One of the common annotations that are correlated with investment is automatically the stock and real estate market. Of course, it is evident how the wealthy allocate a huge portion of their assets in stocks. This is because their rule of thumb is: to make more money than what you invested in.
But with stock investment comes risk. Well, it is safe to say that wealthy people are risk-takers, literally. After all, if any loss happens, it wouldn’t hurt their assets tremendously. Aside from the ‘serious financial’ investments, rich people also have fun, leisure hobbies, and collections that are considered as investments.
The only difference between these investments from the serious financial ones is that they get to enjoy it as much as ordinary people enjoy their new tech gadget that they saved for months. If you’re curious what these leisure investments are, here are three things rich people splurge on.
1. Yachts
Nowadays, it is quite affordable to legally own a yacht. Yacht syndication is a type of arrangement where owners equally own a share of the property. In other words, it is shared yacht ownership. Of course, wealthy people don’t only own and invest in those typical yachts that are good for short trips. We’re talking about big, expensive superyachts.
Just like how they portray it in the movies, some rich people love to spend time on the waters. Some people say that owning a yacht is more expensive than buying one. The maintenance fees, insurance, crew, and other expenses needed to maintain it are true, insane.
Some wealthy people own a yacht with a pool, basketball court, and hotel-like amenities. Really, what greater way is it to enjoy your money but to live ‘the life’ on the waters, right? Of course, rich people are practical too. Some also prefer to invest in fractional yacht ownership instead of spending millions on a yacht alone.
How come it is an investment?
Shared yacht ownership is common in business partnerships, families, and friends. Even the rich consider the importance of being practical and justifiably allocating money. After all, that’s how they get wealthier. They are careful with every single thing they put their every cent on.
Since rich people are careful and smart with their money and assets, some of them open their yachts for rent. Some have their yachts for rent at only $1 million per week. You see, even with their leisure assets, they make sure that they make money out of it.
To make it fair, only rich people are capable to rent those yachts owned by the people of their class. Maybe those who rent prefer to splurge on activities once in a while instead of investing all in.
2. Cars
You’ll commonly hear financial advisers and mentors that it is not worth buying a brand-new car. Why? Because its value depreciates the next year after you buy it. This, of course, is a piece of practical and factful advice that people who live paycheck to paycheck should keep in mind.
But for the wealthy, cars serve as their status symbol. Also, who wouldn’t want a real-life collection of luxury cars? These cars are not only pleasing to look at but their specs and horsepower make them worth the splurge.
Luxury car experts say that when you buy a luxury car, you are not only buying a ‘branded car.’ You are buying a piece of history, they say. Luxury cars are expensive for a reason and not just because of the brand name that they carry.
These cars are carefully designed with materials that make them unique. Their high-end horsepower and torque make them luxury cars that provide the best features one can ever have in a four-wheeled automobile. Let’s also not forget their killer interiors that make your car ride experience a truly luxurious one.
Is it a good investment?
If we are to look at luxury cars from a financial adviser’s perspective, there’s a high probability that they’d say it is not one of the good investment options. They’d probably say that its compounding interest may vary depending on the market.
Another reason they might give is that it would be hard to liquidate. Why? Because there is only a certain percentage of the world’s population who can afford to buy such supercars. Best believe that the wealthy would prefer to buy brand new cars instead of preowned ones.
Recently, some companies propose a fractional car ownership program. Just like yacht syndication, owners will have an equal share of the car, per schedule. Some say it’s not an ideal set-up because yacht usage works differently than cars.
Maybe if you are to apply this arrangement to rich people who want to own a supercar for solely investment purposes, fractional ownership might work. With better policies and regulations in the future, who knows, maybe it might be as ideal and practical as shared yacht ownership.
3. Art collection
There’s a proverb that says ‘art is long but life is short.’ An art collection may it be paintings, sculptures or jewelry is considered timeless and of immeasurable worth. Except for the fact that you have to pay at least six figures of money to own one.
Every artwork that is considered valuable is expensive for a reason. They carry and represent the history, talent, and legacy of their artist. For decades, the demand for art has increased and is continuously increasing.
If you’re wondering what makes them as expensive as owning a yacht is, the answer is scarcity. Since most of the well-preserved artworks are unique, the demand for them is high. No replica or imitation can come close to the original artwork’s value.
It is also one thing to consider that since the artists are no longer alive, their pieces serve as a legacy of their life. Most especially if it is an artwork made by an influential artist that shaped the art history. The older an artwork is, the more expensive they are.
Artwork is an investment
Just like owning a superyacht (regardless if it is yacht syndication) and a supercar, owning a piece of history defines one’s status symbol. But, we can only expect an artwork’s value to continuously increase as time passes by.
If we compare the three, the artwork will be one that can guarantee an interest rate that you can benefit from. It’s also easier to liquidate since the demand for rare pieces continues to increase. The potential market that also demands rare artwork pieces are bigger. There are institutions, organizations, and rich individuals who are willing to spend up to millions for a single, timeless piece of art.
This is just an overview, there’s more than what we know
The three leisure investments I discussed above are just some of the common collections wealthy people have. It’s interesting how most of the wealthy make sure that anything they put their money on is valuable and worthwhile. One thing’s for sure, there are more amazing, beautiful, and rare collections that they have than what we’ll ever know.
What are some leisure investments wealthy people have that you dream about? Share your thoughts with us in the comments below.
About the author:
Bianca Banda is a writer for MIY Yacht Share which offers Yacht Co-Ownership for sale, leaving the hassle of sole ownership behind by providing a cheaper yet luxurious yacht that is your own. She is a massive lover of Japanese cuisine and enjoys binge-watching comedies or variety shows.
