How can you increase your personal finance by investing in wine?

Wine investment is different to many hobbies; most do not result in an increase in your financial well-being. Wine is often seen as something which is bought to be enjoyed. Certainly it is possible to sell a few bottles here and there but a cellar full of normal quality wine will not reap any significant financial rewards. However, if you purchase investment quality wines, of which there are only approximately 75 varieties, then there can be a significant financial gain.

Know your wine

Approximately 80% of the fine wine market is made up by the Bordeaux’s. These wines have been trading strongly for many years with a steady upward trend in their prices. As with any wines there are years which provide better quality wines. 1990 is one such example; a bottle of first growth from that year is now worth 522% what it was worth when first bottled. Invest in the right wine and you could see returns that any stock market trading would be jealous of.

The idea investment

Wine is only ever produced in a limited quantity and there are places with excellent reputations which almost guarantee the quality. A good wine will still be drunk by many people. If you are prepared to hold it and not consume it then after a few years you will be likely to have a rare, quality wine – which will be in demand. It should then be possible to get an excellent return on your investment.

Know the downsides

As with any investment wine is not foolproof. You must be prepared to shop around when making your initial purchase. You may be surprised at how much a bottle of quality wine can vary in price. There are extra costs alongside the purchase of the wine. Merchants often charge a commission for selling your wine and you will need to factor this in when calculating a profit. In addition, wine must be stored properly; this may mean paying to store it somewhere set up for wine storage. It can be an option to store it at home but the temperature and climate needs to be carefully controlled.

Starting as an investor

Investing is risky and the more you know about the product before you start the less likely you will be to make a simple mistake that could cost you thousands.

  • It is essential to build a relationship with a local wine merchant with a good reputation. Ideally, this relationship can be formed whilst tasting a variety of wines and learning about the differences. The merchant may also share his knowledge of the wine industry which may be of use to you.
  • Books and magazines are excellent sources of information for any wine investor. They can be read and re-read and even stored for future reference. It can also be of great benefit to visit some of the best vineyards and learn about the wine whilst tasting their products. It will be very beneficial to plan a visit to France and visit the best vineyards in the world.
  • Remember that wine is a long term investment. It is very rare for wine to quickly go up in value and can sometimes take as long as twenty or thirty years to see a decent return on your investment.
  • Particularly when first starting in wine investment it can be of great benefit to specialise in just one type of wine. Chateau Lafite for example, may be an excellent choice. It doesn’t come cheap, but at least you know for sure that in a few years your initial investment will pay off. This will make it easier for you to learn about the wine and make the best choices for investment.

Wine investment should always be a small part of your total portfolio and when starting out it should be no more than 1% of the whole portfolio. This will ensure you find your feet in this complex market. Once you understand the market more you can increase your portfolio although experts advise to commit no more than 10% of your portfolio to wine investment.  This will allow you to minimize risks. Do things by the book and your chances of increasing your personal finances by investing in fine wine are greatly increased.

How to earn maximum by investing in a property

Whether you want to know more about the potential of investing in property or you’re just curios to find out what the market has to offer, there’s value to learning how to make money with real estate. Don’t let yourself fooled by obnoxious infomercials promising you wealth from obscure investment opportunities and stick to the basics. There’s a wealth of strategies one can use to make a good profit, although this depends on your initial budget. Here are some guidelines on how to invest in property.

Increase in valuation

The increase in general value is the foundation of making a profit with real estate. Provided that you spend money on a property that can appreciate in time, you have the highest chances of making a good profit. It all depends on the type of property you can afford, as the variety is endless.  Have you ever considered investing in raw land? It is one of the most understandable appreciation sources for new land.

Considering that most cities expand, it’s only natural for the land placed outside of the city limits to increase in value and thus become a potential investment for developers. Houses will be built on that land, which means that the value of the raw terrain will never stop from escalating in value. Land appreciation may also arise from the discovery of worthy materials and minerals, but the chances for this to happen are slim.

Residential property

Whenever you think to invest in residential property, location is usually the greatest factor of appreciation that comes to mind. Considering that a residence’s neighborhood evolves (e.g. new schools, more shopping centers, better transit routes), you should expect for the value of that area to increase. Implicitly, the value of that residence will go up as well. This is a trend that can backfire, but if you want to make a profit by investing in property, it is risk you must be willing to take.

