Author Topic: Buying extremely high end things which should hold value?  (Read 7319 times)

HenryDavid

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Re: Buying extremely high end things which should hold value?
« Reply #50 on: April 01, 2019, 09:59:17 AM »
One person's example of high end stuff holding value and bringing joy over the long term:
this month is the 30 year anniversary of my custom-made steel road bike. Have ridden it in several countries, in all seasons of the year. On roads it should not have been on, on bike paths, back and forth to work. Have replaced bits and pieces (it has way easier gears than it did in 1989) and made my own hand-built wheels for it way back when.
It's not just the quality of the object--although it looks great despite scratched paint in places, and rolls like it's on rails, drops down mountain roads with total safety and stops on a dime. It's the consistent pleasure in always coming back to something that was done well to begin with. Hand made by a builder in Quebec who made bikes for legendary racers. Way better than I needed in 1989, and now. But it's the sticking with something good instead of hopping on and off bandwagons which can be satisfying.
Also, as of now it probably has more or less held its value in $ terms, which is the least of my worries. (When carbon was new, for a few years there I could have had a dozen bikes of similar construction for nothing, but now people have returned to their senses.)

Car Jack

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Re: Buying extremely high end things which should hold value?
« Reply #51 on: April 03, 2019, 11:42:58 AM »
Yah....I'm going to say that it depends.  I'll take up the bicycle example.  I built my bike while a bike mechanic and road racer back in 1974.  I bought a Colin Laing frame (Reynolds 531 double butted throughout, campy ends), transferred all the campy parts from my Raleigh International, added whatever wasn't Campy (brakes, upgraded pedals to super record, which had just come out, headset), built a set of race wheels (hi-e hubs, fiami rims, silk tires).  When complete, it was the best of the time.  I seem to remember I spent about $700 on it.  Even the seat tube bolt was titanium and the bottom bracket was one of the very first TTT titanium ones.  Well fast forward through riding state Junior championships, college teams, club racing, just commuting to grad school and I realize I just don't ride it anymore at all.  Any bike rides, I take the mountain bike.  Too many 16 year old girls LOL'ing on their phones while driving Wranglers just about over me.  I put it up for sale.  It takes a solid 2 years for me to finally sell it for $350.  And that's more than 40 years after spending twice that.  So in this case, high quality didn't cut it.  It did not hold its value.

sol

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Re: Buying extremely high end things which should hold value?
« Reply #52 on: April 03, 2019, 12:49:59 PM »
It did not hold its value.

Bikes have changed a lot in 40 years, so I think getting half of your investment back is actually pretty great.

Items like furniture and musical instruments haven't functionally improved all that much, so they hold value better.  Bikes are closer to cell phones than violins, in terms of being mass produced items that get left behind by advancing technology.  Old cell phones are basically worthless in just a few years, old violins can be worth millions a century or more later.

smoghat

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Re: Buying extremely high end things which should hold value?
« Reply #53 on: April 04, 2019, 11:23:01 AM »
I bought a high end Trek Domane a few years ago. I doubt it’s worth more than 1/4 what I paid for it. Bikes don’t hold their value, no way.

nereo

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Re: Buying extremely high end things which should hold value?
« Reply #54 on: April 04, 2019, 12:19:53 PM »
Whether something retains its value is only relevant if you plan on selling it at a later date. 
Otherwise it's simply a question about whether said item brings value to your life.

happy

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Re: Buying extremely high end things which should hold value?
« Reply #55 on: April 06, 2019, 04:12:16 AM »
Quote
Anyways, thoughts? Or am I just trying to justify being a spendypants.
This thread keeps popping up and up til now I've avoided replying.

I have to say it verges on the "Can I buy a ....very special something, if you knew how much I needed wanted it you'd understand" type threads that many of us are completely over. Did they get banned at some point?

If you need to ask, then the answer is NO.

