sell my collection or get (more) student loans?

Ahmanfan

What do you guys think? I have 1 more year at Mizzou and am going to have to get some loans soon. I'm wondering if you guys think I should keep my collection and get loans for the full amount or sell most of my collection to get the loan amount as small as possible. We are talking for the year 15 or so thousand dollars tuition I think. Some of the things I could sell include:

'55 topps (almost complete) set incl. psa 3 clemente, psa 1 koufax
49 bowman jackie robinson psa 1
61 fleer wilt chamberlain psa 5
t206 cy young psa 1
t206 lajoie psa 1
'55 thorpe bvg 3.5
'57 topps football 80% set, incl psa 6 unitas and psa 4 starr
'58 topps football 80% set
'55 bowman football 80% set
71 topps football 95% set
'51 bowman mays poor/fair

the problem is I like a lot of these cards quite a bit. What to do?

John

schr1st

Unless you could pay the whole thing off with the collection, I'd say save them and take the loans. You'll be selling into a depressed market, not getting great prices on what you are selling, and you'd still have some part of a loan to pay off. If they are offering the loan, I'd say take it.

BunchOBull

Loans...you'll like the tax deduction they bring every year.

FavreFan1971

<< <i>Unless you could pay the whole thing off with the collection, I'd say save them and take the loans. You'll be selling into a depressed market, not getting great prices on what you are selling, and you'd still have some part of a loan to pay off. If they are offering the loan, I'd say take it. >>



Agreed. Take the loan. Think of it as you economic stimulus.

halosfan

If at all possible I would avoid the loan. It will be an albatross for years to come. Best of luck in your decision and final year.

Mintacular

Sell off anything that is not near and dear to you, and then take a smaller loan amount.

bman90278

I would never do anything just for a tax break. You need to do what's best for you. Can you get by during the time you are paying off the loan? Your financial well being should come first. If you can live without all of any of the cards and feel you can replace them later on I would do it since today's economics are so unstable. You didn't mention what type of sentiments those cards are to you??? That could be a big factor if they are from your father or if you have had since you were a kid, or if they are just from your personal collections.

Best of luck to you.

Brian

baseballfan

get the loans its cheap money. keep teh collections for a real emergency when you can't get a loan.
good luck with school

BunchOBull

I still see little value in moving items that will almost certainly not sell for their original purchase price in this market.

Having student loans can be a major plus after college. Just one full year of repayment will do wonders for your credit score/history. In my case, 100% of the interest I pay can be deducted from my income taxes every year. For an unmarried man without children, that can mean the difference between owing the Federal Government and receiving a refund check. The loans are easily refinanced for low, fixed rates if they don't originally come with one.

Beyond this, there is no penalty for paying a student loan off early and many employers will give incentives towards loan repayment.

jeffcbay

Take out a loan, buy more cards, and drop out of school!















...or not.

leathtech

Keep the cards and take the loans... just in case you ever really need the money you'll still have the cards - you'll won't be able to get a good loan again till you own a house.

theklonewarrior

You can sell the cards, go to school, and after a few years have rebuilt your collection probably better than you sold it, and no have to worry about the anchor of student loan debt.

Or another way to look at it is would you take out a student loan to go buy those cards?

fattymacs

Keep the cards, take the loan. They make loans everyday, they quit printing those cards a long time ago.

goose3

depends.....

how long will it take you to pay the 15K back if you take out a loan?

Mintacular's suggestion was the best one on here so far. Taking out loan to get a tax break sounds like the logic my wife uses when she wants to foolishly purchase something she doesn't need.

BunchOBull

<< <i>Taking out loan to get a tax break sounds like the logic my wife uses when she wants to foolishly purchase something she doesn't need. >>




You can think that, but over the course of my student loan, I'm saving a lot of money by letting it float. You folks with kids have plenty of deductions to help your cause. I'm unmarried with no kids and I'm currently renting, I have no deductions of merit.

