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Guns are an investment, right?

Discussion in 'General Gun Discussions' started by ZombiesAhead, Jan 22, 2008.

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  1. ZombiesAhead

    ZombiesAhead Member

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    Hello all,
    I'm not wealthy by any stretch of the imagination but I have some money in mutual funds, an IRA, and then a savings account that is larger than it should be - I need to either invest it or treat myself. I'm considering picking up a number of guns - mainly those that are in danger of being grandfathered into new bans - an FAL, an AR-15, high-cap mags for my pistol...I have a good safe to protect them.

    While some people might spend their extra money on vacations, can I justify my gun collecting hobby by the fact that my guns will lose very little value in most cases and quite possibly appreciate as legislation changes?

    Does anyone else rationalize purchases like this? Might it actually make sense? If something terrible happened and I needed to liquidate, I feel like I could get 80% of the value of most of my collection and chalk the lost 20% up to the fun I had with them - and this isn't even considering the possible rise in value pending new legislation.

    Any thoughts?
     
  2. TexasRifleman

    TexasRifleman Moderator Emeritus

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    I'd have to disagree. There are very few guns out there that have appreciated in value in any way close to what you'd have grown if the same amount of cash had been put in a reasonable investment vehicle.

    Short of full auto weapons I can't think of any at all frankly. Even during the last AWB "pre ban" stuff wasn't selling at that much of a premium.

    You yourself said that you think you could get 80 percent of what you paid.

    That's not a very good investment, that's a 20 percent loss.

    So buy guns, shoot them, enjoy the hobby, but don't confuse it with investing.
     
  3. tydephan

    tydephan Member

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    I remember a very spirited discussion about this over on TFL awhile back. Lemme go see if I can dig it up.

    ETA: Whew...need to exercise my google-fu. Took me a few minutes to find what I was looking for:

    Buying Guns...for Investment.
     
  4. Javelin

    Javelin Member

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    Get a really really good deal through an FFL dealer (like 20% off MSRP) and buy up your X amount of principle investment in ARs with 16" barrels and telescoping stocks with 2 mags each>>>> RRA had a good deal going not too long ago and other makers will too soon enough. AKs would work as well for all practical purposes.

    In 2 years they will probably be the best investment you ever did in your life.

    :)
     
  5. takhtakaal

    takhtakaal Member

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    It's only an investment if this crap-shoot environment in which we lives does something predictable and makes it so that they become scarce or somewhat to completely unavailable -- and you're allowed to keep them.

    In the event of zero transfers, or outright confiscation, where's the retained value, let alone appreciation?
     
  6. M2 Carbine

    M2 Carbine Member

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    Well I paid $17 for this NIB GI 1911A1.
    I've had 45 years use of it and I could probably still get my $17 out of it.:D
    1911A1.gif

    Paid $65 for this NIB S&W Model 10.
    Have had 48 years use of it and I'm pretty sure I could sell it for a little over $65.;)
    Mod10targetclose.gif
     
  7. ZombiesAhead

    ZombiesAhead Member

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    I hear you TR - I guess "investment" was the wrong word. I guess I'm more thinking about the difference between putting money into a gun collection versus going on vacation, buying a car that will rapidly depreciate, going out to the bar every night, etc.

    They are a durable good though - that in a time a of fiscal emergency - could be easily turned back into cash (in a way that "experience" type hobbies simply will never be recouped in cash)

    Does anyone see it like that? Even if you don't gain any money when you resell a gun collection, they sure do hold a good amount of their value compared to the crap some people treat themselves to when they have extra cash lying around...
     
  8. TexasRifleman

    TexasRifleman Moderator Emeritus

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    So run some numbers on stocks or bonds if you'd have taken that same 17 dollars and invested it in more traditional vehicles.

    You could buy a LOT of 1911's :)

    I bought a couple of SWD Lightning Links in 1985 for $200. I sold one in 2004 for $11,000. Sounds good right?

    If I'd bought Wal Mart stock or Southwest Airlines stock for $200 I could buy more than one cheesy Lightning Link :)
     
  9. Winchester 73

    Winchester 73 member

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    Its fun to think about.And I've done it.Probably have a collection
    worth 30-40k.
    But you are almost certainly going to do better buying the right mutual funds or stocks.
    Since 1926 the stock market has out performed every other type of investment except to a certain extent quality real estate.
    But there is no feeling like getting your hands on another great firearm.
    To the extent that it won't interfere with your more serious long range investment plans,I'd say go for it.
    And get a C&R.Thats a big advantage.Go here for info:

    http://www.surplusrifle.com
     
  10. M2 Carbine

    M2 Carbine Member

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    Then guns will become very valuable.
     
  11. 3pairs12

    3pairs12 Member

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    I made the mistake of saying look honey guns are an investment before actually this post to opening to read it. The first thing she noticed was teaxsrifleman said that he would have to disagree. Well I am pretty sure the value of guns isn't on the same roller coaster ride as my 401k. At least thats what I'll tell her.
     
