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?