I am semi-apologetic for posting this here, as it has been discussed before (but there is new information!). Feel free to ignore this thread if you do not approve....

Up to now, I have seen mainly second-hand accounts of Steinway dealers telling prospective clients that a Steinway piano is a good financial investment because it will increase in value. (A bit like having a musical portfolio, perhaps?) I always wondered where the sales people got this idea and how they could justify spreading it.

In an interview yesterday, the Steinway NY president made such a claim about their pianos, stating: "They actually make a fine investment. A piano that was built 20 or 30 years ago can command 3 to 4 times what its original purchase price was."
Steinway interview see 2.49

I suppose that means if someone has a teflon era S&S L they can get $100,000 for it. What about a 1985 D for $200,000?
Buy low, sell high???

Typical sales rhetoric from the NY fellow. Anyone who is in the piano business and has been for a number of years knows this type of claim is complete and utter nonsense.

Anyone not attached to the piano business in any way but with an ounce of common sense will realize the same thing.

Unsubstantiated statements such as that simply add fuel to the often heard claim; there is no truth in advertising.

Now there are cases of instruments that do increase in value from this company, but for the most part not the off- the- rack massed- produced instruments.

The idea of buying a piano as an investment with expected return is a bit odd to me. However, I suppose that many folks do it.
I would rather go into stocks or mutual funds myself.
Steinway certainly has the reputation of a high priced insturment and perception is a big deal.
If enough people believe the insturment will increase in value, it likely will. You just need to find a buyer.

not unless you plan on being here in a hundred years..go to any rebuilders web site and look at the model years that are being rebuilt..you won't find that many if any beyond the 1940s.. on Steinway pianos

Steinway is no exception of a company making such claims.

Bösendorfer amkes exactly the same statement; taken from the official website:



Bösendorfer - Investment

schwammerl.

Jurgen,

This is the old statistical data trick. Take some data, ie purchase prices of S&S 40 yrs ago..there now you have some real data to prove you point...then compare these prices to prices today 40yrs later...ah more real data to prove your point. Don't bother to correct for any inflation, changes in what a dollar will buy relative to what it used to buy, etc etc etc, The main thing you have to remember is to compare apples to oranges.

Now, it doesn't matter that you compared apples to oranges, you still have data...verifiable proof.

The good thing about this technique is you can use it to "prove" anything thing your little heart desires.

Handy, No?



Jim Ialeggio

That might well be true.

Of course, just to keep up with inflation, a piano selling for $10,000 in 1965 would have to be worth $71,409 in today’s dollars.

ddf

Although it depends on the measure that is used for inflation.

A piano is an investment in people, arts, children, culture etc...

The instrument itself is just that, an instrument.

The measure is in the results. A well maintained instrument of whatever facture will provide.

Ideally, it would not be sold after the children have gone away, but stay in the family. So as a monetary investment, in order to make money in the future, forget it.

Even if the kids can't or won't play anymore.

It will still be a worthwhile investment in their education.

Bottom line.

It is often said that for every generation add a zero on the end.
at times this is indeed accurate...

U.S. Department of Labor's Consumer Price Index.

ddf

Those indices change. Someone in my neighborhood makes a good living figuring out what it would be if the government had not fudged the economic indices from time to time, because people who rely on them will discover that their formulas no longer work.

My question remains - where are those piano sales taking place - the 1980s L for $100,000 or the 1965 Bösendorfer 225 that allegedly sold for $60,000 or whatever ....

While it would not shatter my world view to hear a salesperson spin these yarns (desperate creatures they can be, at times), to hear the president of the corporation state this is really something else.

Piano is still a good investment when cared for over the years. It's not a retirement investment, but you should be able to get most of your money back. If there's an economic collapse, you'll have a piano to spend your time with. Win win.

So, I'm sure you're about to provide us with a more accurate index....

ddf

I wish I could, but it is not something that I believe provides any accurate measure. In 1965, my house would have perhaps been worth $10-15,000. Today, it would be somewhere in the neighborhood of $700,000. On the other hand, a computer that would cost $100,000 in 1965 would be dwarfed in capability by one that costs $500 today. Or less esoterically, the television that I recently bought for $200 is better by far than one that would have cost that much in 1965.

Economics is a tricky subject, and most people cannot do even the basic math involved, and I salute you for at least using an index reasonably. I have seen bone-headed economic calculations from many people, including one who went on to become dean of the Haas School of Business at UC Berkeley.

