Firearm Depreciation

[84VETTE]

It was a technical conversation,where my point was that a handgun that I had bought could be later sold for somewhat near what I paid for it if I ever was in need of money but the personal value that it holds for me exceeds what money may be lost. I never buy a gun with the intention to resell it, the only reason I ever sell one is to be able to afford a better one.

 

[smoking357]

If you want a safe investment, go buy some bonds or a CD or even some stock.

WHAT!!!!!!!!!!!!!!!!!!!!!!????????????????????
Bonds are subject to interest-rate and default risk, as well as currency devaluation.
CDs, if short-term, have little inflation risk and lesser default risk, but both are still present. Indeed, several money market funds have "broke the buck."
Stocks are subject to each and every last manner of risk.

 

[misconfig]

The point I try to make to my wife is; firearms ARE a safe investment! I'm fairly new to the work force ( in career for 5 years ) and when the economy went down I lost over $12,000 in my IRA. Since then, I have stopped putting as much money in my IRA (403b) and started investing in firearms.

This way, I always have a tangible asset, if the economy completely collapses I can defend my family // home with my investment. Also, firearms will always be worth something, no monetary system, or even a new one, you can always find someone willing to buy.

I'm going to keep investing in this passion, for the reasons listed above and for a family heirloom I can pass on to my son.

 

[leftsock]

... where my point was that a handgun that I had bought could be later sold for somewhat near what I paid for it if I ever was in need of money...

It sounds like our point is: that may or may not work out for you depending on many factors. I can't see any reasonable person paying near MSRP for a used item that they could go out and purchase new from any reputable dealer.

Snorko's items appreciated in value at a rate of 2-4% per year over 14-17 years. I'm sure he had fun with the items, but I wouldn't go out of my way for that sort of return. At such a long time frame, one could consider an S&P 500 index fund and probably get an 8% return or better.

Everything sells at the right price. If you're in desperate need of cash and looking to sell your firearm, how low are you willing to go to liquidate your asset? A 20%-30% discount? Why take a loss to get quick cash when planning ahead and put those funds in a money market that will hopefully keep the dollar's value and is a liquid asset.

 

[leftsock]

... when the economy went down I lost over $12,000 in my IRA. Since then, I have stopped putting as much money in my IRA (403b) and started investing in firearms.

Usually, when the price goes down, you BUY! Besides, you'll get 40+ years worth of dollar cost averaging.

This way, I always have a tangible asset, if the economy completely collapses I can defend my family // home with my investment. Also, firearms will always be worth something, no monetary system, or even a new one, you can always find someone willing to buy.

Fair enough. If the economy and society collapses, you'll be set. If not, you might not be able to afford to retire one day.

 

[misconfig]

Usually, when the price goes down, you BUY! Besides, you'll get 40+ years worth of dollar cost averaging.



Fair enough. If the economy and society collapses, you'll be set. If not, you might not be able to afford to retire one day.

Yes this is understood but it's also assuming the economy is going to get better.

It hasn't in years, to be honest I'm not confident that it will snap back, I can't justify spending more money on an already failing economy, especially after I just lost $12k of my hard-earned money.

 

[UncleMike]

The point I try to make to my wife is; firearms ARE a safe investment! I'm fairly new to the work force ( in career for 5 years ) and when the economy went down I lost over $12,000 in my IRA. Since then, I have stopped putting as much money in my IRA (403b) and started investing in firearms.

This way, I always have a tangible asset, if the economy completely collapses I can defend my family // home with my investment. Also, firearms will always be worth something, no monetary system, or even a new one, you can always find someone willing to buy.

I'm going to keep investing in this passion, for the reasons listed above and for a family heirloom I can pass on to my son.

EXACTLY!!
As I said earlier, it's been my experience in over four decades of gun collecting/trading that you can always make money investing in firearms.
I've NEVER lost one cent on a sale/trade and I only deal with FFL holders or close personal friends.
I could have made more money by dealing with John Q but I choose to avoid the potential legal ramifications of such exchanges.
The trick is to know exactly what your particular firearm is worth.
The old adage "Buy low, sell high" applies perfectly to firearms transactions.
In addition, patience is paramount! If you can't hold onto a gun for several years, or even decades, you will not realize the full potential of your investment.

Just my
Mike

 

[BE Mike]

It was a technical conversation,where my point was that a handgun that I had bought could be later sold for somewhat near what I paid for it if I ever was in need of money but the personal value that it holds for me exceeds what money may be lost. I never buy a gun with the intention to resell it, the only reason I ever sell one is to be able to afford a better one.