All I can say is be very careful about this. If you are absolutely confident you can resell the item for what you paid with CPI at least thrown in, then think about it. Think about the opportunity cost of investing the money. After that you are an adult and free to make your own choices even if they are not fiscally the best.

risky4me

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Re: Buying extremely high end things which should hold value?
« Reply #56 on: April 17, 2019, 02:16:37 PM »
I recently purchased a 31 year old Les Paul guitar after deciding that rather tie up all my investments in real estate and mutual funds, why not spend some on something a will enjoy daily. While not hugely expensive (close to $4,000) it was what I consider a large, non-necessity, it has already brought me much joy. While I know it will hold good value, like many material things, you have to find the correct market if you want to sell it for a decent price. No buyers remorse, I should have bought it many years ago.

Car Jack

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Re: Buying extremely high end things which should hold value?
« Reply #57 on: April 18, 2019, 06:42:40 AM »
Also, looking in the past, it's easy to see that a McLaren F1 would have been a good investment.  Ok, so I bought an E30 M3 with 31k miles on it for $17k back in 95.  After 2 years, with constant prodding, I was finally awarded a car plan at work of $700 a month......but I would have to buy a 4 door car.  So I sold the M3 for $15k (market value for the time) with 51k miles on it and bought a new Audi A4.  In hind sight, I should have put the M3 in storage and bought a Dodge Neon.  Today, that M3 would be easily worth $100k.  But who knew it then.

You also have to be careful about when a car is purchased.  I had a Lotus Elise that I bought from a friend for $30k with 10k miles on it.  I drove it for 4 years and sold it with 27k miles on it for $32k.  You'd think that this would have been a great investment car.  But for the original purchaser, they spent $55k on it, so not such a good investment for them.  Not that it hurt them.....they kept it at their summer home in the Hamptons so they'd have a car when they helicopter'd in from Manhattan.  They replaced the Lotus with a Ferrari F430 so they'd have more room for groceries.  (really....that's why they traded it).

And to poke the MMM bear just a little more with non-Mustacian vehicles, I currently drive a Jeep Wrangler Unlimited with up sized tires for off road events.  As I've said before, it's sort of hard to put a snow plow on a Leaf.  :D

GuitarStv

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Re: Buying extremely high end things which should hold value?
« Reply #58 on: April 18, 2019, 07:34:15 AM »
I recently purchased a 31 year old Les Paul guitar after deciding that rather tie up all my investments in real estate and mutual funds, why not spend some on something a will enjoy daily. While not hugely expensive (close to $4,000) it was what I consider a large, non-necessity, it has already brought me much joy. While I know it will hold good value, like many material things, you have to find the correct market if you want to sell it for a decent price. No buyers remorse, I should have bought it many years ago.

Used guitar prices for US made high quality non-weird edition Fender/Gibson stuff are generally pretty steady.

I tend to feel that it has less to do with the quality of the instrument than the fact that there's a lot of name recognition and all the rock heroes of the golden age of guitar were using them.  Not saying that your Les Paul is a bad guitar (many of them are very nice), but I guarantee you that a less expensive one that looks better, plays better, and sounds exactly the same could be found from a different manufacturer today . . . but it wouldn't hold value at all because it doesn't have that name on the headstock.  Guitars are weird.

caleb

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Re: Buying extremely high end things which should hold value?
« Reply #59 on: April 18, 2019, 08:15:52 AM »
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.

That's the conventional wisdom, but I'm not sure it holds for all "high quality" guns over a long period of time.

Someone who bought a Purdy in 1960 has probably seen a pretty nice appreciation.  But what about the period up until 1960?  Probably not so much.

There are still changes in taste, too.  I'm glad I didn't buy a 12 bore Arrizabalaga with 26" barrels, a pistol grip, and a beavertail in 1980.  It's a quality gun in every way, but it's so out of fashion that I could hardly give it away today.

