So you’ve seen that crazy guy Rudy on YouTube who is obsessed with Reserved List cards or maybe you have a friend who buys a bunch of sealed product that they just sit on. Whatever it is, you know you want a piece of the pie.

The concept of “Magic Finance” is a topic that continually sparks debate among Magic players, collectors, and investors. The financial aspect of the trading card game is a relatively niche field that requires in-depth knowledge of the game along with an understanding of personal finance.

This article is not meant to replace professional finance guidance, but rather to establish some general principles about the topic. Here are a few guidelines to those who may be thinking about starting to invest in Magic products:

Having a grip on personal finance is paramount to a successful Magic Finance experience

First and foremost, if a person is not able to or is just able to afford the minimum things they need in life (food, clothing, retirement savings, etc.) then they should not be trying to invest in anything at the moment. This is not exclusive to the finance world of Magic and is a general personal finance concept. One of the main end goals to investing is having a stockpile of money that can be used in emergencies or for life events like purchasing a home. Cards are not liquid in that they not easily be sold for their true market value in a need-to-sell scenario so even putting cash savings into a relatively high interest savings account is a safer way to store money. Risk and reward are directly related so knowing when the right time to buy or sell products is will vary based on an individual’s situation.

The top image depicts the price trends of Reserved List card Word of Command. In this observation period, the person purchased the card at $175, sat through price spikes, and now the card currently sits at $150 for a loss of $25 (14.29%). The bottom image depicts somebody who put the same amount of money into a relatively high interest personal savings account. Their value currently sits at $180.55 for a gain of $5.55 (3.17%). The owner of the card could have sold it during the price spikes but did not and has lost value; if sold around the $250 spike they would have seen a gain of $75 (42.86%). The owner of the savings account had their money grow without any intervention, but also with the knowledge that it would not grow by a large number. This is a specific example to illustrate the tradeoff of taking on more risk for the potential of a higher reward.

When cruising Magic Finance related forums one can quickly notice a daily influx of people who ask about beginning to invest but also mention that they do not have much dispensable income or perhaps know nothing about the game. This lack of planning is a reckless way to invest. This is not said to “gatekeep” the hobby, but rather in an effort to highlight the realism behind making exciting impulse decisions that may not end up panning out.

Grading cards is rarely worth it

Some newer collectors will buy cards that are what a player would consider “Near Mint” – free of any obvious scuffs and edge wear, no dark marks on white borders, and so on. In the world of Magic Finance, what a player and what a grader considers to be in top condition are vastly different. Graded cards are looked at under heavy magnification and scrutiny. Four criteria used for grading are the surface, edges, corners, and centering. Something as simple as light scratches can be invisible to the naked eye but are easily seen under magnification and quickly lower a card’s grade.

Unless someone gets lucky, odds are they will not find an old raw card that will grade much better than a 7 unless they opened the card themselves and immediately protected it. Making exceptions for items like the Power 9 and other relatively high-priced cards, grading generally only adds a significant premium to the value of a card if it reaches a grade of 9 or better on either of the major grading services – Beckett Grading Services (BGS) and Professional Sports Authenticator (PSA).

The actual rarity of the card adds another layer to the value. It is widely considered that it is not worth grading modern cards because of the print runs which measure in several million more than older sets (the exact numbers are unknown to the public). This high supply will put most modern cards at a ceiling which usually is only lowered with further reprinting. This is tied to the classic economics concept of supply and demand. For a given level of demand, and increased supply will lower the market price because there are simply more available. Most will use a general rule of thumb that it is only worth grading Reserved List cards and older cards that are over $200 in value at this point.

Authenticity is a real factor

Like any high-priced collectible it is important to ensure the authenticity of what is being bought.

Graded cards are a virtually foolproof way to know if a card is authentic. There have been some high-profile incidents of authenticated cards turning out to be fake but those are a small minority compared to the hundreds of thousands of cards that have been graded.

If a card is not in top condition and does not have a relatively high value, then it may not be worth it to pay for grading which already starts at around $20 per card. In this case it is important to be familiar with the many techniques average people use to authenticate cards.

Various forums online have detailed methods such as the bend test, the light test, examining under a jeweler’s loupe, and so on. These may not be foolproof ways to identify counterfeit cards but will help filter out the less-than-perfect counterfeits.

Diligent accounting and price tracking is a must

Spending a few hundred dollars on a card can be exhausting. From there on it is important to track the cost and prices of your new and ongoing inventory which can help you decide when the best time to sell is. Singles can fluctuate in price seemingly out of nowhere while sealed products tend to have more stable trends. In the end, tracking how much you paid for something will tell you how much you have made (or lost) on an investment.

Learn to separate your financial game from your Magic game

This is quite possibly the most difficult aspect. You must prepare yourself to not make financial decisions on cards based on your emotions. On the other end of the spectrum, you can’t let your financial endeavors bring down your enjoyment and love of Magic. In the end, Magic is a game made for fun so make sure you keep that in mind when investing as it can also enhance your love for the game like it does for me.

These five simple guidelines are the basics of what it takes to jump into the world of Magic Finance. Now that you’re ready, what will be your first speculation? Thanks for taking the time to read and check back next week for another look into Magic Finance. As always, feel free to leave your questions in comments down below. You can also reach out to me on my channel’s twitter account: @mtg_vc

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