By paying my loan to completion, I save myself nearly $1200.00 in income taxes a year. I don't get any benefit from paying it off today.

initialD

Get the loan. It'll be easier to hack away a loan payment than to

pull your hair out trying to replace what you sold.

That's of course if you feel that the cards mean enough to you.

If not, then you can rebuild and maybe take a different angle/focus to

your collection after you sold it off.

lsutigers1973

Student loans were designed to be paid back after you have earned your degree and began working. After graduating, be sure to consolidate all your student loans and your interest will be slightly decreased and the consolidation will actually increase your credit rating and ability to obtain future loans.

Use the money saved from the slight deduction to buy more cards.

Yankees001

Only sell what you truely don't want or mind selling. Anything that means anything to you keep.

Student loans have a low interest rate, take them before selling anything you want to keep.

Dave

Archaninator

.

larryallen73

Archaninator took the words out of my mouth. You will be paying interest to keep baseball cards and, to me, that makes no sense. I would take some nice scans to remember them (and help sell them) and I would SELL, SELL, SELL! No question. In the "real" world, the way it is now, you don't want any extra debt. 10 years from now you hopefully can buy all those cards back. They are just cards and they all are easily replaceable in the future. Though we collectors like to think different are cards are not scarce.

perkdog

John, I noticed some part of your collection is of lower grade. Do you plan on upgrading any part of the collection say after you get your degree and become more financially secure? If that is the case I would definately sell at least the cards you plan on upgrading down the road as its always best to avoid debt as much as possible.

Best of luck either way!

minnesotahusker

Take out the loans. Student loans are among the cheapest loans available. And the tax deduction later on is nice.

jimq112

If you didn't have the collection now, would you take out a loan to buy it for the amount you can sell it for right now? If yes, take out the loan and keep the cards. If no, sell the cards and replace them later.

rbeaton

<< <i>I save myself nearly $1200.00 in income taxes a year. I don't get any benefit from paying it off today. >>



If you pay it off today, you don't have to pay interest any longer (could be a big benefit). If you save $1200/year in income taxes, you are probably paying much more in interest.

Robert

BunchOBull

<< <i>

<< <i>I save myself nearly $1200.00 in income taxes a year. I don't get any benefit from paying it off today. >>



If you pay it off today, you don't have to pay interest any longer (could be a big benefit). If you save $1200/year in income taxes, you are probably paying much more in interest.

Robert >>



I'm 25 years old; I have a financial adviser and a financial plan. I get to deduct 100% of the interest I pay on my student loans at the end of the year...100%. If I see the note out for the full 30 years at my current income level, I will continue to see 100% of that interest. Yes, it's essentially like throwing money into escrow to be used at a later date, but like most deductions, I'm paying in little increments to get to the same larger end.

Last year I was at a crossroads, pay off the $22k in loans I have or use that money to gain interest in savings and further other investment opportunities...basically using my money to make money, rather than pay off a debt that is no more financially demanding if paid off over time as compared to all at once.

I chose to make money with my money because I'm not losing out by carrying the debt.

Now, as my income increases over time, more deductions are available, and itemization becomes more of a reality, carrying the debt may not be as financially advantageous. That's what I have the adviser for. I'm a firm believer that any student loan of less than $30k with less than an 8% interest rate is worth carrying for several years. If I decide I want to eliminate the debt in short order, I can double up on my payments and have it wiped clean in less than 30 months. I will not do this, however, until I've acquire a home loan. At this point, my student loan makes me an even stronger candidate for such a loan.

Dobie

I faced this exact problem a few years ago in my final year of school. I had accumulated quite a large number of expensive cards from high school and on through my first couple of years of college. My final year, my scholarships ran out, so I was faced with loans or sell cards (along with a part time job) to pay tuition and rent. I sold everything I had. Now, I'm in the position of trying to buy back some of what I had, but some of it I will likely never see again. Good thing is, the prices are lower than they were six years ago. There's some stuff I regret selling, but I don't have a huge loan to pay back--at 30, I'm debt free except for the mortgage.

