collecting tools as a retirement portfolio...

[fasteddie313]

do you think if a guy was to collect tools for most of his life, 30-40 years, and instead of putting money in a savings account or a 401k, this guy just buys up whatever great deals on quality usa tools he can find with his savings money, then this guy would be able to capitalize/liquidate his collection and retire off of what that brings?

like spend $200-$300 per month, whatever can be afforded, on tools that can be had reasonably below there resale/ebay value..

do you think the value of good tools to be timeless?

would there price ride inflation?

what do you think will appreciate/depreciate?

im thinking mostly hard line stuff from the well known usa manufacturers...

do you think there could ever be a technological advance that renders tools as we know them obsolete in any way?

I like hard investments, things you can hold, much better than a stock portfolio or a savings balance... like tools, firearms, etc..

this has been my idea for quite some time, just wondering if you guys think it would be wise, or idiotic, to build a half million dollar sale value collection of tools and expect to be able to get your money back out of it, maybe even at a profit from what you paid now, in 40-50 years...

 

[McFarmer]

If you are risk adverse, I would say no.

Too many things to go wrong. Think of the storage, the maintenance, the ability to sell if you need to.

 

[d.mcfarland]

30-40 years ago SAE was the norm. Now nobody wants it. Just looking at the past to predict the future.

 

[rshadd]

Used tools typically sell for 50-60% off the retail price of new tools. You better be earning money with your tools to consider it an investment.

 

[Crown Imperial]

It is rare to find tools from the last 30 years that have actually appreciated instead of depreciated.
Buy T-bills.

 

[David W]

In a sane world I would say no. But in this insane world of crony capitalism, where inside trading is legal if you are a congressman, where even the republicans idea of a free market is "you pay the cartel whatever price they want for a gallon of gasoline or else ride a bike", and the democrats think everything belongs to the government, I'm skeptical that I will see a penny of my IRA when I'm 65.
Certainly quality tools are part of a portfolio but don't put your eggs in one basket. Buy stuff that can make you more self sufficient or can be bartered such as tools, ammo, long term food supplies and a myriad of other things that I can't think of right now.
I don't anticipate a conventional retirement of golfing or traveling in an RV for anyone in the future.

 

[fasteddie313]

I pick up most tools at 5%-10% of there cost new 99% of the time..

 

[cgv69]

do you think if a guy was to collect tools for most of his life, 30-40 years, and instead of putting money in a savings account or a 401k, this guy just buys up whatever great deals on quality usa tools he can find with his savings money, then this guy would be able to capitalize/liquidate his collection and retire off of what that brings?

I get that you are trying to find a way to justify your tool habit but no, there is no way investing in tools will net a better RoR then a decent, well managed 401k

 

[Bigblue&Goldie]

Why would you invest in depreciable assets? No offense, but this is a terrible idea.

 

[chrismenke]

This is what is called a collection, and it is not an investment. There are any number of folks who collected baseball cards in the '70's and 80's thinking they would hold a future value, but because everyone was a collector every card printed is in collector condition and they don't hold a lot of value.

Feel free to collect tools. They may be valuable (Wilton Vises, Rolex, Air Cooled Porsches, Tiffany Lamps) or worthless (Craftsman RP Wrenches, Pet Rocks, Hummel Figurines, baseball cards) when you sell them. Because they are not an investment this shouldn't bother you.

For retirement, I would suggest you invest anything you can afford in an investment grade vehicle...stocks, bonds, real estate, gold all have value swings but not as dramatic as collectibles. Even investment grade collectibles like restored cars or vintage firearms are subject to wild swings in value (look at muscle cars over the last 15 years).

Here's a best of both worlds idea...buy undervalued tools when you see them, sell a few on and make back your costs and a bit of profit. Keep some as well. Put the re-couped cost and profit in a tax advantaged retirement account. Now you've got something you can touch everyday, and something you can't touch 'til you're 65!

 

[fasteddie313]

because I don't trust the USD, any other fiat currency, or any stock in any business or bond that's worth is based in a fiat currency... and I don't want anything to do with gold, its too much of a luxury thing..

