Rich people have always had access to investment opportunities that the average person doesn’t even know exist. In this article, we’ll explore some of investments that are popular among the wealthy, but often overlooked by the rest of us. From whiskey and wine to luxury watches and purses, these investments offer high returns and a level of exclusivity that many find appealing.
One investment that may come as a surprise to some is whiskey and wine. While most people buy these items at the supermarket, the wealthy often purchase them directly from the distillery or vineyard. By buying in bulk and holding onto these items for years, they can generate returns of 10 to 15 percent per year, which is higher than many other stocks. Other investments that we’ll explore include rare collectibles, private banking, and art investments.
Key Takeaways
- Rich people invest in exclusive and often overlooked opportunities, such as whiskey and wine, collectibles, luxury watches and purses, private banking, and art.
- These investments offer high returns and a level of exclusivity that many find appealing.
- Everyday investors can still access some of these opportunities, such as through investing platforms like Masterworks.
Whiskey and Wine Investments
Rich people have a knack for making money in ways that most people are not even aware of. One of the investments that the average person may not understand is whiskey and wine. It is important to note that rich people get rich by selling items for a profit and staying rich by holding on to things that appreciate in value over time.
When it comes to whiskey, the value of a 20-year-old whiskey is significantly higher than that of a 2023 whiskey. Rich people tend to buy whiskey by the barrel from distilleries or third-party providers. The barrels can be held by the distilleries or providers until the time is right for sale, which generates cash while minimizing overhead and mitigating the risk of losing money. Aging whiskey generates returns of 10 to 15 percent per year, which is a higher return on investment than many other stocks.
Investment grade wines have seen a compound annual growth rate between 10 and 11 percent since 1988, which is also a higher return on investment than many other stocks.
Rich people also tend to invest in collectibles such as rare books, comic books, toys, stamps, coins, sports memorabilia, sneakers, movie collectibles, and trading cards. The demand for these items drives up their value, but it is important to be cautious as the demand can decrease, causing the value to plummet.
Luxury watches and purses are another investment that rich people tend to focus on. High demand products with limited supply, such as Rolex watches or the Hermes Himalayan Birkin bag worth $500,000, are highly sought after. These products are not readily available for purchase and are often placed on waiting lists.
Private banking is another investment that rich people utilize. Private banks offer higher interest rates on cash deposits, with an average yield between 7 to 13 percent yearly, compared to the 0.01 percent interest rate offered to the average person. Private banking services are typically available to individuals with around $250,000 in deposits.
Fine art is one of the most famous and mysterious investments for the ultra-wealthy. The art market is driven by those who grow richer in times of turmoil and store their money in the form of famous artworks. The global value of art is expected to grow by $1 trillion by 2026, making it a potential investment opportunity for everyday investors. Masterworks is an art investing platform that allows investors to purchase a portion of an artwork, with profits from reselling split among shareholders. Masterworks has sold over $45 million worth of artwork, with a perfect record of returning profits to investors.
In summary, whiskey and wine, collectibles, luxury watches and purses, private banking, and fine art are all investments that rich people tend to utilize. It is important to be cautious when investing in these areas and to do thorough research before making any investment decisions.
Investments in Collectibles
Rich people invest in various types of collectibles that have the potential to appreciate in value over time. Here are some of the collectibles that the wealthy invest in:
- Whiskey and Wine: Rich people buy whiskey and wine at the distillery and hold onto it as it ages. Aging whiskey generates 10 to 15 percent returns per year, while investment-grade wines have seen a compound annual growth rate between 10 and 11 percent since 1988.
- Collectibles: Rare books, comic books, toys, stamps, coins, sports memorabilia, sneakers, movie collectibles, and trading cards are some of the collectibles that rich people invest in. These items can sell for high prices, with some items selling for millions of dollars.
- Luxury Watches and Purses: Rich people focus on high demand products that have a limited supply, such as luxury watches and purses. These products are often not available for purchase in stores, and buyers must be put on a waiting list. Once they purchase the product, they can sell it for a much higher price.
