Well sort of. I am just starting out in this hobby and having already exchanged a few used components I bought here and later sold- sometimes for the same amount I paid- sometimes for more-
Seeing this has made me consider the idea that one could approach this hobby's acquisitions as a sort of currency. Considering the ease with which many popular components are sold- SCD-1, De Capos, etc. I have begun to realize that it is possible to approach an expensive system with the rational (if art is not enough) that ridiculously expensive components are just another form of money- a temporary resting place for your reserves (of course this considers purchasing used and at a fair price).
I'm looking for nominations. What components are most depreciation proof once they have taken the hit of being used? I want to rationize an absurd purchase and enjoy my monetary reserves while retaining my safety net.
Does anyone else approach it like this? Used Elrods? Don't get me wrong, I'm doing it for the love of music, but a $15000 system requires some consideration of financial prudence right?
Like classic cars... vintage audio equipment. Look at Mac, Marantz tube amps ie MC-22 pre,MC-275, MC-75 mono blocks, Marantz 7c, ect. For speakers large Tannoy's with factory cabinets with 15" reds or golds or large classic JBL, Altecs. Must be in excellent condition. Enjoy them for years and when time to sell, you'll make a bit of $$$. I was looking at a 1992 Audio mag. in the classifieds a Mac MC=240 asking $599.00, now they go for $1200-1800.
If it's anything like other investments you stand to loose a lot of money. It's been said about investment in fine art.."don't buy it if you wouldn't enjoy hanging it on your wall forever". Same for audio equipment.
I agree there are some gear if get lucky, you will pay good price, a year later you can still sell them same price, or make a little profit.As as investment? My answer is no.But there are some, who are good at it. I know one, He will offer very low price, to those He thinks are desperate,later on the seller will give in.He will use them, then after couple of months, He put them on AG. But dont forget, this guy has plenty of time to wait for the price. He is very good. Even with his his friends, He is merciless. Thats just him.
Yes, you can invest on HIFI and make some substantial money. My strategy...buy the pieces that you will keep and appreciate the longest...therefore, pieces that are not a FAD......listen to it to your satisfaction and refrain from ever buying the same type of gear again. You will make big bucks...that means, you will not spend money investing in more gear, that will be gathering dust and increasing your debts or your capital equity. This is the ONLY WAY to make money, unless you become a dealer and buy things on the cheap for your own listening and then, sell them used, still getting the price above what you have paid for the piece, wholesale.
As a dabbler in value investing,I define an investment as something that produces a dividend, an interest,or a rent, that I buy when it's undervalued and plan to sell when it's overvalued. Wines,art works,coins,precious metals,and audio equipment do not fall within that definition. I say that as a wine drinker,an oil painting owner,a coin spender,and an audio nut. With the exeception of those rare things mentioned in previous posts,audio pieces will be depreciating assets. You can attempt to reduce the depreciation by buying one generation old,used pieces for what supply and demand dictate. Let the original buyer overpay. Free advice and possibly well worth it,get what you like,don't overpay for it,and enjoy it,but don't confuse it with investing.
I have a friend who is an audiophile and is now 80 years old. He told me that if he did not get as audio crazy as he did he would have owned 3 other homes. He mentiooned that he was changing high end speakers 4 times a year, amps pre amps etc... looking for that perfect sound. Though he enjoys the hobby, there does seem to be a tinge of regret in his voice when he realizes he had gone oveboard. My 2 cents worth is spend only what you are willing to lose. If you make money at the end of the day then Great. If not, then you have enjoyed your system with no regrets :)
Chateu Palmer is an investment? You've got to be kidding! Not for me indeed that literally already "dryed" the whole antique 50y.o. bar with ancient rums, whiskeys, wines and liquers my sister-in-law got from her deceased father-in-law in matter of over a little time! What about Picasso? Seems to be even more valuable and stable investment than real-estate doesn't it? At least it's not drinkable...
run away when you still can this can become the worst sickness you have ever had. it gets so bad you forget to listen to music and try to find all the wrong things with what you do have. i think i forgot what it is like to enjoy ! and so sell and buy the next best thing at more money.deeper in to the hole i fall my system cost twice as much as my car but i drive a yugo lol not really one day i love it and it sounds great the next i am ready to burn it all wow i sound bitter well all in all i can't be with out this crazy thing called hi fi lol just try to enjoy what you have and take it slow and as far as money in it do you take food stamps sorry lol
When I was 4 or 5 I curiousely dismembered a gromophone that was probably bought by mom of my grandma. It realy was functioning properly. Now I realize that that piece might've had an appreciation nowdays. What a fool was I!
