The United States is a consumer society. We buys mountains of stuff that we don’t need. Gadgets we don’t use. Books we don’t read (guilty). Clothes/shoes that never get worn. Toys that never get played with. Some of those things are consumer collectibles i.e., DESTROYER of hopes and dreams and wealth and F.I.R.E.
Norman Rockwell plates, Beanie Babies, sports cards, dolls, porcelain figurines, and the list goes on. Consumers get suckered into a well executed marketing strategy with words and phrases like limited edition, one of a kind, rare, premium, exclusive, # of ####, or the fact it’s SIGNED (OMG!).
What is a collection and why has it crushed so many people’s hopes and dreams? The collections I refer to in this posts aren’t necessarily hobbies but more on the side of Investments under the guise of collections. I’d define collection as the purchase (or acquisition) of a series of like items such as a basketball card collection. I’ve experienced this nonsense through others eyes and my own.
Max’s Bball Card Collection!
My mom recently moved from my childhood home and started giving me a bunch of my stuff that was sitting in her outside shed including my basketball card collection (see how valuable they are!).
I came from a family where my father was a collector of sorts. He collected stamps, McCoy pottery, VHS videos, among other things. I know what you’re thinking: SUPER COOL! And he seized the opportunity to get me into collecting. Every week, he’d come to pick me up and we’d venture to the flea market. An older gentleman with a cigar would sell me $20 worth of basketball cards and I’d take the packs home in a brown paper sack.
It wasn’t just the basketball cards that we bought. Binders with plastic sheets to display them, and Becket: the basketball pricing guide. Occasionally, I’d unwrap a ~gem of a card~ and would be inclined to put them in a hard plastic case so it wouldn’t get damaged. Although I collected for a few years, video games ended up being more exciting than pictures of sweaty dudes. Thanks, Nintendo, for helping me see the 8-bit light 
And btw, the ~gems~ in my basketball card collection we’re worthless. Even my Jordan cards! ugh. oh well.
iSold It on eBay – the Bargain Bin of Collections
In college, I worked at an eBay store called iSold It on eBay. People brought in tons of random stuff to convert to cash including collections. Our process was to look up the item, photograph it, write an “expert” listing, post it, and finally ship it once sold. Our commission was roughly 30%. Many of our customers were shocked once they received their check in the mail. Not only had their “valuable” item had depreciated, we often sold items at a third of their price. Stack on our commission and an item with a perceived $100 value netted you a $23 check after our process.
We moved so much of this stuff through our store at a fraction of its cost. People would bring in trash bags full of beanie babies (oh, the irony of being in a trash bag). We would group them together as a “lot of 100 beanie babies” and, still, they sometimes wouldn’t even sell for $9.99 – our opening price.
Last example I’ll bring up was a Lladro collection. A woman started unloading an ex-husband’s Llardo collection. These are “hand painted” porcelain figures from “Spain”. All in their original packaging. The largest piece we sold was a Cinderella scene with a full on carriage and set of horses. Ridiculous for a middle aged man to have spend so much money on this thing. This one item alone sold for $10,000. We had to call in UPS to come foam protect it prior to shipping. All in all, this collection was probably originally purchased for somewhere around $100,000. After our process, she probably received ~$23,000. She didn’t care, though. It was her husband’s collection and she wanted to inflict maximum damage. And she did.
The biggest, dumbest Lladro we sold: a Cinderella piece (originally worth $38,500 but sold for $10,000)
A Collection That Makes More (Dollars and) Cents
So let’s see how valuable an investment could be worth today.
Assumptions:
- Dad gave me ~$25 a week for about 5 years
- I started collecting when I was 8ish, so 1991 is the start date
- I assumed my alternative investment is the S&P
- Dividends are reinvested
Instead of collecting (investing in) basketball cards, let’s assume that $25 was put into the market using the above assumptions.
I would have put in: ~1600.
After 5 years of investing, I would’ve had $2145.13… not bad…
Leaving that amount in the S&P 500 with no additional investments would have given me: $12,898.31 Smokes! That’s a decent start to a down payment on a home or even enough to buy a decent used car.
Now let’s assume I stuck with the $25 a month until today, i.e., 27 years worth. $29,483… Now that’s a down payment on a small home where I’m from.
Now, Now, let’s assume we continued a monthly investment of $25 from 8 years old to 65 years @9% compounded interest. That’s half a million.
Alternative to Collections
If you’re not going to invest your money in non-depreciating assets then spending on experiences and access makes much more sense. And it certainly beats ownership. For instance, instead of buying music via CDs/Vinyl or even iTunes (RIP) a $9.99 Apple Music subscription will cost you $120 a year and give access to millions of songs. There’s also a comic book version of this. Furthermore, you can buy access such as going to the beanie baby museum (coming soon) vs. dropping a cool $125,000 on the collection; or stay at an AirBnB vs. buying the condo in Puerto Vallarta. Rent the runway (for dresses) vs purchasing. etc.
Conclusion
Really consider what you choose to collect and should you really even collect at all when it doesn’t make financial sense and access to things has never been easier. I didn’t cover the utility of collections and understand you can find joy in some collections. However, if you can’t play with your collection for fear that it will diminish in value and you have display boxes/cases to protect your collection so you don’t get finger prints on said item AND/OR you can’t show your Beanie Baby collection to your friends because you’re a 48 year old male after all, you need STOP IMMEDIATELY. You’re killing your future and your life.
Most of us pursuing FIRE should get this and probably don’t have beanie baby or Lladro collections. But you might have other collections, like shoes, books, Vinyl, (hopefully not food), etc. that are sapping precious FIRE dollars from your future. Figure out a way to reign in those temptations and redirect to investments and or experiences/temporary access.
What have you collected that ate your FIRE dollars?