Contrary to the doom and gloom of TV talking heads and most politicians, things are nowhere near as bad as we’re being led to believe. Unfortunately, with many investors heading for the exits and stock prices way down your 401k could be depreciating rapidly and you might be looking for a nice long term place to put your money. How about a motorcycle?
Have you seen the TV ad from Fidelity where the husband and wife are discussing where to put their money for the long term and the wife recommends a nice mutual fund and the husband recommends a car? The husband is supposed to look foolish, “You can drive it, too!” but after the last few weeks, you have to wonder if the wife is the one being misled. The money in a mutual fund is supposed to at least retain value and ideally increase, but in either case, you don’t realize the return until you cash it in. Looking at those numbers on your statement might be fun if they keep rising, but right now, most folks don’t want to look.
Buying a motorcycle strictly as an investment may not be a great idea, after all, if you just buy it and look at it, you don’t get any dividends and your choice will be influenced by the big money fantasy which means you’re trying to guess what someone else will like. How can you know? If instead, you buy a really nice example of something you personally like, something that looks good, is fun to ride, fun to work on, gets a lot of attention when you’re out, what mutual fund can compare? Ever sit in your garage with your buddies, savoring an adult beverage, admiring the color and lines of your 401k statement or remember the last time all of you moved from one fund to another? Yeah, I didn’t think so.
Like paper investments, a pretty safe principle is “don’t buy junk.” This doesn’t mean buy a collectible, as we’ve mentioned before, because the motorcycles that are supposed to be collectible, seldom are. It means buy a solid example of a popular motorcycle with the intention of keeping it for the long term. Take really good care of it, follow maintenance procedures religiously. 20 or 30 year old motorcycles can look almost brand new even with many thousands of miles on them. As today’s bikes are thrashed and tossed away, your bike will give you years of riding enjoyment and continue to look brand new.
Look at some of the high dollar motorcycles on eBay, they’re often standard models that were very well maintained over the years. They may be high mileage, showing the motorcycle brought the owner plenty of enjoyment and then, as the owner approaches or enters retirement, he starts to sell off a motorcycle or two and gets all of his money back with interest and often, a lot of capital appreciation, too. It’s like riding for free. In today’s use it up and throw it away society, many miss out on this basic idea of buy a good one and care for it. Motorcycles are surprisingly durable when owned by the right person. Be that person and reap the rewards.
If you’re considering a motorcycle purchase, ask yourself one question and be brutally honest, “Do I like this motorcycle?” Don’t get all fired up about the latest magazine road test or bike of the year, do YOU like it? Think about it 10 or 15 years down the road after the magazines have moved on and the young guys are chasing the latest horsepower and speed champion, will you still get a kick out of it? Can you imagine yourself doing a Saturday morning wash and polish or Wednesday evening oil change? Do you see yourself on a weekend ride with a few of your friends, stopping to rest for a bit and watching some folks passing by pause as your bike catches their eye? If those thoughts bring a smile, you might be on to something.
The best protection from a market downturn is to diversify your investments, what better way than adding a motorcycle or two for the long term? And when someone says you should keep an eye on your investments, all you have to do is open the garage door and take a look. How cool is that?
Related: Collectible Motorcycles – Intentional or Accidental?
Related: Affordable Classic Motorcycles
aaron says
I’ll say that the time will be soon 2-3 (years), but for the big buck collectables. when I can get a ducati 750ss for $20k or a goldstar for $10k again, I’ll pounce if I can. when folks realize that barret-jackson style pricing is far from realistic (million dollar hemi cudas?) and not in keeping with tough times, the “investors” will bail out, leaving only enthusiasts.
as evidence, I will cite the post-enzo death stupid ferrari pricing, the 50%ish drop in prices a few years later, and the recovery recently to values above the old ones – but only for desirable models
OMMAG says
Well if you actually do ride the thing you can’t go wrong..
However if you think you can just buy a bike and store then come out a financial winner … I think you’re in for a surprise.
If you count the cost of properly maintaining a bike even in a static storage condition you need to profit around 10% per year to break even.
Restoring costs go up all the time as well.
I’ve met a few guys who bought Ducatis and left them in their crates or sitting as a static displays in their homes thinking that they would be profitable investments.
Not working out so good it seems.
