they spontaneously combusted and you lost their value, you'd still be FIRE. (No fire-related puns intended.)

Fair enough point, and it wasn't so much replacing that stash, as it is in a different form of evaluating the cost, as I think one common facet to mustachians is an ability to think very long term.

You ask the typical non-mustachian about a $30k new car, vs a $30k used scope (or $30k used guitar, or $30k used collector car that will see little use) and they would say they all cost the same. If you run the numbers over the total 10 year life span however, where you buy, maintain, and sell for expected risidual, then discount to Present value, you see that's vastly not the case. In that case the $30k new soccer mom SUV might really cost the same as a $100k scope bought second hand from a university.   

As far as holding value, anything of course is possible, but is something is selling for the same price or more than when it first came out 30 years ago, I don't think it's unreasonable to assume that the depreciation due it no long being new is done, and most of the value left is purely for function.

On your point of technology, that is a fear. Electric pianos now which can fool great musicians probably don't help values of grand pianos. Digital photography crushed the values of film cameras (not necessarily lenses though) and I heard that one group of people who most hated Napster were those with thousands of dollars in rare music recorded in hard form.

BicycleB

  • Handlebar Stache
  • *****
  • Posts: 1098
  • Location: Live Music Capital of the World
  • Older than the internet, but not wiser... yet
Re: Buying extremely high end things which should hold value?
« Reply #35 on: March 15, 2019, 07:05:59 PM »
Also make sure to include inflation.

"The same price as 30 years ago" roughly means "lost only  51.8% of its purchasing power."

https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=48.2&year1=198902&year2=201902

smoghat

  • Stubble
  • **
  • Posts: 196
Re: Buying extremely high end things which should hold value?
« Reply #36 on: March 16, 2019, 09:53:29 AM »
So I have spent maybe $5,000 on telescopes and accessories over the last five years and subscribe to Sky & Telescope but what telescope would you buy for $30,000?

As for this argument and the one about high end lenses...

You buy $100 binos, you use them, horrible aberration and colours, and after a decade they're worth precisely zero. You've had shitty seeing, lost $100, + $4/yr forever. Conversely, buy $1000 binos, amazing seeing, and you can likely sell them for at least $900 at any point. There the cost was essentially the same $100, + $40/year of ownership lost opportunity, *minus* $36 forever.

In both cases, you have missed the sweet spot which is often in the middle. I have a pair of Diamondback Vortexs that I bought on a trip to Washington State. Do they have chromatic aberration? Oh yeah. Are they great? Why yes. For $300. Light, durable, well made, and damned crisp minus the aberration. I am taking them to Kauai this spring and if I slip and fall and destroy them, I will mourn them, but I will not cry over them being irreplaceable.

The sweet spot is often at 90/30, where you get 90% of the performance for 30% of the price (or less). An example is Voigtlander, Fuji, and Leica gear. I've had my photographs exhibited in major art museums, not in the photo sections, but still, and have had multiple books with art presses. So I'm not a total idiot with this. My Leica M 240 is very good, until the goddamn spots start showing up on the sensor and I have to take it to the factory (luckily it is 25 minutes away). I have Leica lenses but my Voigtlander lenses are 90-98% of the quality for 30% (or less) of the price. So I use them on trips since guess what, stuff happens, like the time I got my strap caught getting out of a cab in Philadelphia and my camera fell with my $1,100 Nokton 50 taking the brunt. I got it repaired for $300. It sucked, but how would that feel with a goddamned $10k Noctilux? Luckily, I never purchased one of those. In the end, I take my Fuji gear with me since the technology in it just beats Leica cold. Another friend, who is an accomplished and widely exhibited photographer, uses a point and shoot. Ahae used the world's best gear apparently. But look what happened to him.

I'm 51 and five years ago, out of the fucking blue, I got early cataracts. It could happen to you. And once that happens, no matter what lenses you choose, your seeing will never be as good as it is now (although 2" Explore Scientific eyepieces have helped… they may be below your range of acceptable, but they sure are great to me). If the scope is what you want, do it, just don't rationalize it. If you want to invest in something that will go up when the Canadian dollar goes down and is all but guaranteed to do well in the long run, keep your money in ^VTI. Easy to store the boxes for the ^VTI too.

Seadog

  • Stubble
  • **
  • Posts: 184
  • Age: 35
  • Location: Halifax, NS
Re: Buying extremely high end things which should hold value?
« Reply #37 on: March 16, 2019, 04:34:56 PM »
So I have spent maybe $5,000 on telescopes and accessories over the last five years and subscribe to Sky & Telescope but what telescope would you buy for $30,000?

