Are tools investments ?

[dfsmoto]

I'm 33 and have tools from all over the world, cheap, expensive, used, antique, made well, made bad, and home made. If you know how to use them and use your brain they all are priceless.
If you are focused on getting all your money back out of them someday with the vast amount of stuff out there, I think you would be greatly disappointed!

 

[magicniner]

I've only ever bought tools on the basis of what they will do for me and how long it's reasonable to expect them to continue doing that.

 

[Bob Korves]

I've only ever bought tools on the basis of what they will do for me and how long it's reasonable to expect them to continue doing that.

And I TRY to guess how many times I might use the tool in the time I have it. Some tools are too cool (and/or insanely low priced) to pass up even if I don't really have a planned use for them. I am getting much better at turning down tools and machines that take up large amounts of shop space unless they are really useful. Smaller stuff, no such restraint...

 

[projectnut]

There may be situations where buying low and selling high does happen. However I don't think that's the norm unless you're selling antiques or rare coins. In order to buy low you have to find someone who just wants to get rid of the item or has no interest in researching the value and reselling the item.

BG Hanson mentioned asking having $7,500.00 into a machine, offering it for sale at $6,500.00 and possibly taking $6,000.00. There's currently an identical 5 year old model that's fairly well equipped being offered for sale on eBay with a starting price of $4,000.00.

https://www.ebay.com/itm/Grizzly-G0...933796?hash=item4b3ada52e4:g:~mQAAOSwuIRamHct

It will be interesting to see if the machine goes for more or less than the estimated value of his machine.

The current retail price of the same machine is $5125.00 plus shipping. That doesn't include the taper attachment, collet closer, or collets.

Personally I feel offering a maximum of 50% of the cost of a new machine or tool is the absolute top of the line when buying used for a couple reasons. First off regardless of condition there is no guarantee. The machine could fall to pieces on the way home and the buyer would have no recourse. When paying full price from a retailer I would expect at least a year or longer warranty. When buying from a private party it's pretty much "Buyer Beware".

Secondly almost every time I've gone to purchase a used tool or machine I've literally found multiples of the same item available within a few hundred miles. Most have come from professional shops that aren't emotionally attached to the machines. The prices reflect the fact that they are used, and are being sold at or near market value.

 

[ericc]

I have a fairly strict definition of investment. It is something that has a clear value and is quickly exchangeable. In other words, it is liquid. Also, it has a narrow bid-ask spread. That means that timeshares, most jewelry, some real estate, are not investments. Some people say that financial instruments that don't have natural production, for example, gold and bitcoin, are not investments, even though they meet the above criteria. Note that poor performance when accounting for inflation does not make an instrument not an investment. For example, treasuries perform poorly after inflation, but only the most addled curmudgeon would say that these are not investments. Back to tools; they fail the bid-ask spread criterion. I still buy them. I buy lots of them . A good tool is: 1. one you have, 2. one you can use, and 3. one that you have used to make something useful (not just another tool).

 

[Alan H.]

Are tools investments? For me they are no where close.

We might get a good deal here and there but tools are typically a negative investment for the hobbyist. Yes, they have value but they are not an investment.

I gladly accept this and enjoy my hobbies.

 

[Nogoingback]

It seems like we're talking about two different questions here. The thread is called "Are tools investments?". That suggests (to me anyway) they
are they USUALLY good investments. I don't think that's the case. But the thread seems to have morphed into the question of "can a person
make money on tools?", and of course the answer is yes. But, as with anything "collectable", it has to be the right tool, at the right time,
and purchased at a fire sale price to begin with. And more to the point, for them to actually be an investment, the buyer has to be able to
predict, with some certainty that they will be worth more in the future. Otherwise, a person is just buying tools and getting lucky down the
road.

This is pretty much a supply and demand question. Most tools are built in large quantities, creating large supply. Unless they become
extremely rare for some reason, or demand is high, they aren't going up in value.

 

[Uncle Buck]

Are tools investments? For me they are no where close.

We might get a good deal here and there but tools are typically a negative investment for the hobbyist. Yes, they have value but they are not an investment.

I gladly accept this and enjoy my hobbies.


View attachment 261032

I totally agree! I have tons of machines and tools and my shop stuff means a great deal to me. That said, I would never call any of my machines or tools an investment. (My opinion is speaking strictly as a home mechanic/machinist, and not someone making their living with machines and tools)

I would say this though, if you compare your machinist, mechanic, or wood working hobbies to say golf, or many other such pursuits the return on the dollars invested in the hobby would be much better with quality tools and machines than many other hobbies. That said it still does not mean that your shop is an investment if its use is purely for your enjoyment.

 

[Aaron_W]

I think you are being highly optimistic thinking you can get your money back selling your tools. If that were the case I doubt many if us hobbyists would have many of the tools we have.
I bought a used Criterion boring head recently. Yes, I'm pretty sure I can probably get my $50 back no problem, but new those seem to run around $300-400. Whomever sold it certainly didn't get their investment back in cash, but based on the wear it has I'm sure they got it back many times over in the work it provided.

I try to buy tools that are appropriate for my use. Buying cheap tools can be a false economy as you have to keep replacing them, but so can buying tools of a quality well beyond your need.

 

[BGHansen]

There may be situations where buying low and selling high does happen. However I don't think that's the norm unless you're selling antiques or rare coins. In order to buy low you have to find someone who just wants to get rid of the item or has no interest in researching the value and reselling the item.

BG Hanson mentioned asking having $7,500.00 into a machine, offering it for sale at $6,500.00 and possibly taking $6,000.00. There's currently an identical 5 year old model that's fairly well equipped being offered for sale on eBay with a starting price of $4,000.00.

https://www.ebay.com/itm/Grizzly-G0...933796?hash=item4b3ada52e4:g:~mQAAOSwuIRamHct

It will be interesting to see if the machine goes for more or less than the estimated value of his machine.

The current retail price of the same machine is $5125.00 plus shipping. That doesn't include the taper attachment, collet closer, or collets.

Personally I feel offering a maximum of 50% of the cost of a new machine or tool is the absolute top of the line when buying used for a couple reasons. First off regardless of condition there is no guarantee. The machine could fall to pieces on the way home and the buyer would have no recourse. When paying full price from a retailer I would expect at least a year or longer warranty. When buying from a private party it's pretty much "Buyer Beware".

Secondly almost every time I've gone to purchase a used tool or machine I've literally found multiples of the same item available within a few hundred miles. Most have come from professional shops that aren't emotionally attached to the machines. The prices reflect the fact that they are used, and are being sold at or near market value.

Don't know many of us who've bought a G0709 lathe and were disappointed. Looks to be 16 additional BXA tool holders and a somewhat kluged together tool post grinder in addition to the stock G0709 hardware. Tool holders would be about $250 from CDCO, grinder maybe $250? So around $5500 invested into the machine and asking $4000. Math is the seller is looking for about a 70% return on their "investment" (not including eBay's 10% seller's fee). Probably a fair price but not a smoking hot deal. No bids yet with 14 watchers.

Bruce