The time period really matters, and sometimes I think people ride a trend on the upswing thinking it's a permanent market without seeing all of the counterexamples of trends that went away out there.

nereo

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Re: Buying extremely high end things which should hold value?
« Reply #60 on: April 18, 2019, 08:39:16 AM »
Can't help but wonder how much of this is driven by survivorship bias.  Do we perceive these high-end items (e.g. well made cars, firearms, optics) hold their value simply because we are comparing older models which today fetch a premium over their original price, or do most really retain their value?  If its the former, can a person realistically determine which items available today will be worth more in a few decades?

This reminds me of camera lenses, and the belief that great glass holds their value. And that's been largely true for some lenses and some mounts (e.g. the Summilux/cron, Voigtländer, most 'L' series...) but many haven't fared as well as mounts have changed and because, occasionally, a manufacturer comes up with a design that's both sharper and cheaper (e.g. Sigma's 50 & 85mm 1.4 'Art' lenses undercut much pricier options from Canon, Nikon & Sony, including 'legacy glass' which subsequently became far less valuable).

Just wondering...

sol

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Re: Buying extremely high end things which should hold value?
« Reply #61 on: April 18, 2019, 09:15:13 AM »
Can't help but wonder how much of this is driven by survivorship bias.  Do we perceive these high-end items (e.g. well made cars, firearms, optics) hold their value simply because we are comparing older models which today fetch a premium over their original price, or do most really retain their value?  If its the former, can a person realistically determine which items available today will be worth more in a few decades?

This reminds me of camera lenses, and the belief that great glass holds their value. And that's been largely true for some lenses and some mounts (e.g. the Summilux/cron, Voigtländer, most 'L' series...) but many haven't fared as well as mounts have changed and because, occasionally, a manufacturer comes up with a design that's both sharper and cheaper (e.g. Sigma's 50 & 85mm 1.4 'Art' lenses undercut much pricier options from Canon, Nikon & Sony, including 'legacy glass' which subsequently became far less valuable).

Just wondering...

I suspect that camera lenses were always vulnerable to price depreciation in a way that items like acoustic musical instruments are not.  For precisely the reasons you mentioned, changes in technology or interfaces can make old components obsolete.  Something like a firearm seems more likely to hold it's value as long as you can still buy appropriate ammunition, and items like cars and guitars are mostly self-contained items that don't require any other matching equipment in order to utilize.  Camera lenses are worthless without matching cameras.  Telescopes seem somewhere in between.

Then there are whole categories of items that I think are stupid to purchase new, like basically any form of sporting goods.  It doesn't seem to matter how much you pay for skis, or a kayak, or a bicycle, in ten years it will at best be worth half as much as you paid, and probably much less than that.  I consider this to be a sign that new equipment is grossly overpriced, not that these items don't hold their value.  Values seem pretty consistent past those first few years.  Just don't ever buy new and you're unlikely to lose very much.

I don't think horses even belong in this discussion.  Horses are pets, not toys.  They live and die and their monetary value always goes to zero in short order.  Humans happily spend small fortunes on animal companionship and usually consider it money well spent.

Specific models of "good investment" purchases mentioned above, like the Les Paul or the McLaren are only valued because they are overhyped.  Their "value" is artificially inflated because there is a small community of enthusiasts who objectively pay too much for the physical item they're getting, because they desire the brand name, the history, or the mystique associated with that item.  They're buying the social status that comes along with the thing, not the thing itself, and social status is something that is manufactured by communication between enthusiasts after the thing is made and sold.  I don't think you can predict which items will receive this treatment, but you absolutely can contribute to manufacturing it yourself. 

