Ep 564 - The trading card boom & the new mortgage rate shock

The Money To The Masses Podcast

The episode begins with a tribute to listener Ben, who successfully completed the Great North Run to raise funds for the Alzheimer's Society

Key takeaways

• The global trading card market is projected to grow from £27 billion in 2025 to £52 billion by 2034.
• Professional grading services like PSA and BGS use microscopes and calipers to assign cards a numerical value from 1 to 10.

Main topics

• The trading card boom
• Grading and valuation of collectibles

Notable quotes

The pricing can be exponential.

Conclusion

A comprehensive look at how niche hobbies become multi-billion pound a

Transcript preview

Speaker 2 (0:00) Before we start, this episode is brought to you by Interactive Investor. Unlike platforms that take a bigger cut as your wealth grows, ii uses a simple flat monthly fee. So as your portfolio grows, your platform fees don't. Want to go global? Enjoy award-winning international trading and hold up to nine different currencies to keep exchange fees low. Plus, you pay zero fees on regular monthly investments. Join ii and discover how you can keep more of the money you make. capital at risk. Speaker 3 (0:29) Hello and welcome to episode 564 of the Money to the Masses podcast with your resident expert as always Damien Fay and me Andy Leakes. Damien welcome back how are you doing? Speaker 2 (0:37) Well I'm quite excited about this show because I feel like I'm not going to be doing much I'm going to be sitting here and letting everybody else do the talking because the first thing even the introduction really is going to be somebody else so you're doing the main piece on the podcast which I'll come on to but the introduction I'm going to pass over to Ben. So for those of you who maybe didn't listen to a recent podcast, Ben is a longtime listener of the show and he was doing the Great North Run. And because he'd even been on the show and was part of a recent episode of the Money Vault, so we did a piece on the Black Book, which came back from years ago. We pulled it out of the archives and Ben featured on it. And so we thought, well, It would be good to support Ben because he got in touch and said, look, I'm doing a Great North Run. I'm running for the Alzheimer's Society. It'd be great if you could give me a shout out on the podcast and maybe some of your listeners might want to support me. Well, we did that a couple of weeks ago and Ben has subsequently run the Great North Run. And thanks to, well, actually, let me let Ben explain what happened. So here's the first clip from Ben just before he ran the Great North Run. Speaker 1 (1:51) Hey Damien, it's Ben. I'm just on my way to the start line for the Great North Run. Just wanted to say a huge thanks to all of you as well as our fantastic listeners. You know, you've helped with my donations massively and together we've accomplished a £500 target that I'd set, which is amazing. So yeah, to honour that, I will be listening to the Money to the Masses podcast during my run. Let's see how many episodes we can get through. I actually listened to it at times 1.5 speed. So that means I should be able to cram in quite a few episodes. And also I'll enjoy hearing some of your stumbling and some of the inexperience from the first couple of podcasts. I'm Speaker 2 (2:24) going Speaker 1 (2:24) way back to the beginning to listen to you guys. So thanks very much again. Really appreciate it. And I'll speak to you once I finish. So Speaker 2 (2:30) it's great to hear that Money to the Messes listeners helped Ben. So thank you for me and Andy. for supporting Ben there because it's a great charity and cause to raise money for. And it's really nice that we actually helped him get to his target. I did laugh when he mentioned about the early episodes and the mistakes and fumbles. And the reason I laughed is because I'm not sure necessarily it's got better, but I think the editing probably got better. better along the way so Andy and I do make mistakes I do still fumble but we just clean it up afterwards maybe I'm letting people behind the curtain too much but I dare say over the last 12 years we have improved but yes the early episodes do make me laugh and I'm always proud of those things some people cringe when they go back to their early days of anything they do and i just think that those guys back then andy you and i when we were started doing the podcast who would have thought we'd be doing it what 12 14 years later so those guys who did it back then who were sort of fumbling around a bit they are the people we can thank for the fact that we do this podcast now and even in those days we were when I was driving to your house to record it which was taking me about an hour and a half round trip so a lot's happened now the second clip I'm playing now is Ben subsequently having completed the Great North Run and a message to see how or to say how he did Speaker 1 (4:00) Hi, Money to the Masses team. It's Ben here, just providing an update. After my previous voice note, I successfully completed the Great North Run on Sunday. Completed it in a time of two hours and 23 minutes. A little bit outside of what I was hoping to achieve, but conditions were very hot on the day. But it was a fantastic experience. The crowds are amazing and Speaker 2 (4:20) I'd recommend it to anyone. And Speaker 1 (4:22) if you're interested, you can get through four full episodes on Speed 1.5 of the Money to the Masses podcast. That's from episode one to episode four. Actually gets you a few minutes into episode five as well. But yeah, all I wanted to do is say a massive thank you to the Money to the Masses team and our fantastic listeners who helped raise a significant amount of money for Alzheimer's Society, which was the charity I was running for. So yeah, I really appreciate that and a really heartfelt thanks to everybody. All right. Thanks, everyone. Take care. So Speaker 3 (4:50) there we go. It's fantastic to hear how Ben did. And I know he said he wasn't. particularly pleased with his overall time and he wanted to do a bit better. I think he did fantastic. Certainly better than I could have done. And that reminds me, I must look up