Firearms

Investing in Guns

Gun Sales

I have owned guns since I was a child. My father handed me a .22 caliber rifle when I was very young and I never looked back. I’ve collected handguns, rifles, shotguns, and ammunition for over 20 years and I’ve come to one particular conclusion. Guns are a good investment, not a great investment, but a good one.

Gun Sales
Gun Investing Could be Risky

Something I should get out of the way, the biggest hurdles to investing in guns are the legal issues. Trading other items such as gold, silver, or jewels in the U.S. is simple. For the most part, you can trade with whomever you please, regardless of location or criminal history. Guns and ammo however, come with legal baggage. If you sell enough guns and make enough money, you fall under the category as a professional firearms merchant, and BATFE expects you to have a license to do business. While it is perfectly legal in most cases to buy and sell guns for personal use, study the regulations in your area carefully and follow them to the letter. You do not want to tangle with BATFE, those guys mean business.

Few things hold their value like a firearm. I’m not saying that every gun you buy is going to be worth tons more money in a few years, quite the opposite. Many of the off-the-shelf guns you buy will hold their value to a degree, and you can trade them in at a reduced value to your dealer or sell them to individual buyers for more. The good news is, as long as you aren’t hocking your guns for quick cash at a pawnshop, you will probably get back a decent percentage of the gun’s purchase price—and sometimes more! The key to investing in guns is timing and patience.

Many guns increase in value. Some gun traders speculate that when the Civilian Marksmanship Program runs out of M1 Garands, the value will increase drastically. The same situation occurred with the CMP Springfield 1908s.

As with any industry, the standard supply and demand rules apply. In times of high demand, like when the U.S. is approaching a presidential election (hint hint) or in times of a national crisis, the gun industry skyrockets with buyers willing to shell out big bucks for whatever firearms and ammunition they can get their hands on. There was a time in very recent history when a 50 round box of .380 cartridges went for around $70.00! When things calmed down, the industry returned to normal, and buyers sat and waited for a good deal again.

I almost never pass up a good deal on a gun, even if I already have the same model and have no use for another. I know I can hang on to it until the market goes back up. Even if you do not make money on the guns you sell, you will usually come close to breaking even. There are plenty of other things to spend your hard-earned dollars on that hold no value whatsoever. Clothes, shoes, electronics, and most vehicles depreciate over time—so there are worse places to put your money.

Should a major widespread prolonged disaster befall western civilization, guns will be quite valuable. Ammunition, food, medicine, tobacco, and alcohol will be the new forms of currency. I just can’t imagine anyone caring about paper money after civilization falls off the rails. One could make the foreboding argument that if you had guns and ammo, you could obtain anything you need to survive. Is this a good enough reason to set aside a large chunk of your income and fill every bit of storage space in your home with guns? Probably not, but it wouldn’t hurt to have the essentials, plus a little extra! If you buy guns at the right time, hang on to them until something crazy happens, you can make money. Unfortunately, for the gun investor, this doesn’t happen that often. Unless you pour countless dollars into your stockpile, you won’t get rich. Therefore, draining your portfolio and turning your entire nest egg into guns may not be the best way to retire somewhere that looks like a Corona commercial, but it is nice to have that little trump card laying around just in case!

The Mission of Cheaper Than Dirt!'s blog, The Shooter's Log, is to provide information—not opinions—to our customers and the shooting community. We want you, our readers, to be able to make informed decisions. The information provided here does not represent the views of Cheaper Than Dirt!

Comments (9)

  1. Firearms DO HOLD THEIR VALUE. Given the inflationary times we live in, almost any firearm or ammunition for that matter is guaranteed to cost more 10-20 years from now. I own a pistol (.22 caliber) made in Germany that sold for $5 brand new in the 1950’s. How many $5 pistols have you seen offered for sale lately. While granted this is longer than the 20 years I mentioned previously. I mentioned it to point out an extreme example of price inflation.

  2. Say you have a shotgun you bought for $1K. Here’s the true test as I see it. Ten years from now will your firearm be worth more than say a current $10K stock/bond/muni or even the dollar bill etc. you hold today? For me I say guns will hold more value (IMO) than will your 401K/bank account etc. as the world economy is heading off a cliff whereby paper money will be of little value. Now GOLD is a different story. I will take $10K of gold over $10K of firearms any day (and I mean the actual bar itself and not a ‘paper’ contract saying I own it.

