Value Of My "Investment"

[ArfinGreebly]

A while back, we had a thread about whether guns are a "good investment."

The concensus seemed to be "no" at the time.

I offered the idea that ammo might be worthwhile. That, too, was refuted.

About a week ago, the value of most of my ammo increased about 20% or so.

The value of two of my guns went up 10% and one went up 15%.

Happy New Year.

I've never had an investment that had so much gain in so short a time.

Think I'll pick me up some more ammo.

After all, what do I know?

 

[Fly320s]

Arfin,

I think I posted a response in that thread. IIRC, my reply then is the same as it is now:

It's only a monetary investment if you intend to sell it in the future for a profit.

 

[auschip]

Unrealized income is just that, unrealized. Of course, it assumes that you can sell for new what is currently used.

 

[Hemicuda]

Arfin...

Pre-owned ammo - you would have to sell your ammo to get your money out of it... and being that it is no longer factory new, you will LOSE money... and since it is a perishable commodity (you'll shoot it up YOURSELF) you can't count value gained in the price you would pay now, compared to what you paid a week ago doesn't count...

the guns - how do you figure value? Did you buy them used at a good price, or did you get them new, and the price of the gun go up in the stores? If so, you lost more than the price gain, in carrying it out of the store and making them "used" If you did get a good used deal, and the blue book or whatever says they gained value, you MIGHT make a few bucks... but try for a quick turnover and see what happens...

IF you are buying large lots at estate sales (or elsewhere) and buying shrewdly, you CAN play the "guns as investment game" but as for your personal collection, it is a POOR investment...

 

[Sharps-shooter]

It's only a monetary investment if you intend to sell it in the future for a profit.

Not so. Anything you put money into is an investment.

If you buy ammo regularly, then you save money by buying it when it's cheaper. Saving money looks exactly the same at the bottom line as earning money.

 

[deadin]

Saving money looks exactly the same at the bottom line as earning money.

Does this mean I'm going to have to pay taxes on the 50,000 I saved by not buying that Lexus last month.

 

[Hemicuda]

Wow, I'm REALLY screwed on taxes... I didn't buy that 2.5 million dollar house, that full set of every pre-'64 Winchester rifle ever made, OR that second Hemi'Cuda convertible, and all told, I must owe taxes on about 12 million saved dollars...

Saved money and earned money are FAR from the same... one is simply keeping more of the other... you had to EARN the money to spend it, and saving is simply saving a bit bigger % of the earned stuff...

Since you are not selling the ammo yopu bought, you did not invest in it... or gain any value in the price-hike

 

[ezypikns]

Most of the time...

when I sell a gun, I tend to lose on the deal. I'm sure that it's due to impatience on my part. I usually want to sell it NOW.
But unless you are extremely sharp (I'm not), how can you compete with a gun dealer, Bud's for example, who buys in volume? Guns just don't seem to appreciate in value as quickly as other investments, but they sure are good to have around.

 

[jlbraun]

I wish to point something out.

One does not and cannot invest in firearms, gold, or ammo. One speculates. One invests in a business in order to grow real value. Buying firearms, ammo, or gold does nothing to grow real value, you simply speculate that you will be able to sell it later at a higher price.

Back to your regularly scheduled thread.

 

[Gun Wielding Maniac]

Some people think they know everything. The Norinco 7.62x39mm used to sell for under 100 dollars per case... just a few years ago. Its selling for 400 dollars a case now...

I could have bought Wolf 7.62x39mm for under 80 bucks all day 2 years ago... its over 150 now.

Any of my swedish mausers and M39 finns are worth now more then twice what I paid for them less then 4 years ago.

Its speculation... as with any speculation, there are risks. However, the brave and knowledgeable can still stand to make a profit.

 

[joab]

Not so. Anything you put money into is an investment.

Not so an ibestment is something you spend money on with the expectation of making more money in the future,or using money to make money.
Guns are more of a libility-- An investment where you stand to lose more than the initial investment.

At best in the short term you can look at gun colleting as a way to store money and have fun with it at the same time
if you take care of your guns you will probably be able to get at least close to your initial investment back in the moderately distant future

 

[DoubleTapDrew]

Not so. Anything you put money into is an investment.

I always thought investment meant putting money into something with hope or expectation of a profit in the future.
That's why I always laugh when I see cars for sale that say "Over $30,000 invested" on a car selling for $12k. I don't consider it an investment if you know you won't get out of something what you put in.
There are a lot of guns that now sell for far more than they cost new but you have to consider if it's a 50-100 year old gun you probably could have made more over all those years by putting the money somewhere else (although you can't go out and shoot a savings account or pile of stock).

 

[Hemicuda]

Gun Wielding Maniac...