  12. M2 Carbine

    M2 Carbine Member

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    But try as I might I've never been able to hit a target with a stock or bond.:D
     
  13. ravencon

    ravencon Member

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    Generally, guns shouldn't be approached as an investment.

    Most people neglect the time value of money when they compare their purchase price to the present value. For example, M2 Carbine bought his NIB Model 10 48 years ago for $65. Well, according to the official consumer price index data $65 1959 dollars is $461 in 2007 dollars. M2 Carbine would be unlikely to be able to sell that Model 10 for $461. As a financial investment it wasn't a good performer. But he has had the use and enjoyment of a fine gun for those many years. To me that sounds like a great purchase decision.

    A consumer price index calculator can be found here:
    http://minneapolisfed.org/Research/data/us/calc/index.cfm
     
  14. ZombiesAhead

    ZombiesAhead Member

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    EXACTLY! My point was not that I liquidate my mutual funds and IRA's on the premise that guns will beat the market - but mutual funds aren't much fun to play with, and if I can retain 80% of the purchase price while having a great time shooting my "investment" I'd consider that lost 20% well spent. :)

    A gun collection is a hobby that can be redeemed for cash in an emergency - unlike decorating your house, taking a vacation, stocking/drinking a wine cellar, or buying commemorative spoons, etc...
     
  15. Seminole

    Seminole Member

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    Other than one or two guns that you might justify as defensive weapons, guns really fall more into the category of entertainment or a hobby. Investment for the purpose of wealth accumulation is something else. If you're spending money on guns that you should be investing for retirement, education, or wealth building, I would urge you not to do so. On the other hand, if you are spending money on guns that you would otherwise be spending on a Caribbean cruise, a trip to Europe, lying on the beach for a couple of weeks, going to the movies on a frequent basis, buying a new car every two years, or other such things, then go ahead--buy away and enjoy building your collection.

    You mention you have some mutual funds, an IRA, and a savings account, but do you have a long-term financial plan? Do you have any debts? If so, why?! Do you invest in a systematic way? Do you own a home? Do you create a budget for yourself every month and stick to it? If your financial life is in good order, be sure that your monthly budget includes some "blow" money that you can spend some or all of on guns. There's nothing wrong with buying guns when you can afford it, but don't fall into the trap of thinking that gun expenditures are actually a financial investment. As someone else pointed out, the magic of compound interest, combined with the fact that the stock market has always made money over any ten-year period, makes that your best investment. If you are buying guns instead of investing wisely, you are cheating yourself out of hundreds of thousands of dollars over a long period of time.

    I love guns, but my retirement and my children's financial future is more important than whether I buy myself another rifle.
     
  16. oldgold

    oldgold Member

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    Only if you got a crystal ball. 40 years ago I could have bought cased drillings for $100-150 each. One I passed up an bought a Hi-Power instead. Hi-power is worth maybe $600 , drilling I passed that day up just sold for $23,000.

    Dad took me to Western Auto to buy my first hunting gun. I passed on a 410 pump and took a bolt action 12ga instead. Neighbor kid bought the 410. It was a Winchester model 42 skeet.

    Ain't hindsight grand !
     
  17. BobbyQuickdraw

    BobbyQuickdraw Member

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    A gun with normal use retains an average of 73% of its value.

    A car with normal use in the same period of time retains only 25%.

    So think of it like that and buy some guns!

    (Sample time is 12 years)
     
  18. Hunter0924

    Hunter0924 Member

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    There are many makes of firearms that do go up in value. I have bought a few Colt Gold Cup National Matches that have gone up about 25% a year as well as a few other Colts.
    Colt 1911s (and I am speaking of true 1911s not the generic term) from WW1 do pretty well as do 1911A1s.
    The last gun show I saw a few collector grade Pre Series 70 Colt Government Models that were $1600+.
    It depends on what you go for but there are firearms that will appreciate and you will make money on them, maybe not as much as stocks and bonds.
    What about the Singer 1911 that auctioned off for 80000+ a few months ago.
    Older SAAs and Winchesters do pretty good. Watch the high end auction sights as well as gunbroker.
    Yes firearms can be good investments if you are selective in what you invest in (but isn't that the general rule?).
     
  19. Guitargod1985

    Guitargod1985 Member

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    Generally speaking, no. Not for a while.

    Unless you can call catching an earfull from your wife a capital gain.
     
  20. Kipling79

    Kipling79 Member

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    Depends on what you want out of your investments.

    In a normal year, I purchase almost nothing which I could sell anywhere near its purchase price. Look around yard sales... almost anything in a house is worth very little once out of it's wrapper. But guns... they hold a decent value.