Debt is something to avoid if at all possible. Material things can be bought again, when you have the paying job, and no debt to hold you down.

262Runner

<< I save myself nearly $1200.00 in income taxes a year. I don't get any benefit from paying it off today. >>



If you pay it off today, you don't have to pay interest any longer (could be a big benefit). If you save $1200/year in income taxes, you are probably paying much more in interest.

Robert >>

I'm 25 years old; I have a financial adviser and a financial plan. I get to deduct 100% of the interest I pay on my student loans at the end of the year...100%. If I see the note out for the full 30 years at my current income level, I will continue to see 100% of that interest. Yes, it's essentially like throwing money into escrow to be used at a later date, but like most deductions, I'm paying in little increments to get to the same larger end.

Last year I was at a crossroads, pay off the $22k in loans I have or use that money to gain interest in savings and further other investment opportunities...basically using my money to make money, rather than pay off a debt that is no more financially demanding if paid off over time as compared to all at once.

I chose to make money with my money because I'm not losing out by carrying the debt.

Now, as my income increases over time, more deductions are available, and itemization becomes more of a reality, carrying the debt may not be as financially advantageous. That's what I have the adviser for. I'm a firm believer that any student loan of less than $30k with less than an 8% interest rate is worth carrying for several years. If I decide I want to eliminate the debt in short order, I can double up on my payments and have it wiped clean in less than 30 months. I will not do this, however, until I've acquire a home loan. At this point, my student loan makes me an even stronger candidate for such a loan.




This arguement always drives me nuts. If you pay $1200 in interest each year on your $22k loan, yes you can deduct the $1200 from your income to reduce your tax burden. If you are in the 25% tax bracket, you have saved yourself $300 in Taxes.

The way I see it, and I'm no rocket sceintist, but using debt and interest to reduce tax burdens makes no sense at all, why pay $1200 in interest all year to save $300 in taxes? Sounds to me like you are behind $900. If you have the means to pay off the loan in full, you should, and then start putting your money into an investment that might make you some interest rather than paying it.

Paying interest for the purposes of reducing tax burdens is not smart investing. If you are looking to increase credit scores, that is fine, but remember how much that interest adds up. $1200 a year for 10 years..... $12,000 I bet you could invest that same $12,000 over the next 10 years and end up with a lot more than a tax deduction.

rbdjr1

Can you get a good job after grad?

When would you have to begin to repay this so-called new loan?

Sell the collection if you can. Stay away from a new loan in this economic environment!

Good luck no matter what you do!


rd


P.S. You can always begin new collections. As the years pass, your collecting tastes may change anyway, so selling now may not be the worst thing in the world for you anyway!

fattymacs

If your selling your assets to avoid debt is what you are doing, then you shouldn't stop with the cards. Downgrade your vehicle, stereo, computer, TV, clothing, housing and live on Raman Noodles. If you are happy with the collection you have, keep it. If you plan to change focus or upgrade, sell it. You made a choice some time ago that cards were more important than the cash you gave for them, if the cash is more important now, you must sell and don't look back.

I agree that debt is best avoided, but it's not exactly the doom that many would have you think.

Beck6

Is the interest on your loan deferable until you graduate or does it immediately accrue from the day you take the loan out? If the interest does not accrue until you graduate take the loan out and wait until next year to decide. It gives you a year to sell your cards if you want at good prices instead of "blowout prices" and you can decide what to get rid of and keep.

Nothing says you cannot pay off the loan quicker than the monthly payments if you take it out. There should not be a pre-payment penalty. I do not like the tax deduction argument, but that does not make the loan a bad idea.

earlycalguy

just because you can deduct 100% of the interest does not mean you are actually saving that amount each year. you are only reducing your income by the amount of interest paid for that you. this just means you are paying taxes on less money each year but it's not a dollar for dollar savings - or even close.

if you pay 20k in interest on a home loan and make 100k a year then you are paying taxes on 80k a year after you deduct the interest. if you are in a 30% tax bracket you would have paid 30k in taxes before the interest deduction. with income now being 80k you are paying 24k a year in taxes. the 20k in interest you paid saved $6k in taxes....not the 20k in interest you paid. student loan interest would work the same way.

baseballjeff

I would hang on to your cards that are near and dear to you, and take the student loans.

