Audio as an investment.

[highfihoney]

I see time & time again where alot of people in our hobby are in a rush for the best sound at the cheapest cost,In my opinion this is not ever the best route to go,i know we all say that after we get our systems put together that we are all set & are not gonna spend any more cash,for most people in our hobby this is not a realistic expectation,we will all upgrade at some point.

I also offer this for consideration,what happens if the need ever arises to liquidate a system in order to raise capital for other needs,maybe selling the system is not the first choice but what if the need calls for it ?

Many people associate high end gear from brands like KRELL,MCINTOSH ECT with outlandish prices & think they cant afford these peices,this is not true for the most part,If a person has taken enough time to learn how to build a great sounding system they should also invest the time into researching what gear holds its value & what gear will end up taking massive losses,after all for most people their systems are a huge investment.

Buying used high end gear with no warrenty vs buying new mass market gear with warrenty,for the most part warrenties are way over rated in a big way,this statement applies to doing the research & finding out what manufacturers make gear with an ecpected life cycle & what manufacturers make gear with the intent on it lasting a life time of 50 years or more.Peoples money can go alot further by buying all used high end gear & not sacrifice anything in sound quality plus you end up with a system that will be worth what you paid in 5 to 10 years.

To see this in action take a fictional budget of $10,000 & buy the latest versions of what ever system you want to put together from mass market gear then take the same budget & put together a system from used high end gear listings & see what you end up with.

Try it & see you may be suprised at what you can build for the same amount of cash spent.

 

[MDS]

I wouldn't classify audio gear of any kind as an 'investment' anymore than purchasing a car or furniture is an investment. Investment implies ROI (return on investment); ie you have more than you started with after some period of time and that will not be the case for used audio equipment, furniture or cars.

 

[highfihoney]

I wouldn't classify audio gear of any kind as an 'investment' anymore than purchasing a car or furniture is an investment. Investment implies ROI (return on investment); ie you have more than you started with after some period of time and that will not be the case for used audio equipment, furniture or cars.

I agree but were talking luxury items here,furniture & cars are necessities & audio gear is a luxury item.

The only way i'd equate the audio hobby with buying a car would be the purchase of a hot rod or a classic car not a daily driver.

 

[billy p]

Well

only in a make-believe world 10 grand would be nice. For most of us though it's only an after thought. The advice you're giving is genuine but hi end components new or used is mostly for a minoirty of customers. However, spending your money buying good equipment one piece at a time over time you'll get a better system, I agree with that. For me though its not about the investment.!!

 

[highfihoney]

only in a make-believe world 10 grand would be nice. For most of us though it's only an after thought. The advice you're giving is genuine but hi end components new or used is mostly for a minoirty of customers. However, spending your money buying good equipment one piece at a time over time you'll get a better system, I agree with that. For me though its not about the investment.!!

I just picked 10k as a figure from thin air but 10k isnt that much & surely not in the minority of system owners ,take a look at the thread on this site titled "how much is your system worth",plenty of people in that thread have systems that reach 10k or very near that amount & alot of the systems are mass market gear.

This can be applied on a single peice of equipment the same way at any amount,i think more people would buy used high end gear if they realized exactly how much it could benifit them in the long run for the same cash spent.

 

[billy p]

Hifi what you are saying makes sense, don't get me wrong. The point I was making is most people not only in forums don't think of audio as an investment. I myself always check out peoples sig's and have often grown envious. This to me is merely a form of entertainment I don't think of it as an investment. If I could get my money back on all the things I squandered I'd be a happy man. I do understand that if what I have is desired by others, then its a investment but my money spent on my Denon will quickly depreciate.

 

[Jack Hammer]

This can be applied on a single peice of equipment the same way at any amount,i think more people would buy used high end gear if they realized exactly how much it could benifit them in the long run for the same cash spent.

A few years ago I probably would've disagreed with you or just not seen it as applicable advice for most people. More recently I've started to see that it is very solid advice. The first set of speakers I bought were replaced by speakers that were replaced by other speakers that have since been replaced. I'm on my 4th reciever, 5th dvd player, 3rd cassette deck, ?th tv, etc.

