As you drink a glass of fine wine, have you ever thought about turning it into a next level hobby? People like to say that fine wine is an investment. And it’s true. Most of the time, you end up drinking it, but the rare times that you don’t, you can make a pretty good profit. So, how do you turn fine wine into a fine hobby?
Why don’t you start investing in wine? Now, this can be a fun and rewarding project for you. You don’t necessarily need sommelier level skills to start on this project. You just need a great love for wine and a good head for business and investments. The fun of it is in learning as you go.
If you’re someone that loves and appreciates wine, this is your chance to explore and understand some of the finest luxury products the world has to offer.
To help encourage you in the right direction, here are some of the main benefits of investing in fine wine:
Performs Well as an Investment
If you’re looking for a stable medium to long-term investment that can provide substantial returns, you’ve found it. Fine wine has been found to outperform financial markets and commodities when it comes down to it. To optimise returns, it’s best to hold on to wine for a minimum of 5 to 10 years.
Wine works a little like Gold. Since it is a tangible asset with a limited supply, you can use it similar to Gold to protect your wealth and assets during unstable economic conditions. Even during the pandemic, it has been found that wine is performing relatively well.
It recorded a stable double-digit growth. Liv-ex, the global marketplace for the fine wine trade, recorded a 14.7% rise in the 12 months to 31st July 2021 and a 28.8% uplift in the five years to the end of July compared to the FTSE 100’s 4.3% growth over the same period.
According to the HMRC, fine wine is classified as a “wasting asset.” Essentially, this means that profits made on sale are exempt from Capital Gains Tax. You’ll find that for most fine wince inventors, the attraction stems from the tax-treatment of fine wine.
Apart from that, there are other tax benefits that you can enjoy when you invest in fine wine. Although, a word of caution is necessary. Be sure to stay up to date when it comes to tax laws, considerations, and so on. Everyone’s situation can be different. But in general, as a wine enthusiast, you could stand to gain a lot from investing in wine.
Diversifies Your Portfolio
Now, they say that it’s essential to diversify your portfolio, and this is true. It’s just a matter of finding the right way to do it. When you diversify your portfolio, it prepares and protects your overall assets whenever there are economic disruptions. There’s no time like the present to diversify your portfolio.
When it comes to investing, the best thing you can do is anticipate possible crashes in the future. You can do all that and more when you put your faith and money into some of the best wines the world has to offer. The only caveat is that you should also be prepared to drink what you cannot sell.
Fine wine is an asset with limited supply and growing demand. As long as you do your research and consult with the right people, you can be sure to make a pretty profit out of something you might call a hobby. Celebrate your gains and toast your losses. Either way, you win no matter what. That’s the beauty of it.
If you’re interested in learning more about how to invest in fine wine, we can help you. Cru Wine offers fine wine with a modern approach. Wine is a passion and a huge source of enjoyment. Our goal is to make it easier to buy wine. At the same time, we wish to provide you with a more enriched experience. Download our fine wine investment brochure today to learn more!