Ep 065

From Solo Advisor to Family Office & Marketing to the Sports Card Niche

With

Tom Ruggie

Listen Here

Inside This Episode

Today, I’m talking with Tom Ruggie, the founder and CEO of Ruggie Wealth Management – the flagship company of independent RIA, Destiny Wealth Partners, which has surpassed $1B in managed assets and is recognized among Forbes 250 Fastest-Growing RIA Firms.

The funny thing is, it’s actually our shared passion for sports collectables that brought Tom and I together – which is a major focal point for today’s conversation.

Not only did I want to better understand how Tom scaled his firm and eventually transitioned into a family office style of practice, but I wanted to hear about his sports card collecting journey and how he combined that passion with his wealth management business.

3 of the biggest insights from Tom Ruggie

#1 How Tom built a multi-million-dollar portfolio of rare collectables and memorabilia – including a signed 1952 Mickey Mantle card and an iconic pair of Muhammad Ali trunks from his George Foreman fight.

#2 Why the sports collectibles market is an alternative asset class that you need to understand for your clients – and Tom’s expert tips for building a diversified portfolio like his, which has skyrocketed in value.

#3 The major differences between a regular wealth management firm and a family office – and how Tom has carved out a niche that serves ultra-high-net-worth entrepreneurs.

KEY TAKEAWAYS: 

  • A shared passion for sports card collecting
  • Over $1 billion in managed assets
  • From retail advisor to family office
  • What a family office client looks like
  • 0 to 19 multi-family office clients
  • Tom’s journey into collectibles
  • Owning Muhammad Ali’s trunks
  • The future of the collectibles market
  • Insurance and estate planning for collectibles
  • Tom’s definition of “do business, do life”

PROTECTING A MULTIMILLION DOLLAR SPORTS COLLECTION

DEFINE & ATTRACT YOUR IDEAL CLIENTS

SELECTED LINKS FROM THE EPISODE: 

PEOPLE MENTIONED IN THE EPISODE:

THIS WEEK’S FEATURED REVIEW

Want to leave your own review? Visit us on Apple Podcasts via mobile, scroll to the bottom, and give me your honest thoughts. I read EVERY review that comes through. Not only do they light me up, but they also make a huge impact on people who are considering listening. To leave your review, CLICK HERE. I might even feature it on the show 🙂

MIC DROP MOMENTS WITH TOM RUGGIE

  • The relationship is a lot more important to me than the money. Do things right with people that you want to work with, and you’ll never have to worry about the money.” – Tom Ruggie

  • I love working with people that have the same passions I do. And to me, that’s the greatest of all worlds in business.” – Tom Ruggie

  • I want to work with people that we can have a conversation and 45 minutes later be like, ‘Gosh, I’m not ready to hang up the phone yet.’” – Tom Ruggie

Brad Johnson: Welcome back to another episode of Do Business Do Life. We have Tom Ruggie here with us today. Welcome to the show, Tom.

Tom Ruggie: Thank you so much for having me. It’s a pleasure to be here.

Brad Johnson: Awesome. Well, this one, I have literally been counting down the days. This is a first-ever for me of how I’ve ever connected with an advisor out there, and I’ve been doing this almost two decades, so that doesn’t happen very often. But fun story, I actually brought one of my favorite magazines so I’m going to hold up for those that are actually watching on camera so we’ll hold it up here. So, this is an industry collectibles magazine and it’s put out by PSA, which for those unfamiliar, is probably the biggest name, would you agree, Tom?

Tom Ruggie: Absolutely.

Brad Johnson: In sports card and collectible authentication. And so, I get this every month. It’s the updated version of the old-school Beckett price guide for those that remember that from, if they grew up in the 80s and 90s. So, I’m leafing through this thing. And I get to this page. I’m going to hold this up once again. And there’s this ad. Sorry. If it can come in, focus here. Right here at the top. And it says, “Do you have a million-plus collection? Whether you collect as a passion or for investment, your collection can help shape your destiny. Together, we’ll integrate your collection as we address complex issues that are part of succession, philanthropy, family governance, legacy planning, evaluate your collection, etcetera.” I won’t read the whole thing. And by the way, this is not a paid advertisement. Tom did not ask me to do this.

But being a guy and those that know me obviously know I’m super passionate about finance but growing up, I collected sports cards and got back into it like many did during COVID and really started to look at it through a new lens as an alternative asset and a true investment opportunity. And this is the first time I had ever heard or seen Tom, an advisor that actually had specialized in that niche. So, I was naturally curious. I called your office based on the phone number in the ad, and we connected. And it was, I remember, 30, 45-minute conversation where we caught up, and then we were deep into a conversation on the 1952 Topps set, just looking through it from the lens of a collector, but also an investor. And it was just an awesome conversation. I’m like, “Hey, would you come on the show? I think this could be really fun.” There’s a lot of sports fans, obviously, in our space. So, let’s just start there. Give us the background. How did that come to be? And let’s start the conversation there.

Tom Ruggie: Okay. Well, first, let me say I’m jealous that you hold up a Patrick Mahomes magazine because I think Patrick is an amazing athlete and well deserving of all the accolades he gets but I am a diehard Dallas Cowboys fan and have been all my life. And it’s been a tough, tough run. And I don’t see it getting any better. So, nice to have a team you can follow that’s doing extremely well.

Brad Johnson: In your defense, Tom, growing up, I mean, I was a college football player, grew up watching the NFL. Unfortunately, when I was growing up, the Chiefs never made it far enough into the playoffs to ace Aikman and Irvin. I mean, you guys had Emmitt Smith. Obviously, you had an incredible team and put a few championships together there in a row. So, at least you did have some glory days.

Tom Ruggie: We did. And I’m old enough to have basked in the glory of those times but it’s been quite a while, 25 years plus since then. Anyways, to answer your question, how that ad actually came about or really what the process was of getting to the point of focusing on a niche of working with collectors, really boiled down to my own personal situation, which is in late 2022, redoing my own legal documents. And as I’m doing, I realized that I had a significant problem and that is I have a multimillion-dollar sports collection. I have a family that knows absolutely nothing about the collection, absolutely nothing about the value. And frankly, and I hope this is okay to say on your podcast, but they don’t give a—. It holds no meaning or interest to them. My son has blatantly said that God forbid something happened to me, he would just look to sell everything except for my rock and roll stuff. I do have some rock and roll memorabilia, and he is a big fan of my music, which is really cool, so he’d want to keep that.