As for this argument and the one about high end lenses...

You buy $100 binos, you use them, horrible aberration and colours, and after a decade they're worth precisely zero. You've had shitty seeing, lost $100, + $4/yr forever. Conversely, buy $1000 binos, amazing seeing, and you can likely sell them for at least $900 at any point. There the cost was essentially the same $100, + $40/year of ownership lost opportunity, *minus* $36 forever.

In both cases, you have missed the sweet spot which is often in the middle. I have a pair of Diamondback Vortexs that I bought on a trip to Washington State. Do they have chromatic aberration? Oh yeah. Are they great? Why yes. For $300. Light, durable, well made, and damned crisp minus the aberration. I am taking them to Kauai this spring and if I slip and fall and destroy them, I will mourn them, but I will not cry over them being irreplaceable.

The sweet spot is often at 90/30, where you get 90% of the performance for 30% of the price (or less). An example is Voigtlander, Fuji, and Leica gear. I've had my photographs exhibited in major art museums, not in the photo sections, but still, and have had multiple books with art presses. So I'm not a total idiot with this. My Leica M 240 is very good, until the goddamn spots start showing up on the sensor and I have to take it to the factory (luckily it is 25 minutes away). I have Leica lenses but my Voigtlander lenses are 90-98% of the quality for 30% (or less) of the price. So I use them on trips since guess what, stuff happens, like the time I got my strap caught getting out of a cab in Philadelphia and my camera fell with my $1,100 Nokton 50 taking the brunt. I got it repaired for $300. It sucked, but how would that feel with a goddamned $10k Noctilux? Luckily, I never purchased one of those. In the end, I take my Fuji gear with me since the technology in it just beats Leica cold. Another friend, who is an accomplished and widely exhibited photographer, uses a point and shoot. Ahae used the world's best gear apparently. But look what happened to him.

I'm 51 and five years ago, out of the fucking blue, I got early cataracts. It could happen to you. And once that happens, no matter what lenses you choose, your seeing will never be as good as it is now (although 2" Explore Scientific eyepieces have helped… they may be below your range of acceptable, but they sure are great to me). If the scope is what you want, do it, just don't rationalize it. If you want to invest in something that will go up when the Canadian dollar goes down and is all but guaranteed to do well in the long run, keep your money in ^VTI. Easy to store the boxes for the ^VTI too.

I think people are getting way too hung up on numbers. Same thing with the point about inflation. Just assume inflation adjusted numbers then if you want, the point still stands. I used the 30k number as an example, as that was the high end of what I saw on an online astronomy site's classifieds. Here's another quickly sourced for 25k

https://www.cloudynights.com/classifieds/item/143566-ap-175-edf-get-ready-for-mars-pending-to-russ/

Here's another for $55k that's the one at a local universities observatory:

http://planewave.com/products-page/telescopes/24-inch-cdk-optical-tube-assembly/#.XI14Foh7lPY

Finally it wasn't so much the boasting about optics being a special hobby, as much as it was the ability to fairly evaluate total costs over the life of ownership - as often a great misjudgement occurs since I think most people are obsessed with the initial up front cost, and don't pay as much attention to things like maintenance or residual, which can sometimes dominate the calculation. 

A $10k diamond =/= a $10k new car =/= a $10k guitar, but I think a lot of people would say they all cost the same; $10k. 

smoghat

  • Stubble
  • **
  • Posts: 196
Re: Buying extremely high end things which should hold value?
« Reply #38 on: March 17, 2019, 06:00:05 AM »
A lot of things are losing their value fast these days, and I’d fully expect wildly crazy telescopes to have that problem too. Do you see young people and teenagers at astronomy events? Not really, they tend to be full of older folks. Same goes for high end stereo, stamp collecting, birding, and all the other classic hobbies save maybe cooking. Instead, they all find some niche on the Internet. Add to this the huge growth in light pollution and I think you’ll find your scope will be worth a lot less in en years. We’ve given you the advice you need, if you don’t want to run with it, don’t.

ender

  • Magnum Stache
  • ******
  • Posts: 4691
Re: Buying extremely high end things which should hold value?
« Reply #39 on: March 17, 2019, 06:19:17 AM »
A $10k diamond =/= a $10k new car =/= a $10k guitar, but I think a lot of people would say they all cost the same; $10k.

