I think many may take me to task on the business of collecting magic as an investment. There are those that truly don’t consider magic as an investment at all. They may collect items without value consideration to anyone but them. My contention is if you are paying money it has value. I guess what I am saying is you may be making a bad investment in some cases. Many are just destined to lose money. If you are OK with that then I would say you are not investing in magic but you are collecting for the sake of collecting and if that makes you happy, go for it. It will be your heirs someday that will be in position to try and recoup some of the money you have spent. You personally have no worries!
About 60% of the families in the US have less than $25,000 savings for retirement. If you’re one of those and your magic collection is worth $50,000 you are in the right place reading this. What I am speaking of is your magic collections proportion of your net worth. If your magic collection value is less than 3% (admittedly my hypothetical number) of your total net worth I would not be too concerned if it is approached as an investment or not. If it exceeds 3% you are doing yourself an injustice if you are randomly purchasing magic collectibles without considering their potential as a long term investment. If you don’t know your net worth or your magic collections net worth you need to get busy! If you are in the enviable position of not needing your magic investment to add to your financial net worth, then spend away! I wish we all were in your shoes.
If I sound more like a financial adviser rather than a magic dealer I suppose that is my intention. I believe that magic can be a very good investment however and over time has held its value very well. In the period of 2007 though 2010 I was really glad to have much of my net worth invested in magic collectibles! I try to place items on my site that are worthy of being called a collectible or that can step into someones performance as a magician. I try hard to exclude junk! When I acquired “Old Magic Props” from Terry Harris that was his rule and I have tried to stick with it. I regularly send the “junk” I acquire in collections off to other sites or auctions or sell it in other formats. I do not sell it here! I regularly turn down items for consignment if I don’t consider them collectible! The name says Magic Collectibles and that is what it should mean.
OK, off my soapbox and back to the issue at hand. If you are going to skip lunch or not go to the movies to buy that magic collectible you have been wanting, I would suggest (if you are a significant collector) that you think that purchase through just as if you were buying a share of stock. The big difference in stock and collectibles is liquidity and that is the price everyone pays when investing in any type of collectible. Keeping a certain portion of your investments in liquid assets is definitely the right thing to do! Personally, my magic collecting is the one form of investment that gives me the most joy so it will always continue to be a part of my investment portfolio but not at the expense of other more liquid assets. .
Please keep in mind the above statements are just my opinions and nothing more. It is not my intention to give investment advice to any individual. I am certainly not a financial advisor. What I do know is the magic collectible field and I am always glad to give my advice there.
In the third and final installment of magic investing, I will discuss some “do’s and don’ts” of collecting including potential exit strategies, all designed to maximize your investment.