But bottom line is I said, “Hey, if I don’t make it home tomorrow, there’s a big problem.” And so, I started going on a mission of being in the business that we’re in, what should I be doing to protect the assets that I’ve built up to protect my family and to make sure that proper valuation of what I have is achieved if I don’t make it home. And so, that led to the development of a scorecard, which is ten steps that I walked through personally to help kind of dot all the Is and cross all the Ts with my collection and then realized that there ought to be a market for this considering that I’m in the business that I’m in, and knowing I haven’t done a great job with my collection. I’m sure there’s other collectors, not just memorabilia collectors, but it could be art, could be watches, could be wine, but other collectors probably have the same problem that I have.

And so, that’s really what led to the foundation of, “Hey, could there be a real niche market to help people that have the same passions that I have?” And I’m sure just like you, I love working with people that have the same passions I do.

Brad Johnson: Yeah. Well, our first conversation, what a prime example, we’d never met. We had, as far as I knew at that time, no mutual friends. And I saw an ad completely cold in a magazine. But back to the riches are in the niches. We’ve heard that for years in finance. I’m exploring an interest of mine that has very little to do with the coaching we do on the finance side, although there’s some crossover that we’ll probably get into. And I just call you out of the blue, and we had a super engaging 45-minute conversation as strangers because we were both passionate about the same topic. So, I mean, you talk about the power of just Tim Ferriss on a podcast. I heard him say he invests in companies that scratch his own itch. And I just feel like that’s kind of what you just did.

You’re like, “Uh-oh, I might be in trouble. I’ve got a substantial collection over here, and if something happens to me, my family’s going to have no clue what to do. Probably selling it for pennies on the dollar.” And you said, “I need to do this.” And now you’re like, “Huh, I bet there’s some other people that have this problem too.” And by the way, well, this will be in the intro, but Tom’s been kind enough. He’s going to give this away as a gift, this collectible scorecard, that’s kind of his steps that he goes through to make sure he was good. And then I’m sure you’ve done that for others. So, how has that played out since? How long ago did you kind of make this focus on the collectibles market? And then how has it played out since you’ve done that?

Tom Ruggie: It really has been the longer story is it’s really kind of been a seven-year plan. And you get to a certain point in our business, in our careers. I mean, my primary passion up to this point has been my business. I mean, I’m not a golfer. I love my business. I love my clients. I love doing what I do. So, about seven years ago, I really started looking at what do I want to do with the rest of my life. And fortunately, finances are not a point of contention of deciding what I want to do. So, that led to the development of our multifamily office, where I basically work with entrepreneurs that are very similar to me, have the same passion as I do, and then fast forward into the realization that I’ve got some problems with my other passion, which is my collectibles. It really just kind of fed right into it.

So, now and that, to me, that perfect world of the intersection of my two favorite passions, which is my collection and my business. And it has been something that we’ve really been focusing on for about the past 12 to 18 months. And I have met and worked with some wonderful people in the business. And it just excites me even our discussion, obviously. You’ve mentioned it a couple of times but I too, we probably could have talked on the phone for 2 or 3 hours. It’s just exciting to share with people that have similar passions what you’re doing. So, I’m in my own perfect little world right now of doing what I want to do with who I want to do it with. And a lot of that is revolving around the collectibles world.

Brad Johnson: Cool. And just for background, and if I get any of this wrong, we pulled this from your website. So, just correct anything.

Tom Ruggie: Sure.

Brad Johnson: So, you’re a ChFC, you’re CFP so obviously you’ve gone down the path of designations and being a student of the business.

Tom Ruggie: Absolutely.

Brad Johnson: And you’ve been in the business over 30 years, started out in ‘91, organically grew over $1 billion RIA. As we sit here, we record this on April 19th. Any idea where that’s at right now?

Tom Ruggie: Yeah. We actually track this weekly, so we’re just shy of 1.1 billion or 1.086 billion as of last week.

Brad Johnson: Cool. And from my memory from our first conversation, you didn’t start off like, “Hey, we run a family office.” It was more of like a general retail practice that then evolved into a family practice. So, if you wouldn’t mind because one of the things that’s cool, very similar, most of the advisors I’ve worked with over the years the kind of mom-and-pop shop and then they start to have some success and it goes from a financial advisor to actually a business. And now they might be evolving into a CEO as the business grows and scales. So, what did that journey look like for you? How did you get in the business? And then when did you make the shift to say, “Hey, we’re going to kind of go upstream to higher net worth and more of a family office style practice”? And how would you define that, like the difference between retail versus a true family office approach?

Tom Ruggie: Yeah. It all happened organically over time. I mean, I actually started right out of college. I started off with a life insurance company, although I hate to admit this, but it is the truth. It took me a month to realize that the company was actually wanting me to push life insurance. I mean, I was literally brought on as a financial advisor. But ultimately, life insurance paid the bill, and three years later said, “Hey, this isn’t what I want to do.” Set up my own company. I was used to not making money, so it wasn’t a hard transition to continuing not to make money. And we are pretty well ahead of the curve on ongoing fee-based. We were very much ahead of the curve on ongoing RIA. And as I said, what led to the family office was I’ve been a disciple and a member of Strategic Coach, a coaching program, for over 20 years.

And we always talk about what is your 25-year path look like? And candidly, it never resonated with me until seven or eight years ago when I was actually at my 25th year in the business. And we’re talking about, “Okay. What is the next 25 years look like?” And it really centered around, “Hey, you’ve spent 25 years building up.” You gained the knowledge which you’ve effectively transitioned into wisdom. And now that you have the wisdom, how do you utilize that wisdom with the people that you want to work with? And it came at a time, I had a couple of clients already that were family office-type potential clients. They’ve had some liquidity events. And so, I put together my ideal of what a multifamily office would look like and went to a few of these clients and said, “Hey, what do you think about this?” And they thought it was a great idea.

