The Value of Things

There is an amazing difference between the value of things at retail and at resale.  If you don’t believe this, try holding a yard sale.  Things new in their packages will get 1/4 of the price paid for them at the store, if you are lucky.  Anything out of the package will go for a dollar or two, even if the retail price is $20 or more.

The TV shows like the Antique Roadshow and Pickers, where items that look like junk are worth hundreds of dollars due to some collectible feature, have convinced us all that we have all sorts of treasures.  That quarter collection of the 50 states, that movie poster from A Bugs Life, or that case of Coke bottles may be worth a fortune.  Again, at the yard sale you’ll be lucky to get anything for them.  The only ones who will be interested will be people who deal in the industry, and they are only interested if they can get a great deal from you so they can turn a big profit for their troubles.  Because they have the time and people coming to them looking for the stuff they can get the retail value.

All of this is not to say that some collectibles will not fetch a good price if presented to the right buyers.  It is just that it is difficult to reach the right buyers and those buyers are often separated from you by people who will take a big cut of the profits.  Even if you sell through an auction house or on consignment you’ll pay a big fee to the house.  Again, they sell for retail prices, while you get resale prices.  There are also avenues like ebay, but you’ll often find the marketplace crowded and, if you include your time and hassle, you may find it is better to just work extra hours rather than go through the hassle.  Sure you got $20 for that old coffee pot, but you had to list the item, find a box, and go to the post office to send it.  You made $20 for two hours when you could have made $40 at the office in those same two hours.

So what is the point of this monologue against Beanie Babies?  The point is that when looking to invest, buy things like stocks and bonds that have a defined value and are easy to sell.  In other words, they are liquid because there is an established market and the market makers take a fairly limited cut.  When you buy things for you, just buy them and expect that the money used to buy them will be “consumed” and the money will be gone; therefore, doing things to improve “resale” is a worthless cause.  Don’t tell yourself that you’ll be able to sell them later for anything appreciable. 

The other point is that when buying things retail, realize you are paying a huge mark-up to cover rental of the space, wages, and of course profits for the owners.   If you are looking to save a few extra dollars to invest, perhaps looking at yard sales, estate sales, and pawn shops (not antique stores – they have the same retail mark-ups) for things that don’t really deteriorate like wood furniture, glassware, and so on instead of heading to the mall and buying new.  Just be sure to go with a plan and buy the things you really need, not a bunch of stuff that you think is at a low price that you can sell later for more.

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