Posted by Oliver Meredew on March 1st, 2016.
With interest rates at record lows around the world and UK property prices spiking in popular locations, traditional forms of investment are falling out of favour. Since the outset of the global economic crash in 2008, an increasing number of people have chosen to put their money behind an idea or a product in the hopes of achieving a good return.
In fact, with the dawn of crowdfunding, personal investment of all kinds has exploded across the globe and people are backing an incredibly wide range of projects.
While many forms of investment still fall into the conventional categories of property, land or shares, it is worth taking a moment to consider some of the easier or more unusual opportunities open to individuals who don’t mind playing the long game. Many of the below investments also require a comparatively small initial outlay.
From stocking your wine rack to dusting off your old toys – we look at some interesting alternatives to traditional investments.
As a perpetually appreciating investment, picking up a bottle or case of vintage wine at a reasonable price could give you something to toast about in the future. Getting your hands on a bottle from the Bordeaux region has generally been considered a safe bet in the world of vintners, but it’s worth looking into up-and-coming wine regions/producers if you want to snap up a bargain now and enjoy potential profits in the future.
The fact that an investment in wine doesn’t require any real investor input, besides storage, only amplifies the appeal of this particular option and at the end of the day, if the wine doesn’t appreciate in line with your hopes you can always enjoy it yourself on a special occasion.
Following on in a similar vein (or perhaps, grain), purchasing a barrel or two of Scottish whiskey can also pay off in the long term, whether financially or in keeping your decanter nicely stocked. The Arbikie Distellery has embraced the business model of encouraging investment in their renowned product, although a barrel will set you back £10,000.
Founder’s Cask whiskey from the Arbikie Distellery has a limited-supply appeal due to their being only 300 barrels available to purchase and if you’re wary of investing so heavily in your evening tipple, the company has come up with a contingency plan. The distillery will sweeten the deal by offering to buy back your barrel after 8 years at the same price originally paid, so if it hasn’t gone up in value you won’t have lost out. We should add that barrels should be in their original state and the whiskey undrunk! If you can’t afford a barrel, put a couple of bottles of good quality whiskey at the back of a cupboard and see how much their value has risen ten years later.
While finding hot, untapped talent in the art world is generally a bit trickier than snapping up a couple of bottles of wine, taking a chance on a painter or sculptor can often be far more lucrative in the long run.
Art auctions frequently make the headlines for record-breaking sums spent on individual pieces, so it really can be worthwhile engaging in the ancient act of patronage and supporting an aspiring artist who has a style that could be huge among collectors of the future. While the question of ‘what is art?’ is realistically never going to be answered, and taste is highly subjective, it’s worth remembering that art styles which were once considered unusual can find themselves enjoying immense popular appeal. For example, In 2006, Jackson Pollock’s No 5, 1948 (a painting embodying Pollock’s usual style of chaotic paint blobs and drips) was sold for $140m.
While the opportunities for this investment might be thin on the ground, the payoff is as easily obtained as sitting by the side of the road. Although there are only around 8 such properties still around in the UK, getting your hands on a property complete with private toll bridge can pay dividends if you’re willing to collect on it. One such property crosses the Wye in Herefordshire. The savvy couple who invested in this toll bridge are able to earn £75,000 a year, tax-free.
There’s a bit of fiddly lawmaking around toll properties – the government decides what the actual toll fee is, but the fact that one such property was held by a single family for approximately 180 years shows that taking in a steady income while putting your feet up is an extremely lucrative pastime, if you can get your hands on it.
Although modern children’s toys are generally mass-produced and so cheaply assembled that most don’t last long once out of their packaging, many collectors still hold a soft spot in their hearts (and their wallets) for toys and nostalgia-inducing items from days gone by.
Antique shops and attics across the country can be great places to source toys and memorabilia from the 20th century, some of which are capable of commanding sizable price tags. The ever-collectible Steiff and Gund bears, for example, often fetch hundreds of pounds or more, especially if they were made before the First or Second World War.
Some more modern collectables are also commanding a premium. When the new Star Wars film, The Force Awakens, was released in 2015 the publicity surrounding the film created a spike in demand for toys connected to the previous films. While the value of Star Wars collectables varies greatly according to condition and rarity, a Telescoping Lightsaber Darth Vader from 1978 recently sold for £4000.
The idea of investing in a farmyard animal may be strange at first, especially if you have no experience of agricultural work. However, some dairy farms run programmes which allow those seeking cash cows to effectively ‘lease’ a cow and claim the income based on any milk and cheese that the animal in question produces.
While the price of milk may be a bit of a sour spot at the moment, demand for the white stuff shows no signs of slowing down, so this ‘cowfunding’ practice seems set to continue shoring up farmers and allowing modest returns for investors for a long time to come.
Although it’s certainly a lot more conventional than holding onto casks of alcohol or patronising a potential Picasso, buying property in the hopes of doing it up and reselling for a profit still represents a significant personal investment that many people wouldn’t consider.
As it stands in the UK, low interest rates mean that there isn’t much incentive to fill a savings account and additionally, house prices just keep getting higher. Even for non-domestic property (like a South Kensington garage) costs can be eye-wateringly expensive for very little actual return.
With that in mind, it can be advisable to look beyond the UK to satisfy your craving for owning property or land. The time has never been better to explore the world of foreign property and all the avenues this opens up. As some nations offer more of an investment opportunity than others it’s well worth taking the time to research this area. Look at how property markets have fared in any countries of interest, are prices particularly low at the moment? Are they likely to increase? Is the area you’re looking at likely to benefit from governmental investment in the future? If the answer to these questions is yes then you may have found a ripe investment opportunity and secured yourself a holiday home to enjoy while your investment matures.
There you have it, 7 different ways of making a personal investment that you might have never considered. If none of these have convinced you to take your cash out of more conventional savings solutions, bear in mind that there are countless more ‘off-the-wall’ methods of investment out there just waiting to be discovered.
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