It was escalating our services, a model of who else we’re going to hire so that we can just continue to provide just a completely different level of service. And so, that’s really what started it. And it’s been a great thing because just to put in perspective size-wise, you asked about the assets under management. Our wealth management firm, we have about 930 households that we manage about 650 million for. And then our family office side, we have 19 households that we manage almost 500 million for. So, it’s a very significant difference. And our firm has about 30 people total, about ten advisors, but I spend the majority of my time on the family office side of the equation. And again, I’m 55 years old, soon to be 56. Dan Sullivan wants to live to 157, which I don’t have that same vision but I certainly have no desire to discontinue doing what I’m doing. I love what I do, I’m passionate about it. And if my health is able, I’m going to continue doing what I’m doing for the next 20 to 30 years easily.

Brad Johnson: That’s awesome. I love the clarity of vision there, Tom, and the most successful advisors I’ve crossed paths with over the years have a similar vision different than yours, but they know where they want to go, and they know what they’re passionate about and why they’re doing it. And when their business follows suit. It’s amazing. It’s like you show up to work and it doesn’t feel like work. Not every day. Some days there’s workdays but it’s really cool to hear that. I’m curious if we dive into the family office and then we’re going to get into sports cards. It’s an investment heavily. Trust me. Selfishly, we’re going to. So, I love the here’s where we’re at on just the wealth management side. Here’s where we’re at on the family office side. As far as like if I walk through the front doors, are they the same front doors and family office sides over here and wealth management sides over here? And how do you figure out what are the metrics that say, “Take a right. You hit the family multifamily office side versus the wealth management side”? How do you delineate those two?

Tom Ruggie: Well, I mean, technically we do have a separate office for our family office. We have an office in Winter Park that has an upstairs and downstairs, and the upstairs is the family office. Downstairs is the wealth management. The office I’m actually sitting in right now is our Tavares office, which is all considered wealth management. But ironically, the majority of my new family office clients are not local. I think five out of my last six clients have been outside of Central Florida. Our most recent one was out of Miami but I have a couple of clients in Vegas, a client in Phoenix, a client in Dallas. So, the office, per se. And I think also, especially since COVID, the actual foot space of the office isn’t near as important. I think the part of where you’re going on this is what makes a family office client versus a non-family office client.

And candidly and selfishly, because I’m the primary person in our family office but it really boils down to who I want to work with and what attributes do they have. So, I would be classified as a serial entrepreneur. We have I think I filed 12 different tax returns for the various entities that we have and just have a mindset of always looking to do more, always looking to expand. Absolutely no complacency. And the bottom line is and I think this would hold true for you, I think it holds true for anybody in our business, but we work best with people that are just like us. And I came from a, I’m not going to say a poor background, but living with three people in a single wide two-bedroom trailer growing up, we didn’t have a lot of money. And so, I started from scratch. I started from nothing. I didn’t have the mentorship as a young person to help propel me to where I am.

And so, I tend to work best with people that are similar to me. My best client who’s also my best friend is one of my wealthiest clients. And he has more money than he’ll ever know what to do with and yet he is still, to this day, probably working harder than he was 20 years ago when I met him. And I’m the same way. I’m a worker. Again, I just love being around people like that. So, from a definition to fall into the family office side, what we typically look for as an entrepreneur and a net worth of typically it’s between $20 million and $100 million plus, we do look for a minimum fee of $100,000 per year. So, that again puts into perspective. But I also do work with clients that I kind of use the analogy of belonging to a very wealthy country club because you have the 65-year-old members that are worth tens or hundreds of millions of dollars but then you have the 35-year-old that is in that building stage that really is going to get there but needs the help. And I love being in that position to help somebody like that, even if they don’t necessarily fit the criteria of what we would normally look for.

Brad Johnson: That’s great. It’s interesting. Triad has a very similar model. We kind of modeled it after a multifamily office approach for the insurance brokerage space because what we realized is part of Do Business Do Life, Shawn and I both grew up in a business where we worked with a lot of different personalities. And what you learned through that, which sounds like probably the early days when you were at the life insurance shop, when it’s about just surviving and making a living and providing for your family, you don’t really filter as much. It’s more just like, “Do they have money? Can we work with them?” And one of the things I just realized over the years, it’s a lot more fun to work, to do business with people you want to do life with. And sounds like a very similar approach, but in order to do that and have a profitable business, you have to take the minimum sum, right? Because if you want to go deep with somebody, you can’t work with everyone. And so, that resonates with me.

Tom Ruggie: It’s exhilarating to work with people that you really resonate with. And if I get referred to a prospect that technically would be a family office prospect, but they don’t resonate with me, then I get somebody else from the firm involved because I truly just want to work. I want to work with people that we can have a conversation and 45 minutes later be like, “Gosh, I’m not ready to hang up the phone yet.” We’re having a great conversation or that we can go to a sports event with or travel together or go to eat. I mean, I want that. The relationship is a lot more important to me than the money. And I’ve always had a theory that if you do things right, you’re never going to have to worry about money. And so, I’ve got just a philosophy, I don’t worry about the money side of the equation. I do things right with people that you want to work with, and you’ll never have to worry about it.

Brad Johnson: Yeah. It’s getting rid of the transactional relationship so you can focus on the transformational. It’s a beautiful philosophy.

Tom Ruggie: Yeah. Well said.

Brad Johnson: So, out of curiosity, two questions come to mind on the family office and then I want to pivot to the sports cards and memorabilia stuff. So, you’re at 19 clients on the multi-family office side. Has that been very relationship-based where one wealthy person is like, “Oh, you got to work with Tom. He’s the man.” Has it been through that lens of focusing on sports cards and collectibles where some of those have multiplied and networked? Like how did you go from 0 to 19?

Tom Ruggie: It’s really been organically. I mean, candidly, I get laughed at when I say this, but I’m not a good salesperson. At least I’m not naturally a good salesperson. I think I am now a good salesperson just because I know what I’m doing and I can speak to people really well about what we do and what our value creation is. But, yeah, I’m not somebody that goes to cocktail parties, and everybody I meet wants to work with me. So, it really is more of a one-on-one situation where organically just people are just so happy with what we’re doing for them that every once in a while they say, “Hey, I’ve got somebody else, and here’s the situation. Is there somebody you would want to work with?” And it tends to be a good match. Regarding the collectible side of the equation, we’re in an infancy. Our infancy with that, I’ve made some amazing contacts. It has not actually generated a new client for us at this point. Again, we’re about a year into kind of focusing on this but I have extreme confidence that with everything that we’re doing and the contacts that we’re making, there has been a built-up demand for people to talk to me or for me to talk to people about what we’re doing that I think it’s inevitable that that will come.

