Pokemon Cards vs Bitcoin, Gold and the ASX

Jason · 00:00Welcome to The Numbers Game podcast. I'm Jason. I'm here with Nick. And today, Nico, I've got a bit of a fun one for you.

Nick · 00:06Oh, I like fun.

Jason · 00:07Yeah, I just thought, you know, we'd break it up a little bit. We've been a bit heavy on, you know, government and super funds and taxes and all the rest of it. And not that I'll, you know, I'll always bring an accountant lens and then a financial planning lens into it and we'll have a bit of fun with it. But I want to ask you a question and I want to tell you a story as to why this is come under my radar.

Jason · 00:27But Nick, did you collect Pokémon cards as a young man?

Nick · 00:32No.

Jason · 00:32No.

Nick · 00:33I was actually too old. I'm actually too old.

Jason · 00:36Oh.

Nick · 00:36Yeah. Poké... Pokémon was...

Jason · 00:40You did call me 40 last episode, so maybe this is my way of just bringing that back up. No, no.

Nick · 00:46My younger brother did, was into Pokémon, but there was a fair gap. Yep.

Jason · 00:52So was it around when you were a kid or did you miss it too? I think I did. Yeah, I'm probably throwing myself.

Nick · 00:58I was WWF.

Jason · 00:59What's that?

Nick · 01:00Wrestling. I was Hulk Hogan era.

Jason · 01:03Yeah, yeah. No, that's Greggy. Greggy was hardcore into the wrestling. I think he still is. So he hasn't, he hasn't moved. I'm not going to say he hasn't grown up. He hasn't moved on from that. God bless him.

Nick · 01:11Love you, Greggy.

Jason · 01:13I was love you, Greggy. You'll love your Hulk Hogan.

Nick · 01:15But I'm just, I'm just saying my vintage. Yeah, that's old.

Jason · 01:18No, no, I get it. I mean, what did we have? We had Tarzos.

Nick · 01:23Um, yeah, I don't know, like that was after, but marbles, Tarzos, collectibles.

Jason · 01:26I don't know, Pokémon, I don't feel like it was as prevalent or around, but maybe I just wasn't into it so I didn't see it or feel it.

Nick · 01:34But my first console was a Sega Mega Drive.

Jason · 01:36I had the square—

Nick · 01:37No, it was a Master System.

Jason · 01:38Oh yeah, I don't know. Okay, a couple of years. How old were you?

Nick · 01:42It was old, but I had an Atari for not long.

Jason · 01:44Okay.

Nick · 01:44And then I had a Sega Master System. Tommy might remember that. Sonic the Hedgehog.

Jason · 01:47The square brick Nintendo was my—

Nick · 01:50Had that. Was that the Nintendo That was the Nintendo Nintendo.

Jason · 01:53Yeah, yeah.

Nick · 01:54Then they went to the 64. Yeah, I had an interesting story.

Jason · 01:58Trip down memory lane. GoldenEye. How good was GoldenEye on the 64?

Nick · 02:01Yeah, I was NBA Jam. And we're going off topic here, but my nostalgia— my parents split up and my mum and my step— my mum and my stepdad. Mum had me, my stepdad had someone, um, my stepbrother was a couple years younger. Yep. He was a Nintendo man and I was a Sega Man.

Nick · 02:18So, we basically had both of everything the whole way through. So good. Happy days.

Jason · 02:24Love it.

Nick · 02:25Well, anyway.

Jason · 02:26The reason for bringing up Pokémon and this trip down memory lane, and I do enjoy this, it's good to change it up. Case and I went to some friend's house a couple of weeks ago and we hadn't been there. You know, we catch up, you know, probably quarterly. Great friends, you know, the ones you can catch up once a quarter and, you know, life's good.

Jason · 02:42Or for birthdays, Christmas.. And we went around there last year and, you know, all good, no worries. Went back around recently, their entire living room, the dining room table, the whole joint is just Pokémon cards.

Jason · 02:58I won't say the suburb or the exact address location because I don't want them to, you know, have their place ransacked and gone through, given that the value of these Pokémon cards is apparently quite substantial at the moment. But my wife and I, Kasa and I, were shocked. We're like, Guys, like, what is this new hobby you've got?

Nick · 03:15Some kind of fetish or something?

Jason · 03:17Yeah. And they're obsessed and they love it and they send us, you know, Instagram reels and videos of like, you know, all the different things that are happening and the opening of the cards and whatnot. So, my algorithm has gone down a bit of a different path, you know, not so much the financial and budget stuff just at the moment and then running stuff thanks to Greg sending me all these running reels.

