Is this a good investment?

babyontheway
Wed, 15 Sep 2010 19:41:06 +0000

I have an opportunity to invest a small sum of money today (around $5000) into an investment that would return $125,000 in about 50 years. It would return a smaller amount should I sell it prior to then. I’ve done the math and am confident in the return.

Problem is, I’m unlikely to ever sell the investment. It’s not a traditional stock/savings/bond/etc. It’s more along the lines of a piece of art, a rare coin, or an antique automobile (but it’s something different).

If I sold it in 50 years, it would be a good investment because my return would be about 6% or so, which isn’t bad. If I don’t sell it, then I’m flat out the $5000 because I could have invested it in something different in something that I would be willing to sell.

I’m focusing purely on the financial aspect here - how does one figure whether something is a good investment if it appreciates nicely in value but the owner is reluctant to sell?