Investing, investing, investing. You may hear this over and over again throughout your daily life. In ads, on TV, on the internet, wherever you look, you are being told to invest. It doesn’t matter how much money you make through your income; investing is the best way to improve your lot in life, and help you grow your financial portfolio.
When you think of the richest people in the world, you think of Bill Gates, Jeff Bezos, and Warren Buffet. These three men alone are worth more than nearly half the globe, and they did not get there just through their salaries. Sure, they may be in a pretty astronomically unattainable position, but their advice on how they improved their wealth all revolves around that one factor – investments.
You might not have the capital to start buying hundreds of thousands of stocks, but it never hurts to admit you do not know where to start. If you have no idea, a little idea, or just like to keep up on your homework when it comes to luxury investment strategies, ideas, companies, or options, then you likely are scouring the internet for resources on the subject. You are being pummeled with messages every day that tell you how to invest, but never on how to do it, or what to do it on. So, if you are in that beginning stage or just need a fresh perspective on luxury items, then this may be for you.
What Is Luxury Investing?
The best place to start is asking the obvious: what is luxury investing? It is quite simply as the name implies. Luxury investing is similar to other forms of investment, except it is done with items that are considered of higher value and worth, be it in terms of cost or importance. The most common form of investment is through tangible items like real estate or property, and it applies to some areas of this investing too. Luxury real estate/properties (more on this later) are a real thing that people have an understanding of, so it makes for a good example. Likewise, people (ex. Ultra-rich) sometimes invest in extremely rare art, wines, and jewelry. Not all luxury items need some insane amount of capital to invest in. You do not need to be the Bill Gates or Bezos’ of the world to get into a luxury investment, but the general idea is that these products are of significant value for their monetary worth or historical/cultural impact. Luxury investing is not just tangible items too. Much like traditional stock investments, you can invest in the stocks of luxury brands as well.
Personal Luxury Items
Personal items can be defined as luxury items. These are most often clothing or accessories of a specific type. A good designer fur coat can be considered a statement piece, but others may view it as a long term investment. With a fur coat in mind, the reason why this would be seen as an investment is exclusivity. Not only do they cost a lot, but they can represent something unique. While the world quickly moves away from using fur on coats because they believe the practice to be unethical, that only makes real fur coats less common, and there is still a big enough market for people who want fur coats. This investment strategy is long term, but no one said anything about luxury investing being a quick-rich scheme, because it is not.
Another example of personal luxury items is accessories. Rolex, Audemars Piguet, and Patek Philippe are all luxury watch brands. They are status symbols, and walking around with someone’s mortgage on your wrist certainly is a power move, but they are not always purchased for the purpose of wearing to a business meeting. The idea is to buy these limited models of a watch or coat, and sit on them for some time. There is a reason why buying vintage is becoming more popular for many people, so it makes sense that as time passes on, the appreciation for older methods or styles of craftsmanship can increase in value. For personal accessories like watches, the longer time passes by, the harder it is to find a good condition product from such a valued brand, so that is why you would purchase a personal good and wait until it was ready to be auctioned off.
Luxury Real Estate and Properties
Speaking of auctions, luxury real estate and the property is one of the most common forms of investing in a luxury item. While a fur coat or watch can be expensive, properties are going to be much more expensive. When many people think of luxury real estate, they envision vineyards, castles, islands, and other lavish (putting it lightly) land or buildings. These certainly are potential areas to invest in, but they come at steep prices. Some of the most expensive real estates in the world come at listing prices north of $50 million dollars, so unless you have the kind of upfront capital to afford that, you might want to adjust your search filters for something more in your ballpark. Still, as the number of millionaires and billionaires increases in the world, the desire to have the most luxurious home or property is increasing.
Now, if you are not quite there yet in terms of finances to purchase one of these properties, you can always scale down to luxurious mansions. Purchasing a luxury property works in a similar manner to buying a family home, only there are more unique options. The sales and listing options at Supreme Auctions are different from a local realtor, because they usually focus on quantity over quality. Auctions for luxury properties are focused on quality first and foremost. Suburban duplexes are not going to appear in these listing pages, and for good reason. What you can find online are many options to purchase a wonderful investment property or one for personal use. Property is one of the best forms of investment because there is only a finite amount of land, and an ever-growing want to own a home, especially a magazine cover quality living space.
Dividends and Luxury Stocks
It was briefly touched on with regards to the billionaire examples, but they have made a significant portion of their money from investments, not the salaries they have collected from their companies. While the salaries of company ownership nets them some serious funds, many of these titans of the industry actually attest their accumulation of wealth to investing in dividends and stocks. Dividends are shares of companies, and they can provide you a passive income that provides you a good alternative stream of financial gain. They are growing in popularity, and many companies are starting to appear as good investment sources for dividends. Why are dividends considered a luxury? It is not necessarily because they represent luxury companies like Gucci or Ferrari, but they require more capital before they start to pay off well.
Warren Buffet makes hundreds of millions on a yearly basis solely from his dividend investments, but that is because he owns hundreds of thousands of these shares. You might not be there yet, but passive income can eventually create the cash flow that allows you to compound your income and reinvest into more shares. Likewise, you can invest in luxury brands, but it pays to monitor the market as something like diamonds fluctuates depending on supply.
Rare and Exotic Automobiles
Cars are another classic form of luxury investing. Cars are notorious for their short lifespans, and there is always a need or want for mint condition automobiles from luxury brands, and from rare lines. Automobiles depreciate in value exponentially, so a collector may wait on his or her garage of Ferrari’s, Lamborghini’s, and first edition American muscle cars for quite some time. The reason is that they do lose value even after the first time they hit the asphalt. Purchasing a luxury automobile is often never for the purpose of joyriding, rather, it is better to wait until it becomes much less common. Some luxury cars can give you a return of millions of dollars, as is the case for old Ford’s or pre-war European brands like Mercedes.
Luxury items are not often thought of when it comes to investing, but they can yield great results when you know what you are looking for. Luxury investing can revolve around personal items like expensive furs or watches and can go as high up as purchasing a castle or island. For everything from the least to the most expensive, there are moderate options for those who have a pretty penny to throw around. Dividend stocks and luxury real estates like a high-end house or property are among the more affordable options that are less of a commitment to time that waiting on a watch may take for value to appreciate. Stocks are always a good way to take a gamble on investments, but some of these luxury options represent unique ways to increase your financial portfolio.