Tuesday, February 7, 2012

Are Firearms an Investment?

First, let me start off by saying "no".  If you want to invest money go talk to a financial adviser.  Money put into stocks, savings, land or a small business can be considered an investment.  Firearms really can't.  Of course, neither do they quickly become worthless, like say a computer or a television set.

The important thing to consider is unlike many consumer goods, firearms don't generally wear out or get superseded by models with significant improvements every few years.  Firearms innovation has really plateaued, there aren't many new "must have" features being introduced each year.  Unlike your cell phone a 4 year old revolver is just as good as one fresh off the assembly line and because of that guns tend to hold their value pretty well. 

S&W stock is an investment
Money put into guns can't be considered an investment in that one can expect them to appreciate, but they are a durable good and hold their value quite well, especially if you buy used.  Most firearms don't experience a high enough round count to bring about significant wear.  Modern quality guns have lifespans in the tens of thousands of rounds.  So if you buy a used Glock and put a couple thousand rounds through it (the cost of ammo has likely exceeded the cost of the gun at this point) it's still a used Glock.  It has the same relative value as when you bought it.

S&W guns, not so much
Sometimes guns even go up in value if there is special demand or you hold onto it long enough.  Firearms can be prone to panic buying and the increase in value that comes with that.  If a type of gun gets banned from import or manufacture or the company just stops making it, market prices increase.  When Winchester decided to stop making lever action rifles, the ones on the shelf increased in price.

Quality firearms can cost a fair bit of money.  If you buy smart and pick products from a quality manufacturer they will hold their value pretty well.  As mentioned many used guns have life spans in the tens of thousands of rounds and are very unlikely to receive significant wear by most owners.  Find a gently used firearm at a reasonable price and it will hold it's value very well over time.  More so, if you find a good deal on a used gun and you later decide it's not a good choice for your purpose you will be able to get much of your money back out of it in trade.  Many small shops will gladly take guns back in on trade, often at a pretty reasonable price.

I'm not suggesting buying guns speculatively as a money making deal.  Not only is it often a bad risk, but buying and selling guns for a profit falls under the category of dealing in firearms according to the BATFE.  Dealing in firearms without a Federal Firearms License isn't something you want to do.

The main purpose of this post is suggest that one shouldn't balk at buying a gun.  Obviously you don't want to spend food or rent money on a gun but neither should you stay awake at night because you've spent $400 on one.  Guns are exceedingly durable and they will hold their value well over time.  Should you be unfortunate enough need one the money spent on it will have been worth it, no matter how expensive it was.

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