Brad Johnson: Well, tell you, I have over the years developed a network, obviously, of many advisors across the country. But obviously, I mean, I just got a call the other day from one of my friends in Boston. I’ve got just over a billion under management. He’s like, “Hey, do you have somebody in Pittsburgh that has a great estate planning contact because I’ve got somebody that needs one there?” I will tell you, if I get a phone call like that of, “Hey, I’ve got somebody that’s got a large collectibles, basically, portfolio or whatever we want to call it,” and they’re not sure what to do with it, I would have one person in my Rolodex to call and it would be you. So, I mean, that’s the beauty of I call it in marketing, it’s dog whistle languaging. People not interested in sports cards or collectibles, they’re never going to see your ad but the people that are, it’s going to filter straight to you based on your showing up where they’re at.

So, let’s transition. And I hope we don’t geek out too much for the listeners here because this could get a little nerdy and geeky but, hey, if it does, just hit fast-forward a couple of times. So, philosophically, what I’ve seen and I just want to get your take. I was born in 1980. I was a kid of the 80s, now affectionately known as the junk wax era in sports cards. And that was where the Grail card that I remember was the 1989 Upper Deck Ken Griffey Jr. that was as I was 8 or 9 years old in the late 80s, I think it was typically an $80 to $100 card. And what we didn’t know at the time because the Mantles, the Babe Ruths, those were worth real money back then. But they were scarce because the famous story and I’ve heard it 100 times now, “Oh, my mom or my grandma threw away my cards when I moved out or went to college or I put them in my bicycle spokes,” all that.

Nobody actually saw them as valuable. They saw them as like toys almost. And so, they’re now scarce and in good condition. Well, in the 80s, everybody was throwing them in top loaders, preserving them, but thinking, “Hey, they’re scarce,” but what we didn’t know was how many were being printed in the supply.

Tom Ruggie: Yeah.

Brad Johnson: Now, as technology has evolved, now we do know companies like PSA, you can grade them. They have a population account that 1989 Upper Deck Ken Griffey Jr is the most graded card in the history of sports cards, like hundreds of thousands of them. And obviously, that’s not counting ones that haven’t been graded. But as I fall back into it and being in finance the last close to two decades, now, I look at it almost like I do a stock. You know how many shares are outstanding? What is the demand? What are the underlying value in that individual? Are they still playing? Is there upside? Are they retired and they’re a goat? And so, I’m curious like what was your journey? Were you the kid that grew up collecting or how did you get into it? And now how do you look through it from a collecting side versus an investing side? And what’s kind of your approach?

Tom Ruggie: Yeah. Great question. So, yes, I did get into it as a kid. You know, I’m a little bit older than you are, really started collecting in 1978, and then put my first full set together which was a big thing back in the day of completing the overall set in 1979, which, again, for those that are listening that are collectors or older collectors completing a set was the big thing to do. So, you’re opening all these wax packs and I’m just dying to get a Mario Soto because it’s the last card that I need but isn’t worth a damn thing today but it was the fun of completing the set. But then the other thing being born and raised in Florida, spring training’s down here. And so, I got into the habit of deciding I wanted to get my sports card signed at spring training, and I used to go to as many games as I could.

And candidly, this even went through to my adult years, although there was a gap in between, just like there was with you, where I wasn’t really doing much collecting, but the autograph cards is really what was enticing to me and that has followed through to this day. I ended up selling the majority of my non-autographed collection while I was in college and to this day I have very few unautographed cards in my collection but I’ve probably got five, six, seven. I don’t even know, but probably somewhere between 5,000 and 7,000 autographed cards in my collection, most of which are PSA slabbed. How I look at it from a kind of an investment window, always even as a kid, when I mowed the lawn and I had $15 to spend, I would look at what do I think from an investment standpoint is the best way to spend this money. And that has always flowed through.

So, there’s always been that correlation between investment and passion. Because if I was going to spend the money, I was hoping that it was going to be worth something. And when you started collecting cards, that was kind of the rookie card craze. The early 80s was when the rookie card was a big deal. So, I was doing a lot of rookie card stuff. You know, as I sit today…

Brad Johnson: And can you define rookie card for those unfamiliar?

Tom Ruggie: Sure. A rookie card is the first card that is released of a particular player. So, the 1952 Mickey Mantle is considered his rookie card, although he also had a ‘51 Bowman a year earlier but it’s widely considered the ‘52 Topps as his rookie card. The big thing in the 80s was the 1984 Don Mattingly, which is ironic because Mattingly is not even in the Hall of Fame but he kind of was a spur-of-the-rookie card craze in the 80s. But to your point, a couple of things. One is valuations of these items have increased so much over the last 5 or 10 years that this is actually a kind of a funny story. But back when I was buying new stuff and my wife would walk into the office and was like, “Gosh, you seem to be adding more stuff.” It got to the point where I would say, “Look, this is an investment. So, if we have a dollar to invest, I’m taking $0.20 of that dollar and going to buy sports memorabilia.”

And the reality is, I was saying that just to allow me to buy the things I wanted to buy but I wasn’t really at that point looking at that as part of my investment portfolio. Now, you fast forward and my collection is a considerable part of my overall investment portfolio. And unfortunately, I’ve been lucky enough to buy items that have appreciated significantly. So, I’ve got a large collection, but I also look at it very similar to investing in stocks meaning the thing I talk to people about is the difference between a blue chip stock and a penny stock. So, as my family likes to say, I like to buy memorabilia of dead people. You know, I’ve got a lot of Babe Ruth stuff. I’ve got a lot of Lou Gehrig stuff, a lot of Ted Williams stuff, a lot of Mickey Mantle stuff. Those are blue chip stock investments.

And much like I talk to people about real estate, I could have a client say, “Hey, I’m looking to buy a condo on the beach, but prices are high. You know, valuations are high right now. I’m worried about buying it and it going down.” And my response is, “Hey, if you’re buying it and you want to flip it in a year or two, that’s a very valid concern but if you have a holding period of at least ten years, in all likelihood you’re never going to go wrong buying great property.” And I say the same thing about blue chip stocks as well as blue chip memorabilia investments. You know, you’re not going to go wrong buying Babe Ruth stuff and Michael Jordan stuff. What I personally don’t get into, to a large degree, is what is very hot right now, which is buying the wax packs and coming across that one card of a rookie basketball player, a rookie baseball player and hoping that it’s going to go up thousands of percent, which it absolutely might but it also could end up being worthless.

