Mandolin as an Investment !

[GreenMTBoy]

So, I just got a statement from my bank about one of my IRA accounts coming up for renewal.
This particular account has like $5500. in it .
Last year I made about $.77 on it which is totally ridiculous,but I know that's just the way it is these days .
I am trying to convince my wife that I might as well buy a nice mandolin with the money that I could play and enjoy .
If I ever need the money and I have to sell it I'm pretty sure I could do better then $.77 profit per year on it ?
Was wondering what Y'all think about it .
And .....What would be a good investment should I be able to convince my dear wife ?
Thanks Much ,
Tom

[Jeff Hildreth]

AN observation:

Investment grade instruments usually cost more than $5500.

Unless you are looking at the extreme upper level, mandolins are a poor "investment"

Go to garage sales.. buy anything that is cheap enough to double your money at your own garage sale. Beats current dividend rates and certainly IRA and bank rates.

[tkdboyd]

As much as I would like to help support your MAS, if there is a potential that you may need the money for "real life" there isn't a chance in hades I would recommend a mandolin in that price range as an investment. There are some models that could be considered less risky, but if they are an investment you wouldn't want to play them...and well that would really, really suck!

Good Luck!

[Denny Gies]

Don't do it, Tom.

[GreenMTBoy]

So,you guys have been talking to my wife .....hahahaaha

[pheffernan]

I think you can reasonably make the argument that you could get more than 77 cents' worth of pleasure from a $5500 used instrument that is unlikely to devalue, like an Ellis or Heiden A. I don't think you can reasonably make the argument that you're going to build a retirement portfolio by investing in midrange instruments.

[jaycat]

Unfortunately, if some bad luck comes your way, you may need that $5500. Having a mandolin worth that much is not the same as having the cash on hand. You would still need to find a buyer.

[foldedpath]

You could spend about half that amount on an old Gibson Snakehead A, like maybe an A Jr. Or spend more on one of the fancier Snakehead models. That's the only thing I can think of, off the top of my head, that has a pretty good chance of appreciating a bit over time, and within that budget. That is... if you wait long enough, and you can afford some time to find the right buyer. I still wouldn't call it a real investment though. The value would be in the enjoyment of playing it.

It also won't get you far in real estate, which as Mr. O'Hara once said to a stubborn daughter, is the "only thing that matters"...

[bigskygirl]

Don't forget to factor in the income taxes off the top, ordinary tax plus 10% penalty if you're not 59 1/2 plus state income taxes. I know, I'm a buzz killer...ha

[barney 59]

Buy a mandolin -you could have it the rest of your life! It's probably true that as an investment your not likely to come out on top. There are some possible scenarios where you might profit though. You might come across one of the newer builders that have as yet made a reputation for themselves but have great potential to possibly be the next Gilchrist or Monteleoni. If you pick correctly you'll get a terrific mandolin at a good price and down the road it may be worth more than you paid for it when their instruments are in demand. People who bought early Gil's etc. did quite well. This of course is a little like taking your money to a craps table. In both cases if you lose your out the money but with the mandolin you'll at least have the mandolin. The other possibility is you do what a lot of us do --first study the subject then spend countless hours hunting for a vintage instrument with substantial value and collectability at a price that is way below market value. If your do it diligently it might happen for you,like it might happen for me--and Oh, by the way there are probably thousands of people who frequent just this site alone that are hoping that it happens to them and probably most of them have a head start. But really, buy the mandolin! Yes you might need the money some day but most likely something will come up(like a transmission problem) that just sucks the money away from you and if you didn't have it you would still get by and you'll have a mandolin!

[Ed Goist]

If you are a patient and discriminating buyer, and buy a decent used instrument in the current buyer's market (in almost any price range), and you keep the instrument in good shape, you will be able to sell it in a future "seller's market" at a surprisingly healthy mark-up.

[Charles E.]

Buying an instrument in that price range is no investment. Take a long look at the classifieds here on the Café and see how many sellers are selling at a reduced price just to move their mandolins.
Do your research and look into opening an Ing account or something similar.

[Josh Levine]

As with any form of investment, you have to have an understanding of the market in which you are investing. If you are able to understand current market values of mandolins, you may be able to purchase one, or several mandolins at below market value and sell them at market value when it is time to move them on. Those of course would have to be used mandolins and you would be taking on the risk of getting a bad instrument, getting ripped off, etc. I try to buy my instruments at or below current used market value, so when MAS strikes I can atleast get my investment back if not a little extra on top.