They do cost the same.

If you are referring to total cost of ownership, now those are different.

smoghat

  • Stubble
  • **
  • Posts: 196
Re: Buying extremely high end things which should hold value?
« Reply #40 on: March 17, 2019, 07:56:02 AM »
Electric guitars are a great example of what I've been citing. I bought one for $1,500 a while back (it still had packing plastic on) since someone had bought it for $3,000 and sold it to a used shop. I can probably get $1,100-$1,200 now, which is not bad at all! But nobody should buy a guitar thinking of it as an investment. The guitar market is collapsing. Sure, if you want Hendrix's guitar it will be $50 million, but even then it's a terrible investment.

All the old hobbies are collapsing (golf, tennis, skiing, trains ... yes, I know somebody who bought one). Don't expect anything to stay of value. You are kidding yourself if you do. Fashion is dying too, as trash has taken it up.

BBub

  • Pencil Stache
  • ****
  • Posts: 774
  • Age: 34
  • Location: Deep South
Re: Buying extremely high end things which should hold value?
« Reply #41 on: March 18, 2019, 12:07:17 PM »
Old guns are similar to the telescopes in your example.  The high quality ones hold their value and even appreciate over time if kept in good condition.  You can enjoy them for years, pass them down, and there is a very active secondary market.

There is an entire asset class called "collectibles", so this is not a novel idea.  Collectibles can include furniture, art, jewelry, firearms, flatware, china, musical instruments, clocks, memorabilia... the list goes on, and there is quite a large industry built around this asset class (stores, auction houses, appraisers, restoration, legal, insurance, niche specialists).  Note that the tax rate on collectible gains is a less favorable 28% vs either 15 or 20% for traditional long term cap gains.

AccidentalMiser

  • Pencil Stache
  • ****
  • Posts: 659
  • Age: 51
  • Location: SE Tenn
Re: Buying extremely high end things which should hold value?
« Reply #42 on: March 18, 2019, 09:15:10 PM »
Anyways, thoughts? Or am I just trying to justify being a spendypants.

Yes.

MustacheAnxiety

  • Stubble
  • **
  • Posts: 125
Re: Buying extremely high end things which should hold value?
« Reply #43 on: March 19, 2019, 09:33:47 AM »
At least on some level Jacob Lund Fiskar agrees with your theory.  So that puts you in good company:

http://earlyretirementextreme.com/how-i-live-on-7000-per-year.html
"Do you indulge in any luxuries?
A lot of my stuff falls in the luxury category. For instance, the suit mentioned above is a $500 suit (I bought it on sale for $100). This may sound expensive until you realize that the suit is old and thus it holds up rather well. The amortization rate, that is, spreading the cost out over the years comes to very little. When I buy tools or other things to enjoy, I buy near the top (this is why the Mall doesn’t work for me). For example, I’ve acquired several $300 hand planes for my woodworking. This may also sound expensive, but realize that if I ever tire of wood working, I can sell those for close to what I paid for them. This makes them much cheaper than a $45 hand plane from the big box store. In fact, many of my hobbies are financed by selling my old gadgets. My one exception is my martial arts training. I spend over $1,000 per year on that or almost 15% of my entire budget."

Luxury stuff can be more Mustachian than midmarket or lower end stuff.  That said tying $30,000K up in a single item means losing out on $1,200 in spending money per year (if you follow the 4% rule). And if you are trying to emulate Pete that is probably about 12% of an annual budget for 1 person. So there is a pretty uphill battle to make tying up 30K mustachian, even if you can resell the item for full value.  But if you are talking a 1 time expense of 30K for your primary hobby that brings you happiness for many hours a week, $1,200 a year seems like it could fit in the budget.  Even more so if the whole family can make use of your fancy luxury item.

Rick Imby

  • 5 O'Clock Shadow
  • *
  • Posts: 27
  • Location: Montana
  • Whatever you are, be a good one--Lincoln
Re: Buying extremely high end things which should hold value?
« Reply #44 on: March 27, 2019, 05:37:18 PM »
The 30k spent on the centerpiece of your life could be awesome.  If it brings you the joy I have gotten from the $7k I have spent on bicycles in the last 4 years it will be worth every penny.