And so, to me, that’s kind of a penny stock type investment. And by and large, something that I tend to shy away from, although I will admit that I’ve bought a few rookie cards of Ohtani who I just don’t know it’ll end up happening for the rest of his career, but he’s certainly a once-in-a-lifetime type athlete to me.

Brad Johnson: Yeah. So, let’s dive in there a bit. So, very similar philosophy on my side. And it’s crazy how much crossover there is once you start to educate yourself and it took some time because the sports market, I was primarily in the sports cards. I know you’re into some memorabilia as well, which I don’t know nearly as much about, but on the sports card side, it is very different today than it was in the 80s where you had originally it was Topps, and then there was Donruss and Fleer. So, there’s three, four, five different makers of cards and primarily baseball. And then football and basketball came along. And now as you look today, thousands of variations where now Panini soon-to-be fanatics as their licensing switches over but they might make 6, 8, 10 different, 12, 15 I can’t even keep track sets. And so, now there’s like tiers of sets of like these are the higher end versus the lower end.

Then there’s parallels where you’ll have the exact same card and one of them as a one-of-one. It’s like the Willy Wonka golden ticket. If you pulled out one versus, “Hey, here’s the standard base card,” which would have been the cards from the 80s. And that’s essentially worthless even in a good player because they print so many. So, the interesting thing going to modern versus vintage, which be like the Mantles and the Babe Ruths that you’re talking about, it is, I think that’s a great analogy, penny stock investing versus blue chip. If you were looking at it through the lens of diversifying a portfolio, and obviously this is 100% your philosophy and how you would do it, what would be your allocations to here’s the 1952 Mantle, which, by the way, isn’t cheap. So, you better have a decent-sized portfolio.

But here’s the ‘52 Mantle that is not going to go down over time. Now, there can be ebbs and flows but over time you hold that thing for ten years. There’s, in my mind, essentially no way it’s worth less than it is today. And then here’s the Ohtani, who’s very hot, obviously, a very unique player but there’s still a lot of volatility. He could have injuries. You’ve got lots of things that could happen with him. How would you look at it through allocating a portfolio if it were just a portfolio of sports cards?

Tom Ruggie: Well, great question because I’m actually getting a pretty big push from a number of people to develop a fund that invests in sports memorabilia. And so, I think there’s a decent chance that we’re going to go that route. But in the back of my mind, I’ve already been asking myself the same questions of what would I look for or what would I allocate for? And on the sports card side, it would probably be ballpark 80% blue chip and 20% let’s roll the dice a little bit on some players and see what happens with it. If I were to do something like that, it would be memorabilia across the board, not just sports cards. And on the sports card side, it would probably still be along the line of autograph cards just because I know so much more about autograph cards than I do just pure graded cards. So, I think that’s the methodology.

What I’ve done with my own collection that I think is important from a valuation standpoint is my collection really consists of three different stools to the leg, if you will. So, I have a very significant autograph sports card collection. I have a fairly significant original artwork collection. I have about 50 original pieces of art that are sports-based. And then the third piece is a little bit more on the eclectic side but tends to focus a lot on one-of-a-kind type items. And not just one of a kind but some examples I have. I have four separate set of trunks that are Muhammad Ali worn fight trunks. The major one I have is I have the trunks that he wore when he fought George Foreman. So, that’s a pretty significant piece for us.

Brad Johnson: Sounds significant. Yeah. If you’re open to sharing because a lot of people would be like, “Wow. That’s got to be valuable but I have no clue,” if you were to put a rough estimate and you’re willing to share, what would those trunks be worth at auction, you think?

Tom Ruggie: Well, that’s a timely question because I have it insured for about three times what I paid for it back in 2012, and when I bought it in 2012, it sold for the exact same amount as the trunks that he wore when he fought Joe Frazier in the Thrilla in Manila. So, I think most people would put those two fights for Ali interchangeably at his top one and two fights. And the trunks for the Thrilla in Manila was listed in Sotheby’s a month or so ago. And the last bid that I saw was 3.8 million, with an expected ultimate gavel price of between 4 and 6 million, which is significantly more than what I have mine insured for. So, I was like, “Holy crap.”

Brad Johnson: We’re going to get into that, by the way. So, this is where you go to your wife and you say, “Honey, I told you so, right? Like, this is an investment.” You pulled that up?

Tom Ruggie: You know, my family did not even know that I purchased the trunks and paid for them what I did when I did it because they would have looked at me like I was effing crazy. I mean, they would have just thought I was insane for paying and what I did for those trunks. But again, obviously, at this point, it’s been a fantastic investment. Whether it’s worth the amount that the Frazier trunks are going for or not, it still stands that they’re probably pretty significantly valued compared to what I paid for them.

Brad Johnson: Yeah. That’s cool. Thanks for sharing that. So, either share this with your wife or don’t share it with your wife. Your choice.

Tom Ruggie: Oh, she knows. She knows now.

Brad Johnson: So, let’s go back like if we’re looking back through that portfolio allocation, I love the three-legged stool analogy. If you were to say those were like three separate sectors based on what you paid versus how they’ve appreciated over time, has it been pretty equal across all three of those or has one of them outperformed the other two?

Tom Ruggie: The one that’s probably underperformed, certainly compared to the other two is the art side. But I think art, as a generality, art has certainly appreciated in value over the last ten years but art has been considered not only a collectible but an asset class for many, many years. So, not that it’s peaked and not that it won’t continue to go up, but it’s certainly a more mature market. So, the artwork that I buy, I do feel will appreciate at a nice level but you’re not going to get the 10X appreciation that you may get on some of the other things. By and large, the autographed card side has increased significantly but as you know, going back to the roots of my collecting my autographed cards, I work on getting complete sets. And so, the star cards have done extremely well. I bought my signed 1952 Mickey Mantle probably 12 or 13 years ago and it has probably gone up 20X since I bought it.

Brad Johnson: And all of those are in PSA slabs, right? They’re graded.

Tom Ruggie: Yes.

