Transformers collecting and superannuation

[Raider]

This is just something I was randomly thinking about today but wondering if anyone has ever looked into using a self managed super fund (SMSF) for the purposes of collecting transformers?

Now there are various rules surrounding the purchase of collectables by SMSF's but it is legal. I am looking at this from the perspective of purchasing items that you would think will appreciate over time with a view to either selling them for profit in coming years or holding them until retirement.

The rules for SMSFs specify, among other requirements, that the collectables cannot be:

1. leased to, or part of a lease arrangement with, a related party
2. used by a related party
3. stored or displayed in a private residence of a related party. (this might be problematic)

The decision on where the collectables are stored must be documented and the written record kept for 10 years, and the item must be insured within seven days of the fund acquiring it. If the collectable is transferred to a related party, this must be at market price determined by a qualified independent valuer.

From a realistic standpoint, if I was to buy transformers they are not going to be leased or used by a related party.

I would prefer to have them stored at home but this could be overcome possibly by having a secure storage facility (I would think tax deductible given its purpose). Alternatively, and I don't know how accurate this is, but if you had a friend on these boards you could each verbally agree to buy the same items and store them at each others residential addresses. Should get around the private residence exemption.

I know that a lot of people don't necessarily have SMSFs but I look at my collection as an investment that I want to pass onto my son one day. Nothing wrong with wanting to make some money off it either.

Anyone have any thoughts on this, think I am way off base and wasting my time or just generally nuts for thing about this?

[Ode to a Grasshopper]

Just a general observation, but TFs aren't really a good choice investment-wise. You'd be better off with something a bit more reliable/predictable.

Don't be these guys.

[Trent]

I collect Transformers because I enjoy them. I don't want them locked up somewhere I can't see and play with them because then what's the point?

And I think that Transformers as a long term investment is a terrible idea. The current high prices that certain items (mainly G1) can all be attributed to people that grew up with them as kids and now have the disposable income to pursue the hobby for nostalgic reasons. In 20-30 years, when those people are no longer in the market and/or trying to offload their collections, there will be no one with that nostalgic attachment to these toys and prices will decrease, perhaps dramatically. And anyone stuck with them as primarily an investment, will lose.

Warren Buffett didn't make his fortune from investing in toys

[Sinnertwin]

Don't be fooled by the overinflated aftermarket prices. Transformers aren't investment pieces. Property, shares, long term deposit accounts? Yes. Toys? No.

[Raider]

Don't get me wrong, I'm not hyping this as an idea to make a killing, it's more of a way of gaining access to funds to support building a collection. My main purpose would see me passing my collection onto my kids one day if they were interested otherwise they can sell them. I don't intend in making money off it myself.

I wouldn't advocate going out and blowing all your super savings on it. But if you have the cash locked up in super and you are comfortable with your current super levels then it can't hurt to use a small part of the funds for that purpose.

[theshape]

And I think that Transformers as a long term investment is a terrible idea. The current high prices that certain items (mainly G1) can all be attributed to people that grew up with them as kids and now have the disposable income to pursue the hobby for nostalgic reasons. In 20-30 years, when those people are no longer in the market and/or trying to offload their collections, there will be no one with that nostalgic attachment to these toys and prices will decrease, perhaps dramatically. And anyone stuck with them as primarily an investment, will lose.

Can i asked what you are basing this statement on? When i think to past brands that are older than transformers many seem to have held or gained increased in value.

Look at vintage comics (lets say marvel comics from the 60s). They are getting to 50 years old now. Their "peak" would have been the 80s-90s. Why are Amazing fantasy 15/X-men 1/Hulk 1 etc worth significantly more then ever before now? A big player in this has been the films injecting new fans and igniting old fans to keep collecting.

If the TF brand stays strong i think the vintage toys can maintain their value (I dont think its the same for any other TF line as they are simply not as scarce nor sort after).

Its a guessing game and only time will tell.

[BigTransformerTrev]

I collect Transformers because I enjoy them. I don't want them locked up somewhere I can't see and play with them because then what's the point?

