A Beginner's Guide To Passion Investing

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Investment does not have to be just about stocks, bonds equities, etc. traditional investment options. Beyond these types of investment options, a growing number of people are investing in non-traditional types of assets, such as fine art, jewelry, classic cars, etc. These investments are items that they are passionate about, enjoying owning, all while making money from them as the value of these items appreciate over time. Investing in non-traditional assets you are passionate about is known as passion investing.

Passion investing is a great way to create a long-term investment strategy that could be not only lucrative but also rewarding. If you make passion investments as part of a diversified investment portfolio that includes different types of investments, including cash savings, you can reduce your overall portfolio risk.

If you are interested in passion investments, here is a beginner's guide to passion investing that will help you learn about a few popular passion investing choices, the benefits of passion investing, and some tips on passion investing.

Is AI art the next big passion investment category?

What is passion investing?

Passion investing is all about investing in non-traditional types of assets that let you enjoy the joy of ownership of these assets and make money when the value of these items increases over time. Keep in mind, that this type of investment is speculative - meaning that you can not guarantee a return. However, it can be an effective way for you to diversify your investment portfolio.

As a passion investor, you can buy these types of assets to enjoy your wealth and satisfy your desires while making money when the value of these items increases over time. 

These types of investments typically tend to do very well during times of economic uncertainty. Durable passion assets such as jewelry, coins, paintings, and cars will appreciate in value as they get older, or at the very least retain their value without depreciating. Passion investments also include rugs, carpets, rare musical instruments, rare books, trophy property (such as overseas real estate), and so much more.

Passion investing focuses on both the cultural or aesthetic value of passion investments and the economic output they can produce for the passion investors. The value of passion investments is determined by their rarity, quality, demand, and cultural value. 

It is important to remember that different cultural and geographical factors influence what types of luxury passion investments are popular in different regions of the world.

What are the most popular types of passion investments?

You do not have to be super wealthy to get started on passion investing, as there are investment opportunities that might be within your means.

The most popular types of passion investments are:

  • Fine art

  • Classic cars 

  • Coins

  • Stamps

  • Furniture

  • Jewelry 

  • Clocks and watches

Fine art

If you have a passion for fine art, you can consider investing in art that can be enjoyed by you while their value appreciates over time. However, there is certainly no guarantee that the art you buy will appreciate in value.

Depending on your passion, you can invest in modern art, old masters, traditional artworks, etc. 

One of the best ways to invest in exciting art you are passionate about at an entry-level price is to buy pieces from up-and-coming artists. Another more affordable way to invest in art is to buy historic film posters which are decorative and nostalgic.

Classic cars

If you have a passion for classic cars and are interested in luxury passion investing, then investing in classic, modern classic and future classic cars can be the ultimate passion investment for you. Generally, a car that is older than 25 years is considered a classic. It is worth remembering that not all classic cars rise in value so it is important to know what you should look for in a classic car that is investible. 

When investing in a classic car, consider the condition, supply, and demand for the desired model, the price you pay for, restoration requirements, and other costs associated with ownership of the classic car before investing in it.

You can buy classic cars privately or via dealers and auction houses. You can also buy classic cars via investment funds but without the joy of owning the car itself or being able to drive it.

Passion investors who are interested in luxury classic cars use the HAGI (Historic Automobile Group International) indices to chart how well investments in classic cars are doing. The HAGI indices measure the price of selected rare vehicles as well as high-profile brands such as Mercedes Benz, Ferrari, and Porsche. Passion investors in classic cars also use Hagert's price indices, which cover more day-to-day investments through an index for affordable classics.

You can sell your classic cars privately or via dealers and auction houses or sell them via investment funds. In short, you can make money investing in cars as long as you choose a car, such as selling a Lamborghini, that may appreciate in value if you keep it well. In addition to buying top classic cars, you can also consider investing in modern classic and future classic cars that may appreciate in value if they are kept well. 