ol1970

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Re: Buying extremely high end things which should hold value?
« Reply #62 on: April 18, 2019, 12:12:20 PM »
I have quite a few items that would be considered high-end, and I'm not delusional to think that they are an "investment" or a good place to park your money.  I will say once your number is way beyond 50X your expenses it is kind of nice to have a few quality items purchased properly.  I bought a newer but used Porsche 8 years ago (with cash) that is worth today essentially what I paid for it.  Now if you count lost income from having the cash invested, maintenance, insurance, and registration its a big time losing endeavor.  When I think about the memories of driving down the winding roads on the coast, weekend gateaways with my soon to be wife, and the smiles it has brought...all at less in depreciation than a Honda Civic I can't help but be extremely pleased with my use of capital in this case.  I am in the, it is okay to live a little camp though once you've got your stache properly padded.

sol

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Re: Buying extremely high end things which should hold value?
« Reply #63 on: April 18, 2019, 12:28:49 PM »
I am in the, it is okay to live a little camp though once you've got your stache properly padded.

Sure, but you have to work extra long to do that padding.  The whole point of this movement is to voluntarily give up stuff like owning a Porsche, so that you can have those extra years of your life back.

There is no luxury item I could possibly buy that would be worth as much to me as early retirement.  No car or boat or vacation house is worth twenty more years living in a stifling bureaucracy.

I don't dispute that winding coastal roads with your wife are a good time.  But you could have had ten times as many of those good times, at 20% of the price, if you had retired earlier and bought a Miata instead.

GuitarStv

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Re: Buying extremely high end things which should hold value?
« Reply #64 on: April 18, 2019, 12:29:38 PM »
Not even a Vitamix blender?  Be honest Sol.

spartana

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Re: Buying extremely high end things which should hold value?
« Reply #65 on: April 18, 2019, 03:15:28 PM »
I am in the, it is okay to live a little camp though once you've got your stache properly padded.

Sure, but you have to work extra long to do that padding.  The whole point of this movement is to voluntarily give up stuff like owning a Porsche, so that you can have those extra years of your life back.

There is no luxury item I could possibly buy that would be worth as much to me as early retirement.  No car or boat or vacation house is worth twenty more years living in a stifling bureaucracy.

I don't dispute that winding coastal roads with your wife are a good time.  But you could have had ten times as many of those good times, at 20% of the price, if you had retired earlier and bought a Miata instead.
or a used bicycle!

I'm in the "don't own much and what I own is inexpensive" club. Other than a couple of somewhat expensive bikes I was given as gifts long ago I don't think I own anything that would be considered quality or high end.

londonbanker

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Re: Buying extremely high end things which should hold value?
« Reply #66 on: April 18, 2019, 03:31:43 PM »
Also, looking in the past, it's easy to see that a McLaren F1 would have been a good investment.  Ok, so I bought an E30 M3 with 31k miles on it for $17k back in 95.  After 2 years, with constant prodding, I was finally awarded a car plan at work of $700 a month......but I would have to buy a 4 door car.  So I sold the M3 for $15k (market value for the time) with 51k miles on it and bought a new Audi A4.  In hind sight, I should have put the M3 in storage and bought a Dodge Neon.  Today, that M3 would be easily worth $100k.  But who knew it then.

You also have to be careful about when a car is purchased.  I had a Lotus Elise that I bought from a friend for $30k with 10k miles on it.  I drove it for 4 years and sold it with 27k miles on it for $32k.  You'd think that this would have been a great investment car.  But for the original purchaser, they spent $55k on it, so not such a good investment for them.  Not that it hurt them.....they kept it at their summer home in the Hamptons so they'd have a car when they helicopter'd in from Manhattan.  They replaced the Lotus with a Ferrari F430 so they'd have more room for groceries.  (really....that's why they traded it).