And I think that Transformers as a long term investment is a terrible idea. The current high prices that certain items (mainly G1) can all be attributed to people that grew up with them as kids and now have the disposable income to pursue the hobby for nostalgic reasons. In 20-30 years, when those people are no longer in the market and/or trying to offload their collections, there will be no one with that nostalgic attachment to these toys and prices will decrease, perhaps dramatically. And anyone stuck with them as primarily an investment, will lose.

Warren Buffett didn't make his fortune from investing in toys

I don't know if I want this to be true or not. If it turns out to be true it means my roughly 350-strong G1 collection will plummet in value (not that I plan on selling them anyway - but still) but also means that maybe I will finally be able to get all the G1's I'm missing much cheaper in a decade or two. Most of what I don't have now I don't have because I cant justify to myself spending just how much they cost now compared to their original value.

Hmmm.... conflicted

[Raider]

I think it is ultimately one of those things that comes down to supply and demand. In 20 years time there will be no doubt fewer G1 (or any other transformers) on the market but they will only increase in value if the demand does not fall below the supply.

There are arguments on both sides of the fence as to whether there will be increases in price or decreases. If you have a look at G2 and Armada for instance, they all sell at the moment well above what market price was when they original came out.

My personal opinion is that they will appreciate in value, above inflation. how much and whether it is a good investment is another issue. I am talking from a position of being a collector who is highly unlikely to sell his collection and if they at least maintain their value, throwing a few hundred/thousand on them each year isn't necessarily a bad investment.

Plus, isn't it nice getting a tax deduction on storage and insurance costs as well as using another source of funds (other than your weekly wage) to pay for them?

[Trent]

Can i asked what you are basing this statement on? When i think to past brands that are older than transformers many seem to have held or gained increased in value.

And how many have faded into obscurity and are worth nothing?

Look at vintage comics (lets say marvel comics from the 60s). They are getting to 50 years old now. Their "peak" would have been the 80s-90s. Why are Amazing fantasy 15/X-men 1/Hulk 1 etc worth significantly more then ever before now? A big player in this has been the films injecting new fans and igniting old fans to keep collecting.

If the TF brand stays strong i think the vintage toys can maintain their value (I dont think its the same for any other TF line as they are simply not as scarce nor sort after).

Its a guessing game and only time will tell.

Like any collectible, it all comes down to perceived value. I would very much like to be wrong. Transformers is a big part of my life and I would like to see it still booming 50 years from now but I just don't see it. A simple way to look at the investibility (I know, I made up a word ) of a brand is to look at who is collecting it. Brands like Superman and Spider-Man have people who aren't necessarily fans buying up comics purely as an investment. People like investment bankers, syndicates and even Superannuation funds all dabble in anything they think can make a profit. Action Comics #1 is a perfect example. These comics are locked in a vault to appreciate and be offloaded at a later date at a profit. Not many are bought as a trophy piece for a massive Superman collection.

Now apply that thinking to Transformers. As far as I am aware, only TF fans are buying up Transformers stuff. There are no non-fan investors buying up MISB G1 TFs to seal away for resale 10-20 years down the track. The only people buying TFs are fans. Even our fandom's highest auction and arguably THE best investment piece the brand has to offer, the recent G2 Stunticon lot, was a bidding war between cashed up fans. I can't see that price being beat for a very long time, if ever.

This is all just my opinion. Like I said, I hope I'm wrong and would love to hear anyone's arguments to convince me otherwise

[GoktimusPrime]

I'm content to just use my regular income to fund my TF collecting, and if I plan on purchasing a lot of toys or a big expensive one, I pre-plan the purchase, such as saving up my money before the toy's/toys' release when it's/they're released, I go, "Just take my money!" Preparing for TF purchases is so much easier now with the interwebs informing us of what products are going to be released in the near future.

And as others have said, toys are generally a really poor form of financial investment. Only a select number of toys appreciate, and even then, it's pretty slow. I buy toys because I love to play with them. It doesn't make a huge difference to me if they appreciate or depreciate since I have no intention of selling them anyway.

3. stored or displayed in a private residence of a related party. (this might be problematic)

Bugger that!