Cashing in on your gun collection?

[Reloadron]

A friend of mine is a devout collector of firearms. He owns 100s of guns. Recently his best friend, a dog named Sparky, needed surgery at a cost of $3,000. He went into his gun room, picked out a few items and sold them for enough money to pay for the surgery. Sparky is now happy and healthy. My friend believes that his collection is better than money in the bank. Do others use your collections in this manner?

Back around post #33 I left a few simple comments. However, looking at this original post I am going to call some degree of BS plain and simple. Any devout collector of guns owning hundreds of guns (to use your own words) would simply have the resources to sit down and write a check to the veterinarian service performing the surgery on "Sparky". Three thousand dollars isn't a heck of a lot of money, unless of course you do not have $3,000 or $3.000 in available credit and I find that very hard to believe of any devout collector who owns hundreds of guns, especially collectable guns. Heck, most collectors I know have $3,000 in cash laying in their gun safe just in case a real good deal comes along through a private sale. Just makes no sense to me and that is why I call BS on all or part of this story.

About all this thread has become is an open debate on whether guns serve as a good investment purely for investment purposes. Again, anyone I know, owning hundreds of collectable guns, certainly should have $3,000 in cash laying around to cover a vet bill.

Just My Take
Ron

 

[paradox998]

If you do invest in guns as a hedge, buy the best quality you can afford. A $4000 gun will likely appreciate more strongly than a $400 one. Consider those that are popular with collectors, for example winchesters, colts, lugers, high end shot guns, etc. One better firearm will appreciate more than 10 poorer quality ones. Lurk on the websites of the collector groups and learn. This is no different than collecting stamps or cars, you need to know your area and when something is really a good deal.

 

[CWL]

Anyone who can afford to invest in heirloom firearms usually has their finances well taken care of already. It's exactly like collecting art.

It's really the ones who can't afford to, who will buy lower priced guns and delude themselves into thinking that they are buying it as an investment. Hopefully some will understand this and make better investment choices.

 

[R.W.Dale]

Where did this go into "investment" territory.

Guns are a hobby

One of the few hobbies that isn't tantamount to flushing cash down the toilet. A hobby that if need be a large majority of the buy in price can be recouped.


If your gun collection is actually appreciating in value then good for you. But that just tells me that you aren't shooting enough to wear any depreciation into them (see any NIB thread)

 

[Old Fuff]

Those of you who believe that buying guns and thinking they can use it to pay for real expenses when it come time to will be horribly mistaken.

Well yes and no.

Of course one shouldn't confuse quality medical or life insurance with a gun collection when it comes to financial security. A gun collection (or most any other collection that has meaningful value) is an asset and nothing more or less within a larger picture. The general idea is to increase assets while as much as possible protect yourself from liabilities.

Unexpected emergencies may be big or little, but when they occur one may have to sacrifice some or all of an asset. If or when that happens a gun collection may be an option, but in the meantime you can enjoy it.

 

[CWL]

Unexpected emergencies may be big or little, but when they occur one may have to sacrifice some or all of an asset. If or when that happens a gun collection may be an option, but in the meantime you can enjoy it.

I guess I can't fault that!

 

[Joe Demko]

That's quite true, CWL. The amounts of "profit" that I hear the average guy talking about per gun is not even chump change when it comes to retiring or serious medical expenses. Often, it isn't even dinner for four at a good restaurant money. You would need a warehouse full of such guns to make real money.
I will agree that the really high end guns and extremely rare antique guns are investment items. My guess is that, if you can afford enough examples of such to really be considered as investing in them, you are already well off and have a diverse portfolio.

 

[mboylan]

They may not be a "good" investment but unlike most hobbies you can enjoy them AND NOT lose significantly on depreciation.

Generally speaking guns don't lose value like most other hobby items. Nor to they consume cash on their own in the form of upkeep. They also tend to be relatively easy to move.

They may not be as sound an investment as gold or silver, but unless you're into running precious metal coinage through your fingers and laughing manically they are a lot more fun. In the short to mid term as investments and hobbies they look like a veritable windfall compared to electronics, cars, bikes or boats

I wouldn't say that. People have lost their shirts on gold and silver since 2011. Adjusted for inflation, it took 3 decades for people who bought in 1980 to get their money back. People who bought silver at the 1980 peak never regained their losses factoring in inflation.

Pre-64 Winchesters were a much better investment.

 

[CWL]

I wouldn't say that. People have lost their shirts on gold and silver since 2011. Adjusted for inflation, it took 3 decades for people who bought in 1980 to get their money back. People who bought silver at the 1980 peak never regained their losses factoring in inflation.