I want an investment that would survive war with china/Russia, or a US civil war, an investment that's still worth something in hard times like the great depression..

firearms sound great but anything that's worth anything in a time of war could just as well easily be confiscated by our own feds... I have enough to arm my family plus a bit, that's enough.. could always use a couple more K 5.56 but whatever, you know..

 

[Bigblue&Goldie]

I suggest investing in tin foil so you can make a lot of hats.........

 

[Garage Junky]

Don't want to rain on your parade but I don't think it's a great idea. A lot of things to consider:

- cost of storage, not to mention the space it takes up
- rust
- demand for tools in the future is uncertain, plus there will always be new ones made that are better/faster/stronger/cheaper etc.
- if the economy is in the dumper and you need to sell you may be unable to get your desired price (admittedly a problem with any investment) or any price for that matter (stocks at least are generally liquid).

I'd say if you want to do some buying/selling/trading when you see good deals go for it. Put the proceeds into a more suitable long term investment. (unfortunately, this wont

 

[BJ42LX]

do you think ... this guy would be able to ... retire off of what that brings?

No.

Not a chance.

 

[Garage Junky]

If you don't like gold there are other precious metals to consider. Silver for example is cheaper relative to gold, has industrial uses, not just for luxury and is used up in many cases, whereas all the gold ever mined is still in circulation and every year there is more of it in peoples hands.

By no means would I suggest precious metals as your only investment, however. Have you considered real estate? It's tangible, which you like and could generate income or appreciate in value depending on location.

 

[Garage Junky]

This is what is called a collection, and it is not an investment. There are any number of folks who collected baseball cards in the '70's and 80's thinking they would hold a future value, but because everyone was a collector every card printed is in collector condition and they don't hold a lot of value.

Feel free to collect tools. They may be valuable (Wilton Vises, Rolex, Air Cooled Porsches, Tiffany Lamps) or worthless (Craftsman RP Wrenches, Pet Rocks, Hummel Figurines, baseball cards) when you sell them. Because they are not an investment this shouldn't bother you.

For retirement, I would suggest you invest anything you can afford in an investment grade vehicle...stocks, bonds, real estate, gold all have value swings but not as dramatic as collectibles. Even investment grade collectibles like restored cars or vintage firearms are subject to wild swings in value (look at muscle cars over the last 15 years).

Here's a best of both worlds idea...buy undervalued tools when you see them, sell a few on and make back your costs and a bit of profit. Keep some as well. Put the re-couped cost and profit in a tax advantaged retirement account. Now you've got something you can touch everyday, and something you can't touch 'til you're 65!

+1

 

[cagullett1]

If you want tangables, then buy gold, silver, and guns. Real estate (land specifically) is an easy tangable asset that will appreciate with little maintenance.

 

[Garage Junky]

I get that you are trying to find a way to justify your tool habit but no, there is no way investing in tools will net a better RoR then a decent, well managed 401k

Agreed. Tools are just that, tools. They are not an investment vehicle.

 

[Garage Junky]

It is rare to find tools from the last 30 years that have actually appreciated instead of depreciated.
Buy T-bills.

With interest rates at all time lows I can not with good conscience recommend T Bills.

 

[cagullett1]

Here's a best of both worlds idea...buy undervalued tools when you see them, sell a few on and make back your costs and a bit of profit. Keep some as well. Put the re-couped cost and profit in a tax advantaged retirement account. Now you've got something you can touch everyday, and something you can't touch 'til you're 65!

I've literally built my entire tool collection off of the profit I've made on buying and selling undervalued tools. While my wife always complains that I have too many tools, I remind her that it didn't cost me anything (besides time), and when someone goes wrong around the house or with our cars, I have the ability to fix them.

 

[snapmom]

There are a lot more older collectors than younger collectors, so the supply will far out pace the demand. Prices for most old tools have dropped like a rock in the last 5 years, and except for the handful of tools, prices will probably fall some more.

 

[jmm]

You better be earning money with your tools to consider it an investment.

