14 Mar Follow Your Heart, Beat the Market With Your Passion Investment! Wine, Ferrari, Yachts, Oh My!
What is life without passion…. A pretty sad life. Passion drives us as human beings and this is one of the many reasons why people are following their hearts when it comes to investing and building wealth for themselves and their families.
Looking beyond the sheep, there is a lot more investment opportunities out in the world than real estate and stock markets. The number of super-rich individuals is slated to explode over the next decade, driven by a huge increase in wealth in Asia.
The annual Knight Frank Wealth Report forecasts the number of people with assets worth $30 million or more will grow by 43% over the next 10 years, far outstripping general population growth over the same period.
The report, based in part on research by New World Wealth, predicts that Asia’s ultra-rich population will nearly double by 2026 to more than 88,000. China and India will see increases of 140% and 150%, respectively.
As the number of super-wealthy people increases, the value of passion investments will become more of a driving force in the intentional investing market place.
Passion investments technically fall under the alternative investments category, but passion investments are the only real investment that will get your blood pumping.
If you don’t, believe me, I will give you a challenge. Looks at your stock or funds portfolio on a really good day I mean pick a day with a crazy jump in the market. Then get your ass our form in front of your monitor and go rent a car, a real passionate car. An Aston Martin, Ferrari or Porsche. Get in that car and drive all day drive fast down a mountain road. Drive fast feel your palms sweat and your heart pound and you find the apex of the turn at high speed. Feel life as you drive and your thoughts drift away.
Drive slow through your suburban neighborhood and see all the moms give you that look. Return the car and go home and sit back in front of that monitor…. Tell me what made you feel more alive? Just imagine investing and making big money from this passion of yours.
“There is no passion to be found playing small–in settling for a life that is less than the one you are capable of living.” -Nelson Mandela
Passion investments, what are they and how do they work?
Traditional financial investing is all about corporate growth, and economic productivity. This utilitarian approach assigns the value to your investment purely on the basis of what kind of economic output it can produce, rather than on the cultural or aesthetic value.
Passion investment works in a completely different way. Luxury purchases like rare jewelry, art, fine French wine, and cars don’t work the way your investment in the business would do. Passion investment value is defined by their rarity, quality, and what they represent culturally to the communities who appreciate them. As this value is increasingly recognized by communities of passionate investors and enthusiasts, and as global wealth grows, more people pursue these luxury purchases. This, in turn, raises the demand and the value of those items more.
A brief overview of passion investing.
To get a better idea of how passion investing works you have to take a macro look at passion investing from sales collectibles and luxury goods. Knight Frank has built an index to track luxury goods compared to more traditional markets.
The Knight Frank Luxury Investment Index (KFLII) uses a variety of other indexes to track a selected overview of collectible luxury goods, including luxury cars, art, jewelry, wine and other popular passion investments in order to create that broad overview.
In 2017, the value of the KFLII rose by 7%, showing that luxury investment is growing worldwide, despite a 5% drop in the value of the Financial Times Stock Exchange (FTSE 100) equities index, and an anemic 1% growth for the top end of London’s residential real estate market.
Passion investment as an alternative investment are diverse.
The first example people jump to when we talk about high-value passion investments is art and the passionate collectors who spend years hunting down unique pieces from their favorite artists such as; Pablo Picasso, Leonardo da Vinci, and Vincent van Gogh.
Art defiantly is one kind of asset that passion investors pursue, investors actually collect all kinds of high-value luxury items, from gems to wine, to musical instruments, to coins, to cars. The “best” choice is the one you’re most knowledgeable about and most comfortable with; it’s about expressing yourself through your investments. A passion has no value to an investor if that investor is not passionate about it!
Also, it’s important to consider that different cultural and geographical factors influence the types of luxury investments that are popular in different regions of the world. A sample of the most popular passion investment include:
Luxury cars growth as passion investment.
The most popular and fastest growing passion investment today is luxury collector cars. Not only have they worked as symbols of independence and power for a century, but they’re also an accessible genre to investors from all over the world, which makes them extremely promising for the future.
Rolls Royce, Lamborghini, and Bentley are rolling out more off-road models to accommodate tougher roads in emerging countries and entertainment goals of younger millennial investors. This is designed to feed the appetite of major luxury car aficionados in countries in the Pacific region and in Africa, where high-end automobiles are far more popular than the global average. Only Europe has a higher rate of luxury car investment.
Yachts move into the investment stage.
Yachts offer the ultimate private sanctuary for people with plenty of money and not enough time. They’re a great lifestyle investment and are a great choice for adventurous people who want to be able to make active use of their assets. Yachts are gaining investment popularity due to their uniqueness to bring a big quality of life improvement.
