How to make money from your hobbies(Read article summary)
Hobbies that continually require you to buy new things tend to be money drains, Hamm writes, unless you find things you can purchase for personal enjoyment and fulfillment that won’t depreciate in value, or at least won’t depreciate very much.
I have an old friend that collects vintage comic books. He owns several World War II-era Superman comics, many first issues of comics from the Silver Era, and lots of other issues with significant value. He mostly collects comics that were printed prior to 1980 and is meticulous about storing them.
This is his primary hobby. He actively hunts for deals on these comic books, participates in many forums about them, organizes and stores them, and so on. It’s his passion.
Having observed this hobby for a long time, I can say without question that he spends thousands of dollars on it each year.
At first glance, a person might think this is a wasteful hobby. Thousands of dollars a year on comic books?
Here’s the catch: his collection is retaining at least all of the value he’s putting into it.
Just like many of us, he’s spending a lot of money each year on something that entertains him. He gets a great deal of personal enjoyment from it.
The big difference is at the end of the day, he can sell off the items he has been purchasing and not only recoup his money, but likely make a nice return on all of it.
Whenever we spend a dollar, we get something in return for it. Sometimes, we’re buying a service, which means the only value we get in return is whatever the service is worth to us. At other times, we buy consumable things – food, electricity, and so on.
At other times, though, we spend our money on things for personal enjoyment. We buy books or DVDs or golf clubs.
The problem with many of these purchases is that they depreciate rapidly almost the second we buy them. When we pop the wrapper off of a DVD, it loses most of its value. We can only sell it for a portion – and usually a small portion – of what we paid for it. That money’s gone. The same is true for a book or for golf clubs.
One great way to find financial success is to find things you can purchase for personal enjoyment and fulfillment that won’t depreciate in value, or at least won’t depreciate very much.
Collectibles – provided that you know the field intimately – can be one example of this. Many collectibles with a stable and broad set of potential buyers can retain their value for a long time.
What kinds of collectibles? Comic books are just one example. Trading cards are another. Art is another, for that matter. Sports memorabilia is certainly one.
Other hobbies along these lines include any hobbies where you make things that can potentially be sold (meaning you buy supplies and increase their value), hobbies where you can ply a trade, or hobbies that directly revolve around earning more money (such as stock investing or frugality).
A big part of these kinds of hobbies is that much of the enjoyment tends to come from hunting bargains, craftsmanship, and participating in the community of other hobbyists.
It usually does not come from buying the latest and greatest thing. Hobbies that continually require you to buy new things (without actually making things that you can sell for a return) tend to be money drains.
This isn’t to say that hobbies that cost money are bad things. It merely means that you should be wary of them and it might be worth your time to look for alternate hobbies that involve things that retain or produce value.
If you want to live a more financially stable life, one of the first places to look is at your hobbies. Are you spending your money on things that maintain their value or produce value to make up for the cost? Or do your hobbies mostly absorb money? Thinking about those questions might lead you down a much more stable life path.