It depends on the gun. For example, Glocks don't seem to appreciate. If you buy a nice used one, you may get your money back when you sell it if it is still in very nice shape. If you make very wise purchases, you will probably not lose in the long run, but guns aren't generally a good investment when you consider inflation. The way I look at it, I buy a gun I like and enjoy it and years later if I decide to sell it, I may get my initial investment back or make a little on it. Sometimes I've gotten lucky and bought guns that have increased a lot in value over the years, but that is the exception rather than the rule.

Good guns don't depreciate like cars, mobile homes, clothing and household appliances though. You are better off spending you money on a good used gun than that new TV, computer, iPod or Wii and all the games that go with it.

 

[tuoder]

WHAT!!!!!!!!!!!!!!!!!!!!!!????????????????????
Bonds are subject to interest-rate and default risk, as well as currency devaluation.
CDs, if short-term, have little inflation risk and lesser default risk, but both are still present. Indeed, several money market funds have "broke the buck."
Stocks are subject to each and every last manner of risk.

These are all better investments than a gun. All of those risks are minimal, except of course if you buy junk bonds or crappy stocks.

 

[PatriotPride]

WHAT!!!!!!!!!!!!!!!!!!!!!!????????????????????
Bonds are subject to interest-rate and default risk, as well as currency devaluation.
CDs, if short-term, have little inflation risk and lesser default risk, but both are still present. Indeed, several money market funds have "broke the buck."
Stocks are subject to each and every last manner of risk.

Never thought I'd say it...but I do agree with you! The nail---you hit it. On the head.

 

[pudly]

They are like most any collectible item. Condition, functionality, rarity, and desirability all matter. A rusty old Plymouth Volare won't be worth much. A nice looking 70's muscle car will fetch a high price.

 

[public servant]

Don't take my word for it. Look at the classifieds and tell me how many of those guns you'll buy used for the same price you can buy a new one.

Apparently you haven't seen all the $600 Glocks in the classifieds.

 

[Kirk Freeman]

Id just like to hear everyone's input in the sense that most guns hold their value better than a lot of alternatives someone could choose to make an investment in.

84, think it though, you can answer your own questions.

You want to look at "emerging markets" in firearms collecting. Don't run out and buy Winchesters but what the collectors will turn to next--Remington pistols, Mosin-Nagant rifles, Sauer pistols, inter alia. You have to make educated guesses as to what will be hot.

Guns do appreciate, especially in inflationary times, but you need more than appreciation you need return, e.g. the Smith .22 revolvers could be had for $200 just a few years ago, now they are going for $500 to $600.

What is rare has value; what is common or fungible (e.g. Glocks) does not have the same value. Focus on what is low priced but still rare and beat the market to the punch.

Since then, I have stopped putting as much money in my IRA (403b) and started investing in firearms

Yes, but those of us with SEPs or SIMPLEs have a hard time convincing the IRS that purchasing firearms should reduce our AGI.

 

[djl02]

These are all better investments than a gun. All of those risks are minimal, except of course if you buy junk bonds or crappy stocks.

You got any good stock tips? My finance advisor sucks.

 

[linzal12]

I have never seen a stock or CD shoot an intruder. I personally try to invest in stuff that will be of value regardless of our economy. But the most important rule I follow is to diversify. Don't put all of your eggs in one basket.

 

[Jack Ryan]

Apparently you haven't seen all the $600 Glocks in the classifieds.

Lots of those, they just don't sell very well.

 

[jtolbert8]

You can also think of buying guns as not just being a monetary investment. but an investment in your security. If you bought any gun and it saved your life just once i would say that is a sound investment. not to mention the peace of mind it brings.

 

[tuoder]

You got any good stock tips? My finance advisor sucks.

Not really, other than going for big and stable companies, and then buying and holding for a long time, and reinvesting the dividends.

 

[BigMatt]

I look at it this way: There are a lot of worse ways to spend my money than on a gun. There aren't many guns that if you buy them right, you won't make your money back. I try not to buy new guns and I also try not to get too antsy about any particular gun that I want. I'm not saying that I invest in guns, but i haven't lost any money and have had plenty of fun playing with them in the meantime.

Buy them right, and sell them right, and you will be ok. Try to say that about many other hobbies.

 

[88GT]

What about milsurps? I know Kar98k's used to be dirt cheap, and they're going up in value now that the supply has dried up. Are they doing better than the pace of inflation, though? Also, could one invest in Mosins expecting the same to happen when those dry up?

The K31s are going up too. Bought my first for $129. Most expensive one was $179, when the demand started increasing. The same store has them now for not less than $229. The condition on the ones that are left is usually not as good either.