Pre-64 Winchesters were a much better investment.

How many pre-64 Winchesters do you own? How many did you buy for "investment" purposes, and what years did you buy? Do you own enough of them to pay for a chunk of your retirement, or will you be counting on more traditional investment decisions?

Did you know, in the 1980's about buying-up pre-64's?

Just getting lucky with a few collectibles is not the right example to take when using the word "investment".

 

[huntsman]

Selling requires buyers, the greater fool theory, but what happens when there are no buyers? Can the Collectable gun market take another financial crash? I'm all for hard assets but I'm also all about not putting all my eggs in one basket.

 

[Old Fuff]

Selling requires buyers, the greater fool theory, but what happens when there are no buyers? Can the Collectable gun market take another financial crash? I'm all for hard assets but I'm also all about not putting all my eggs in one basket.

I'm no advocate of the "all eggs in one basket" theory, but I will point out that during and since the 2008 crash and Great Recession , auction results (no, I don't mean Gunbroker or Guns America exclusively) to present show substantial increases for best quality classics and antiques. Several million dollars over a weekend isn't unusual anymore.

If you follow the "for sale" posts on this forum as well as those asking for price estimates you'll see that popular makes and models generally aren't decreasing.

 

[R.W.Dale]

The problem with high end guns is that as a pure luxury item they can be extremely sensive to the strength of the economy as a whole.

I can remember back in 08 I was dealing as a "online lister" for a consignment shop.

Lots of folks wanted to cash "collectable guns" in and you couldn't put $1 with a NIB whatever and come away with enough interest to buy a small McDonalds coffee.

 

[Old Fuff]

The problem with high end guns is that as a pure luxury item they can be extremely sensive to the strength of the economy as a whole.

I can remember back in 08 I was dealing as a "online lister" for a consignment shop.

Lots of folks wanted to cash "collectable guns" in and you couldn't put $1 with a NIB whatever and come away with enough interest to buy a small McDonalds coffee.

It depends...

Even through a recession or even depression they're will be some people who still have money and are looking for a place to park it. The trick is to have what they are looking for. I think the main point I want to make is don't horde cash in this economic environment, and that which is probably coming.

In this evaluation don't necessarily consider medical insurance to equal "cash," although you may have your clock cleaned if inflation wipes out the value of the payout. On "also ran" guns you may get wiped out too, but if you buy a true collectable or popular shooter today at 50% of value (yes it does happen) then you can have some wiggle room, and if necessary sell before the bottom drops out and prices start to trend down.

Example: I bought a Smith & Wesson .38 M&P revolver that was unusual only in that had markings which showed it was 1 of 3000 purchased by a U.S. Military Service just before World War Two. Now it is worth about 3 times what I paid for it. Since it was used in the first place I can shoot it if I want to and not reduce it's value.

I consider it among other things to be a great investment.

 

[gspn]

Cash is immediately liquid. Guns take time, paperwork, haggling, etc to liquidate.

If I need $3,000 from my bank I just pull $3,000 cash out.

If I need same from my gun safe I have to find a combination of guns that i think might generate the funds at auction, take pictures, list them on gun broker, answer all types of questions and provide additional pics for interested parties, then wait a few weeks for the auction to close before I find out if I got the desired funds.

If I didn't…I get to start the process all over.

If I did I sell them, now I have counter-party credit risk while I'm waiting for funds to clear. Then I have the pain it the neck of having to ship the gun to the buyer.

Guns are fun, but Cash is King.

 

[gspn]

Again, anyone I know, owning hundreds of collectable guns, certainly should have $3,000 in cash laying around to cover a vet bill.

Just My Take
Ron

My experience is the same as Rons. The majority of big collectors I know have two things in common…lots of guns…and lots of cash.

I have a small collection by comparison, but when I grow it I tend to expand it 10 or 20 guns at a time. When someone else's big collection goes up for auction it's nothing to throw $10,000 to $50,000 at it…cash.

 

[jimwill48]

I love my guns, but they are only things. I just sold a bunch for vet bills myself! Do I regret it, nope. They can/could be replaced. As for the argument that if you have the money to have bought guns, then you should have cash for emergency's, is just not happening in the real world. When I was buying my collection, a period of over 40 years, I was working and could afford it. But now I'm living on Social Security Disability, my wife just lost her job and what few (very few) dollars we have saved is trickling away month to month to cover mortgage and other bills. Hopefully the trickle will end when she can find another job, before we are broke. When a sudden illness or vet bills happen cash is next to impossible to obtain. So yes I have a gun collection but not cash... sell guns = obtain cash its simple.