Case closed. Bad idea.

 

[d.mcfarland]

because I don't trust the USD, any other fiat currency, or any stock in any business or bond that's worth is based in a fiat currency... and I don't want anything to do with gold, its too much of a luxury thing..

I want an investment that would survive war with china/Russia, or a US civil war, an investment that's still worth something in hard times like the great depression..

firearms sound great but anything that's worth anything in a time of war could just as well easily be confiscated by our own feds... I have enough to arm my family plus a bit, that's enough.. could always use a couple more K 5.56 but whatever, you know..

I suggest investing in tin foil so you can make a lot of hats.........

Bahahaha

 

[honcho]

I can't see tool collecting as a viable approach to preparing for retirement.

While many tools will retain a significant amount of value, few will have the ability to appreciate in value. Tools earn value by being used, which in turns results in wear and tear on the tool, thereby reducing the value of the tool. You may be able to beat this in the short term by buying at well under retail prices but it will be hard to amass a large financial position over time paying under retail prices.

As another poster pointed out, liquidity of your tool "portfolio" may be a problem when you need pay your expenses in retirement. Yes, people took a beating on their stock portfolios in the recent/ongoing recession, but they were able to sell their stocks for whatever the current market price was at the time. The market for a set of sockets might not be very active when you need money to pay for your 75th birthday trip to Hawaii.

Also pointed out was the possible obsolescence of some types of tools. A technology like 3d printing may render some classes of tools obsolete and near worthless.

I personally think the best investments are those that will reduce your need for cash in your retirement years, like a paid for home located in a low tax location. Of course, the choices you make should be made considering your timeline. Retirement in ten years is different than retirement in 40 years.

Good luck.

 

[rsanter]

If you buy good deals or like new used stuff.
Then you use it lightly to save yourself some money
After 30 or so years the price on the tools will have gone up enough that you could then sell them and make money over what you paid for them.

Can you retire off that....yes
If you want to live in a one room shack in Mexico

Bob

 

[panknuckshovel]

Beanie Babies and the coins on late night TV, the only way to go.

 

[kf4zht]

If you want to invest in something that you can still have fun with and show off I would recommend guns and ammo. Ammo never goes down as long as you don't buy during a panic. Guns tend to go up as long as it isn't something terribly common (glocks, xds, etc) or crappy.

I don't think I have ever lost money on a gun buy/sell. Also if the economy falls apart you have something of immediately high trade value

 

[DekeT]

In a sane world I would say no. But in this insane world of crony capitalism, where inside trading is legal if you are a congressman, where even the republicans idea of a free market is "you pay the cartel whatever price they want for a gallon of gasoline or else ride a bike", and the democrats think everything belongs to the government, I'm skeptical that I will see a penny of my IRA when I'm 65.
Certainly quality tools are part of a portfolio but don't put your eggs in one basket. Buy stuff that can make you more self sufficient or can be bartered such as tools, ammo, long term food supplies and a myriad of other things that I can't think of right now.
I don't anticipate a conventional retirement of golfing or traveling in an RV for anyone in the future.

Oh wow, what a bunch of ****! How is what you describe any different than from the beginning of time? If you can't make do, you have only yourself to blame.

 

[Steinmetz]

"...then this guy would be able to capitalize/liquidate his collection and retire off of what that brings?…"

Is this the best you can do?

 

[bczygan]

because I don't trust the USD, any other fiat currency, or any stock in any business or bond that's worth is based in a fiat currency... and I don't want anything to do with gold, its too much of a luxury thing..

I want an investment that would survive war with china/Russia, or a US civil war, an investment that's still worth something in hard times like the great depression..

firearms sound great but anything that's worth anything in a time of war could just as well easily be confiscated by our own feds... I have enough to arm my family plus a bit, that's enough.. could always use a couple more K 5.56 but whatever, you know..

In a war, if your aren't killed in the hostilities, the powers that will have control over you will determine your fate in a much stronger and direct way than your puny resources will be able to. You're horde may just be taken from you, one way or the other.