    Yes, stocks, bonds, and mutual funds provide a greater return and are probably your best bet for a good retirement, but if you are choosing between a new couch or a new gun, the gun wins. :D

    BUT, I guess a rational person would forgo the couch and the gun and would invest in the market in hopes of retirement.... but what is going to put food on the table when the market crashes again. ;)
     
  21. Guitargod1985

    Guitargod1985 Member

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    Oooo ooo I know! The couch!

    No, seriously... isn't that what the welfare office is for? J/k
     
  22. no_problem

    no_problem Member

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    "" Guns are an investment, right?
    Hello all,
    I'm not wealthy by any stretch of the imagination but I have some money in mutual funds, an IRA, and then a savings account that is larger than it should be - I need to either invest it or treat myself. I'm considering picking up a number of guns - mainly those that are in danger of being grandfathered into new bans - an FAL, an AR-15, high-cap mags for my pistol...I have a good safe to protect them.

    While some people might spend their extra money on vacations, can I justify my gun collecting hobby by the fact that my guns will lose very little value in most cases and quite possibly appreciate as legislation changes?

    Does anyone else rationalize purchases like this? Might it actually make sense? If something terrible happened and I needed to liquidate, I feel like I could get 80% of the value of most of my collection and chalk the lost 20% up to the fun I had with them - and this isn't even considering the possible rise in value pending new legislation.

    Any thoughts?""

    No, If you want to invest, invest. Have a clear strategy in mind and buy the investment that is right for you. Bonds are a risk free way to protect the value of your dollar from the dangers of inflation and interest rate fluctuation, mutual funds, ETF's, stocks are good vehicles if you can calculate their expected rates of return and match them to your needs and expectations.

    Gun legislation s a gunstore's best friend. That said, you can have your fun with guns and leave it there. In Gun collecting, the reward is in itself.
     
  23. asknight

    asknight Member

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    no_problem, there is a little quote button in the top of the text box you type your message in. It increases the force of your reply or point ten-fold. Try it, you'll like it. :neener:
     
  24. 45Broomhandle

    45Broomhandle Member

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    My Two Cents Worth

    I'm using guns as an investment too. BUT, I've always loved guns, and it's a perfect excuse for collecting around me the objects of my affection.

    When I decided to use guns as an investment my only worry was how to transfer my knowledge of them to my wife (and/or other heirs) in the event something happened to me. Here's what I came up with and I highly recommend it to anyone with ANY gun collection with ANY kind of value.

    Remember some time ago it was suggested that we all take photos of our valuables, such as TVs, Cameras, tools, etc., and even to scratch our initials or SS number into them in case they were stolen? Well my system is a take-off on that.

    With this system we not only assist our heirs, but we also have great records for our home owners insurance company in the event of a theft.

    What information do you need to pass on regarding your collection to someone who has NO KNOWLEDGE of guns?

    1) WHICH gun are you telling me about? ANSWER: Look at the several photos which includes detailed pics of identifying markings, serial numbers, etc..

    2) Where did you get it, when, and HOW MUCH DID IT COST? ANSWER: That too is detailed in text just above the photos.

    3) What kind of condition is it in? ANSWER: It's condition, and any additional accessories - or whatever - I've purchased for it, are also detailed here.

    4) What's its estimated current value? ANSWER: My guesstimate is here, and this info should be updated as markets change.

    5) Where is my BEST prospect to sell it at top value? ANSWER: Here I've listed the name, address, phone number, website, email address, whatever, of all prospects I can think of. If there is a single collector who you believe will pay TOP dollar for your gun, list them here too.

    ALL OF THIS INFO I print out, and slide it inside a plastic page protector, along with all invoices, money order receipts, FFL copies, whatever, then place it inside a three-ring binder.

    I keep FOUR binders for my records: handguns; long guns; accessories; and sold. Since I also collect some pretty valuable boxes of ammo, I have a separate FIFTH binder for those.

    The Sold binder is mainly for me. Also, the ATF requires C&R holders to keep a "bound book" with records. When I upgrade one of my collectibles, and sell off the lesser gun, I not only record it in the ATF "bound book," but I take that gun's page out of its binder and put it in the Sold binder.

    The main binders are kept in a bank safety deposit box since I have no fireproof safe at home. As I add or make changes in the collection it's no big deal to stop by the bank and make necessary changes or additions.

    Below is a photo of one of my binders to give you an idea of what they look like. Best regards ~ ~ ~ 45 Broomhandle

    GUNINVENTORYSHEETSSIZEDetc.jpg
     
  25. Kipling79

    Kipling79 Member

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    Broomhandle:

    That is an amazingly precise system you have developed. Obsessive Compulsive Disorder a little? :neener:

    No, seriously I wish I could be that precise in my documentation. I am lucky if I comply with our state laws requiring records of private gun sales for the last 10 year. Kudos.

    Perhaps someday when my gun collection's value exceeds my months income I will be provoked into being more careful.
     
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