Appreciation can also be spurred by home improvement. This is something fully controlled by the property owner. Performing upgrades like putting up a new bathroom, redoing the flooring, fixing the roof, and so on, may also increase the value of your property. A lot of investors use this technique to add more value to their properties; some of them are willing to perform high-end fixes in the hopes of witnessing insane returns.

Inflation plays a major role in appreciation

In the real estate business, inflation is vital to property appreciation. If a type of property was estimated at $100,000 in the 70s, and it remained unloved and undeveloped, it would still have more value today. Due to run off inflation in 1970, that same property we just mentioned would be worth somewhere at $560,000 today, assuming that $100,000 was a fair market price at the time.

Have a budget in mind

If you’re looking for long-term wealth, investing in property can be an excellent idea. However, before jumping in you should know that this is a long-term type of investment. Make sure that you’re able to preserve your mortgage repayments, and only sell the property after it has increased in value significantly. This might take years to happen.

Consult with a property manager

Dealing with a reputable property manager is necessary if you want your investment to pay off. These people are licensed realtors with a lot of experience in the field. Their job is to make sure that everything goes by the book. An agent can help you with ongoing advice, official documents, tenants, and so on. He should also have the capacity to offer guidance on property law, as well as inform you of your right and duties as a landlord.

Investing in a property comes with a lot of benefits. However, you can’t make a profit if you’re not patient. It is important for investors to get informed prior to spending any money on property. The real estate market is still shaking. This means that it comes with risks you don’t want to take. If the US marketplace doesn’t sound appealing to you, you can always buy property in Turkey for example. Whatever you do, don’t do it on your own, and ask for professional advice to be sure that your initial investment pays off.

wine investment

Alternative investments – how safe are they to invest money?

Potentially one of the best ways of making money over a long period of time is via investments.  Investments can be tricky and you should only use money that you can afford to lose. Economic downturns or troubled companies can destroy share prices and see their cash turn to dust. Of course, the rewards can also be great.

Traditional investments have been made in stocks, bonds or cash. The volatile economic climate experienced over the past few years has encouraged many investors to look at alternatives to the traditional three. There are many other places to invest your funds which are safer and still have the potential to deliver decent returns. These alternatives should compliment your existing portfolio and not replace it.

Many of the alternatives to the traditional investment portfolio require larger amounts of capital initially, and may be harder to convert to cash if needed quickly. The following are still well-worth a look:

Wine

Low yields and poor quality can affect the price of even the premier wines. This fluctuation can actually assist the investor. Several low quality years will bring a price down yet the product will eventually return to form and the wine you have invested in will gradually appreciate in value. A reasonable return on wine would be between 6% and 15% annually. One bottle will not be enough to make a significant return. You will need to purchase a large quantity of a type of wine you know will be of interest to a collector in the future. Bordeaux is an excellent choice – have a closer look at Mouton Rothschild – and if you stay on top of the wine market, you will find many more with excellent potential.

Managed Funds

A managed fund is run by one person or company who pools several people’s money. These funds are invested in a variety of different financial instruments. The funds are highly regulated and usually involve the prediction of how a certain product will do over time. In essence, the fund manager agrees to purchase a set amount of shares for a set price at a set time in the future.  At the point in time that the purchase is actually made, you hope the shares are worth more than the purchase price and a profit is made. Alternatively, the shares are worth less and a loss is made. This can be high risk and the market can be hard to predict as it is different to the normal stock market.

Venture Capital

Many companies starting up do not have the funds needed. They also often struggle to obtain these funds through the normal banking channels. A venture capitalist will finance all or part of a start up if they feel the company is worth it. When the company is ready to issue stock, the venture capitalist makes their money back and a profit. Sometimes the start up is purchased by another firm and a profit can be made this way. It is normally impossible to get the funds lent back during the first few years. It is also possible that the company will not do as well as hoped. This makes the initially funding risky and careful analysis is needed before you part with your cash. It’s not easy to make money with venture capital, but everything’s possible if you’re careful enough.

Real estate

Property has always been a fairly safe bet. Prices usually rise over time and the property does not usually fall down.  The economic crisis of 2008 did cause a lack of confidence in this type of investing but there are plenty of investors using this approach again. Property prices are still lower than pre the 2008 crisis and can make this an excellent time to purchase a rental property. The value of the house should rise to create a profit and it is possible to receive monthly rent payments at a higher rate than the monthly outgoings. This is a fairly safe investment technique but it is not possible to access your capital quickly.

In spite of a rather shaky financial time, there are sensible ways of making money with alternative investments. It’s all about making right choices at the right time.