Magic Money: MTG Investing Intro - Article #1

There are many ways to enjoy Magic the Gathering and its products. As someone who plays, collects, and invests I know that there is no wrong way for someone to enjoy MTG. There are a lot of videos and articles that cover game play and strategies. My articles will not be one of those, I am going to be covering the investing side of MTG. Topics I plan on covering are buying, selling, inventory tracking, storage and protection, profits, and others in addition to covering out of print notifications, rotations, and quarterly market reviews. This article is going to cover the basics of investing and how MTG Products can be used as a vehicle for financial growth.

Before we get into this, I’m going to be very blunt. Almost all MTG boxes go up in value over time. If you like a product, buy it, stick it in a closet, and forget about it for a few years, and when you find it again you will be happy you forgot about it. It's that simple. There are tips that I plan on going over that can help you identify which products tend to appreciate in value faster than others, and some that in the long haul will be worth significantly more than others.

Investing in my articles will be defined as buying something with the goal to sell it for more money in the future. There are other ways to define investing, but I’m going to be using this one as it is very straightforward.

A very important thing about investing is setting rules for yourself to follow. Everyone is different and rules should reflect each person's individual goals and abilities, below are the rules I set in place for myself when investing:

1. Make and stick to a budget - Everyone has different financial situations, only you know yours and be honest with yourself about your budget. Going over your budget can lead to financial stress and bad situations. Only spend what you can and never bet the farm.
2. Set price and time goals, but trust your gut - Set a value that you are going to sell each product at, once it hits that price sell it. If you feel it can still go up further, give it a few months and then re-evaluate. Don’t hold it too long because dead money is bad, that's why you set a sell date. Bad products happen, sell it and put the money in something else.
3. Smartly diversify - Don’t only buy 1 product. The odds of that 1 product you stocked up on performing better than every other product you didn’t is very low, but you don’t need to buy everything to have a diverse portfolio. Pick and choose what you don’t want to invest in.
4. DO NOT check values frequently - You will drive yourself crazy! I only check the prices of my personal inventory quarterly so I can do my spreadsheets and share information about market movements. Checking values frequently can be discouraging as it takes a long time for values to increase, and there will be many months where a product’s value is flat or negative. It's ok to check values, I do it quarterly but yearly is probably best for your sanity.

Another key thing is that you will make mistakes, it's ok, learn from it and move on. I’ve made many mistakes, but I try to learn from them and try not to repeat them in the future.

Alright, you have your rules and budget in place, where should you start? Booster Boxes. Booster boxes are the key product in Magic the Gathering (All TCGs/CCGs actually), which makes them the perfect entry point. They are what WOTC puts in cases and ships, stores buy boxes to sell to customers, customers crack boxes when a new set releases, you draft boxes with friends, and you open boxes when you have that itch (you know what I'm talking about).

Buying

The best place to start is boxes that are still in standard and are about to rotate. At this point most people aren’t buying the boxes to build Standard decks because if the set rotates the cards in it are no longer Standard legal. This makes these boxes a great starting point because this is typically when these boxes are at the lowest price. Always buy from reputable sources, and with a little bit of shopping around you can usually find a good deal with free shipping (lower overall cost). A note of caution, if a deal seems too good to be true, it probably is and just pass on it. I’d rather spend a little more to be sure I’m not getting ripped off.

Holding Time

You bought a box, how long do you hold it? This is the tough part. Every product ages differently, but they all go up in value over time. Some spike in value right away then flat line then spike again and others increase slowly and steadily year after year. Once a product hits your price goal or your sell date, sell it. Trust your gut, if you feel it can keep going up in value then hold it longer, but if you feel it's near its peak or isn’t going anywhere sell it.

Selling

The box you bought hit your price goal or sell date and you want to unload it, how do you do it? There are 2 main ways to sell boxes Online or in person. Selling online gives you access to person to person sales sites, buylists, auctions, and consignment. Online sales have shipping costs, website fees, payment processing fees, and fraud risk. I’m not trying to scare you about selling online, just trying to share items you need to be aware of. I sell most of my boxes online and have only had 2 unfortunate situations out of the hundreds of sales that have been completed. In person sales include bringing it to an LGS or selling it to someone you personally know. There is less cost with selling in person so the price of sale will often be lower, around 10-15% lower.

I will be going over selling boxes more in depth in a future article where I will be covering the ins and outs of online and in person sales. Items like specific websites and platforms, pricing, shipping, fees, and more.

Profits

You sold your box and you got paid, what do you do now? Well, that's completely up to you. You can stick it in a bank account, pay bills, reinvest it, or buy something shiny, but this article is about investing so let's go down that path. If you bought your box for $100 and sold it for $250 you can buy 2 more boxes and then just repeat this process as many times as you’d like. Every time selling 1 box and buying 2 doubles your inventory, after 3 cycles you have 8 boxes for the initial investment of $100….pretty nice.

Stay tuned as my next article will cover buying. How/where to buy, timing of buying, what to expect from buying certain types of products, and the differences between products. In this article I will also be covering some portfolio tracking tips, advice, and solutions.

Disclosures

1. I am not a professional Financial Advisor. I have been investing in MTG products for many years and I want to share what I’ve learned and what mistakes I’ve made with those who are interested in getting involved.
2. Investing in sealed collectibles requires a lot of patience and self control. If you can’t resist the urge to crack packs, or if you can’t wait years for something to go up in value this may not be for you.

Collin Pohl