and see if he ended up beating Andy Burnham. Because I know Andy Burnham did the North Speaker 2 (5:04) Run. He got a lot of applaudits for it. Yes, so congratulations to Ben. Now, what's on this week's show? We've got a really interesting piece on this week's show, which Andy's going to be running. And it's about investing in things like... pokemon cards or formula one cards it's trading cards there's been a real boom in this and andy and i getting served up lots of this on social media i don't know if it's just us but i think it's everybody because there's been a real movement of people trying to trade these and make money so we're going to discuss the whole trading card phenomenon and whether you can make money and how it's taxed and then the Last piece on the podcast is going to be a very short piece, but an important one nonetheless, because there's been a dramatic shift in the expectation for interest rates in the UK. And it's going to impact people particularly who are remortgaging in the next six months. So it will date the podcast a little bit, but it's such a jump. And unfortunately, it's not good news. Yeah, so we're going to be talking about trading cards and whether they Speaker 3 (6:07) are a legitimate investment opportunity. Now, I'll explain the history, essentially how trading cards have transitioned from what is a niche hobby into what seems to be a structured multi-billion dollar alternative asset class. Now, Damien, I know you have dabbled in the digital version of Pokemon. But if someone had told you maybe 20 years ago that a Pokemon character, a cartoon character on a piece of cardboard would be worth more than a Mayfair apartment, you'd have probably Speaker 2 (6:34) laughed them out of the room. Yeah. And do you know what? This is fascinating to me because anyone who's listened to the podcast long enough will know that I do dabble into playing Pokemon. I like the computer games. I used to be obsessed with Pokemon Go, which was the game where you wandered around and captured... Pokemon. I think I kind of like collecting things, but it was also, you know what, distracting from lots of things in life and just an easy little hobby. But then Pokemon cards is something that my kids got into. I didn't so much, but I can see the attraction. And so I knew a little bit about Pokemon cards and trading them. But now it seems to be, as you say, become this multi-billion pound industry where there are cards being sold for insane amounts of money. Yeah, so for people who've never heard of trading cards, I mean, where have you Speaker 3 (7:22) been, first of all, but for people who don't really understand it, we can sort of break it down into two main pillars. So first of all, you've got the sports trading cards, and they feature like real world athletes across different sports. basketball, baseball, football, Formula One. And where these cards become particularly valuable is when a player performs particularly well. Perhaps they've built an iconic career. Maybe their rookie card has become available and they've then turned into a brilliant prospect. And that could be quite exciting for collectors. And there's a financial impact to that. And I'll talk about that in a bit more detail later on. And then the other pillar really is the trading card games, TCGs, non-sports cards, brands like Pokemon, Magic the Gathering, and these kind of cards often combine gaming mechanics. So they'll have points and scoring systems on there and people can actually play them in the physical world. Now, these trading cards aren't a new thing. I mean, we could go right back to the late 1880s where they first started appearing in tobacco products. And they actually used them as stiffeners in cigarette packets so that they didn't get crushed. So let's talk some numbers then, because this is where it gets particularly interesting. 2025 the combined total market for sports cards and these TCGs sit at over 27 billion pounds globally and there are forecasts that predict it could get to 52 billion by 2034. So I'll just give you some context around those numbers so you know where they kind of sit in terms of other asset classes. If you look at the pre-owned luxury watch market it's almost exactly the same so around 25 to 28 billion pounds. So that entire secondary market for things like Rolexes, think about that. It's absolutely huge. That's the same as these sports cards. And in fact, when we look at the trading card market as a whole, it's actually more than double things like fine wines and even fine arts. Speaker 2 (9:12) I mean, that has blown my mind. I think it's a brilliant stat to give it context because although I've seen... this market and i get fed it loads on my instagram feed and inevitably you know how these things know the kind of things you've been sort of in into like pokemon or whatever and i and i get served it and i did think it was really quite niche but to see that it's that large that you're having these trading card games and sports cards being bought and sold to that extent i i find that mind-blowing it's interesting that you gave the examples of art and i suppose fine wine but there'll be a lot of people who don't quite draw the sort of parallel to things like trading cars as to why they go for so much money why one would be worth 10p while another is worth the sums of money that you mentioned earlier Yeah, I mean, essentially, these are pieces of Speaker 3 (10:09) cardboard, so it does seem particularly crazy. But you need to understand how these cards are priced. And I'll explain briefly how raw and graded cards work. So raw cards are simply things that you pull out of a pack of maybe two or three pounds. And it looks good to the naked eye, but essentially it hasn't been officially graded. The most expensive cards are cards that have been officially graded. Now, these are often put in those cellophane packets or what are called slabs. And these are often sent to a professional third-party grading company. Things like PSA, which is the Professional Sports Authenticator, or BGS, which is... Beckett Grading Services. They're the two biggest companies that are well known for grading these trading cards. Now these companies will inspect the card