Like so many young boys, my love affair with Baseball Cards began in Little League. Each week our coach would give us a $1 to spend at the concession stand after the game. I spent my money on a cream soda and a pack of cards (none of which would become valuable baseball cards).

In those early days I didn’t have a lot of money so the collection grew slowly. I amassed several hundred cards and kept them rubber-banded together in a shoebox. I shuffled through them a lot so the surfaces became dull and the edges worn.

In 1986, I scrounged up enough money to buy my very first complete set of Topps baseball cards. I bought plastic card pages in which to insert each card and a three ring binder to hold all the pages. So began a decade of collecting the full sets and the update sets each year. By the time I ended college, I had amassed about 20,000 baseball cards.

Then marriage happened and grad school and buying a home and kids and a career and more kids. Through all that, the baseball cards spent years boxed up in the back of the closet rarely seeing the light of day.

My love affair with collecting baseball cards resurfaced about 10 years later in my early 30s. Some life events reinvigorated my love of the hobby. The best part was that I had more money than when I was 8.

I decided to do something different instead of purchasing individual packs or complete sets. My focus shifted to buying individual cards, ones where I could be more certain about their projected value. This can only be done by collecting those cards that are professionally graded.

This change of strategy required me to understand what I was getting into and why I was doing it.

How Do You Define Investing in Collectibles?

The above question is tricky to answer in part because it depends on your definition of “collecting” and “investing.”

By definition, a collectible is anything you might be interested in accumulating. The concept of time is implied here. In other words, the collection doesn’t happen overnight.

Most collectors gather items to store or display for the long-term. They may also buy and sell items in their area of interest. But they will always have pieces they continue to hold. If they are buying and then selling – not holding – I wouldn’t consider them a collector.

When thinking about collectibles, would you see collecting as a means to invest money looking for a profit? Or to diversify your portfolio? Or would you define “investing” in collectibles as using your money, time and effort to accumulate something simply because you enjoy it?

How you answer those questions defines your attitude and approach to collecting.

There are those who see investing in collectibles as a way to diversify their investment portfolio with the hopes of making a positive return on their money. Forbes noted in a 2012 study conducted by Barclays that “global high net worth households hold an average of 9.6% of their wealth in collectibles.” That seems a bit high of an asset allocation for my taste but some clearly see it as acceptable.

It’s More About the Heart for Me

For me, I see collecting as something that begins from the heart. I didn’t set out to collect valuable baseball cards to make money. It was simply about finding cards of my favorite players.

I held the cards through my 20s because they were a connection to my childhood and the many memories of my playing days and going with my dad to Cincinnati to watch the Reds. I realized though that some of the cards may have value – specifically if the player had reached a high level of success and his card (most notably the rookie card) was in excellent condition.

As I came back to the hobby in my 30s, I realized much had changed. Vintage card prices (approx. the 1960s and prior) had experienced a dramatic rise in price. However, those from other decades (the 1980s and 1990s) had experienced a sharp decline in price. Some cards were worth hundreds of thousands of dollars. Others weren’t worth the paper they were printed on.

So my approach changed at that point. I did begin to look at collecting valuable baseball cards more as an investment. The love for collecting the card itself is still there but it’s taken on an added dimension. I wouldn’t say I’m necessarily looking to make a profit from them but I’ll definitely take it in the long run if one comes.

The Upside and Downside to Investing in Collectibles

Whether your focus is valuable baseball cards or something else, it’s important to know there is an upside and downside to investing in collectibles. The baseball card market has seen dramatic upside in the last 30 years but it hasn’t all been rosy. Other collectibles markets face the same issues.

The Upside

1. Personal growth and fulfillment. In my mind, this is the biggest reason anyone should collect. There is great enjoyment in building that set or finding that hidden treasure you’ve been hunting for years. The practice of gathering items gives us a sense we are achieving something noteworthy, even if it so only to us.

Plus, collecting connects us to other people. I have an instant connection with the owner when I walk into his baseball card store. We share the same passion, which serves as a tool to facilitate communication and relationships.

2. The Profit. As demand for a collectible grows, the more chance there is to make a profit on that product.

Other things play a role here like the age of the item, its creator/manufacturer, how unique it is and its present condition. But I’d say nothing drives prices like demand. If people want an item the price will increase and collectors can cash in on that trend.

3. To Diversify. A third upside to investing in collectibles is that you are able to diversify into other assets. Seasoned investors who already have a healthy allocation of stocks may look to spread their money around into other investment categories. This could include bonds, real estate, commodities and even collectibles. As noted earlier, many of the world’s wealthy investors seem to viewing collectibles in this way.

The Downside

1. Emotion. Collecting is fraught with emotion to the point that our actions can get entirely out of hand. If we want an item badly enough we will go to any lengths to secure it, even if that means overpaying.

Furthermore, we can get so involved in collecting that it begins to negatively impact other areas of our life. You are reaching a danger zone if your collecting is taking precedence over the budget or family relationships.