Trust me, I just finished grad school with a ton of loans, kept my baseball cards, and now that I am working. I am still buying cards, and the loans are paid off.

Don't regret the minor debt at all. The joy of the cards is so much sweeter!

Jeff

VitoCo1972

As someone with a ton of student loans...I would sell now and buy back better cards when you get a good paying job. College loans are an anchor that prevent you from buying other things like a car or even a house if you have enough debt. Keep 10% of the stuff you have (that you would really hate to part with) and dump everything else. Who cares if it's a depressed market, you need the money now and tax breaks are only worthwhile if you're making a bunch of money right away.

storm888

At this time, I would borrow the money.

IF likely-current prices for the subject cards were higher,
I would sell the cards.

.............


In general, borrowing expensive dollars and paying back
cheap dollars is a good idea.

The key is to have a hedge that will increase in value as
the value of the borrowed dollars shrinks.

Historically, during some cycles, precious metals have been
good for this purpose. In theory, cards could serve the same
purpose, though that would depend largely on the quality
of and the demand for such cards.

........

In general, I prefer a dollar in my pocket to several-dollars worth
of tax breaks, but the interest deduction is viewed differently by
different folks, depending on their circumstances.

mike92694

brutally honest advice. don't sell any, but don't buy any more.

BunchOBull

<< <i>just because you can deduct 100% of the interest does not mean you are actually saving that amount each year. you are only reducing your income by the amount of interest paid for that you. this just means you are paying taxes on less money each year but it's not a dollar for dollar savings - or even close.

if you pay 20k in interest on a home loan and make 100k a year then you are paying taxes on 80k a year after you deduct the interest. if you are in a 30% tax bracket you would have paid 30k in taxes before the interest deduction. with income now being 80k you are paying 24k a year in taxes. the 20k in interest you paid saved $6k in taxes....not the 20k in interest you paid. student loan interest would work the same way. >>



You're totally right and I'm not arguing that point...I was saying that I'm not paying so much interest on my loans that I'm meeting the cap and not able to deduct all of the interest from my income. I plan my deductions so that I can fall into the lower bracket. I've been lucky thus far. Last year with standard and loan deductions, I dropped into the lower bracket by less than $300. But it was enough and resulted in a savings of around $4k. This year, I will have been a student for most of the year and will make so little that I'll get it all back anyway. Next year as a teacher I'll have a much lower annual salary and will only pull off a lower bracket with a few deferred deductions. After 2010, it will be time that I pay off the loan.

matthewbschultz83

How about quit school, its overrated.....

Just kidding...Luckily I never faced this decision as my parents planned very nicely for my 4 year in-state school education, but I don't think I could ever part with any of my cards especially my older 50s/60s stuff. The main reason is I have this fear in the back of my head that I will never find that particular card again, so I guess I'm saying take the loan its just more debt - welcome to that club.

Good luck.

goose3

<< <i>I'm 25 years old; I have a financial adviser and a financial plan. . >>




How much does that cost?

BunchOBull

It was an upfront cost of $400, and what equates to essentially $200 a year right now as it is based solely on my income, with an $800 a year cap.

goose3

to think....I do that service for my wife for free.

BunchOBull

<< <i>to think....I do that service for my wife for free. >>



haha, yeah, as a young person who wants to purchase a home, save, invest, and meet some overall lofty financial goals in a short amount of time, I didn't feel prepared to do it alone.

I didn't have a choice to not get student loans, but I'm glad I did. Despite having my academic scholarship through the state, I had to pay room/board and living expenses out of pocket. I've been very fortunate that having this debt has actually saved money for the 2.5 years I've been paying for it. Despite having had a revolving credit account that is nearly a decade old, it alone wasn't enough to build an adequate credit score for home purchase because the debt was never substantial enough...that's another thing I can attribute to my loan consolidation.