If you are a serious collector and can afford to perform all the maintenance and restoration, if enjoy the process of the work required to do it right and if you’re lucky. Then you just may be able to enjoy your self and eventually show a profit.
If you simply flip bikes by picking up items at bargain prices and selling them at an inflated price you will make money. But doing this entails no joy or love of the machines.
All that being said the only reason I miss any of my old bikes is that I miss owning and riding them. A certain 71 Ducati twin and a little 68 Yamaha twin come to mind.
kneeslider says
OMMAG,
Like I said above, riding it and enjoying it are investment dividends. If occasionally getting your hands dirty on routine maintenance is part of the fun, if the whole experience is what you’re after, then a bike works as part of your portfolio. If you’re just going to get a new bike in a crate and store it, buy some wine, it takes up less space.
Those links below the post to previous articles expand on the idea even further.
Jeff says
Life is to short to worry about this . I’m just gonna ride my classics of tomorrow and let someone else find my little gems in the barn ready to be restored . You can’t take it with you .Ride long and often 😉
Azzy says
Im with OMMAG here.
Besides, you never know when some idiot will get a bill passed through making gas illegal or something in 10 years, and then you have a wonderfully engineered paperweight sitting at home that was not ridden or enjoyed as it was meant to be.
B.Case says
Good topic. I enjoy my dividends every time I shift gears and twist the throttle. I also hope to find out what an original Miguel Galluzzi Ducati Monster will be worth in 20-30 years. Or, at the very least, pass it on to one of my kids, like my dad did for me. What’s the value of an original hand-me-down ’81 Yamaha XS650 Special? Priceless.
Although, the last thing a large OEM will tell you is that they want you keep your bike for 20-30 years. True, we live in a fast turnover, disposable world. But, for the companies whose customers hold on to their bikes longer, like say H-D, the addition of lifestyle products and extended service contracts have certainly added sustainability to their bottom line.
But, for the same reason I think worrying about what your house will be worth in 30 years is ridiculous, I support the idea that enjoying your investments today can add unmeasurable value to your quality of life.
-brian
Jeff says
Azzy
That has been in the back of my mind . That’s why I am enjoying my rides now . Good comment .
Azzy says
Might I also say that buying any vehicle brand new is a horrible investment. Until, and if, it becomes a classic, it constantly goes down in value, and you have to maintain it.
Buy good used bikes for cash in hand. If you want to get by in this economy, you got to spend wisely, and spend less than you earn (if only our governemnt could figure that out…)
B*A*M*F says
Azzy, +1 on the government thing, but in the US we the people are the government. It explains a lot about why we’re doing some of the things we’re doing, I guess.
I don’t see anything like this as a very good investment. It’s like trying to guess what will be an antique. There is always a mix of factors that determines the value of an older item. Some combination of rarity, desirability, and nostalgia come into play.
The VW Beetle is not rare (though some variations certainly are), but is quite popular. The desirability is bolstered heavily by nostalgia. A Fiat 500 carries a reasonable price largely because it’s cute and relatively rare here. Had more of them made it over here, I doubt they would command the prices they do.
I’m still kicking myself for not scooping up several of the good deals on vintage Vespas I wanted a couple years ago. Those darn things have really jumped in value with the rediscovery of Roman Holiday and this weird fascination with Italy that’s everywhere right now.
Jim says
Please don’t encourage vintage or even potentially collectible late model bikes as investments, all it does is lock interesting bikes up in garages and causes them to be prohibitively expensive for those who would like to enjoy them.
Besides cars and motorcycles are about as good an investment as tulips. Yes some with interesting provenance, mostly former racing bikes/cars, that were owned or campaigned by well known racers will appreciate greatly but the rest…just ride them.
L.Font says
I will try to explain this ocean side view.
Here, at Spain, a lot of people bought bikes and scooters in bad condition in order to resell it two months later at astronomic prices. This were because you can see advertisements of bikes in poor condition sold at those astronomic prices.
Now with the crisis over our heads this people has a lot of unusable iron at their garages and no money at their pockets.
The real lovers of classic bikes are still waiting for bikes at reasonable prices, but it is hard to find true bargains.
Maybe in a close future the market will restart with bargain sales, but this is only the future.
Speculation grows as the economy grow, now the economy falls and the speculation also falls.
Earl says
Could be a great idea. Wish I’d bought a muscle car 15 years ago.