In today’s risky financial market, it is difficult to find a reliable investment strategy.  My contention for more than two years now is that there is a small handful of people in this country who are holding all of the money, and are not willing to take a pay cut that may result in taking 1 less vacation this year, but would mean the annual salary to a subordinate.  Since the upper 2% of the income bracket only seem to hand out their money if they get something tangible, and usually flashy, in return, I say we capitalize on that and start investing in classic cars.

Mind you, today’s classic was brand new 20 years ago, so there is a factor of patience involved here.  But then again, we wait 40 years to draw on our retirement accounts…

Let’s crunch numbers:  a conservative IRA plan taken at age 20 with a 6% annual interest rate and an initial investment of $3000 will yield $41,294 in 45 years.  Now, say you were 20 in 1964 and had purchased a new Corvette.  According to UsedCorvettesForSale.com, the car would currently be worth a range from $39,000 to $54,000.  Not bad.  Considering the current volatility of the stock market, how many people with only a $3000 contribution would have $40,000 right now in their retirement portfolio?  Autos seem to be a more reliable investment than real estate:  my house lost 25% of it’s value since I bought it 13 years ago. 

Since there are not that many 1964 Corvettes available, I’d have to say there are considerably more potential buyers than sellers of this item, so the risk factor is very good.  A Corvette may seem like an extreme example, but all of the classic cars have an extremely high return on investment rate, and a vast majority of them were not hot rods when originally on the market.  Hard to undervalue nostalgia.  With a profit margin like this, it would almost be worth purchasing the original car using a credit card and paying it off over 10 years.

My current recommendations for investment cars:  Corvette and Mustang for long-standing name recognition, VW Beetle for ability to project the hippie “green” image over 4 decades, the PT Cruiser because there is just nothing else on the market like it, and the F-150 4 x 4 as an example of strength and hard work.  I have two of the above list in my driveway … maybe I’m wasting my time watching the stock market…