Quote "The Norinco 7.62x39mm used to sell for under 100 dollars per case... just a few years ago. Its selling for 400 dollars a case now...

I could have bought Wolf 7.62x39mm for under 80 bucks all day 2 years ago... its over 150 now."

(I have a half dozen cases of 80$ Wolf 7.62x39 still sitting here... it isn't an investment, because my intent is to USE it personally...)

AGAIN, it is ONLY an investment if you are SELLING it... if you bought it and used or are using it, it is NOT an investment... and I'm not seeing alot of private resales of that ammo right now, so it really wasn't used as an investment...

 

[The Rifleman]

I look at a firearm as a tool.. Just like a hammer or a crescent wrench.

My tool shed is full of tools. Most times when you want something - it is at the bottom of the tool box. Everyone else wants to borrow a tool, because they do not want to spend their money on something that they don't use every day. They waste their money on things that in my opinion are garbage.

New clothes, going out to eat and drink. New cars, fancy vacations.
Everytime I see that commercial - when the football game is on, about the two neighbors that goes out and trys to outspend the other one -- buying clothes for themselves and their dog and junk - just makes me sick!

I buy a Firearm because it is something that I always wanted. It has to be in nice shape and it has to be for the price that I am willing to pay. Once it is bought and paid for, I have no further desire to sell it unless something even better comes along and I have no further use for it. Even then I would never go to a gun shop to sell a used firearm.. Gun shops are in the buisness to sell firearms - not collect them. They are not going to give you more money for a gun than what they can buy it for new. They will usually give you half the cost of a new gun and mark it up 30 - 50%

If I am going to sell something - I want to be the one that is going to make the money. But if a gun dealer is willing to take a gun of mine and swap it for one of the same make and model in better shape for say $50. Than that is a good deal. By the time that you sell yours and buy that one - if it isn't already sold - you might end up loosing more than that.

Last year they advertised to buy now before the price goes up.. I thought that it was just a marketing ploy. I now come to find out that a box of bullets that I bought for $14.99 last year is now $20.00 I guess the raise in mininum wage has hit everyone a little harder than I thought. Or is it because of LEAD being so hazardous? I guess some people think that it is going to just jump right out and bite me or something...

$5 on a $15 investment in my book in a period of one year is 33%

I don't know of any IRA or Stock or Bond or CD that pays that amount!

 

[MikeH]

As far as toys and tools go, I think firearms aren't bad things to spend money on. If you spend a thousand big ones to buy the latest and greatest PC today, two years later it will be worth maybe $200. Guns tend to hold value better, even if you don't hit one of those jackpots mentioned earlier.

This is the party line I presented to my wife, and I'm sticking with it.

 

[XavierBreath]

If ammo was a decent investment, I could retire to Bermuda.

 

[ZeSpectre]

I was just thinking about money spent on firearms just recently.

I have a modest collection scraped together with an extremely tight "fun" budget and it occurred to me to wonder if it was really an optimal choice to have spent the $$$ on firearms as opposed to any of a bazillion other "fun" things.

So I jotted up a little list of the other "fun" things I might have spent the $$ on like travel, meals out, computer stuff, etc.

In the end I realized that most of what I might have spent the money on were, to be honest, fairly short duration items. I'd have had my fun and then it would have been over...but by God my guns are still sitting in the safe ready to play when I am.

Okay, so the numbers are offset a little by the ongoing cost of ammuntion, range fees, cleaning supplies, and other sundries, but even so with the guns I have some long lasting (durable?) goods on hand.

In terms of "enjoyment per dollar" the firearms have really been a most excellent investment and they have the added bonus of being a very solid "crisis management tool" if (God forbid!) it should ever come to that.

About the only other thing that comes close in terms of "enjoyment per dollar" is my camera gear (and most of that was/is WAY more expensive).

 

[Sharps-shooter]

well, we could waste all kinds of times quibbling about tax deductability and the definition of the word invest. However, future monetary benefit is certainly obtained by getting while the getting is good.

ps. My first rifle cost $40 brand new and has a book value this year of $5,500. so the things can appreciate in monetary value.

 

[ArfinGreebly]

Articulation

This is not an easy concept to articulate, it seems.

The house we bought three years ago we got into for low-ish interest (like 5.5 or 6%). We're gonna pay rent/mortgage no matter what, so less interest is better.

We're looking to re-finance in May and secure an even better interest rate.

This will reduce our monthly mortgage payment. Same house. Same land. Same usage. Less money monthly.

I drive my car every day. I will probably continue to drive for another 30 or 40 years (see, I'm an optimist!). When fuel prices began to climb two years ago, I despaired, knowing that there was just no way to stockpile fuel against what I knew would happen to the prices over the next few years. I was right: gas didn't quite double in price, and it now bites a substantial chunk out of our budget that it wasn't eating before.