In the chaos of war, or the deprivation of economic bad times, the only resource you really have, is your wits and a few tools you can use to keep life going.

Learn to be independent as possible. Learn to live a simple and rugged life. Acquire basic life skills like growing crops and making your own shelter and finding a water source and hunting and trapping. Be ready to learn to live like a native american before the Europeans came. Find a community. A group that knows how to live in basic fashion, and will support each other will survive the best. Think Menninite or Amish or other religious and social based groups. They will survive and flourish better than high tech groups.

In fact, why not make the change now and beat the rush. You need to be already ensconced in this lifestyle when the apocalypse comes.

Or, you could try to stop living in fear, and learn to live in our interdependent world, and enjoy all it's benefits. Life is short. You'll be long gone before the end of society comes.

"The best-laid schemes o' mice an' men. Gang aft agley."

 

[d.mcfarland]

I will admit that tools keep up with inflation, they don't go above that though for the most part.

 

[Steinmetz]

"...Or, you could try to stop living in fear, and learn to live in our interdependent world…"

Amen.

 

[Steinmetz]

"...Oh wow, what a bunch of ****!…"

Agreed.

 

[Olafur]

The enormous cost and work to gather, store, maintain, and finally sell/ship again such a tool collection is going to eat up much if not all of the "investment"

Today the markets are overflowing with totally usable cheap tools and try to imagine the amount of decent cheap tools the world has produced in 40 years - with the Asian giants on full swing. Who on earth will then need 40 year old tools - and for what? To repair the cars of the future. Will they even be repairable for the common car guy?

 

[Fcvapor05]

I will admit that tools keep up with inflation, they don't go above that though for the most part.

Yeah right. You can't tell me that a USA craftsman wrench from 1980 is going to be worth even the pittance that a current craftsman USA wrench is worth, except to an extremely tiny percentage of the population.

 

[Makapuu]

Yeah right. You can't tell me that a USA craftsman wrench from 1980 is going to be worth even the pittance that a current craftsman USA wrench is worth, except to an extremely tiny percentage of the population.

I agree that we here at GJ are enthusiasts living in a delusional state when it comes to understanding real world market value.

As far as retiring on tools vs. the usual methods, there are no tax deferment benefits. It is more of a hobby.

But like some hobbies, it can create wealth and appreciate in value, and help out in retirement-but only if you sell the tools. Unlike coin collecting or something similar, when you sell your collection you do gve up something that has a useful utility.

I was fortunate enough to retire early, and would go crazy if I sold my important tools. In fact I am actually upgrading my tools and lived without (including tools I inherited) and my coin collection, on the other hand, was just consigned to an auction house with no regrets.

Remember that if you do sell your tools later, for a profit, the gain is taxable. So save all your reciepts!

 

[Olafur]

I want an investment that would survive war with china/Russia, or a US civil war, an investment that's still worth something in hard times like the great depression..

I do not know how the Third World War will be fought, but I can tell you what they will use in the Fourth — rocks!
Albert Einstein., in an interview with Alfred Werner, Liberal Judaism 16 (April-May 1949)
https://en.wikiquote.org/wiki/World_War_III

 

[AndrewV]

Buy gold, silver, or gems. Value doesn't really decrese, value of money changes. So they stay, or gain said value over time.

Would never invest $$$ in tools, to try to earn money in my later years.
All mine are for work, not retirement.

 

[bochnak]

Put it this way, the market from 1926 to present averaged 10%/yr, or something like that.

If you bought a $100 tool today, and compounded it at 10% for 30yrs, you would have to sell it for $1745. Not to mention you have to store it, polish it, whatever, for that period of time.

I think it would be a bad investment.

 

[PFSard]

This doesn't sound like a promising idea. This forum is probably not the place to be asking this question.

I would be researching (through well-documented articles and books) the types of investments (assuming financial) versus real estate to give you a feel for the relative appreciation of each asset. I doubt you will find anything regarding tools as a point of comparison.

And search costs for tools. And the care of tools and storage costs would chew up time. And the liquidity problem of selling tools. And on and on ...