And to poke the MMM bear just a little more with non-Mustacian vehicles, I currently drive a Jeep Wrangler Unlimited with up sized tires for off road events.  As I've said before, it's sort of hard to put a snow plow on a Leaf.  :D

Can I be a pedantic smart ass and point out that I would be very surprised if your 1995 m3 were worth anywhere near your claimed figure of $100k ? Last month auction results at Monterey show 2 Ferrari F355s selling for $56k and $58k for a 1996 & 1997 respectively both with sub 40k miles... so I doubt very much your m3 would fetch anywhere near that in the current market.
I hope it makes your feel better selling your car back when you did.
If that doesn’t, then look at me selling a manual Porsche 993 at the bottom of the depreciation curve for £12k in 2012... hopefully you feel a bit warmer inside :-)

spartana

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Re: Buying extremely high end things which should hold value?
« Reply #67 on: April 18, 2019, 03:46:30 PM »
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.
Don't forget your opportunity costs! That's a lot of money and time out of investments not earning to spend on a depreciating asset.

In 2007 I bought a 2001 Ford Ranger with approx 50k miles on it for $4,000. After 10 years of use and approx 70k miles added by me I sold it for....$4,000. No repairs but basic maintenance and a fuel pump replaced. So not high end, not expensive yet retained its value due to increase demand for small trucks. Even if I had junked it I would have gotten $1500 from the dismantler.  I think I could have sold it for more :-).   https://www.carfax.com/Used-2001-Ford-Ranger_z16431
« Last Edit: April 18, 2019, 04:08:57 PM by spartana »

Villanelle

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Re: Buying extremely high end things which should hold value?
« Reply #68 on: April 18, 2019, 03:50:11 PM »
You say that optics are useful but baseball cards aren't.  Unless you are doing actual scientific research, I'm not sure I agree.  What's the use?  To bring you enjoyment, fill your spare time, give you a bit of an identity?  There's nothing inherently wrong with those "uses", but I don't know that it makes an item "useful".  If you want to quibble about how much time they fill or how they fill it, then I suppose a movie collection is as "useful" as a telescope, no? 

Look, if you want to spend $30k on this item, I think at a minimum, it need to be a carefully examined decision.  And thus far, it sounds like you aren't actually carefully examining the decision because you are crafting this careful narrative to justify it.  Instead of trying to convince us (and yourself) that this is a "good value" and a worthwhile investment, admit that it's a damn expensive hobby item, albeit one where *maybe* you can get at least some or even much of the money back, someday, if you decide to sell and if you particular choice does actually hold up well.  (I think the point of survivorship bias is valid.  How many telescopes from 50 years ago haven't appreciated or even held their value?  Generally it's damn hard to know if you are picking a winner or a loser.) 

Telecaster

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Re: Buying extremely high end things which should hold value?
« Reply #69 on: April 18, 2019, 04:26:47 PM »
I recently purchased a 31 year old Les Paul guitar after deciding that rather tie up all my investments in real estate and mutual funds, why not spend some on something a will enjoy daily. While not hugely expensive (close to $4,000) it was what I consider a large, non-necessity, it has already brought me much joy. While I know it will hold good value, like many material things, you have to find the correct market if you want to sell it for a decent price. No buyers remorse, I should have bought it many years ago.

Used guitar prices for US made high quality non-weird edition Fender/Gibson stuff are generally pretty steady.

I tend to feel that it has less to do with the quality of the instrument than the fact that there's a lot of name recognition and all the rock heroes of the golden age of guitar were using them.  Not saying that your Les Paul is a bad guitar (many of them are very nice), but I guarantee you that a less expensive one that looks better, plays better, and sounds exactly the same could be found from a different manufacturer today . . . but it wouldn't hold value at all because it doesn't have that name on the headstock.  Guitars are weird.

Guitars are extremely weird.   I have a mid-1980s Ibanez RG-somethingorother that I bought for $150 on eBay.  It SHREDS!   It is such a great guitar.  I play it all the time, I keep it on a stand right next to the computer so I can pick it up anytime I want.   It is maybe worth $200 today.    I sold a mid-1980s Gibson Les Paul that I bought new and had had for a few years but it just turned out to be it was amazingly average.  I kept trying to like it, but it just wasn't that good.  I bought PRS SE semi-hollow for $650 that was better.