Audio as an investment? You have to be kidding. Spotted a Château Palmer 1972, if I remember correctly, the other day and was astounded that the asking price was around $495 a bottle. I bought one around 1982, the time I bought my house, and remember paying something like $50.00 for it. Now that is something that appreciates. Have you ever heard of any piece of audio equipment (except maybe for the very exceptional product like tube tuners) that do anything other than depreciate? Counting yourself lucky because what you bought depreciates less than something else you may have gotten is not a proper yardstick to measure an investment. I suspect you have fallen prey to sellers of high priced goods that like to call an "expense" an "investment", to provide the customer that little extra push to get the person into a comfort zone and to sign on the dotted line. Oh, and as for my investment in the Bordeaux, well my wife and I drank it way before it appreciated in any degree. C'est la vie
Wheeler: I made my entrance into audio in 1956. I can safely say your idea is not unique. There is an old saying,"After you drain the swamp,then you discover the alligators."
I've mentioned and am leaning toward the SCD-1 (maybe the 777es). These things sell within an hour of posting. Also, its such a beast of a player for $2000 and it has already come down quite a bit from $5000.
One thing though is that the risk increases a bit with speakers like the Avalon Eidolons. You could easily lose a couple grand in a year on those I would think. Perhaps the optimal price range for this "free ride" strategy might be more in the 2500-5000 range for each component.
Wheeler, I pretty much try to minimize my losses when buying and selling. It seems that digital gear and full range speakers are the ones I expect to take a loss on. Speakers eat up a lot of money on shipping and tend to get hurt during shipping. Digital stuff is like the computer industry IMO, and is always based on the flavor of the year and latest technology buzz.
Ok, given the new, revised topic of what used equipment best holds its value (new equipment will never hold its value, as like a car, once out the door it depreciates immediately), can be used for a while, perhaps a few months to a year and can then be resold for virtually the same price paid:
I recommend that units that require little maintenance (which rules out most tube amps, except preamps, as the tubes last for many years typically). You can buy the tube amps, and they do sound great, but if you have to replace the tubes, it can cost hundreds, perhaps even thousands of dollars, and you are in this to get a free ride as it were, so I recommend against it.
Therefore, I recommend:
Good solid state amps and preamps, including Mark Levinson, Krell, etc...
Very good tube preamps, such as Audio Research, Conrad Johnson, etc..
I don't really recommend :
Turntables, (The cartridges do wear out, and the arms can show signs of use very quickly. If the table is made of acrylic plastic, as so many are, it shows signs of age quickly due to dust being wiped off, and scratching the plastic! Wood can dry out and look aged as well.) But if you insist, I suggest such TT's as the high end SMI (TNT, Aries) or the Basis Deput, or other similar units.
Speakers, but only the highest value, and they need to be in the very best shape for the lowest possible value, as they also double as fine pieces of furniture, such as the Avalon Eidolons. (For some reason, speakers seem to lose the greatest value once taken out the door. They seem to lose 1/3 of the value immediately, and after only a few months, it is not unheard of that the speaker value is down by half. (I know this for a fact, as I was watching the price of the Avalon Eidolons, and Revel Salons and Studios before I purchased my Studios for 1/3 off, and they had not even been taken out of the boxes - in fact they were still sitting at the store, when the new owner sold them to me).
Any cables at all, as they seem to make so many different models each and every year, that after only a year or two, the names start to lose their luster. The caveat here is that if you only keep the cables a short while, you probably can do A/B testing to see which ones you really like. (I bought a less than one year old pair of high end MIT 770 CVT speaker cables only a year or so after they were discontinued, for less than a 1/3 of their normal retail price.)
Digital source components. I recommend against them just for the fact that they seem to be upgrading the technology constantly. The better units do seem to hold their value somewhat, but even those do start to lose value if their own company comes out with a better unit. However, some units, such as the Sony 777es Cd/SACD unit does buck the trend somewhat, although even that $3000 unit can be had for almost half, but it does not seem to be dropping much lately. Other units from Levinson and other good manufacturers also come to mind if you must indulge.
Words of Advice: If you do decide to do this, you must put in your due diligence. You must be constantly scanning all the available used sources, such as Audiogon, ebay, and the used stereo shops that also are on the internet. In this way, you can pick and choose the best available deals, and know what the prices of the different units are actually going for. Don't get hung up on any one piece of equipment, but create a list of items you are interested in and if a real deal shows up, jump on it. You'll find that it will usually be at an auction that this occurs, just because it slips through the cracks. This is exactly how I put together virtually my entire system. I wish I had the money to try what you are attempting, but I have a wife, and a strong desire to remain breathing!)
Remember also, the shorter the amount of time you hold onto a unit, the more value it retains.
Wheeler - yeah, a better subject for the thread would probably be "creating your own full-credit upgrade plan". Many full-service dealers used to offer a full-credit upgrade plan if you wanted to, say, trade in your speakers you bought from them for something higher in the line. I don't think many dealers offer this any more, which is part of what makes used / internet so attractive, IMO.