    Of course, I hope I am 100% wrong and the world economy improves to Utopian like nature but I am not holding my breath…

    -Cheers

  3. If you ever want to continue with your Enfield research again Bryon, check out ‘The Enfield Rifle Association’ or ‘Enfield Markings’websites. The Enfield is very interesting and like the AK it has been all over the world. I enjoy the shooters log for sure. Thanks for the conversation!

    Regards to all,
    Roy

  4. I agree with Bryan. Natural disasters, etc., are perfect times to have a firearm to defend one’s self and one’s property. We should all be prepared for disasters that can hit our areas. I am all for being prepared.

    My main problem is how the author starts the article by saying that firearms are a good investment, then goes on to explain how they probably won’t really gain in value, and how you might be able to break even. Losing value and maybe being able to break even isn’t my idea of a “good investment.” If I buy a Glock for $500 today, it would have to be worth about $1,550 in ten years in order to be a good investment. FV = PV * (1 + i)^n http://en.wikipedia.org/wiki/Time_value_of_money

    Firearms are good investments for protection, but bad investments for you money. (barring disaster, civil unrest, SHTF, TEOTWAWKI)

  5. Good for you, Roy! I picked up an old Enfield quite some time ago and tried to pin down the origins to no avail, and then a friend of mine found me a bizarre little .25 auto manufactured in West Berlin about a year ago. Took me some time, but I tracked it down to being issued to the police force in the mid-60’s; it’s a true pity whatever buyer owned it Stateside ‘Americanized’ it by machining a crude slide stop into the slide.

    Secondly, I want to reply to Alex’s post there.

    This is gonna read a little flame-post, but I haven’t had my coffee yet.

    When you describe a national emergency, you’re ignoring situations like post-hurricane zones before crews arrive to help to arrive at those long past dates. I’m pretty sure a few firearms owners were happy they invested in a rifle or handgun during the hours after Katrina hit, given the rate of looting going on. Or towns that are too small to support a full time officer of the law, but with a high regular influx of students and off roaders, like mine.

  6. I will argue they are a great investment! How many other investments can you buy and use for fun,practice, protection and then use for trading purposes to try a different model gun or anything else for that matter? Unless your hurting I think you can get as much or more $ for your guns, because if your lucky and smart you got it for a good price to began with. Like any other investment you have to buy low and sell high. If you’ve done your home work you really can’t lose. I collect WWII weapons. The return I get researching them and imagining where they’ve been and actually knowing where they’ve been……priceless!

  7. I agree that it’s a good investment in terms of getting all or at least much of your money back, in particular, when compared to electronics, cars etc…I would be willing to wager that if one had in their possession today 10K worth of firearms or 10K worth of Wallstreet investments that the guns would hold more value. I would not have made that argument say twenty years ago when the Country was much more stable both economically and politically speaking.

    Great article well worth the read!

    -Cheers

  8. The message of this article isn’t consistent. From the title, it’s about investing in guns, and the author states early on that “guns are a good investment, not a great investment, but a good one.” Then he says “few things hold their value like a firearm,” indicating that a “good investment” is something that retains its value. Then we get “many of the off-the-shelf guns you buy will hold their value to a degree, and you can trade them in at a reduced value to your dealer or sell them to individual buyers for more” and “even if you do not make money on the guns you sell, you will usually come close to breaking even.” So a “good investment” is something that holds value to a degree, and you might be able to break even on it? “If you buy guns at the right time, hang on to them until something crazy happens, you can make money. Unfortunately, for the gun investor, this doesn’t happen that often. Unless you pour countless dollars into your stockpile, you won’t get rich.” A “good investment” involves a situation that the author states “doesn’t happen very often.”

    Should you own firearms? Yes. Should you be prepared for emergency situations? Yes. Would firearms and supplies be valuable in an emergency situation? Yes. What’s the likelihood of an emergency situation happening? Your gauge on this question will determine how much of an investment you should make. When was the last emergency where a stockpile of guns would have been very valuable? 1776? 1861?

    Barring antiques and collectibles, should the Average Joe “invest” in firearms as a way to make money or maintain your money’s value? No. There are better choices for regular non-emergency periods of time. Stocks, bonds, mutual funds, business ownership, and gold and silver can be “safer” investments. If you can’t average a 12% annual return or better over an extended period of time (think decades), you’re not doing it right. Of course, during an emergency, these money-making investments are worthless.

    What does the article tell us? That the average private individual probably won’t make a very good return on an investment in firearms.

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