Understanding Guitars As Investments (Part 1) WiredGuitarist May 14, 2016 Articles, Uncategorized 1 Comment Welcome to our series of articles on guitars as investments. This first article will answer whether or not guitars are good investments, and if you’re better off putting your money in the stock market. Are Guitars Good Investments? Let’s talk about guitars as investments… The idea disgusts some people, as they feel guitars were made to be played. To others, it seems like a reasonable way to make money and own a very special instrument at the same time. As someone who has had the chance to own a ton of rare instruments, a guitar dealer, and an active venture capitalist, I believe I can offer a somewhat unique and educated take on buying guitars as investments. Now, it would be in my best interests to tell you that guitars are good investment vehicles, and they slaughter the stock market as a way of making money. I should tell you to hand over your life savings and I’ll sell you a guitar that will be collectible in future years. I can guarantee you I would generate more sales of $10,000+ guitars that we carry if I said that… The truth though, is that guitars are not very good investments unless you buy them for less than they are usually sold in the first place. “But Mehtab, if I bought a 1959 Les Paul in 1959 and sold it in the mid 00’s, I would have made six figures!” Good point. Let’s take a step back and ask ourselves how many billionaires made their money investing the supposedly lucrative vintage guitar market… If guitars really are a better investment than stocks, then there must be a lot of billionaires that made their money by investing in guitars right? Nope. There are a grand total of exactly zero billionaires that made their money investing in guitars. Now compare that to how many people have made billions and billions of dollars investing in the stock market. Many are common household names, like Warren Buffet. Now, I am aware that’s not really a fair comparison, but that just points out how absurd it is to ask if you should invest in guitars instead of stocks. The stock market exists to make people money, and high end guitars exist as playable art which you can use as a tool to create more art. The reason a lot of people seem to think guitars are a good place to park their money is because it’s a myth that has been perpetuated by guitar dealers for years and years now. Simply put, it means more money in a dealer’s wallet at the end of the day when some guy walks into their store and blows his savings on a vintage guitar because he believes it will outperform the stock market. There’s a reason Gibson and a few other brands like to frequently push certain models as being collectible, when in fact, they are not, and will not ever be collectible. They know someone will believe the myth that guitars are good investments and buy one of these supposedly collectible models for much more than what they can usually sell a guitar for. This is purely because the buyer thinks he will be able to sell the guitar for more than he paid in the future. I can’t think of a single guitar that has been marketed as being collectible actually ending up as a collectible item. Don’t believe me? Head over to Craigslist, type the word “vintage” in and look at the people with “collectible” guitars trying to sell them for more than they paid. Unfortunately, they were fooled by clever marketing tactics employed by brands like Gibson, and they definitely will not get what they are asking for. Just to be clear, none of this stops me from wanting – and frequently buying – vintage or high value instruments. I would love a pre-CBS Fender Stratocaster or a vintage Les Paul. I’ve had a chance to own instruments like a Blackmachine B2, and a Teuffel Birdfish. The other guy running Wired Guitarist is a huge vintage nut and he has bought loads and loads of vintage Les Pauls. Now, both of us knew none of these guitars were going to tank in value as soon as we bought them, but if they did, that wouldn’t really bug either of us. We bought them because we wanted a great guitar to play, not somewhere to park retirement funds. Before reading any further, you need to ask yourself the following question… Do you want to grow your money in the best way possible? If you’re looking to grow your money in the best way possible, then stop reading this article, and buy a Series 7 study guide so you can tell if your broker knows what he’s doing or not. If you’re curious to know what makes guitars go up in value, then keep reading this series. If you want to know which guitars will go up in value, keep reading this series. If you have money to play with, want to experience some of the best guitars ever made, and can afford to have your “investment” tank in value without it affecting your family, then keep reading this series. Ready for part 2? Here you go.