I'm not in as big of a rush to have the latest (untested & possibly unnecessary) features as I was just last year, because next year they will add one more feature to the next new model and I'll want that too. So if I buy the new model for $1500 to add one feature and I can only sell my 'old' one (bought for $1500) for $500, I'd be taking a huge loss every year. Used high-end equipment that holds it's value is starting to look much better to me. It's a little more $ up front, but a lot less when you keep upgrading every other year and it doesn't depreciate as much as mid-fi stuff does.

My $0.02

Jack

 

[highfihoney]

Hifi what you are saying makes sense, don't get me wrong. The point I was making is most people not only in forums don't think of audio as an investment. I myself always check out peoples sig's and have often grown envious. This to me is merely a form of entertainment I don't think of it as an investment.

I dont think of it as an investment either but in the same breath i cant just throw money out the window,the main point that im trying to make is financial responsibility within the hobby,most major brand high end gears value only drops so far then it levels off for decades & will only go up or down by about 10%.

On this site we preach to people all the time not to waste their money on bogus magic cables & other fancy stuff but we never teach them how to spend money wisely unless its comparing gear on a watt vs dollar ratio or the can you hear a difference speel,all we do is compare features nobody ever talks about what happens to the old gear that is being replaced,in alot of cases it just gets given away to family & friends or ends up in the bedroom or a closet because its value has dropped so low that selling it is not worth the time,ebay is full of $25 recievers that just a few years ago cost 10 to 20 times the amount they are selling for used.

 

[stratman]

My hi-end stuff (2.0 system, Krell, Proceed) has lasted for 15 years now, never had problems, is it investing? no, but it has kept me from buying new gear since there's been no reason to replace (mechanically speaking it works) any of my components. So one way of looking at it is spend as much money as you can on good equipment and make it last, or spend less and upgrade alot. Well both points have merits and detractions. If you feel the need to have the latest upgrade probably the best way to go is the "cheaper more often" route, if you don't, and have the cash it's probably cheaper in the long run to invest up fron and not worry about upgrades. My HT system has cost me about 5,000.00 (Panny, Gallo) I feel this system is a throw away. Plasmas are getting so cheap pretty soon it'll be the standard, my receiver and dvd player are throw aways, but they have great specs and more importantly they work perfectly, so I don't see the need to upgrade, the system is 2 years old, it has HDMI (one of the first in the market, Audioholics gave the DVD player an excellent review) I just don't see the need. So I spent 5K upfront I don't need to upgrade for the forseeable future, in the long run I'll save money. When new technology hits the market (real tech, not the "improvement" upgrades as ordered by marketing) I'll evealuate and spend accordingly, this may take 6-8 years? Maybe 10 on the outside, that's a wad of money I can save for my future HT.

 

[Rock&Roll Ninja]

Well HT is changing daily, a 2-channel system hasn't had a radical change in 25 years (since the CD was introduced).

 

[stratman]

HT is changing daily, but not with profound achievements. They're mostly "tweaks" and fluff, products being milked for all their worth. So if a person feels the need to have the flavor of the month they can buy less expensive gear and upgrade more frequently or you may spend more upfront and buy gear thats expandable (more money, higher tier equipment) and lengthen replacement cycle.

 

[Seth=L]

Hmm, Investing....

I think I may be one of the few that invest. I take my time, search out insane deals, then I usually end up with something I can get a return on. That isn't to say I would be able to keep a lot of the things that I find for long periods of time, so in that respect I don't come close to fitting what the Opening Post had stated.

If I was going to define Investing this is it- when you purchase stock or items with the intent making profit upon sale of stock or items. Investment the way the Opening post suggested would be a long term investment, and you would have to pull your stock without financial gain, but when a stockholder puts shares into a company the only thing that is going to possibly benefit him/her is a financial return. Audiophiles are getting something now, an enjoyable experience from their home theater or music system.

So when you invest in audio/video components you shouldn't be looking to get a financial return, but a return in enjoyment. If you feel you have spent your hard earned money wisely and you enjoy what you have purchased, then you have made an investment. Keep in mind that if you want to enjoy your investment for a long time that getting high end components with exceptional warranty (customer service) with no BS, then you have made I wise investment.