2. Value fluctuations. This is the biggest downside to seeing collectibles as an investment. The value of items is very much subject to the whims and tastes of the buying public. What’s hot today may not be tomorrow.

Baseball cards experienced this during the 1980s and 90s. For decades the manufacturer Topps had been the only game in town. Through a series of events, new companies like Fleer, Donruss and Upper Deck sprung up to produce cards. Suddenly, the baseball card market became saturated. Due to overproduction, prices for cards manufactured in that timeframe plummeted to the point that most cards from that era are now worthless. You really can’t give them away.

3. Liquidity. This is a huge issue that any investor in collectibles should consider. Collectibles are an illiquid asset. That means they are not easily transferred or sold. Like a house, you need a buyer. If none exist, then you are stuck with the collectible.

Advice For Investing Money in Collectibles

Investing in valuable baseball cards or any collectible can bring loads of enjoyment and, if you are fortunate, maybe a little profit. If you are going to head down that route and start your first collection consider this advice that has helped me over the years:

1. Keep from wagering the budget money. A whole host of expenses should be funded in your monthly budget before you allocate money for collectibles. Food, clothing, shelter, utilities, transportation are higher on the priority list. Don’t use the $1,500 for the mortgage payment on a piece of art you’ll be hanging on the wall.

Related Content: The Ultimate Guide on How to Make the Best Monthly Budget

2. Non-interference with family. Your collection should not interfere with family matters. Yes it’s a fun hobby and you should enjoy it. However, you can’t be gone to showcases every weekend and miss your kid’s lives. Furthermore, it would be unwise to spend on collectibles if that money could be better used elsewhere (like career training, needed vacations, kid’s college, etc.)

3. Avoid using money you’ll need soon. If you know a big expenditure is right around the corner then you should be saving for that not using your money on collectibles. In addition, finding that one item you’ve been tracking for years is not an excuse to take money out of the emergency fund.

Related Content: Emergency Fund Basics: The Step On Which All Other Success Is Built

4. Invest in real estate and the stock market first. I would be real hesitant to pour money into collectibles if I had no other investments. The better investment vehicles would be the stock market and even real estate (i.e. buying a home). They have both shown a stronger track record of providing significant and consistent returns over time.

5. Know the niche market. You’ll have to know the collectible’s market in which you are investing. This includes knowing current prices, trends, how to spot a forgery and any other issues surrounding your focus. The best way to know the market is to study and read about it and to…(see #6)

6. Be routinely engaged. The Internet has made it incredibly easy to engage with people. If you can’t get away to showcases, it’s still possible to connect with people online. Find forums dedicated to your niche and websites (like Ebay) where you can routinely track what’s happening.

7. Find Bargains. You can find bargains in the collectibles market. First, you have to know what a real bargain is and then you have to know where to look. Garage and estate sales are some of the best places to find them. But formal events also offer a chance to find a deal.

Several years ago I bought an ungraded baseball card at a local card show for $35. Because I had read and studied the standards of how cards are professionally graded, I could see this particular card might grade very high and I sent if off to be graded.

Upon it’s return it had received a grade of 10 (the highest possible) from Professional Sports Authenticators (PSA). To my delight, it’s now worth significantly more than $35.

8. Specialize in rarity. This piece of advice would apply mainly to those who are truly looking to make a profit from their collectibles. An item has more chance to appreciate in value if it is scarce. If making a profit is your focus, then buying bulk lots of 1980s baseball cards makes no sense. You’ll lose money on that transaction.

9. Keep them secure. This can be tough depending on the collection. Some items like valuable baseball cards or stamps can be kept in a fire safe or a safety deposit box at your local bank. But how do you handle things with size or that you might want to display like art or antique furniture?

I’d say at a minimum this means making sure your collection is insured. Make a record of your inventory for insurance purposes in case it’s stolen or destroyed. If the collection has real value it may mean beefing up your home security with alarm systems and surveillance cameras.

Related Content: How to Make a Record of Your Home Inventory in Case of a Catastrophic Loss

But above all…

10. Enjoy Collecting!

After all, isn’t this what it’s really about?

I’ve had so much fun through the years collecting valuable baseball cards. Granted, my focus has shifted within the niche but the excitement of purchasing cards still remains.

My Pursuit of Valuable Baseball Cards

I’m currently working on finishing a professionally graded set called “Hall of Fame Players – Post War Rookies.” Pretty specific, I know. I’ve completed about 62% done and it may take me years to complete. I have many vintage baseball cards in the set yet to buy from the 1940s and 50s and those can get rather pricey.

As I said though, for me it’s not about making money. I’m pursuing this because it occupies my time and I enjoy it, just like I did when I was young.

Leave a Comment or Answer a Question Below: Do you have any valuable baseball cards? Do you collect anything? If so, what is it and how did you get started? Do you view investing in collectibles as a wise move to make money? What other advice would you give to those investing in collectibles? Anyone else have worthless 1980s and 90s baseball cards taking up space in your closet?

Image Credit: Luke1428.com (Yes, that is one of my all-time favorite cards that I do own.)

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