“Follow your passion” may be cliché, but what if you could make money off your passions? Known as “passion investments”, certain hobbies have proven to be profitable alternatives to traditional investments; here are a few unconventional ideas to diversify your assets!
Fine Wine
If you have a taste for wine, building your own fine wine collection can be rewarding. “Fine wine matures once bottled, and improves with age,” says David Jones, senior private account manager of Berry Bros & Rudd, a wine and spirit merchant with broking services. “Demand generally rises as the wine matures, and interest in fine wine is growing around the world.” Supply of top wines, on the other hand, can only decrease, since only a limited amount is produced every year. This supply-demand dynamic makes wine a lucrative investment for the mid to long term.
Only specific wines tend to increase in value though, so seek advice from an expert to avoid putting funds into the wrong types. In 2019, according to Jones, while Bordeaux wine remains the backbone of any investment, there’s been a growing interest for Burgundy, the Super Tuscans, and top vintage Champagnes such as Dom Pérignon, Krug and Bollinger. As with any investment, however, prices can go up and down; but with wine you can at least enjoy it even if it doesn’t perform financially as well as expected.
Designer Bags
Have a passion for fashion? Getting yourself a designer handbag can be more than a guilty pleasure, provided that it can hold or even increase its resale value over time. Rarity, quality and popularity are what determine whether an item possesses good investment value, according to Winsy Tsang, a specialist of Handbags & Accessories at Christie’s Asia Pacific.
Fashionistas will be familiar with the iconic Hermès Birkin bags, which are difficult to acquire and outrageously expensive, but what other options are there if you want to get your hands on a valuable designer bag? “Crossover collaborations between artists and luxury brands have become sensational in Hong Kong, London and New York. We believe this is the trend to be going on in 2019,” advises Tsang. “But tastes and trends in the market may shift, so buy what you like rather than purely for monetary returns.”
Fine Art
Appreciating art can be uplifting, but art itself also has the potential to “appreciate” in value! Historically fine art has been one of the best performing asset classes, and in Hong Kong, the art collecting culture has also been booming, with HK$36 million art sales recorded at the Affordable Art Fair this year. “Art investment is a good hedge against the stock market. It is low risk as the painting will almost always carry a fair value,” explains Jeremy Kasler, CEO of Hong Kong-based Art Futures Group, which specialises in Chinese contemporary art investment.
The key to making profits with art is to identify investable artists – works by famous artists are certainly valuable, but returns may not be as impressive as those by emerging talents. “We are tipping Wang Zao Bo as the artist to watch this year for Chinese contemporary art. He has huge potential and is definably under-priced,” says Kasler, who also predicts photography to be a market with potential to boom. For first-time art investors, he has one final tip: “Where possible try and buy pieces you like. Although your main reason for buying might be profit, we should not forget that art is intended primarily to be enjoyed.”
Want to turn your passion into a business? See how these two entrepreneurs did it,
here.
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