The goal is to be happy every day.  I enjoy my $800 folding bike a ton along with my $2k plus bike and my $?? carbon bike. 

however I became FI over a dozen years ago if that makes a difference. 

londonbanker

  • Stubble
  • **
  • Posts: 200
  • Age: 39
  • Location: London, UK
Re: Buying extremely high end things which should hold value?
« Reply #45 on: March 27, 2019, 06:09:30 PM »
I am a huge petrolhead and I bought myself a 10y/o high end sportscar which cost me 6figs despite being at the bottom (or near enough) of its depreciation curve.
I am under no illusion that it will cost me money over the next 5-10years in maintenance, insurance, petrol etc... i am happy with that cost, as I am enjoying every mile driven in this car, from road trips with petrolhead friends across Europe , track days, romantic get-away w the wife etc... I am fairly certain however that I won’t lose much if anything at all on depreciation. This is the reason I don’t feel bad about owning such a high value toy.
My daily driver, which I bought used for a small fraction of the price, is still costing me more in depreciation alone.

JoJoP

  • Stubble
  • **
  • Posts: 153
Re: Buying extremely high end things which should hold value?
« Reply #46 on: March 30, 2019, 10:39:16 AM »
I'll echo the sentiment that, if purchased wisely, good quality tends to hold it's value.   Buy it and enjoy it. 

 We try to calculate things by "cost per use", and, when figured like that, it's amazing how much value I've gotten out of some things, and not out of others.   I have a very expensive horse. The upkeep is a big monthly expense, the purchase price was huge by any standards.  There's no return value on it, it's now old and has no monetary value at all.   It may soon be too old to ride, and I will keep it and meet its needs, it's my friend.   I have ridden this horse joyfully for nearly every day of the past 15 years, and it was worth every penny that I paid for it.   If I added the combined waste of money of clothes/shoes/jewelry that were unworn or seldom worn, meals out eaten, expensive drinks ordered and consumed, and compare that to the horse which has given me lasting, lifetime pleasure in pursuit of my personal happiness, the horse wins, hands down.  Every ride is like a 2 hour vacation.  I ride 10-15 hours a week, rain or shine, and I love it.  Right now the flowers are blooming, the smells are amazing, and the sheer joy of a gallop across the countryside is bliss.   I would have (and did) make sacrifices in other financial areas so that I could have something that my heart truly desired, and I have no regrets.

If your purchase will bring you similar joy, go for it.   A happy life isn't just about watching your portfolio grow.  Go live a good, happy life!  If that involves a large and potentially frivolous purchase, so be it!  Temper that purchase, as mentioned repeatedly in the thread, by making a good choice that may somewhat retain its value.  You got yourself to FI through hard work and effort, that commitment isn't going away just because you buy something big just because you want it. 

londonbanker

  • Stubble
  • **
  • Posts: 200
  • Age: 39
  • Location: London, UK
Re: Buying extremely high end things which should hold value?
« Reply #47 on: March 30, 2019, 03:05:47 PM »
I think that a horse - as it is a living creature - cannot be compared to expensive toys... although I get that one can be purchased for a lot less than what you seem to have spent on yours, a horse becomes - like a dog - a member of the family, and has no ROI to it. The amount of money you spend on it and it’s “residual value” are irrelevant. The moments you have with him/her are definitely more special than using a “thing”... however special my cars are to me, I do not speak to them and exchange any level of complicity as you would.

JoJoP

  • Stubble
  • **
  • Posts: 153
Re: Buying extremely high end things which should hold value?
« Reply #48 on: March 31, 2019, 10:07:24 AM »
Exactly!  Some people (ok, many people) think it's crazy to spend money on horses, after all, they are very expensive and certainly put a dent in the pocketbook. There's even a term for it:  "Horse poor."  I'm just glad that I have a lifelong passion and such a wonderful member of my family.  Just writing this out makes me smile. I LOVE my horse.  i wouldn't trade my time with horses for a bigger 'stache, and have no regrets at all.

londonbanker

  • Stubble
  • **
  • Posts: 200
  • Age: 39
  • Location: London, UK
Re: Buying extremely high end things which should hold value?
« Reply #49 on: March 31, 2019, 09:20:46 PM »
Exactly!  Some people (ok, many people) think it's crazy to spend money on horses, after all, they are very expensive and certainly put a dent in the pocketbook. There's even a term for it:  "Horse poor."  I'm just glad that I have a lifelong passion and such a wonderful member of my family.  Just writing this out makes me smile. I LOVE my horse.  i wouldn't trade my time with horses for a bigger 'stache, and have no regrets at all.

Some people feel the same about the prancing horse sitting in my garage ;-) let them talk... the memories are yours to keep and cherish