It's certainly reasonable to imagine buying a system for 50% of retail, using it for several years and selling it for 35% of retail. That means you could enjoy a $20K system for $10K invested, use it for five years, and sell for $7K. You might even be able to do better, but even if you didn't, that's $50 /month to enjoy a fabulous system. Certainly one of life's cheaper pleasures.
Do a search for "free audio" and see what you find, I am not sure what you will find, but the concept is out there. This opportunity has been around for quite awhile. Linn Kan II loudspeakers are a prime example of a product that has a large enough following and the used price holds its own for years. Obviously there are a lot of vintage products that fall into the same category. Digital sources will not sustain their resale price point for too long due to improving technology.
As long as you are willing to forego food clothing and reasonable lodging there is no reason you cannot enjoy this hobby and not have it conflict with other aspects of your life. Actually making money though is doubtful!
Perhaps the title threw off my intention for this thread. I wasn't actually suggesting that you could make money in this hobby buying and selling.
What I meant was that I like the fact that I can pick up a used pair of De Capos for $1500 and sell them for $1500 a year later. I enjoy them and they actually cost me nothing except for shipping. Maybe I sell them for $1400. Oh well. If you take this up another level it becomes interesting in that I can enjoy some $5000 amp bought used and sell it later for about the same thing.
I'm looking for items that are particulary strong in this regard. A place to "put" my money and take it out later if I want easily enough.
TTs seem like they fit the bill well. What else? Maybe some power cords?
You're going to spend and probably lose money in this hobby. The upside is you get to enjoy your expenditures. If you want to invest in audio, try collecting popular rare NOS tubes, old collectible vinyl records, and possibly some sought-after vintage gear.
I always consider the "deal" when purchasing used equipment. I certainly don't plan to make money if I later sell the piece of equipment, however, I do intend to cut my potential loses on each piece.
My plan is to always buy "desirable" components with original packaging and only if it is fairly priced. I have bought several pieces like this that just didn't work well in my room. I re-sold them for little or no loss. For me, this is a great way to try lots of different equipment.
If this is a goal for you, I would highly suggest keeping an eye on what products regularly get recommended in their respective catagories and learn what the "real world" prices are for these pieces.
As an example, I bought a pair of perfect Reference 3A MM DeCapos when saw them listed for $1000. For me, this was a no brainer. I had wanted to hear a pair in my room and I knew I could re-sell them for a profit or at least with zero loss. Anyway, they are still in my system. I consider them a great investment.
None of the hardware holds their value forever, and even in the short term, they merely lose it slower that average equipment. Take a look at the best gear on this site, and you will see that even the best loses its value over time, albeit at a slower rate.
The only possible way to invest in HiFi is in the software. (Buying limited edition records, CD's, etc...). Had we all had the vision to have bought all the MFSL records, and some of the gold CD's we could lay our hands on, and stashed them away, we would all be quite rich right now!) These MFSL records and CD's have gained in value quite a bit from their original purchase price. (I have an unopened MFSL Rolling Stones box set that I bought for $100 about 12, and it is currently worth 7 or 8 times that amount! But then again, who would have thought they could have gone bankrupt. If they were still in business, my collection would only be worth what they are currently selling it for. And, yes, I know they are back now, selling SACD's.)
However, even this plan has a flaws. The first flaw being, what if that standard is replaced with another technology that TRULY is better. For equipment this is a given, it will always get better, or at least it always has in the past 100 years or so. Even for the Software, this is somewhat true. As an example, old 78's, and to some extent old 45's, are still worth money, but who buys them other than for collecting and completing collections? (Take a look at the Audiogon "music for sale" catagory and you won't see any, at least I have not!) LPs are a different story, because while CD's are easier to handle and less fragile, they are not better. SACD's have narrowed the gab considerably, but still LP's rule (at least in my system.) Please don't flame me for that last statement, as everyone has a different opinion on the subject!
The second flaw is, what if they keep making the limited editions? If you have 100 records stashed away bought at retail prices, they are only valuable if they stop making them. If they don't, then you have no chance of marking up your inventory and making a profit. As long as the consumers keep demanding a product, they will keep making them, or at least the most popular items. As an example, see the current LP market. They are still making records, when 95% of the market is only buying CD's. Only us Audiophiles (and Hip-Hop fans, go figure, huh?!) are buying records. We continue to expand our collections, (and our circle of friends who listen to our analog systems, and make that leap themselves), so the record compnaies can continue to make the records for us to buy. I went to the Home Entertainment Expo and bought $250 worth of records, some priced no more than the CD (i.e. Iron Butterfly's In-A-Gadda-Da-Vida - $10. Yeah, yeah, I know, dating myself. BTW, lousy recording, but I still like it). So even if you had stashed a copy away, only those true collectors would be interested in it. I would, and did, buy the latest reproduction, rather than pay a marked up price to buy an original issue.
