⌄ Scroll down to continue ⌄

A Beginner’s Guide to Investing in Wine

⌄ Scroll down to continue ⌄
A Beginner’s Guide to Investing in Wine

Experts say “invest in what you know.” Well for me, one of the things I know and love is wine. I’m sure the rest of you winos reading this understand. One thing that you might not have known until now, is that it is possible to make some money off of your love affair with this fermented beverage from the gods.

Investing in wine is certainly not a new concept, however, it is one that is trending a bit more now that a push to get more Americans investing has begun. Interest in the stock market has seen a significant drop given the economic rough patch our nation hit back in 2008. However, it remains an important part of building the high risk/high potential funds you need to supplement retirement savings.

If you’re a wino looking to diversify your investment portfolio with a commodity investment, investing in wine could be a good option. Here is a beginner’s guide to investing in wine that might help you determine whether or not it’s a solid prospect for your next addition to your portfolio.

1. Start a sufficient savings

As you probably already know, investing in wine isn’t quite as simple as heading to the store to purchase a bottle slightly above the price you’d already buy then waiting for it to grow in value. Determining how much you’re planning to invest in wine depends on whether you’re doing it for the love of wine or the potential for serious money.

⌄ Scroll down to continue reading article ⌄

⌄ Scroll down to continue reading article ⌄

If you’d prefer to simply start collecting the wines you enjoy out of your pure love of wine, Investopedia recommends treating your collection like a baseball card or stamp collection where you pick up wines that interest you as you go. Although the payout might not be as grand this way, you could still end up with some delicious wines to drink if they don’t sell.

2. Be prepared to wait

When it comes to investing in wine, you have to be patient for the right time to buy. You have to carry out research on what vintages and wine producers have done well in the past and what is expected to happen in the future. For example, the past few vintages of Bordeaux wine have not been great and an investment could have been a bad decision. However, last year thanks to the “Rule of Fives”, this year is looking like a great year to invest in Bordeaux according to wine experts.

Unlike certain stock investments, wine can take a while to grow in value. Although this might seem like downfall for some investors, it actually could be a good thing for investors who are getting in the game early and have the precious gift of time on their sides.

According to MarketWatch, investments in wine can take 10-20 years to yield a return. If you’re looking to diversify your investments to supplement your retirement funds, this might not be an issue. If you’re looking for quick money, wine is probably not your best bet.

⌄ Scroll down to continue reading article ⌄

⌄ Scroll down to continue reading article ⌄

wine 2

    3. Look into professional storage options

    Storing wine that is intended for investment on your own is very risky. In order for wine to rise to its full potential, it must be stored at a temperature that is cool, but not too cool, in a dark area that doesn’t see much light, and away from shaking and excessive humidity. You could purchase a wine cooler, but experts in wine investing highly recommend professional storage in order to achieve higher perceived value upon selling. If you choose to go with a professional storage service, there are online guides that can help you find them in your area.

    If you choose to take the gamble and store your wines on your own, the Wine Spectator offers up a pretty solid guide to help you out.

    4. Purchase at least three bottles to get going

    According to Wine Folly, serious investors should plan to purchase at least three bottles to get started. These bottles should add up to at least $8,000 in value. This is recommended because when you consider the sizable cost of storing, insuring, and ultimately selling your wine, it becomes clearer that you should invest a sizable amount upfront to make the return worth the hassle.

    ⌄ Scroll down to continue reading article ⌄
    ⌄ Scroll down to continue reading article ⌄

    But, as I also mentioned above, it’s possible that you’d prefer to take a more modest approach to investing in wine and treat your collection more like a passion project rather than a serious money maker. If this is the case, you’ll more than likely want to buy at your own discretion.

    5. Understand market risks

    As with all investments, investing in wine comes with a certain degree of risk. As a commodity investment, you might notice that the market is a bit more volatile than others due to industry changes. This is why diversification in your investment portfolio is so important. You simply cannot rely on one form of investing alone whether it be wine, stocks, or even your 401(k).

    As with any market you plan to enter, you should do your research to understand where the market for wine investment has been, where it currently sits, and where it might be headed in the future. This will give you a better idea of where your potential risks and benefits lie.

    ⌄ Scroll down to continue reading article ⌄
    ⌄ Scroll down to continue reading article ⌄
    wine 1

      Now that you’ve got the basic information, does investing in wine sound like something you might be interested in adding to your investment portfolio? If so, use the resources throughout this post to learn a little more about the process. I might also recommend reaching out to an industry expert or two to find out how he or she got started and gather some professional insight. You never know, your love of wine could turn into a profitable skill if you play your cards right!

      Featured photo credit: perfectinsider via perfectinsider.com

      More by this author

      6 Ways to Get Out of a Creative Rut
      6 Ways to Get Out of a Creative Rut
      5 Incredible Underrated Locations to Spend a Year
      5 Incredible Underrated Locations to Spend a Year
      5 Smart Moves For Millennials To Boost Retirement Savings
      5 Smart Moves For Millennials To Boost Retirement Savings
      5 Ways To Boost Your Website’s Success In 2017
      5 Ways To Boost Your Website’s Success In 2017
      How to Tech Out Your Home With DIY Security
      How to Tech Out Your Home With DIY Security

      Trending in Money

      1 5 Tips on Coping With Financial Stress and How to Bounce Back 2 30 Things to Sell to Make Extra Money Easily 3 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 4 30 Fun Things To Do With Your Friends Without Spending Much 5 Not Sure How to Set Up a Weekly Money Routine? Read This Now!

      Read Next

      Advertising
      Advertising

      Explore the Full Life Framework

      Advertising
      Advertising