Brad Johnson: What’s the grade on the Mantle?

Tom Ruggie: So, it is considered a one or an authentic grade because it was trimmed a little bit. But aesthetically, you would never know unless you looked at it really, really close. And the bottom line, it’s a fantastic-looking card but because somebody tried to make it look like a fantastic card, that does take the value away. But even being a trimmed card because of how aesthetically pleasing it is, the autograph is great, it still carries significant value. But the hard part about completing a set is I told you, I’ve added two cards to my collection this year which put…

Brad Johnson: Tom, real quick, sorry to interrupt. That 1952 Topps set, it’s a goat set in sports cards. So, can you give a little bit of background for those unfamiliar? And obviously, you mentioned it’s the Mickey Mantle rookie year, but can you just for context why it’s so special, why it’s unique, why it’s so scarce? And then I’d love to hear like getting into the pursuit of the complete set.

Tom Ruggie: Yeah. So, 1952 was Topps’ first major issue of a set and Topps is considered, at least historically, to be the top baseball card manufacturing company. So, they did have a set previous to ‘52 but ‘52 is really considered to be their initial set. And with that set, there were a number of different series. So, they used to release one series at a time. And the scarcity of the set is in particular in the last series because there were not nearly as many cards issued for that last series. And included in that last series is the Mantle rookie, the Willie Mays rookie, Jackie Robinson, Roy Campanella, all of which are not even signed or unsigned. They can be relatively difficult to get but signed is a different level of complexity. So, there’s 407 cards in that set. I have 400 of those cards signed. Again, I added two more this year, which is the first two I’ve added in two years so the last seven.

It’s kind of a lifetime deal for me. Can I get everything? Because some of them I do believe with all cards that there’s probably some in existence, but six of the seven that are missing do not have a PSA-graded card in the system. And the other one that I’m missing is Jackie Robinson, which unfortunately, I passed up at much lower prices than what I’ll probably end up paying but, yeah, that is what it is. But what I was going with the valuation, I pay, well, if one of those other six cards comes up which probably none of us, including all the listeners, probably wouldn’t know any of the names but because the card itself is scarce and the autograph is scarce, I’m still paying a premium for something that candidly, when I buy it, I’m sticking it into a box because it’s not a displayable type card because nobody knows who it is or what it is.

So, those sorts of things can still be expensive, relatively speaking, that may or may not appreciate as much, but again, certainly the Jackie Robinsons and the Campanellas and the Mays and the Mantles are blue chip and are going to continue to do very, very well financially.

Brad Johnson: So, is it true? Because sometimes there’s these tales that are told, I think, in all collectibles markets. I’ve heard it from a few different sources that one of the reasons that last series of ‘52 Topps is scarce is I think they kind of got it out late and the new season had already started. So, kids were collecting the new series and they dumped like a Topps, the company dumped a bunch of them in like the Hudson River. Is that true? Or do you have any fact check…

Tom Ruggie: That is my understanding. I didn’t recall if it was the Hudson River or the ocean but my understanding was they were dumped into a body of water. And it certainly could have been the Hudson River. Yes. So, again, the cards themselves are scarce let alone the autographed side. Yeah.

Brad Johnson: And of those seven remaining, I mean, that’s 1952. Obviously, Mantle’s no longer alive. What percentage of that 407 are still alive today? There can’t be many.

Tom Ruggie: There’s not many. In fact, actually, there was an article in Sports Collectors Digest about four years ago of all the living members of the ‘52 set. And at the time, I want to say it was about 50, and I kept the article and I actually look at it on a year-by-year basis. As we sit right now, I believe seven of the members of the ‘52 set, so seven out of 407 are still alive, including Willie Mays.

Brad Johnson: Wow. So, let’s once again, this may be getting a little nerdy, but it’s okay. So, what’s interesting about today’s sports market or sports card market is now the market has evolved to where cards come out of the pack, autographed at different scarcities. Back in, I think it was like the early 90s that Upper Deck started doing that with like a Hank Aaron, A Nolan Ryan card is what I remember. Michael Jordan was sponsored by them. But that didn’t happen in 1952. So, these are all after-market where people are having to seek out the players at a game, just like you did when you were a kid, and actually get the autograph or a sports card show, whatever. So, most of the population on most of those cards, because it wasn’t as much of a thing back then, I’m guessing it might be in the 5 or 10 total that are even graded on some of them top like total. Is that fair on a lot of those cards?

Tom Ruggie: For signed cards?

Brad Johnson: Yes.

Tom Ruggie: For the ‘52 set, I probably own myself. And I’m pulling this number out of the air, but I probably own at least 25 that is considered by PSA to be the only one in existence. So, as an example, the major recent card that I added within the past month was the signed ‘52 Campanella, Roy Campanella. For the audience that doesn’t know, Roy Campanella, one of the first black players in baseball. He was the catcher for the Dodgers, who were originally a World Series team back in the 50s, and he was in a debilitating car accident, I believe, in 1958. And so, for him to have signed a card, it would have been prior to 1958. So, there was a fairly short window.

Brad Johnson: He couldn’t even sign after that?

Tom Ruggie: He could with the use of it’s a completely different signature.

Brad Johnson: Oh, wow.

Tom Ruggie: Yeah. So, he had the use of something to help him sign. So, I purchased this card, which was the first card signed I have ever seen of him from the 1952 set. I do believe that there’s at least one or two more out there but it is the only one that I’m aware of. Well, it’s the only one that shows up as being in a PSA authenticated signed ‘52 card.

Brad Johnson: Wow. Okay. So, ‘52 set. PSA, the company that we’re talking about, so when they authenticate them, they put them in a slab, they grade it. Ten being a perfect card in their eyes, one being the lowest and/or authentic trimmed like you said. They have, basically, a way to say, what do they call it where they basically keep track of who has the top cards in that set? And it’s a public almost like database. What do they call that? I forget.

Tom Ruggie: The registry.

Brad Johnson: Registry. Thank you. So, they have a registry. I believe your 1952 set, signed ‘52 set is you have the most number and in the highest grade so it’s like the top set on the registry. Back to the investment, what I have seen following auctions over the last handful of years so, obviously, the Mantle by itself is a very valuable card but I have seen a premium where you have a full set authenticated slab. So, they’re like all the same flavor when it comes to the grading companies because there’s a few of them out there. And when you get to that complete and I’m just speaking it into existence because I know someday you’re going to accomplish this lifetime goal. So, when you hit the 407, what premium does that put on top of the individual value cards versus the full set all of them graded, autographed, authenticated? Do you have metrics on the premium? Because I’ve seen them go for premium when you have the complete set and other sets that I’ve seen go at auction.