Antiques

If you are interested in antiques, it is important to understand that tastes change. Some antique jewelry does not stand the test of time, and therefore will not appreciate in value. stood the test of time so well may not appreciate in value if you buy it.

If you are interested in investing in antique jewelry, make sure to store it safely and have it properly insured. You will need to keep it in tip-top condition with expert cleaning and maintenance. 

If you are interested in antique furniture, make sure to look after it very carefully. Similar to art, ensure to keep it out of direct sunlight.

Stamps and coins

If you love collecting stamps and coins, you can make money investing in stamps and coins. Coins tend to appreciate in value more than stamps. Some modern coins can be valuable if they are kept in pristine condition.

This market is volatile but if you have expert knowledge on coins that are valuable, investing in this type of passion asset will help you to monetize your passion for coins.

When it comes to investing in stamps, there are two different types of stamps: collectible stamps and investment-grade stamps. If you want to buy investment-grade stamps, it is important to remember that they should appear new, with gum intact. The designs should also be complete.

Like any passion investment, stamps and coins need to be kept secure and appropriately insured to keep your investment safe.

If you find collecting coins and stamps really enjoyable, then investing in coins can be both lucrative and rewarding. For example, if you have a passion for precious metals such as gold, then you can invest in gold coins.

You can invest in coins for their rarity value, or for the value of the precious metal that they contain. For example, if you have a passion for precious metals such as gold, then you can invest in gold coins.

Watches

You can invest in watches as a private investor or via an investment/hedge fund. There are three main ways to invest in watches as a private investor. You can buy and sell luxury watches through dealers, internet exchanges, and auction houses.

If you want to invest in watches through investment funds, then there are two investment funds available out there. The Watch Fund, based in Singapore, Hong Kong, and Geneva is the bigger of the two watch investment funds. 

You need $50,000 to invest in watches through The Watch Fund investment fund. For that investment, it appears that you receive a guaranteed net annual return of 10% or a variable return of 20-30%. At the end of a year, all your luxury watches are sold. You can leave the fund or reinvest it back into The Watch Fund.

The value of a watch is determined by a number of factors, including its condition. If you choose to wear your watch everyday, make sure to keep it clean and maintained well. Do not clean non-water resistant watches. Instead, keep them away from moisture at all costs.

What are the advantages of passion investing?

The value of passion asset classes does not rise and fall at the same time as the stock market, so passion investments help to hedge against unfavorable stock markets.

Passion investments provide passion investors with a return on the investment, as the demand and value of these items tend to increase over time.

Passion investing provides diversification and a potential return on the investment.

Since many people invest in passion asset classes, the demand and value of these items have increased.

Passion investments allow passion investors to enjoy their wealth and satisfy their luxury desires. Due to the growing number of passion investors and growing global wealth, passion investing can be both a lucrative and rewarding investment choice for those who have an interest in these items.

What are the cons of passion investing?

It is important for all passion investors to know that passion investing involves risks, as the value of your investments can go up as well as down, often and sometimes quickly. 

These types of assets can also be difficult to sell quickly as they are illiquid.

Tips to consider for passion investing

Passion investing should only be considered as a long-term investment strategy as well as a part of your wealth management strategy. 

Passion investing requires specialized knowledge about the items you are passionate about and want to buy to diversify your portfolio. So if you are interested in passion investing, look at how different passion investments have performed over the past ten years or so and then buy the assets you are passionate about and that have the potential to appreciate in value.

It is important to know that not all passion asset classes perform similarly over time. Luxury passion investments such as cars and jewelry tend to do very well if they are kept well through maintenance. Coins have performed well historically.

It might be worth talking to a financial advisor or planner to see if your portfolio is appropriate for passion investing before you invest in passion assets.

In Conclusion

Passion investing is a great way to enjoy your wealth while earning you money. Each different passion asset class has pros and cons. If you are interested in passion investing, it is best to choose the one you love and are knowledgeable about.

Disclaimer: the content presented in this article is for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.