- Private Banking: Rich people have access to private banking services that offer much higher interest rates than those available to the average person. Private banks can yield an average of 7 to 13 percent yearly on cash deposits.
- Art: Fine art is a popular investment for the ultra-wealthy. The art market is driven by those who grow richer in times of turmoil, and the global value of art is expected to grow by 1 trillion dollars by 2026. Masterworks is an art investing platform that allows everyday investors to invest in a portion of a painting and receive profits from its resale.
Overall, investing in collectibles can be a lucrative way for the wealthy to generate returns on their money. However, it is important to be careful and invest in items that have a high demand and limited supply to ensure that the investment retains its value.
Luxury Watches and Purses
Rich people have a keen eye for high-demand products that have a very limited supply. Luxury watches and purses are among the top investments of the wealthy. Most people don’t know this, but you cannot simply walk into a Rolex or an Hermès shop and buy yourself their products. In rich people’s land, the stores are mostly for display purposes only.
If you qualify, meaning that if you align with the brand correctly, they’ll put you on a waiting list and call you when the product becomes available. For instance, a Royal Oak has a waiting list of two years, and it’s the same with most Rolex watches and sometimes even with luxury cars.
In the case of the Hermès Himalayan Birkin bag, you buy your way up. You get on the waiting list, and first, they offer you a lower-tier bag, which you have to purchase, or else you’ll not be invited back. If you keep on shopping with them over time, you’ll build up enough social credit to be offered a Birkin bag. There are long waiting lists that can stretch up to six years just to buy yourself a bag.
In the store, you’ll pay between ten to fifteen thousand dollars for a Birkin bag, but the moment you walk out of the store with it, you could easily find buyers online for thirty to forty thousand dollars. The same thing happens with luxury watches. A Patek Philippe Nautilus, which will sell at retail between thirty to fifty thousand dollars, will sell on the secondary market for over one hundred thousand.
Luxury watches and purses are not only a status symbol but also an investment opportunity for the wealthy.
Private Banking
Private banking is a service offered by banks to high net worth individuals, providing them with exclusive and personalized financial services. Unlike regular savings accounts, private banking offers significantly higher interest rates, ranging from 7 to 13 percent annually. This is in stark contrast to the 0.01 percent interest rate offered to the average person for a savings account.
To qualify for private banking services, individuals typically need to have at least $250,000 in deposits. Once they become top-tier clients, they are offered a range of perks such as concierge services, access to exclusive events, and discounts on luxury products and experiences.
Private banking is a way for the ultra-wealthy to leverage their financial power and make even more money. While regular people are charged fees for depositing and withdrawing money, high net worth individuals are treated differently by banks. They are given preferential treatment and can make significant returns on their cash deposits.
Art Investments
Investing in art is one of the most famous and mysterious ways the ultra-wealthy increase their wealth. The art market is driven by those who grow richer in times of turmoil, and they store their money in the form of famous artworks. In 2022, high net worth collectors doubled their spending on art, even as other markets around the world saw losses, topping an unbelievable 36 trillion dollars.
The global value of art is expected to grow by a whopping 1 trillion dollars by 2026, which means there’s still time for everyday investors to get involved. One of the platforms that allow investors to invest in art is Masterworks. Masterworks’ art investing platform has already sold over 45 million dollars worth of artwork, with the net proceeds distributed straight to investors.
Instead of buying an entire painting, investors can invest in a portion of it with the profits from reselling it split amongst the shareholders. Masterworks has gone 13 for 13, with every single exit handing back a return to investors. In fact, Masterworks just sold two more offerings while a banking crisis unfolds.
With such an opportunity, it’s understandable that there’s a waitlist for most new investors to get onto the platform. However, Alux.com is a long-time partner of Masterworks. By going to alux.com/art or clicking on the link in the description, investors can skip the waiting list and claim their free account right now.
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