Tom Ruggie: Well, there’s never been another complete ‘52 signed card set offered. So, it would be interesting. And I haven’t actually had a conversation because I’m not the type that looks to buy something to sell it. And in fact, until now, the few people that know about my Ali trunks and what’s going on with Sotheby’s, the few people that I’ve talked to about it, have all been, “So, are you selling them?” And I’m like, “No, I’m not selling them.” But it’s worth more to be able to see it than to put some additional money in the bank. And at some point, I might get to the point where, for whatever reason, whether it’s estate planning reasons or really just the ability to let somebody else get enjoyment out of what I’ve been able to get enjoyment out of for so many years that I might sell, but I do not have a personal sale strategy.

But back to your question, there certainly would be a premium on the entire set. It would be a huge check for somebody to write. And I’m not sure how an auction company would divide it up. I don’t know if they would say, “Hey, we’re going to offer the entire set,” or they might piecemeal it up and say, “Hey, we’re going to offer all but the top 20 cards of the entire set.” And then we’re going to do the 20 cards individually because that might bring more premium. I don’t know the answer, but it’s an interesting question.

Brad Johnson: Okay. So, let’s go to the future of, and by the way, we haven’t hit much on memorabilia other than the trunks but both sports cards and non-sports cards. I mean, now there’s Pokémon. There’s a lot of pop culture cards that are getting very valuable. And then, obviously, the memorabilia. What I’ve seen COVID and I think here’s my take but I want to get yours on the future of the market. It’s a growing market. I look at these nostalgia cycles. It’s happening right now with me and my family. Kid of the 80s, went to sports card shows as a kid, went to the hobby shops, and just that rush of opening the pack and did you pull the card? And much more from a collector lens back then than investment lens. So, now I have a 13-year-old and a 12-year-old and an eight-year-old. Gone to the Dallas Card Show three times now with my two boys. My daughter came to the last one.

Now, it’s a shared hobby for us where they’re collecting their stuff where we’re setting up the booth. My son’s making Pokémon deals. So, I love it as a dad because he’s getting an economics 101. We’re getting family time. I’m geeking out. So, these nostalgia cycles are happening where it was big when I was a kid, and now it’s getting big because guys like me are taking their kids and it’s repeating. Then we have COVID hit. People are bored out of their minds. There’s no sports on. They’re going down in their basement, in their attic, grabbing old cards, and then people have they’re not spending money on leisure. They’re not going anywhere. So, now eBay blows up. Sports card market just skyrockets overnight. And now you have, last layer on this and I want to get your take, now you have real private equity coming in.

Leore that runs Alt, I think they had a $10 million fund that bought like Steph Curry’s biggest National Treasures Logoman rookie. And they’re looking at it through investment-grade lens. And so, now you’ve got big-money fanatics coming in just bought Topps. They’re going to start marketing. They’re going to start doing like they’re doing a big event coming up in New York. Tom Brady will be there and they’re putting real money behind this marketplace. Give us a preview the next 5 to 10 years. Where do you see this market going if you’re looking at trends and like Bull versus Bear, that sort of stuff?

Tom Ruggie: Well, I think in some situations we could get to a point where with any investment category, we could get to a point where it becomes oversaturated or maybe even gets to a bubble-type scenario. I’m not making a prediction on if that will happen or when that will happen. But to your point, prices have escalated so much, there is so much demand, so much desire but there’s also so much money out there. And so, I still think that there’s room for things to really go for the next, certainly, I’ll say the next five years just because people have money. You know, whether it’s because they made money in crypto or that people have made money in crypto or the type of people that say, “Hey, what else can I do with this money to buy something tangible?” And I think that’s the big plus about this type of an investment is the fact that you have a tangible item.

And, obviously, we manage the money that we manage in traditional investments that is not tangible at all and yet that’s been my career and my passion for over 30 years. But people like the tangible impact, something that they can see, something they can display, something they can talk to people about. I actually took a client to the Orlando Magic game this past Sunday and he drove an hour to my office because he wanted to see my collection, and he was literally like a kid in a candy shop as I walked around and showed him everything and gave him the story about everything. And people just like that. I still will fall back on if you’re buying blue chip investments and you have a ten-year holding period, nothing really should matter. But even if you’re buying blue chip investments, but you’re looking to capitalize on a quick run-up in that investment and flip it, you certainly might be able to do so but you also might get caught holding the bag when there’s a downturn or a blip in the market.

I prescribe to a newsletter called Altan Insights that is a phenomenal newsletter, but it tracks kind of what’s going on in the market, in the memorabilia market, what things are doing well, what things are not doing well. As great as Steph Curry is with his career potentially starting to wind down, I would bet that there’s a little bit less interest right now in some of his stuff, which might mean some of those cards might not pay or be sold at the same premium that they might have been sold at two or three years ago. So, things like that happen. But I think the more all or the essence of what we’re talking about is the sports memorabilia market, in my personal humble opinion, has officially hit a phase of being considered an actual investment class category much like historically artwork and coins have been.

And to your point, I don’t think that’s been historically the case from a wide audience perception that this is actually an investment category for a small group of niche people that want to geek out on it, like us. We’ve probably looked at it that way but this is more mainstream right now. And people are recognizing it, even people that have not been collecting for a long period of time are getting interested in this because of the tangibility but also because of the potential gains.

Brad Johnson: Well, and there’s a democratization of information now. Like now, what’s different than when I was a kid with the Ken Griffey Jr, you actually know how many of those cards exist because their population counts because of PSA. So, now it’s investable because you actually have just like a public IPO, you have the information to say, “What is this thing worth?” And the auction houses, you can aggregate these. Like, I’m looking back at the Beckett sports card thing from the 80s, I’m like half of those I’m sure were just made up. I mean, what do they do? Go to five local card shows and just survey them? And the other thing that I think about is the globalization going on with sports. NFL, you’ve seen the expansion into Europe, into Mexico, basketball. It’s huge in Asia now. So, I think the fan base and the collector base is expanding globally too, which is obviously going to create more demand.

