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A Beginner’s Guide to Investing in Wine

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.

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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.

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    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.

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    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.

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      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

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      Last Updated on July 20, 2021

      Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

      Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

      Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

      Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

      Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

      In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

      Break Free of Your Finances

      Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

      When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

      Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

      Though it seems hard to believe, it is really very simple to get financial freedom.

      To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

      While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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      Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

      1. Stop Unnecessary Spending

      We often spend money inwardly, instead of objectively.

      For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

      To stop this habitual spending, log down all your spending over the course of a month.

      Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

      This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

      2. Plan a Monthly Budget

      This is a great opportunity to get serious.

      Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

      Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

      3. Cut-up Credit Cards

      Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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      If not, you may want to consider ridding your life of the burden that credit cards bring.

      Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

      Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

      4. Increase Savings

      There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

      It’s good practice to save up to 15% of your income.

      Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

      Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

      5. Invest Wisely

      Consider investing in funds.

      Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

      To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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      Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

      6. Invest in Gold

      There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

      You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

      Another way to invest in gold is through ETFs (Exchange Traded Funds).

      These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

      With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

      7. Stash Emergency Funds

      Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

      If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

      Make it hard to get your cash.

      Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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      8. Find Fabulous Mentors

      Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

      If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

      There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

      9. Be Extra Patient

      Patience is the key of financial success.

      Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

      So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

      Financial Freedom for All

      Anyone can achieve financial freedom, regardless of their financial circumstance.

      Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

      Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

      Featured photo credit: rawpixel via unsplash.com

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      Reference

      [1] Hartford Gold Group: IRA Retirement Accounts

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