I shoot whenever I can. Ammo costs whatever it costs. There is, however, a dramatic difference: I can stockpile ammo. It doesn't take up much room, it keeps forever (for certain values of 'forever'), and whatever I buy today I don't have to worry about its disappearance/obsolescence tomorrow.

I didn't manage to shoot all the ammo I bought last year. Every box I still have is a box I won't have to buy this year. I just picked up $2.50 a box on one of my more common calibres -- nearly 20% of its last year's price.

No, that's not money in the bank. No, it's not profit.

But one way or another, that $2.50 can now be put to better use.

You could consider it improved "spending efficiency" if "investment" bothers you. We don't really have a good word for ex-post-facto discounts. Try "waste avoidance" if it makes you feel better.

We all recognize a good deal. That power saw you bought the day before the price went up another $30, or the tires you purchased last week and saw priced today at $100 more than you paid.

Investment? Not at all. Warm fuzzies? You bet. You're $30 or $100 richer even though you can't explain how.

The buying power of the dollars I spent last year on ammo just increased dramatically -- and retroactively.

Oh, and there is also this: what's the "value" of something you can no longer buy?

 

[Jim Watson]

I don't worry so much about fine distinctions in definition of investment, speculation, appreciation, savings, etc. as I do about the fact that guns are an increasingly politically incorrect possession and can be rendered valueless at the stroke of Hillary's pen. It won't keep me from buying guns to SHOOT but it discourages me from buying guns for resale or even from applying current values to guns bought in the past.

 

[Jorg Nysgerrig]

I guess the raise in mininum wage has hit everyone a little harder than I thought. Or is it because of LEAD being so hazardous?

I would guess it probably has something to do with the fact copper has gone up more than 500% over the last 2 years.


As far as investment and value, it's really only worth as much as you sell it for. While certain things do appreciate, the majority of items won't fetch full retail on the secondary market if they are still readily available.

 

[Soybomb]

So the cost of you replenishing your stock of ammo has increased 20%. Now if you want to go on vacation or pay for a trip can you sell your ammo for more than you paid for it 6 months ago? You've already paid sales tax or shipping on it so you have to include that in your marked up sales cost. Unless you're going to undercut current prices, most people will just buy from the store. I'd think the increase in price would mean at most you'd break even. This is a losing scenario versus compound interest.

Lets take $1000 worth of ammo, conservatively make 5% a year on it, and compound it monthly. At the end of 10 years you've got $1,647. The value increased by 64.7% In 10 years your $15 box of 9mm will need to cost $24.71 just to break even with a very modest cd or poorly performing index fund.

I'm all for stocking up on ammo, but if you want to invest in metal commodities there are far better ways to do it.

In relation to metal pricing though, here's some numbers some will probably find interesting:
metal - USD per 1000 kg 2004 - 2006
Copper - 3,200 - 6,670
Lead - 990 - 1,515
Zinc - 1,226 - 4,110
Nickel - 15,190 - 30,050
Aluminum - 1,947 - 2,595

Remember cartridges are copper and zinc (~30%).

 

[ArfinGreebly]

Stuck Thinking

Look.

I really do understand the concept of "investment" and how that differs from "just a good deal."

Evidently, there's no actual realized value in buying something before the price goes up. ~

Here's what we'll do: those of you with ammo stocks worth more than $1,000, and who believe there's no realized value, please write me a check for $200 for every $1,000 of ammo that you have in stock. PM me for my address. ~

Oh, and that's $1,000 in "2006 dollars" as opposed to whatever year you actually bought the ammo.

I promise not to buy ammo with that money. ~

When my son inherits my old guns and what's left of my ammo, the fact that he won't have to spend $80 a box for .22 LR probably won't mean anything to him; after all, what's $80 anyway?

Still, I'm going to continue to kid myself into believing it's better to spend less for something today, and use it 5 years from now, than to pay more tomorrow for that same thing, and use it 5 years from now.

Your Milage . . .

 

[bclark1]

Guns are more like cars than stocks. (Unfortunately for some of the sellers here, they don't realize that) they both depreciate significantly as soon as you take them away from the dealership. After that they hold their value pretty well. Some will go up. Most won't. Ammo prices will fluctuate with commodity prices and the expense of manufacturing. But really now, who has enough ammo to realize any significant capital gain on its appreciation - and you're just going to spend it all again when you have to buy more at a higher price anyway.

They are definitely worth something if you're in a bind and need quick cash, but no, I wouldn't can the money markets to invest in any consumer product.

That may have been too serious for the spirit of the thread though, so I'll throw in a half dozen and a for good measure. Sorry for being literal