Oh, and back in the day, any mid-1970s  Fender was considered crap, because everyone wanted  the pre-CBS models.  Now mid-1970s Fenders go for amazing dollars. 

Eventually, CBS sold the Fender name, but they didn't sell the factory.   Back then Japanese companies were copying everything, so Fender, in need of a factory,  went to Japan and contracted a one of the companies who was building copies to start stamping "Fender" on the headstocks.  The clones go for good money, but not as much as the Fenders even though the only thing that changed was the decal. 

One of the Japanese companies building Gibson copies was called Greco.  I've played Grecos and liked them better than Gibsons.  A fraction of the price and identical down to the screws. 

Even weirder is guitar pedals.  I have an original Ibanez TS-808.   Looks like they are going for about $1200 on eBay.   A brand new TS-9 is $100 and the sonic differences can be detected only by dogs.   

Don't get me started on amps. 

sol

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Re: Buying extremely high end things which should hold value?
« Reply #70 on: April 18, 2019, 05:26:11 PM »
Guitars are extremely weird.   I have a mid-1980s Ibanez RG-somethingorother that I bought for $150 on eBay.  It SHREDS!   It is such a great guitar.  I play it all the time, I keep it on a stand right next to the computer so I can pick it up anytime I want.   It is maybe worth $200 today.    I sold a mid-1980s Gibson Les Paul that I bought new and had had for a few years but it just turned out to be it was amazingly average.  I kept trying to like it, but it just wasn't that good.  I bought PRS SE semi-hollow for $650 that was better.

Oh, and back in the day, any mid-1970s  Fender was considered crap, because everyone wanted  the pre-CBS models.  Now mid-1970s Fenders go for amazing dollars. 

Eventually, CBS sold the Fender name, but they didn't sell the factory.   Back then Japanese companies were copying everything, so Fender, in need of a factory,  went to Japan and contracted a one of the companies who was building copies to start stamping "Fender" on the headstocks.  The clones go for good money, but not as much as the Fenders even though the only thing that changed was the decal. 

One of the Japanese companies building Gibson copies was called Greco.  I've played Grecos and liked them better than Gibsons.  A fraction of the price and identical down to the screws. 

Even weirder is guitar pedals.  I have an original Ibanez TS-808.   Looks like they are going for about $1200 on eBay.   A brand new TS-9 is $100 and the sonic differences can be detected only by dogs.   

Don't get me started on amps.

This just proves the point, though.  Luxury items that keep their value well aren't keeping because they are are superior versions of whatever they are, but because people value the brand name, the history, and the mystique.  We pay for provenance of cars or guitars, just like we do with fine art.

soccerluvof4

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Re: Buying extremely high end things which should hold value?
« Reply #71 on: April 19, 2019, 03:07:39 AM »
I own really nothing of value for brand name recognition or anything that if I sold thats old would be worth as much or more than I paid for it and not sure why that came about. Never really was into things like cars, guns etc.. and to me things are just things. Perhaps I spent my money more foolishly growing up than others as I did usually try to buy quality over junk but that didnt mean it was going to be worth something. The most valuable thing I have is more sentimental which makes is priceless in my book and that is my Fathers ring he left me in his will when he passed in 86'. He was a staff Sargent in the Army and it is a plumb gold ring with the rank with a tiny diamond in it as well as cross pistols. I've tried over my life at one point or another coin collecting, stamp collecting and some other things but kinda sad thinking about it nearly 55 and really dont have anything off the top of my head other than sentimentally worth much.

ol1970

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Re: Buying extremely high end things which should hold value?
« Reply #72 on: April 19, 2019, 09:06:23 AM »
I am in the, it is okay to live a little camp though once you've got your stache properly padded.

Sure, but you have to work extra long to do that padding.  The whole point of this movement is to voluntarily give up stuff like owning a Porsche, so that you can have those extra years of your life back.

