slowjoe24

Who is planning to sell their 401K and start investing in Classic Cars........read my newest blog and find out if you can make it work??

http://carsandcoffeetalk.blogspot.co...is-always.html

Thanks, Joe

AlsCobra

It won't work. The market fluctuates too much. Just watch the auctions every year. I've seen the same cars go for big money only to go for half that a couple years later. People's taste change, technology and innovation change. There are so many overdone customs I see from the 80's and 90's that are just outdated. $80k custom from 10 years ago is now struggling to bring $20k. Just because it's outdated. Unless you buy something special at a hell of a price, it ain't worth it.

slowjoe24

Don't forget this is just my opinion...........It you keep it fun and buy small to begin with and do some flipping, it could work!

exchallenger

You do have to buy the right car(s) but it is possible and certainly there are some blue chip collectibles that experts agree WILL appreciate dramatically in value over the next several years. I didn't need a crystal ball to know that the Ford GT would be going way up in value when they announced it would be discontinued. Same thing with the BMW Z-8. The folks with big money to spend have an advantage in that they can spend a lot to make a lot.
I do agree that some if not most rest-mod cars are money pits but buying a mint, stock 1967 Corvette with a big block is a great investment. The thing is, unless you really know what you're doing, you'd be better off with an index fund in your 401k.

slowjoe24

Satern Sky or Pontiac Soltice may also be good investments!!

exchallenger

Some people do think that those two, the Saturn and the Pontiac two-seaters will gain in value but I don't think they will. They really weren't important cars and not particularly rare either. Some cars that people think are gold mines turn out to be duds. I know a guy who sold a mint 1969 Corvette convertible 427 for an expensive brand new 1981 Porsche 928. He kept the car mint since new but it's worth nothing. Nothing. It will never be worth sh*t because enthusiasts just don't like the **** car.

slowjoe24

http://finance.yahoo.com/blogs/daily...163501671.html

Here is another article from Yahoo about the subject!

cdynaco

Classic Cars would be a very speculative investment. So having a portion of one's (after tax) retirement money invested - with a limit of say 10-15% of your total portfolio (depending on your risk tolerance) - would be fine for those so inclined to take that risk in cars.
However to completely invest in cars rather than a well diversified, well balanced, investment portfolio in one's (pre tax) 401k, is strictly gambling.
Might as well go to Vegas and see some babe's as you lay your money on the high risk table.

friedmaster

Pretty much this.

I think it's important to realize -- the classic car crazy is still something relatively new. It's been going on for maybe 10 years. There's really nothing to say that this craze won't die down as the baby boomers die off, their vehicles flood the market, and decrease prices.

Furthermore, let's not forget about the cost of maintaining / holding these vehicles.

Flagstang

also keep in mind... As time goes by and the car scene changes to electric and solar and whatever else that we may find a turn away from what we currently consider class cars. The current cars(classics) will turn into the model T and lose value.

This has been bothering me for a while and we seen a lot of it with the new boss mustang. A lot of people bought them as an investment. I talked to so many boss and Shelby guys that thought they would be on BJ making a hundreds or thousands.

Cars now days are seen as a bad thing in the eyes of a large portion of the public. The Green movement will in the long run harm and stifle the longevity of the car culture. In a day and time were many love the Prius and other hybrids and attack any kind of performance vehicle.

I just noticed the ad bar above the "quick reply" box is for a Nissan leaf "100% electric"...

Todays cars are built to be used and replaced. After 50 years plastic and glue will start to fail. The amount of cars made is much larger and we have people saving no or low mile cars for "the future". The old cars currently have value because not many are still around(basic supply and demand) compared to the amount produced. The baby boomers fueled the crazy for the 1960s-1970s muscle cars. The generations that follow do not love the 1980s-2000s. The fact is the younger generations really do not suffer from nostalgia and are always willing to get the latest and greatest. This is why we have the disposable cars and cell phones. All the major cell phone companies in the next 5 years will do away with traditional contracts or start to push the new "edge" programs(option to get a new phone every few months).


I would go on but I am hungry and headed to lunch.

slowjoe24

All very valid points!!! Thanks!

1 Alibi 2

If you need money, you can cash out your 401K ( under 59 1/2 get a loan against it )
.
If your money is in cars, you gotta hope someone will buy it / them !!

Glenn

I am in the middle of my first flip. The process has taken longer than I expected, I could have put more time into it but have not. I believe there's money to be made on cars but you really have to be careful. Buy low and sell for what you can get. Do your home work and add 10% to the budget. I don't think I would risk my 401 k on cars ..... maybe on houses

slowjoe24

Good advice...........any others??