Tom Ruggie: Well, and it’s my understanding and I’m going based on what I’ve read, not from any factual knowledge that I personally have but it’s my understanding that China is buying up a lot of sports collectibles, memorabilia strictly as investments.

Brad Johnson: Yeah. I’ve got some friends. There are some big. We talked about the National, which is the largest kind of sports card and memorabilia that’s coming up in July, but the Dallas Card Show, and then there’s one in Burbank. And I’ve heard from many that have gone to Burbank, there’s a huge Asian representation there because obviously it’s easiest to just pop over to California and there are some very big international collectors. Well, cool. So, two questions if you’re cool. I don’t want to run you right into the next thing. So, two final questions. That work for you, Tom?

Tom Ruggie: Of course.

Brad Johnson: Okay. We’re going to hand out this collectible scorecard but you said one thing that you think about an investment and then you think like for stocks, bonds. It’s where is it custodied? How do we make sure it’s actually there? With a tangible, real-world asset, now you got to think about like insurance or if a house would burn down. What’s the lens that you look through when you have substantial collectibles that have real value? How you start to look through the lens of insurance or how you store them and how you preserve them?

Tom Ruggie: Yeah. And that actually is what the Scorecard was built upon is what are the ten things that you should be looking at if you either have or have a desire to have a large collectible asset, and again, doesn’t have to be sports cards but there’s the acquisition phase. Insurance is a big phase. Again, my Ali trunks is a great example. I mean, I’m going to have to go back to my insurer and say, “Hey, we need to use this as some form of a comp and readjust my insurance on that.” The storage, how are things properly stored, again, depending on the collectible itself. You know, wine obviously is different than anything else but storage is something that has to be looked at. The big thing that I look at is there’s estate planning and also what I call succession planning.

So, estate planning is really looking at things from a vision of are there any tax ramifications to what you have. While succession planning is still considered to be part of estate planning but again, that’s what’s near and dear to me, which is what do I want to have happen with my collection. And there’s two components to this on my Scorecard. One is, in a perfect world, do I want to hold my collection until I pass away? And if that’s the case, do I have things in place so that my family and my heirs know how to execute on the ultimate disbursement or sale of that collection? And then the second one is, do I want to start unwinding my collection while I’m still alive? And if I don’t die early or unexpectedly, then what does that look like?

So, as a great example, Cal Ripken Jr. just sold a lot of his personal memorabilia that he had collected throughout his entire career. And when asked why he was doing it, he said he wanted people to have the ability to enjoy some of these one-of-a-kind artifacts that he has but, secondly, the proceeds were going into the foundation that was set up for his father and they’ve got charitable things they want to do. So, they’re using that to seed money into that. So, I think it’s important to look at what your succession plan is, what impact does it have on your estate planning. And then two other areas that I touch on in the Scorecard is, number one, the valuation tracking because you can insure things but if you don’t have proper valuation or have a methodology of trying to maintain an ongoing valuation, you could be significantly undervaluing your portfolio.

And the second, which certainly on the one-of-a-kind type items, the fight-worn trunks, the game-used bats or jerseys, but is the provenance. Provenance is key. You have to have some sort of provenance showing what this is from because who’s to say that the trunks that I have hung up are the trunks that Ali wore when he fought George Foreman. Well, I have provenance from his cornerman. I have photo certification of a matching of those trunks versus the ones that I have. I have documentation from two of the leading boxing experts. But if I didn’t have that or if I lost, that provenance is literally probably worth more than the trunks themselves. Because if I lose the provenance, the trunks aren’t worth anything. And provenance is key.

Brad Johnson: Well, thanks for running through that. I know a lot of advisors are going to benefit from this because they have a client come in like a lot of people are just like, “I have no clue.” And so, thanks for making that Scorecard available. It’ll be a download on the episode page. And this has been fun. So, thanks so much.

Tom Ruggie: And for me too.

Brad Johnson: And last question on my side, Tom, is we talked a lot about even before we hit record and how you’ve built your business is really, it’s an example of this. It’s both doing business and doing life and the integration of that. So, I would love to hear Tom Ruggie’s definition of what does do business do life mean to you.

Tom Ruggie: Well, it’s what I try to live every single day of my life, which is spending the time that I have. And we all have limited time, whether it’s limited time on this earth or limited time with your family and kids but spending the life doing what you’re passionate about and what motivates you and drives you to get up every morning. And I made the comment that I hope to be working in 20 or 30-plus years. And again, I say plus because I have no desire to not have something that drives me every single morning when I wake up to go and do what I do. And I’m just very fortunate and blessed to have gotten into the industry and the career that I’ve gotten into that I love so much and is such a driving factor for me. And lucky, and there’s different definitions of luck. Hard work and a lot goes into being lucky but I’ve been lucky enough to get to a point in my career that I can also do what I love doing, but more importantly, do what I love doing with people that I love doing it with, and also people that I share commonality and passions with. And to me, that’s the greatest of all worlds in business.

Brad Johnson: Love it, Tom. Well, if you roll through Kansas City area, hit me up. We’ll go grab some dinner, talk cards, maybe pull out a few of the collection, and talk about them. And if I’m down in Florida, I might just swing by and check out the collection. So, thanks and we look forward to eventually when our paths cross in person because I know they will eventually.

Tom Ruggie: Absolutely. Yeah. And please do look me up. We’d love to connect.

Brad Johnson: All right, my man. Until next time.

Tom Ruggie: All right.

Brad Johnson: We’ll see you.

Tom Ruggie: Thank you.

Disclosure

These conversations are intended to provide financial advisors with ideas, strategies concepts and tools that could be incorporated into the advisory practice, advisors are responsible for ensuring implementation of anything discussed is in accordance with any and all regulatory and compliance responsibilities and obligations.

Brad Johnson is not a client of Thomas Ruggie.

Copyright Triad Partners, LLC 2024.

TP05243458889

FREE SWAG

Get yourself some DBDL Swag by clicking below

Become a dbdl insider

Get your copy of and access the rest of the DBDL Library

Claim your private coaching session

Apply today to schedule a coaching session with brad

Sports Collectibles Scorecard

Tom's sports collectibles scorecard outlines 10 major factors that impact the value of a collectibles portfolio.