There is no luxury item I could possibly buy that would be worth as much to me as early retirement.  No car or boat or vacation house is worth twenty more years living in a stifling bureaucracy.

I don't dispute that winding coastal roads with your wife are a good time.  But you could have had ten times as many of those good times, at 20% of the price, if you had retired earlier and bought a Miata instead.

Totally agree, stuff isn't worth working an extra minute vs. having financial freedom.  But...I retired at 43 and didn't hate my job, it was actually fun and rewarding.  I actually considered retiring at 34 when I passed the $2M threshold, holy shit I'm glad I didn't do that!  Six years into retirement I'm traveling the world and my net worth has ballooned passed 8 figures all while not increasing my lifestyle one penny.  I realize that I'm an outlier here, and agree with your point on stuff not being worth being miserable at work, I just think it is good share with people real life examples of people who are extremely frugal, but find it okay to loosen up a bit once you are covered for life...and your kids lives.

Think about it, if you run your own numbers on any calculator, over time your net worth is most likely going to be over 100x your burn rate.  Are you really not going to take that vacation to Hawaii you've always dreamed of, or (fill in some modest luxury here) because of some arbitrary budget amount you set when you were 30 years old that you thought was prudent?   

sol

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Re: Buying extremely high end things which should hold value?
« Reply #73 on: April 19, 2019, 09:25:14 AM »
I realize that I'm an outlier here, and agree with your point on stuff not being worth being miserable at work, I just think it is good share with people real life examples of people who are extremely frugal, but find it okay to loosen up a bit once you are covered for life...and your kids lives.

If you're worth over $10M, I don't begrudge you a used Porsche.  Your financial plan seems sound.

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Are you really not going to take that vacation to Hawaii you've always dreamed of, or (fill in some modest luxury here) because of some arbitrary budget amount you set when you were 30 years old that you thought was prudent?   

Ummmm, yes?  That's kind of the whole point of retirement planning.  If I discover that I have a desire to spend twice as much money in retirement as I was planning, then I either need to find a way to fund that spending, or I need to agree to let those desires go unmet.  Maybe we'll all get lucky and I could fund that extra spending with great market returns, or maybe I would need to get another job or find some other income source.  More likely, though, is that I would just forego that new luxury because it's not in my financial plan.  That's true for literally everyone, at every income level.  Even if you're worth >$10M, there are some things you cannot buy.  There will always be something you cannot buy.  We all have to manage our expenses to fit within our budgets, regardless of what that budget is.

ol1970

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Re: Buying extremely high end things which should hold value?
« Reply #74 on: April 21, 2019, 06:08:02 AM »
I realize that I'm an outlier here, and agree with your point on stuff not being worth being miserable at work, I just think it is good share with people real life examples of people who are extremely frugal, but find it okay to loosen up a bit once you are covered for life...and your kids lives.

If you're worth over $10M, I don't begrudge you a used Porsche.  Your financial plan seems sound.

Quote
Are you really not going to take that vacation to Hawaii you've always dreamed of, or (fill in some modest luxury here) because of some arbitrary budget amount you set when you were 30 years old that you thought was prudent?   

Ummmm, yes?  That's kind of the whole point of retirement planning.  If I discover that I have a desire to spend twice as much money in retirement as I was planning, then I either need to find a way to fund that spending, or I need to agree to let those desires go unmet.  Maybe we'll all get lucky and I could fund that extra spending with great market returns, or maybe I would need to get another job or find some other income source.  More likely, though, is that I would just forego that new luxury because it's not in my financial plan.  That's true for literally everyone, at every income level.  Even if you're worth >$10M, there are some things you cannot buy.  There will always be something you cannot buy.  We all have to manage our expenses to fit within our budgets, regardless of what that budget is.