Globalizing wealth is having an enormous effect on yacht ownership, and the Super-Yacht Sector (boats over 24 meters) reported over 40% growth in sales from 2014 to 2015. They’re especially popular in the Pacific region, where there’s plenty of beautiful coastline and open blue seas to explore. Less nautically inclined Asia, by comparison, has the lowest rates of yacht ownership in the world.
Jewelry a timeless investment option.
Jewelry is the classic choice for passion investors. More than nearly any other type of investment, gems and precious metals make an excellent hedge against economic volatility. Example of most popular makers to invest in are, Tiffany, Cartier, and Mikimoto, to name a few.
Given recent political turmoil and economic events, assets that retain all of their value for an indefinite period are an excellent insurance policy against unexpected inflation and currency devaluations. Jewelry is this powerful investment option!
Private Jets a status symbol and a passion investment.
A private jet, much like a yacht, isn’t just about holding or growing wealth, it’s an asset that you can put to work. Besides being a clear status symbol, private jets offer easy and convenient travel with a level of comfort and privacy that isn’t available any other way.
Investors in Africa and Latin America, in general, own private jets at a far higher rate than the global average. This is a result of a number of factors, most significantly a combination of poor commercial travel infrastructure and the vast geographical distance between business and travel hubs on those continents.
Wine is a popular passion investment all over the world. Not only is wine relatively accessible to investors of more moderate means, but wine culture also introduces a social aspect to the investment that many people find rewarding and engaging.
Vinito Wine Funds has revolutionized the wine investment landscape. Vinito Wine Funds average over 29% return a year and growing!
Since inception, Vinito Wines Funds team has been obsessed with searching for the most promising fines wines to build revolutionary investment vehicles for public and institutional investors. Raising wine funds of this size is a testament to the growing confidence in the alternative crowd investing market – which they have pioneered from the start – and their unique strategy of partnering with extraordinary partners to help them build successful global wine portfolio funds.
Vinito Wine investment funds are designed to preserve and grow our clients capital, provide financial security for retirees, sovereign wealth funds, and other institutional and individual investors, and contribute to overall international economic growth. Vinito Wines is the world’s leading crowd investing platforms for wine funds as an alternative investment. We seek to create positive economic impact and long-term value for our investors. We build and manage premium wine funds to help our clients reach their financial goals.
“The secret to investing is to figure out the value of something – and then pay a lot less.” Joel Greenblatt
Luxury spending is growing exponentially!
As emerging markets all over the globe grow and bolster the global economy, more wealthy investors are joining the ranks of passion investors, effectively growing the demand for a relatively finite supply of luxury items. It’s really simple supply and demand, Apple will always make as many iPhones as they can, however, there is only a small number of 1986 Rothschild wine available.
What about the economies impact on passion investments?
The global economy in the past 10 years hasn’t been particularly stable with the American housing crisis in 2008, the sudden slowdown in China, and the economic crisis in the EU. Because of this, it might come as a surprise to less experienced passion investors that the luxury investment market has been positively booming during this entire period. Despite ongoing issues in established and emerging markets, wealthy collectors are continuing to thrive.
Contrary to what many might expect, this is not a fluke. These types of investments typically do very well during times of economic uncertainty. This is because tangible and durable investments like jewelry, coins, cars, wines, and paintings will appreciate in value as they get older, or at the very least retain their value without depreciating. Ultra high net worth individuals (UNHWIs) in Europe are much more likely to currently own a collectible than their counterparts in Asia and Latin America and the United States. Rising demand in those emerging countries as the UNHWIs there work to stabilize their wealth is a large part of what’s driving the growth of passion investments globally.
The European UHNWI have always known the power and importance of their wealth and status. Now the rest of the world is fighting to catch up and find available investments.
There has never been a better time to be involved with passion investing!
Many factors help growth continue of passion investments, bids on these types of items break records year after year. As these luxury investments get older, their history and relevance in their respective collector community grows. Additionally, the growing number of passion investors with an interest in these items is increasing rapidly, and not just because of growing global wealth.
Beyond simple economics, globalization is driving a global cultural homogenization that makes these traditionally western pursuits more accessible and more relevant to potential investors all over the world. Of course, yachts are unlikely to become very popular in landlocked countries, and private jets will always be most popular in places where they are most practical.
Other goods, however, like luxury cars, wine, precious gems, and other collectibles aren’t strongly restricted geographically, and are likely to continue rise in popularity all over the world. While this process is still ongoing, we can expect the prices on the world’s most valuable collectibles to continue to rise rapidly.
Vinito Wine Funds only focus at the moment is building the most diverse and profitable wine portfolios for our passion investors. We do have an extensive network so if you’re interested in other passion investments we are more than happy to help you find the right people to talk with.