Jason · 03:36But now I've also got Pokémon worked into my, you my life. So off the back of that, I thought, why don't we do a little unpack of what would have happened if you'd invested in Pokémon cards versus other asset classes?

Jason · 03:51This is interesting. Yeah. Have you seen much or heard much about it? Any clients talking about it?

Nick · 03:57No. Maybe you mentioned it.

Jason · 03:59Probably me. Yeah. Yeah.

Nick · 04:00But no. Yeah. No.

Jason · 04:02There you go. Well, I'm just, I'm going to give you the numbers, the numbers at a glance at the moment, just so you can kind of understand where we're at. I will take you through— this is where the numbers are quite substantial and weird and kind of hard to get your head around, but a lot of these investors are sitting on multi-million dollar portfolios.

Jason · 04:24And I sit there going, "How did that happen and what's happened there?" And I'll give you some of the examples. So we're talking about— I just picked a number to compare and talked about if you invested $10,000 in January 2000 and you left it for 26 years.

Jason · 04:44And we've gone— I've got a couple of different examples. It's just one is a sealed Pokémon box. So, when it's sealed, it's worth more. I didn't know this stuff, but, you know, apparently if it's a sealed packet, you've got no idea what's in there. There's a bit of a hype around it. There is also first edition Charizard singles.

Jason · 04:59So, Charizard, again, all news to me.

Nick · 05:02Is that a Pokémon?

Jason · 05:03Charizard is a Pokémon. Thank you for asking. So, for those who have joined, then there's what happened if you bought gold gold, and what happened if you bought into the ASX 200 and just left it in a managed fund or an ETF. So do you want to, do you want to hazard a guess as to, of ASX, gold, Charizard, or a sealed box, where would you have been best to place $10,000 in the year 2000?

Nick · 05:27I'm going to take a wild stab at it and say Pokémon cards.

Jason · 05:31Not bad, Nico, that, that is brilliant. The best return for your money that you could have had, had you had a crystal ball back in the 2000, a sealed box, $10,000 worth of sealed Pokémon boxes from the year 2000, 25,000% return.

Jason · 05:50You could sell them today for $2.5 million.

Nick · 05:55So, 2000, was that when they were popular? Like, is that when the show was popular or was that when people started buying cards?

Jason · 06:02The value went up substantially over the time. So, from late '90s, early 2000s, values were really low. So, your $10,000 worth probably would have filled up quite a substantial area with Pokémon, sealed Pokémon boxes. So you would have had a lot. Now it's all about if you can get your hands on an original sealed box.

Jason · 06:19Obviously the anticipation, the excitement, and the idea of maybe then landing a single Charizard card gets you, you know, pretty excited.

Nick · 06:29But wouldn't it be a stupid move to open the box? Because they're worth the most.

Jason · 06:35You got to keep it sealed to keep the investment going up.

Nick · 06:39Who's the idiot that opens it and devalues their asset?

Jason · 06:40Logan Paul. So there's a story somewhere buried in here, but he had either a Pikachu or a Charizard that was worth millions and he wore it on a chain before he entered one of his boxing fights, you know, just to be like, look how much I can kind of flash around.

Jason · 06:56The other numbers in that example, Nico, the Charizard $10,000 would be close to up to a 10,000% return. So you'd have $1 million. The other Charizard singles ungraded or raw, like opened, $10,000 worth could be worth $200,000.

Jason · 07:14And then gold, if you bought $10,000 worth, you'd have $128,000 in gold. And then ASX 200, $10,000 would be $128,000.

Nick · 07:24Have you quizzed your friends on— I assume they've got these things insured.

Jason · 07:28That is a great question. Add that to the list of questions because the other thing that I wanted to talk to them about is had they planned for if they were going to pay tax on their collectibles. So the ATO, I'll get into that a little bit. I'm gonna go read you one more list of numbers, then we'll unpack some of the tax side of the collectibles of what happens when you, you know, it's like buying anything that you buy to collect and then grow in value and then sell later.

Jason · 07:51There's certain limits on what you can have before taxes kick in. Those numbers of the year 2000 to the year 2020 were quite dramatic. Obviously it's, oh sorry, 2025. 2026, it's, you know, it's a long time and there's been some fluctuations.

Jason · 08:10So I wanted to take it back to where the last kind of hype happened and people started to get back into it again was around COVID. Yeah. In COVID, they released the Pokémon game where you can go around with your phone and catch the Pokémon in like a—

Nick · 08:24I remember that.