Mintacular

Along with my other suggestion, make sure you don't put yourself in the position that you HAVE to sell your cards---that is when you get robbed blind/low-balled because your hand is weak and you will have to pay double in the future to get back what you sell. I

n other words, if you go the sell route, either put a comfortable price tag on your stuff and sell it on eBay BIN/BO or sell to a reputable dealer (not sure those exist )

If you get a nice price, it's all good. If not, take the loans. Just DON'T enter the "Well, need to bail on these, let's see what I can get..." mentality.

theczar

i'd go with the take out a loan, and keep your collection route.

president BO, leader reid, speaker pelosi, senator dodd and rep barney frank are in the process of turning our country into a nation of victims where the lender of your student loan is a predator and you as the person borrowing the money is an innocent rube not responsible for his actions or more importantly ever having to repay it.

for the politically cluesless think of your collection full of high grade PSA and SGC cards. thanks to our friends in washington they think that all of those beauties (aka your tax money) look better in PRO and Gem holders.

cwazzy

<< <i>i'd go with the take out a loan, and keep your collection route.

president BO, leader reid, speaker pelosi, senator dodd and rep barney frank are in the process of turning our country into a nation of victims where the lender of your student loan is a predator and you as the person borrowing the money is an innocent rube not responsible for his actions or more importantly ever having to repay it.

for the politically cluesless think of your collection full of high grade PSA and SGC cards. thanks to our friends in washington they think that all of those beauties (aka your tax money) look better in PRO and Gem holders. >>



Thanks for your political commentary.

iamthegreatcornholio

I was in a similar position - I sold, and I firmly believe I made the right call. The cards I had sure as hell weren't going up 8% a year.

For what it's worth, I still have some loans, and I can't deduct 1 cent of the interest.

metrotheme

Student loan rates are somewhere near 6% (at least what I saw from Suze Orman recently). The rate of the loans are higher than the current interest rate being given on savings account (2%). You will be "making" more money by paying off the loans than keeping the money in savings, being that the loans are accumulating more interest than the savings.

Scrap the cards, you can always get them back, and who knows if demand for them will increase? Kids are barely collecting cards, especially vintage. Most are collecting Yugi-Oh cards. It will be mighty nice not to have that loan payment for the next 15-30 years. You can then start paying yourself instead of the loan company.

It's almost like the 40 yr old virgin movie, when he realized he could live WITHOUT the toys.

ArchStanton

How about getting a job to pay your tuition? I had a full-time job and graduated in four years. It wasn't so tough.

Mintacular

<< <i>How about getting a job to pay your tuition? I had a full-time job and graduated in four years. It wasn't so tough. >>



Umm, what year did you go to school, 1960?? Today's tuition rates (15K+/yr) does not allow a full-time student to work and pay off their tuition. JMO, well actually JMO that is right

VitoCo1972

<< <i>

<< <i>How about getting a job to pay your tuition? I had a full-time job and graduated in four years. It wasn't so tough. >>



Umm, what year did you go to school, 1960?? Today's tuition rates (15K+/yr) does not allow a full-time student to work and pay off their tuition. JMO, well actually JMO that is right >>



While I know John and don't see him doing this, that post you're making fun of isn't that wacky. You could certainly bartend or take a bouncer job that pays $100/night over a weekend Fri/Sat/Sun plus summer work and make $15K. To think otherwise is purely lazy. Now, would you be sacrificing some of your college experience? Yes, to a certain degree, but having college loan payments is a HUGE anchor.

Mintacular

Not today my friend (with all due respect). 15K is a very LOW estimate. And I didn't even include cost of living/rent, etc. Near impossible unless you are Tom Cruise in "Blank tail", it just ain't going to happen...

P.S. That's wierd PSA wouldn't let me spell out the actual name of that movie. Sorry Joe!

halosfan

It is possible. Many have done it in the past and it can still be done. One just has to have the drive and work ethic to get it done.