Concerning the value of electronics as time goes by, I will use Krell as an example. Krell makes Preamps, processors, amplifiers, CD players, DVD players, and I believe they make subs and speakers now. The things that are going to retain their value best in such a league of components would be the amplifiers and the preamps. The Processors, CD players, DVD players, and speakers all will eventually loose significant value as technologies become obsolete.

 

[Nick250]

There is a lot of "toy" factor in high end electronics and as a consequence "value" gets lost in the process. I certainly feel the pull to have the latest and greatest electronics. A part of me was actually happy when my 5 year old Onkyo reviver bit the dust. I had wanted something newer (toy factor), but I could never justify it on a SQ or features basis. My downfall is that "new in box" instead of used has real appeal to me.

Nick

 

[highfihoney]

Hmm, Investing...
Concerning the value of electronics as time goes by, I will use Krell as an example. Krell makes Preamps, processors, amplifiers, CD players, DVD players, and I believe they make subs and speakers now. The things that are going to retain their value best in such a league of components would be the amplifiers and the preamps. The Processors, CD players, DVD players, and speakers all will eventually loose significant value as technologies become obsolete.

Hi seth,these are the exact peices that im talking about,for instance take the krell 5.1 pre/pro we were all talking about before tawnos went on the rampage in another thread,this pre/pro is a prime example of how to build a world class system that will never loose any value.

That model pre/pro was $6,500 when it was new & being that newer models have replaced it the value of it has fell to right around $1,000,the price on that model will never go any lower,you cant get the quality that the krell has built in that 5.1 pre/pro for $1,000 nor will you get a peice of gear thats resale value is virtually gaurenteed to never drop any lower.

Ive been trying not to give examples from any of my personal gear but since were talking about speaker systems i think it is essential,my xrt 22 line arrays when new carried a msrp of $10,000,i picked them up in person from somebody who just had to have the latest model line array & wanted to get rid of them cheaply,i paid $2,500 for them (mint) & they have a resale value that will never go any lower than $4,000 as long as they are taken care of.

These are just 2 examples of how people can save a fortune in audio,buying used high end speakers is as easy as pie you just need to hear & see them in person & as for buying the electronics if you pay attention to fair market value of the gear you can end up paying less for a high end system that will retain 100% of its value because the blue book value has allready bottomed out.

Take these b&w's for another example,nowhere can the quality vs cost or gaurenteed resale value of these be matched by any new speaker on the market no matter the msrp or manufacturer,these speakers were a friend of mines,they were $22,000 when new & he sold them for $5,000,you cant touch a speaker like that for 5k.

All im trying to show people is that by taking advantage of other peoples rush to have the latest & greatest connections on their gear & to have new flashy model speakers is that they can have smoking rigs that dont cost more than store bought mass market gear.

 

[Seth=L]

Bower & Wilkins, drool.

Those speakers are beautiful.

I do agree that they will maintain a certain value, especially McIntosh. They have such a cult following that even the oldest stuff goes for a high dollar, and many times higher than their retail would have been at the time they where sold. McIntosh is like a perpetual antique, every time you see one, you instantly know what you are looking at, it can't really be copied. McIntosh is one of those companies that when you look at their product, you know it is heavy looking at it from 20ft away.

 

[dave1490]

I wouldn't classify audio gear of any kind as an 'investment' anymore than purchasing a car or furniture is an investment. Investment implies ROI (return on investment); ie you have more than you started with after some period of time and that will not be the case for used audio equipment, furniture or cars.

i agree getting a return,is not the norm.but i seen muscle car,s go up %1000 and have seen some sound gear go up,an crown ic 150 was worth $200 2years ago and now is $500.it,s always high end stuff.

 

[stratman]

I wouldn't classify audio gear of any kind as an 'investment' anymore than purchasing a car or furniture is an investment. Investment implies ROI (return on investment); ie you have more than you started with after some period of time and that will not be the case for used audio equipment, furniture or cars.

Differences would be muscle cars, older Ferraris (and newer limited runs) , modern furniture (antiques are different ball of wax): anything by Eames or Nelson (Herman Miller) up 400 to 500%. My take is that electronics even the high end is seen by consumers as "toys" therefore disposable (I'm not talking here about audiophiles, they know the value, just the regular consumer)thus they don't see the need to spend the money. Again, most people don't buy furniture as an investment, unless you're into that sort of thing, though there is a market for it. Ditto for cars.