Jason · 08:25That, that, you know, virtual reality type of world. And it kicked off a bit of the reinvigoration of Pokémon again. So did the numbers again and added a few more things that had become fringe investment types over that time, including rare whiskey and Bitcoin.

Jason · 08:43So as of 2000, rare whiskey and Bitcoin was more on the radar as opposed to the year 2000. Um, so I don't know if you're going to try it again, but if you invested $10,000 in January 2020 I should have done April 2020 after the stock market had come back.

Jason · 09:02But anyway, if you'd invested in January 2020, $10,000, and your options, Nick, for the best and biggest return are Bitcoin, vintage Pokémon Gold, rare whiskey, ASX 200, modern Pokémon, the new prints, or your Land Rover Defender if you'd bought a brand new one in the year 2000.

Nick · 09:23I'll go with Bitcoin.

Jason · 09:25Pretty good at that one, Nick. It's not bad by you. That's 2 from 2. Bitcoin was an 800% return over that time. If you'd bought $10,000 worth in January 2020, you'd have $90,000 in mid-2026. And that's including a bit of a retraction at the moment too.

Nick · 09:43So, see— So, Jase, as an accountant.

Jason · 09:44Yes, mate.

Nick · 09:45Could you buy a Pokémon card inside your super fund?

Jason · 09:48I was actually going to ask you that. I believe, I would think yes, as long as it's not, you know, a personal use asset. You can't look at it, touch it, feel it. You've got to ship it off and have it kind of stored and held somewhere. But yeah, I mean, look, if you got your hands on a Charizard and could buy it in your super fund with an idea that it's going to go up—

Nick · 10:05As soon as I got it.

Jason · 10:05Yeah. You know, if it's going to go up 300%, 400% over the time. The thing with this Pokémon stuff, and you know, Case and I will sit there and talk about our mates and be like, like, you know, are they crazy? Are we crazy? They're messaging us being like, buy Pokémon. Like, so they just had a release recently where people were lined up outside Big Ws and Kmarts, like overnight.

Jason · 10:27People camped overnight and it It was chaos. People are fighting each other. Like, if you come across these, I'll start to send you a couple of clips so that your algorithm is as ruined as mine. But people are going nuts, like beating the shit out of each other to try and get a box of these Pokémon cards.

Nick · 10:42So, what's a box worth?

Jason · 10:44Well, the new printed ones, you know, it could be $100, $10. Like, so, for a little packet, I think you can get them for $7, $10. But it's the chance that as you rip one of those open, you might get a card worth $200 or $500 of the new editions.

Nick · 10:59Who controls the supply? That's the issue, right?

Jason · 11:02Great question. So I did have a little bit of a summary here. You printed my notes so big that I—

Nick · 11:09Well, you're in your 40s, mate, so that's it.

Jason · 11:11Yeah, apparently. The layers of the story here where the returns are looking a little bit, not skewed or scary, or where the market ebbs and flows, Pokémon, the Pokémon Company printed 9.7 billion Pokémon cards in the '23-'24 year, which made up 18% of all cards ever made in the Pokémon series from day one.

Jason · 11:36Okay. So, the things that I talk about, you know, when I'm going, "Oh, how does this work? Is it, you know, is the value going to start to shift or change?" I guess where the Pokémon collectors are going, "No." Like, it's the originals. If you've got the originals and you can get of that 9.7 billion, if you can get a hold of one of the ones that only had a limited run or a limited print because it's rare and it's special, those of the 9.7 billion, there are still cards in the collection that are valuable and sought after because there's limited.

Jason · 12:05The problem was, I think the numbers for the following year, they printed even more billion. It was like 14 billion. And then last year again, they printed like 20 billion. So if you look at the, the sheer volume of new print Pokémon cards, because of the craze and the hype and the supply demand, or, you know, where there's demand, they're creating supply to— for the Pokémon Company is not silly.

Jason · 12:29It is then going, uh, you know, is the market flooded with this new print versus the vintage? Um, again, I'm not an expert in it. I share this story to go, you know, should you invest in gold? What happens if you buy Pokémon? Um, or I mean a rare whiskey.

Jason · 12:45I mean, that was of those numbers. So Bitcoin was the most gain at 800%, vintage Pokémon 300 to 400% gain, gold was at 220% up between 2000 and 2026. Rare whiskey was the next one.

Jason · 13:00Rare whiskey performed better than the ASX 200 And then your Land Rover was the worst performing investment on that list.

Nick · 13:09Did you put your EV on there? So, hang on. So, what was the Pokémon return since 20—?

