WORDS YVONNE JACOB
It’s time to put your knowledge of fine wines to some profitable use!
WHEN PEOPLE SAY “INVEST IN WHAT YOU LIKE”, TAKE THEM LITERALLY AND START YOUR OWN WINE INVESTMENT!
Think of 5 things you just need in life to get through the week. Done? Now, if your list had wine in it or all over it, first of all, a crisp high five for you. If not, I think you might want to reconsider. If you want to know why then I’ve got two words for you – Wine Investment. Yes, it is a thing and a very popular one at that. Investing in fine wines has a ton of benefits; provided you turn away from your preferred palate and get wines that have more time-growth potential. (Time-growth what now?) I will decode this for you. But first, let’s go over some basic rules to get you started.
THREE’S THE CHARM
Start your investment with a minimum of 3 bottles. Most wine auctioneers prefer to sell wine in sets of 3, 6, 12 and 13. Some auctions also require full crates, so know what you get into well in advance. Starting off with a set of 3 will help you to diversify your choices and know what sells more.
Storing your wine well in a temperature controlled cellar or storage box is a must. Get yourself a set up that will ensure that your wine maintains its quality, which would later help the resale price. Most people prefer wine that is “In Bond”, meaning, it is purchased and stored in a bonded warehouse.
EXPECT YOUR EXPENSES
You need to shell out some bucks to get something in return. Similarly, you will have to calculate the cost of wines, storage charges, and also insurance to know exactly how much you need to empty your pockets to get started.
SELECT YOUR RANGE
Some would suggest you to stick to the classic châteaux of Bordeaux because of its high resale value, and it is in reality a safe bet. Napa Cabernet Sauvignon is also very collectible. Only 1% of the world’s wines are actually investible. These wines will last you between 50-100 years. The value of all wines do not appreciate with maturity, so investing in wines with a shorter lifespan is not advisable for investment.
PATIENCE IS KEY
Wine does not have a fast turnaround investment rate. Once you invest in some wine, you need to wait for at least 5 years for the price value to increase before auctioning them off. The ideal time limit should be 6-10 years for you to get a bigger time-growth potential. There you go! So, as your wines mature and improve, they also become rarer and more desirable to your potential buyer.
Wine investment is a great addition to your investment portfolio and also makes it look pretty diverse. Study your market well before purchasing your stock or just reach out to a fine wine investment company to take you through every process with ease. One benefit of wine investment is that, in any worst case scenario if the bottles don’t sell, you can always get drunk on your own stock!