[GreenMTBoy]

Thank you for all your reply's .
I realize that $5500 in the mandolin investment market is chump change , Like wise it is chump change in a retirement portfolio.
The way I look at it is ,The $5500.00 that I have in the bank in ten years is going to worth a grand total $5507.70 if I keep it in the bank at the current interest rate.
I could put into stocks like the bankers want me to do but that is risky business as well .
If I bought a $5500. mandolin and in ten years I could sell it for anything over $5000. I think I would be happy and consider it money well spent ,a small price to pay for the use of a fine mandolin for ten years .

[fatt-dad]

Mutual funds do better.

f-d

[foldedpath]

If I bought a $5500. mandolin and in ten years I could sell it for anything over $5000. I think I would be happy and consider it money well spent ,a small price to pay for the use of a fine mandolin for ten years .

Wouldn't it be money well spent, if you had the pleasure of playing it for 10 years and only sold it for cost, or a little below cost? I know I would, but then I've never thought of my instruments as investments, partly because I lean towards unusual designs and finishes in musical instruments.

Something else to consider, is that you're talking about buying into what may be a declining market within the next 10 or 15 years, even if the overall economy is healthy. That doesn't help if the market is flooded with product. The Baby Boomer surge in the population drove a big part of the recent "Golden Age" of new luthiery and vintage collecting during their peak earning years. Now they're starting to go into a retirement phase later in life, where selling off the instruments is inevitable due to health or financial reasons.

I hope I'm wrong, because I'm a tail-end Boomer and I hope to stick around for a while. I don't want to sell off my instruments just yet. But that clock has a habit of keeping on ticking, regardless of what I'd like it to do. I think people who are now in their 20's and 30's, are eventually going to have a pile of great instruments at low prices to choose from.

[John L]

I have seen some Gibson A, F-2 and F-4 mandolins recently that look like really good value. F-2's in particular. Some good points on demographics though...

[Astro]

Bad idea. Your wife is right. Not a good investment--especially not for retirement.

It falls in the big category of life's unfair truisms.

-If its fun to buy, its not a good investment.
-if it tastes good, its bad for you.
-If the ladies think you are cute, you're either too young or too old for it to matter.

I think you should buy banjos. You'll loose a ton of money but at least you'll be getting them off the streets.

[Jimmyrus]

You know the old saying, want to make a small fortune in mandolin collecting? Start with a large one!

[fatt-dad]

if you buy a mandolin and sell it for more, it's an investment.

if you buy a mandolin and sell it for less, it's tuition.

after learning about investing in mandolins, I quit. Takes too much tuition.

f-d

[Eddie Sheehy]

I do it all the time. I'm doing pretty good at it and I've gotten to play a lot of instruments. Go for it...

[Petrus]

The way I look at it is ,The $5500.00 that I have in the bank in ten years is going to worth a grand total $5507.70 if I keep it in the bank at the current interest rate.

With a buying power more like $2500, if you factor in hidden inflation.

I could put into stocks like the bankers want me to do but that is risky business as well .

I think it's a little late in the game for stocks; the bottom at 2009 was the time to get in. Of course, hindsight is always 20/20.

[barney 59]

Wouldn't it be money well spent, if you had the pleasure of playing it for 10 years and only sold it for cost, or a little below cost? I know I would, but then I've never thought of my instruments as investments, partly because I lean towards unusual designs and finishes in musical instruments.

Something else to consider, is that you're talking about buying into what may be a declining market within the next 10 or 15 years, even if the overall economy is healthy. That doesn't help if the market is flooded with product. The Baby Boomer surge in the population drove a big part of the recent "Golden Age" of new luthiery and vintage collecting during their peak earning years. Now they're starting to go into a retirement phase later in life, where selling off the instruments is inevitable due to health or financial reasons.

I hope I'm wrong, because I'm a tail-end Boomer and I hope to stick around for a while. I don't want to sell off my instruments just yet. But that clock has a habit of keeping on ticking, regardless of what I'd like it to do. I think people who are now in their 20's and 30's, are eventually going to have a pile of great instruments at low prices to choose from.

Something that I hadn't considered. The buyers for high end instruments and vintage instruments has been for quite sometime older people for the most part and partly because they finally had the money to buy the thing they wanted when they were younger and couldn't afford it. Those instruments are most definitely going to start coming back into the market and they are going to start coming back right around now!

[mrmando]

A new mandolin depreciates by 20% as soon as you take it home from the shop. That's just a fact of life. The majority of them never make back that 20%, let alone appreciate beyond the original price ... unless you just happen to find the next Stephen Gilchrist and buy one of his mandolins while his ears are still wet.

A mandolin is an investment in your enjoyment of music and the skills you can develop. It usually isn't a financial investment.

[Fred Young]

Rather than buying a mandolin as an investment. have you considered, booze, smokes and tattoos. Everything that don't burn or run out on the ground you get to keep maybe.