The art world is currently experiencing this same problem, with limited editions seriegraphs. lithographs, etc.. Because the artists are continuing to make new originals, and subsequently and making hundreds of limited edition copies, they have diluted the market so the limited editions are not worth nearly what you might think they would be worth.
Sorry to be so long winded, but anything I can do to dissuade you from going down that path will be worth it to you in the long run, trust me.
Wheeler: As a case in point regarding the Marantz gear, i recently traded my original Marantz 8 ( serial number just above 1000 ) that was in very good shape for some test equipment. While the Marantz 8 is an item that seems to be in less demand than the 8B, an 8 in good shape would draw somewhere between $800 - $1200 on the used market with the 8B drawing several hundred dollars more. Due to the condition of the 8 that i had, a local collector had been interested in this unit ever since seeing it. When all was said and done, he ended trading me some test gear that would sell for over $2000 in current condition. Since i had paid considerably less for this unit, the "investment" that i made in this piece did pay off.
Having said that, this is a rare case of planning ahead and finding a good deal when i initially purchased this unit. As Jdevine stated above, if you can buy low and sell high, you'll do okay. I've been involved in quite a few transactions and never really been "stung" without everything working out okay in the long run. Just take into account that there are bound to be mishaps in shipping, items that are misrepresented, etc... On top of this, you may end up with a less than satisfying system musically as products that may hold their value individually may not work together as a system synergistically. Then again, we all have different priorities and ideas as to what "sounds good", so have at it. So long as it makes you happy ( one way or the other ), that's all that counts. Sean >
I learned a valueable lesson from a shrewd business man years ago He told me you don't make money when you sell something you make money when you buy something it took a while but it finally sunk in the profit or loss is determined when you buy it " buy low sell hi-fi" just a thought you should consider the investment in the pleasure that good music brings you anything else is icing on a very sweet cake
IMHO audio would be a terrible investment, or alternate currency, compared to mutual funds, the stock market, real estate, or investing in classes or an advanced degree to further yourself in your chosen profession. Most of us are in this because we like the music, and occasionally (or even frequently) have a jones to improve our systems to approach whatever "the absolute sound" means to us. You have been fortunate to break even or make a profit on your transactions, and I am sure some here are in it for that reason. However, in my experience, when you throw in your time to pack and ship, shipping and insurance charges, the time to deal with sellers and buyers, the time to search the web for the best deals, and the risk (nothing is risk free) of being defrauded or losing on shipping damage, you would likely do better in any number of "businesses." I feel I have been fortunate to do ok at this by buying only components I wanted to upgrade my system, sticking to items in good condition, being patient when both buying or selling, getting to know the sellers I am buying from, and walking if things do not sound right. Even so, I have had 3 deals where I felt the item was not in the condition advertised, and 2 deals with shipping damage. The shipping damage deals turned out alright (after significant time involvement) and one of the disputed condition items turned out alright after I e-mailed pictures to the seller (who had been selling for a relative and had not seen the item). On the other 2 deals, I took a loss on resale since I described the item honestly and accurately. Believe me, you will do better to simply have fun with this, enjoy your successes, take your disappointments with a grain of salt, and find a better way to make money.
as if not outright then by receiving an item which is not in the condition advertised
While some items retain their used value (usually about 50% of retail) longer than others, as soon as the next generation of that item comes out they will drop in value. Since you can't really preditct when that will happen, I think your plan is flawed. This especially true with digital but happens with all gear. That is unless the company goes out of business, and then it drops because you can't get support.
Buy it because you like it and it is fair value today. Tomorrow it may be worth a lot less and very rarely will it go up unless you got it below market value.
The only thing that really holds it's value is vinyl.
Obviously, items that are hand built in limited quantities by "masters of the trade" are the most likely candidates. The early tube based pieces made by Marantz are a prime example. Once you start working your way into more modern gear, there are very few pieces that could ever come close to obtaining their original retail sales price on the used market.
As such, building a system based on "collectability" or "market value" will have you running almost all vintage tube gear. If you like that sound, that's a double bonus for you. If you don't like that sound but are worried about your investments in this "hobby", you are better off looking for the best buys possible on used gear that has a good reputation. Straying from this formula to find some lesser known "gems" may net you musical satisfaction, but it will only end up hurting your pocketbook in the long run.
While i do agree that a quality "bang for the buck" system is hard to beat for the money invested, if you are more worried about your pocketbook than you are obtaining musical pleasure from your system, you should be scouring the ads at Best Buy & Circuit City to see what will produce the amount of sound desired for the least amount of money. In the long run, it is only the personal enjoyment that you obtain from using your system and listening to music on it that will ever recoupe the investment that you make in it. Once you accept that fact, you'll be a lot better off and won't feel so guilty about allowing yourself these pleasures. Sean >
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