One thing that I never get bored of doing is looking at alternative ways that I can invest my money. In fact, it was through looking at different ways to invest that lead me to crypto currencies.
There are many, many ways that a person can invest their money. Some great, and many terrible.
Just today, I received an email via my brokerage platform about investing in fine art. My first reaction was to question why this came via my brokerage platform. My second question was “why would I buy fine art as an investment?”
The email essentially said that I could buy some artwork and lease it out to corporates for a reasonable return. Something in the order of 6-9%/a apparently. Naturally the company sending the email would act as the middle man and take a cut of your earnings.
Would this be a good way to invest some spare cash? My immediate reaction is that I would rather buy real estate. Even buying a parking space could generate better returns with a lower amount of risk.
Buying art might be an interesting investment and I might even enjoy owning a nice piece of art work. But I would never get to see it assuming it is continually leased rather than gathering dust in secure storage.
Interestingly, the email advertising this investment “opportunity” claimed that investing in art is low risk. I really don’t agree with this claim:
- there is zero certainty that the art work will be leased;
- if it is leased, over what timeframe would it be leased for? 1 week? 6 months? In other words, the income is likely to be highly unreliable and inconsistent;
- there is no real way to understand whether or not the art work will increase in value over time; and
- your money could be locked up in the art work for many years, and selling the piece could take a very long time.
So no, this isn’t an investment option for me. I’ll stick to what I know for now.
What unique investment options have you encountered?
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I do keep in my portfolio a small invest in art. But art is a long term endeavor, unless you know what you are doing, and find good opportunities at discounted price.
And yes, it has a risk associated with it... I would even say a high risk. An artist that is popular today, might not be at all popular in 3 years from now. Or something that you like, is something that you are the only one who likes that. Or, your famous painter decides on a dramatic change in the future and he gets so much popular with that new think, that no one is interested anymore in his other stuff.
In addition, commission are quite high when you are buying art from actions or from art galleries. And if you buy it from the unregulated market, you might end-up with a nice copy instead of an original piece of art.
But it is the most beautiful way to store your money. Especially if you have a nice house where to display it...
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I must say your argument is valid because one can buy an art piece today, and by tomorrow, the artwork is no longer popular
It is all a matter of risk as with all businesses and investment options that we have
From your comment, I have learned about how to get high commissions from art galleries instead of buying from an unregulated market that is liable to create copies of the original art piece instead
Thank you for this advice
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Well
I am a bit surprised as you are over the advice of investing in artwork
The truth is I have always been curious about how artist make their money, now I think I just got my answer
They do so when their artwork is invested in, and leased out as you were told
Maybe, there are people who will be able to make a fortune out of this investment though
It could be just by chance or lot of calculations, whereby, they may be able to determine which art piece will be readily sorted for in the market
This could be so that they will be able to overcome the negative part of having to wait like you mentioned for the value to grow
I think you should follow your heart and do invest in projects that you are sure of, instead of taking this financial advice
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It seems like the company does spend a lot of time doing due diligence. They seem legit. It just isn’t an investment option for me.
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