I've always found this discussion of inflation rates and the "value of the dollar then vs. now" to be rather dubious when it relates to this particular subject. Here's why. Let's say a brand new Steinway B cost $500.00 in 1915. Now let's assume that the normal wear and tear and misuse causes the piano, in 2012, to require a total rebuild, save the original rim, plate and keys. I know rebuilders who would pay $5000.00 to $7000.00 all day long for that piano, then put tens of thousands more into it, in order to sell it for $35,000.00 to $45,000.00. So where are people allowing for the fact that the piano was $500.00 new in one time period, and cost $7000.00 as a used piece of junk, that requires all new parts, in another? How do you allow for that in your inflation calculations?

Of course this is a sales ploy, even if it was true. I think it is interesting that it must work, otherwise it would not be used. It reminds me of models of vacuum cleaners that used to be sold that could be converted to drum sanders or even spray painters for cars! It is just finding an excuse for the buyer to do what they really want to without as much guilt.

AH!but that "shell" you speak of CC2 is a Steinway..and that is where its value lies!
if not, a "shell" is just a shell? ah... the fundamental things apply, "as time goes by"

The fact still remains, Bob, that someone is willing to pay $7000.00 for that "shell", (that cost $500.00 in perfect working order in 1915), for which they know that, with additional investment, they can make a profit. My point is, even though this all seems rather ludicrous, it can be argued that this 1915 Steinway B has become a good investment for all involved. The family who paid $500.00 in 1915, got almost 100 years of use out of it, then sells it as junk for $7000.00, and the rebuilder, who pays the $7000.00, puts umpteen additional thousands in labor and parts into it, then turns around and makes a profit at a sale price of $35,000.00 to $45,000.00.......still tens of thousands less than a new instrument, but, it seems to me, a good deal for all concerned! How was this NOT a good investment?

Exactly CC2! the value is in the name.. and after its rebuilt you still have a wonderful instrument at far less cost of a new Steinway..

In 1915, that piano cost maybe one quarter of what it cost to buy a house, or two yearly incomes for a workman. That hardly equates to $7000 today.

For me the kicker is the 20 - 30 year time period and the 3 to 4 times the original purchase price quoted by the president of Steinway. How much did a Steinway cost in 1990? I am not sure, but let's say an L would have set you back $40,000. Where is that piano selling for $120,000 or more today, restored or not?

A couple of thoughts here. First, I doubt that back then, a person making $1000.00 per year was buying a $500.00 piano. It was probably a much more affluent person, and so, the effect of inflation was inconsequential to such a person. Secondly, there is still no consideration being made for the fact that, at the time of resale, the piano in my scenario is essentially a worn out piece of junk that needs to be completely rebuilt, yet fetches the $7000.00, after 97 years of use, and brings additional profit to the rebuilder of thousands of dollars.....a good investment for all.

Well, yes, people making $1000 a year in 1915 would buy a $500 piano. They would buy it on credit, make a few payments, and then move, leaving the piano behind. It would cost too much for the dealer to repossess it, so it became part of the furniture in the apartment.

Today, many things get financed by bankruptcy in a very similar manner. You buy some cheap land on the edge of nowhere, put up a sample house and sell the rights to buy similar houses in the development, and maybe build the houses and declare bankruptcy so you will not be responsible for anything that goes wrong because you built the houses on the cheap, or you just declare bankruptcy without building the houses if the economy gets bad. That happens all the time.

I finally watched the video. The president makes no claim about vintage instruments. He does make the claim that a Steinway instrument purchased 20-30 years ago will have increase in value and therefore makes a good investment. This is sales speak only, not truth to the current marketplace. That is what this discussion is about.

Of course a piano built 100 years ago will have increased value for the raw materials or frame. But this can be said about a lot of other items too.

Antique furniture would be a source. So would stamp collecting. Vintage cars another. So this argument about vintage costing more than the original build cost can be found in a variety of places.

But the president makes no reference to anything vintage.

I wish I had invested in Whirligig in the second race at Epsom yesterday.

Dan,
I did not watch the video, nor were my comments meant to in any way bolster the Steinway Corporation's arguments about the value of recently manufactured instruments. My points were more globally referencing the fact that Steinway pianos, as well as numerous other items you mention, can be good investments in a general sense, when the scenario I described exists

BDB, I know your stock in trade here is to be argumentative at any cost, but this comment is inane even by your standards.

I cannot remember where I read that, but that was definitely the way many pianos were sold then. Things like that are done even today. It is not much different from buying clothes, wearing them once, and then returning them.

Ford Mustangs sold for about 3,000 in 1964....but here we are folks
brand new "shells for 15,000 direct from Ford, for you Mustang fans!
this is what popularity of a "name" brings

http://blogs.automotive.com/ford-release...tion-63053.html