Jason · 13:17Yep. So, Pokémon for vintage, if you bought $10,000 worth of vintage Pokémon in 2020, you would have turned $10,000 into about $50,000. Yeah. Depending on what cards you land, of course. Yeah. The modern Pokémon, this is, this is where, this is where I start to go, is it all, it's, is all the hype what it's cracked up to be?

Jason · 13:39In 2020, as the hype was ramping up of these new prints, if you bought $10,000 worth, in mid-2026 you can get about $3,000 worth for your modern Pokémon. Yeah. So you've lost value potentially.

Nick · 13:52That's, and it's that exact word, hype, you know, and That's why I would never do it because there's not underlying fundamentals there. So if you were to compare the gradual or incremental increase of the other assets you mentioned, it would be fairly incremental.

Nick · 14:11Surely there'll be periods of time where they grow more than others and sometimes they'll go backwards. But if you average it out, it'll be a pretty consistent looking line graph. Yep. Versus Pokémon, which will be driven by hype. There's a lot of— And hype can disappear very quickly. Yeah.

Nick · 14:26And there was a lot of hype around a lot of things around 2020, 2021 because people had cash flow because of COVID The speculative stock market was the same and pumped during that period because people started punting, like, because they had money that, you know, they could pull money out of their super and all those things.

Jason · 14:46And that's exactly why that $10,000 worth of those newer Pokémon are now worth $3,000. Because in 2020, people are sitting at home, they're getting JobKeeper, JobSeeker, not travelling for work, maybe still getting their full salary, but bored. Things are popping up online. There's hype. I know like the record, vinyl records were going off at that time too.

Jason · 15:06Cars. Cars.

Nick · 15:07Collectible cars.

Jason · 15:08You couldn't get certain cars, even just getting a car full stop. People were paying a premium. So, on some of the other numbers that were quite interesting and, you know, kind of won't go too into it. I did mention Logan Paul, that Pokémon card.

Jason · 15:23He ended up selling it for $16.5 million. And then there was also an $80 booster box from 1999 recorded to be sold for half a million. So, you know, if you're at the right place, right time and held on to some of these things.

Jason · 15:40But also, like, if I'm— in 1999, I was what, 12 years old? Mate, if my parents bought me a box of Pokémon and I was into it, I ain't keeping it sealed. I don't have the foresight to think, you know. So I would just— I do wonder who these people were that managed to keep sealed boxes from 1999 and So did you cover off on the tax?

Jason · 16:02No, mate. So on the tax side of these collectibles, if you buy Pokémon cards, I'd love to take you through the outcome of what happens. And this is the bit no one's talking about, especially for my mates that are collecting their Pokémon. Not a single time that I was there, and they know I'm an accountant, no tax was mentioned at all.

Jason · 16:20It was very much, we're just going to build our wealth. And on top of that, they're taking it seriously. They're tracking their wealth on an app that is specific to Pokémon and these collectibles. And it shows there is the, the movement in value and what the most recent sale was through the app.

Jason · 16:36Um, but if you— let's say you did buy a Pokémon card 20 years ago, some of these numbers, and you've sold it and made half a million dollars profit. So at tax time, the ATO will treat this Pokémon card like a collectible, and collectibles are subject to our good friend capital gains tax, or the thing that we've talked about a fair bit lately.

Jason · 16:57Now This is a little catch, though. It's only if you acquired the original item for more than $500 for that one singular item. Yeah. So if it was less than $500, let's say, Nick, you bought it for $50 in 2002. You held on to it.

Jason · 17:14It's a personal use asset, sits over there for $50, and you got lucky and you were able to sell it for $200,000. Do you know how much tax you pay? Nothing. Correct. You keep the lot.

Nick · 17:27Yeah. So then you can't— they don't consider the fact if you've got 100 of those under $500.

Jason · 17:35Collectibles, personal use collectibles. So it's all about value at individual item. But this is where I then go, you know, if you're the ATO and this is ramping up, how do you really police it and target it? But this is also then if you're the ATO, and this is one of the statements that I'll often talk to clients about, is that the ATO almost has this— if they audit you and come after you and they don't get the right information, records, or answers from you, they can make a judgment or an assessment.

Jason · 18:04And if they say you have to pay tax on that $500,000 that hit your bank account, and they audit you and say that's the outcome, you're essentially guilty until you can prove yourself innocent. So it's now up to you to have the records on hand to show I can definitely, definitively say I bought this card for $50.

Jason · 18:25Here is my transaction and record because I noted it down in 2002, and now I sold that personal card for $200,000, and that is my money and I'm not paying capital gains tax. So it is very important, and I'll share that message for anyone who is going down this collectible flight path: keep records.

