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Put your money where your interests lie

02 Nov 2015

 

 

When choosing what to invest your money in, it doesn’t have to be all stocks and property. There are plenty of other enjoyable things to invest your money in that can prove to be a lot of fun.

A man in Pennsylvania purchased a picture frame for $4 from a market stall. When he got home and opened the frame, out popped a very rare copy of the Declaration of Independence – the ‘Dunlap print’. In 2000, another version of the Dunlap print sold for $8.14 million. 

It just goes to show – a few dollars can turn out to be a fortune.

So when it comes to your money, perhaps you should consider the less conventional things to invest in. Here are a few ideas. 

Play it again, Sam

Remember those records you used to play and your favourite songs that floated through your home as the pin hit the vinyl? Turns out, those could actually be worth something. However, it’s important to understand the industry and which records are worth your time and money. 

Vinyl is valued based on rarity, quality and year of production. According to Lee Hillman, owner of Backbeat Records, originality and condition are key. “Usually it has to be an original pressing, and of course in good condition, including the cover. If it’s a really collectable record and it’s wrecked, then it’s only worth a fraction of the price.”

When it comes to originality, Lee explains you have to be careful of subsequent pressings. 

"Often, there was a pressing made in the following years [after the original]. If it’s not the original pressing, it’s not worth as much,” he says. For example, there are at least 24 different versions of Yesterday and Today by The Beatles and sometimes the differences are exceptionally subtle.

There are always exceptions to the rule though. If a limited edition has been released, this can be just as valuable. 

In fact, a copy of Yesterday and Today sold for more than $38,000 in 1996, just because of the cover.

It’s also important to look at the artist, too. Often, the market will work on trends, and as it turns out, records are sparking the interest of the younger generation.

“A lot of young people are collecting records. They want punk, metal and

more from the seventies, which never used to be collectable. Now it’s going up in value,” Lee says.

Just like most collectables, it’s always nice to collect something you’re going to enjoy listening to. Just remember to keep it in good condition. “Be careful with it when you are playing it. Make sure you don’t put your fingers on the records, give them a clean, and make sure you play them with a good needle,” Lee explains.

Hang it on the wall

Purchasing artwork is an exceptionally personal thing to do. It all boils down to taste, style and enjoyment. But, it doesn’t have to be this way when it comes to investing. It’s just important to understand the markets.

“There are two sides of the market – the primary market and the secondary market,” Ralph Hobbs from Art Equity explains. “The primary market is generally the gallery market and the secondary market is the auction market. Artworks will have different values according to the market you purchase in.”

As with any investment, it’s important to have realistic expectations. “If you’re thinking about buying today and selling in a week, and making a massive gain, you’re better off buying shares. Art is a longer-term investment,” Ralph explains.

You also have to understand that the artwork you enjoy may not be the one that accrues the most value. Ralph says in this situation, the rental route may be beneficial. “The work, which may appeal to a corporate sector, gets rented to an office and actually derives an income for you. The returns of that can be very good.” 

When starting out, it’s important to consider the time needed for an artwork to increase in value. While retirees may not have the full timeframe to get the most out of the work, remember it is all part of an asset in the end.

Ralph also advises to take the transaction costs of selling into account. Plus, remember to check the authenticity, especially when purchasing from the secondary market.

When in doubt, ask the experts and remember, art is a passion investment so being involved and educated in the market is key. 

Go antiquing

While it’s nice knowing that the retro couch you’ve had for years is worth something, antiques are always something to be enjoyed. Dawn Davis, national president of the Australian Antique and Art Dealers Association affirms this.

“There’s a sound financial reason for investing in antiques and art, as not only can it be profitable, but you also have the added advantage of enjoying the items for their beauty,” she explains.

If you are choosing to invest in antiques, there’s a lot of research to be done.

“Education is always the starting point,” Dawn explains. “Just because something is old doesn’t mean that it is valuable. You need a keen eye and to gain a lot of knowledge to pick up on the differences.”

And according to Dawn, there are some basic rules to heed. “Buy the best you can afford, look for items with provenance (a paper trail that proves the piece’s origins), buy signed objects, don’t buy damaged items, no matter how much you love them, and look after your purchases,” she advises. According to Dawn, the final two rules are essential for resale.

When it comes to finding authentic and valuable buys, it’s always best to find a dealer you can trust. And remember, antiques are long-term investments, so it’s not worth your while to simply follow the fashions.

Dawn says it’s always important to think about the item your purchasing, especially when it comes to your returns. “It all comes back to choosing wisely in the first place. As with all things financial, think with your head, not your heart.” 

More ideas

Wine

Just make sure you’re not tempted to drink it first.

Coins

Condition is key.

Number plates

Heritage plates, with a low number, are usually your best bet.

Jewellery

Growing in popularity, you’ll need to be in it for the long-haul, so make sure you buy something you like.

Crowd-funding

Invest in other people’s ideas.