 

[GunnyUSMC]

I haven't counted them for some time, but would be safe in saying that I have over 300 guns in my collection. And I know good and well that I don't have $3000 in cash sitting around.
If my dog got sick and it would cost $3000 to get him better. Would I sell some of my guns? No, he would die. Now if it were one of my kids, Well I would have to think about it.
Investing in new guns to make money is only good if you have a gun store. Investing in good used guns is where you can make your money. But if you buy for this reason you need to buy below market value and know what you are buying.
Here is one I bought last week for $250 I could get $300 for if in just a few days.

And then there is the German KKW I picked up for $130 back in 1999. Look up what they are selling for these days.


Here is a rule when it comes to selling guns. If you sell guns when you need money, you will most likely take a loss or end up selling for below market value.

 

[tarosean]

If my dog got sick and it would cost $3000 to get him better. Would I sell some of my guns? No, he would die. Now if it were one of my kids, Well I would have to think about it.

Whereas my dog would be alive and guns would be sold iffff it ever came to that.

I would have no qualms about help family or close friends, guns are just stuff. Not much different than the multiple motorcycles and classic car in the garage.

They all have a price.

 

[jrdolall]

I have a bunch of guns but they are toys and tools, not investment property. If I needed to sell them to help in an emergency then I would do it an live with the regret. The regret would be based on the fact that I didn't have enough cash on hand to handle the emergency and NOT that I had to sell guns.

Back when I was in the 7 day a week work world I had maybe 20 guns and most of them were inherited. After I "got rich" as some of my friends call it, I started buying guns that caught my eye and now I have a bunch. Owning guns is like owning horses for most of us. Sure they have a value and sure you can sell them but most of them will cost you money to keep.

 

[CWL]

Here is one I bought last week for $250 I could get $300 for if in just a few days.

...

Here is a rule when it comes to selling guns. If you sell guns when you need money, you will most likely take a loss or end up selling for below market value.

In your first example, you'd have to sell 60 pistols very quickly, in order to make $3000. That's haggling with dozens of people just to make $50 at a time. And since no consignment store or pawn shop will take that many firearms at one time ( and pay enough for you to profit), therein lies your problem. Time to convert into cash. Personally, I couldn't afford to take this route.

Even if you were willing to sell that KKW, it would still take you time to run the add, haggle, and then wait for the transfer before you make your $900-1800.

We know your dog is a goner, but you'd have to go thru this trouble to pay for one of your children? To paraphrase your own words, selling during a time of need wouldn't be the way to earn top dollar.

 

[W.E.G.]

The opportunity cost of maintaining a "bank" of firearms far exceeds many other types of investment.

You can occasionally have that moment where you sell an AR receiver for 5X what you paid for it, but those times come along rarely.

Most of the time, you will only break even if your time and the other opportunity costs are factored.

Glad the ol' fella got his dog cared for.

 

[HankR]

Guns are a hobby

One of the few hobbies that isn't tantamount to flushing cash down the toilet. A hobby that if need be a large majority of the buy in price can be recouped.

True enough if just buying and selling guns. My guns tend to turn quite a bit of money into noise when they're not sitting in the safe. To the un-enlightened, this is remarkably similar to flushing cash down the toilet.

YMMV

 

[huntsman]

To the un-enlightened,this is remarkably similar to flushing cash down the toilet.

yeah if they think it just a hobby (like golf) but truth be told this endeavor that allows one to exercise the skills of SD and hunting(feeding oneself) is not a hobby but a carrying out of tradition, fundamental survival of the species.

 

[Schwing]

Guns as an investment, probably not for me. I see them as an investment towards my mental well being; something to be used and then passed down.

Now ammo on the other hand... I had folks call me crazy 6 years ago when I took about $700 out of my savings account and invested in 30 bricks of .22 ammo. It has paid off handsomely in the form of trades for other stuff (not even all gun related) that I probably would not have been able to make without it. In that light, that $700 has become an almost priceless investment.

 

[Eaglestroker]

Owning guns is like owning horses for most of us. Sure they have a value and sure you can sell them but most of them will cost you money to keep.

I was going to just read this post, but you caught me. An old riding acquaintance of mine has a favorite saying about horses: Know the quickest way to make a small fortune messing with horses?

Start with a large one. I'm sure this applies to some gun buying habits as well