Great post, couldn’t agree more.  There is always a nicer house, fancier car, bigger boat, etc. to deal with, I’m lucky that spending habits didn’t explode like my ability to fund them did.  Everyone’s enough is a different number, and even though I have a burn rate around 1% I’m happy as a clam.  I think my point in writing all of this is to say that history tells us that most here will get “lucky”, and they to will see there net worth ballon over time.  I mean to a person in rural Mexico living on 40k a year might seem ridiculously extravagant, but to most here it’s basic FIRE level.  If your net worth grows to $6M (like the investment calculators show is possible) I think it would be okay to loosen up the purse strings a bit, not buy a Lamborghini, but within reason I think it can add to happiness.  This could mean just buying better quality food, or healthcare.  Happy Easter all 🐣!

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Re: Buying extremely high end things which should hold value?
« Reply #75 on: April 21, 2019, 06:22:04 PM »
You say that optics are useful but baseball cards aren't.  Unless you are doing actual scientific research, I'm not sure I agree.  What's the use?  To bring you enjoyment, fill your spare time, give you a bit of an identity?  There's nothing inherently wrong with those "uses", but I don't know that it makes an item "useful".  If you want to quibble about how much time they fill or how they fill it, then I suppose a movie collection is as "useful" as a telescope, no? 

Look, if you want to spend $30k on this item, I think at a minimum, it need to be a carefully examined decision.  And thus far, it sounds like you aren't actually carefully examining the decision because you are crafting this careful narrative to justify it.  Instead of trying to convince us (and yourself) that this is a "good value" and a worthwhile investment, admit that it's a damn expensive hobby item, albeit one where *maybe* you can get at least some or even much of the money back, someday, if you decide to sell and if you particular choice does actually hold up well.  (I think the point of survivorship bias is valid.  How many telescopes from 50 years ago haven't appreciated or even held their value?  Generally it's damn hard to know if you are picking a winner or a loser.)

I don't know how many times I need to say it so I'll bold it. I am in no way, shape, or form considering buying a $30k telescope. I already own a telescope, mid range, worth more than an order of magnitude *less* than 30k, which suits all my current needs.

It was just an interesting observation I noted that several new high end camera lenses I bought years ago were selling for as much or more than I paid on kijiji, and several top name telescopes/eyepieces on astronomy forums were selling for what they cost 1-3 decades ago or more, so I was curious people's take on such things since it's counter intuitive to the typical depreciation curve you see on low to mid range things.

And the reason I say that optics have an inherent use, is that they can be used say for surgical microscopes to fix real medical issues by making tiny things bigger, or binos on sailboats when you have issues to spot a ship to signal for help that you otherwise couldn't see, or in jungles for bird watching to advance science by identifying new or thought to be extinct species. Hell Galileo got himself out of considerable debt and prospered by selling his telescopes to the military because they conferred such a visual advantage. I'm not sure I understand how baseball cards solve real world problems.

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Re: Buying extremely high end things which should hold value?
« Reply #76 on: April 22, 2019, 05:36:08 AM »

It was just an interesting observation I noted that several new high end camera lenses I bought years ago were selling for as much or more than I paid on kijiji, and several top name telescopes/eyepieces on astronomy forums were selling for what they cost 1-3 decades ago or more, so I was curious people's take on such things since it's counter intuitive to the typical depreciation curve you see on low to mid range things.

See above for discussion about whether this is actually the case of simply survivorship bias. Many 'upper-tier' lenses haven't held their value nearly as well as newer designs have been released and mounts have changed.
To get a real sense of which classes of items have retained their value one must go back and compare all the items within that class (e.g. "high end camera lenses") and see what they are all worth now, then adjust for maintenance costs, opportunity cost, insurance etc.

Case

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Re: Buying extremely high end things which should hold value?
« Reply #77 on: May 01, 2019, 07:18:07 PM »
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.

You’re just trying to justify being a soendy pants.  There are some things taht are worse to be a spendy pants on (cars), but it doesnt justify your esoteric hobby.

Its ok to spend big money on hobby, but up to you to figure out the math in relation to savingsand whtehre you can afford it.