Jason · 18:42You think right now that it might not be a big deal and that you're not going to pay capital gains tax on it because most of the ones you're buying, you know, you're doing it in bulk and you can prove that it's worth less than $500 a card. But like anything with our government and some government changes, maybe the numbers change, maybe it's applied retrospectively.

Jason · 19:00So the best thing you can do is keep great records, record all the value of what you paid. But keep in mind right now, because the values are escalated and gone up, if you do get your hands on something that was over $500 for a particular set, sealed box or a particular limited edition, I know, Pikachu or whatever they're called, record the value you paid because one day when you sell it, CGT and the ATO might be coming after you.

Jason · 19:25Um, the other one, the other catch, if you bought it for more than $500, you're in the CGT realm. There's a nasty rule specifically for collectibles though, Nick, and it is if you make a capital loss on that collectible, you can only offset that capital loss against capital gains from the same class of collectibles.

Jason · 19:46So it's not like capital gains in general. If I sold shares in a portfolio and I made a loss, and then I sell a property and I make a capital gain on a property, yeah, I can offset my CGT losses from shares against a gain on real estate. With these particular class of assets, if you were one of those unfortunate people that bought $10,000 worth of Pokémon in 2020 and now you've got to sell them for $3,000, you want to book that $7,000 capital loss so that you can recoup that

Jason · 20:16later. You're only recouping that later if you're selling a sweet Pikachu or Charizard from the same example of the collectibles. If you then sell shares or something else, too bad. That capital loss on the collectible cannot be used against any other class.

Jason · 20:31So that's, you know, there's— and this is why, you know, they talk about, you know, the real winners most of the time in when the when there's budgets and tax changes and everything else, the real winners they talk about is accountants. Because the tax law is complex, keeping records is complex, and you don't want to be caught in the ATO eye by not keeping records and doing this properly.

Jason · 20:52And given the scale and the volume of these numbers of what some people are selling cards for, yeah, my final message there, as much as this was a bit of fun, it is about record keeping, dot i's and cross t's. Because if this does continue to be something that— if you're a Pokémon collector and you're having a wild time and a great great time doing it.

Jason · 21:10Love you to share in the comments on YouTube or wherever you find us and tell us your story. But also, have you kept records? I'd love to know if people are aware and across that, or if they think that this is just a hobby that isn't going to be a taxable item one day for them. Other question for you, Nick, is, or do you know, if I had a Charizard and it was worth $400,000, would a bank lend me money?

Nick · 21:33No. Well, not that I know. Yeah. There's really only in recent times been lenders come out that are willing to lend against Bitcoin. Or crypto. You know, so you can leverage crypto for a house deposit. That's probably been around for a couple of years now.

Nick · 21:49But I would suggest, apart from Cash Converters, no one would lend you money against the Pokémon card. But also, I have no idea, so I could be completely wrong. No, fair enough. Interestingly, the only thing I would say to your friends and anyone else that is investing in Pokémon cards is just, you know, don't assume that it's going to continue to be a good ride.

Nick · 22:15So like any speculative investment, I'm going to say it's speculative. Yep. Sometimes you just need to take your wins and spread your risk. So, you know, if you're heavily invested in Pokémon, which is, you know, could probably go downhill pretty quickly.

Nick · 22:33There's nothing wrong with realising a win and, you know, not saying to put that into any particular other asset, but just spread it into other asset classes.

Jason · 22:43Yeah.

Nick · 22:43So you're not so exposed to one. It's probably the only thing I'd say.

Jason · 22:48Yeah, 100%. Look, apart from the vintage Pokémon cards, like the numbers are pretty strong for the vintage Pokémon cards, but with billions and billions of prints of the new modern cards, as you said, yeah, diversify, limit it and understand your accounting side and the tax treatment. I think for most people, they're going to have acquired each individual card for less than $500, so most of them are going to be safe.

Jason · 23:09But for those serious investors that are buying for more than $500 and tracking it in their fancy Pokémon apps, start to— if you're going to take it that serious, then also take the record keeping serious as well, because, uh, you don't want to get caught out later on.

Nick · 23:22Uh, well, Jase, thanks. That was, um, interesting. Not what I would expect you to bring, but it was a great chat. And, um, Um, yeah, Pokémon sounds like a lot of fun, but you, you can't build a retirement plan on a piece of cardboard.

Jason · 23:37Game over. This podcast is for educational and informational purposes only. The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional. Individuals on the podcast may hold positions in the companies discussed.