How is Fine Wine as Loan Collateral?
Investing in fine wine is
a risky business, but it can grant you a loan
People used to think that nothing could be more valuable than investing in gold?
Well, that’s until they discovered the benefits of investing in wine. Even though both fine wine and gold have been
in a serious competition, the situation between these two concepts has become clear now. Fine wine is one of the
market’s most appreciated investments, since the global demand for wine is constantly on the rise.
Can wine be considered a loan collateral? Yes it can actually.
|Passion might drive you into wine investments, but
treat it like any other risky investment -
with a cool head and due dilligence.
Worthy wine can grant you a loan
Believe it or not fine wine can grant you a loan. There are financial institutions in the US that are willing to grant loans to borrowers in exchange for fine wine. Needless to say,
it’s risky now that scams are everywhere. Believe it or not, the biggest risk of wine investments is that the
field is exposed to liquidity problems. There are several rare bottles that can command increased market values,
but they’re insignificant as long as people aren’t willing to pay for what they deserve. The most important
thing related to wine funds is the fact that they come with an exit strategy. A wine collector should have an
innate ability to sell and make others fall in love with his wine.
What can slow down a wine investment?
Wine cannot be valued that easily, especially if we were to talk about
expensive wines. Their value is related to how much a buyer is willing to spend and not on an objective indicator.
What’s more, experts from all over the world agree that trying to establish whether a wine fund will achieve
success is similar to the process of rolling the dice: you never know what you get, but the enthusiasm is so big
that you cannot help it.
Fine white wine Riesling Schoenenbourg 2004 comes
from Alsace wine region in France.
In spite of the risks, increasingly more people are willing to invest a small part
of their fortune in wine. Why? Because wine is valuable; wine collectors can earn a lot of money from buying and
selling part of their collection. However, there are several voices who say that investing in wine can be very
risky. A wine investor should afford to lose money, since wines are perishable especially if they aren’t kept in an
Profits and investments
Wine specialists agree that more and more people have started to invest in wine
since 1994, when America, London and Hong Kong became the main markets. However, the situation has changed since
then, and China has joined the list of serious wine markets. According to recent data, more than 13,000 lots of
wine were purchased in the U.S, their worth being more than $40 million. This means that there are plenty of active
wine investors nowadays, and they all agree that only the right bottle of wine can bring you the profits that
you’ve been dreaming of.
A wine investor shouldn’t be interested in short-term profits, because wine gets
better with age. Besides, wine investments are similar to art
investments, because everything that matters is the beauty of the
achievement, which lies in the eye of the person who watches it. It’s obvious that you only open a wine bottle
because you want to impress your guests, but imagine how would that wine taste in five or maybe even in 10
years, when you could sell it for a larger amount of money.
|Investment wines should only be purchased sparingly,
who have experience in this risky field of investing.
Quality wine investments
If you want to invest in wine, you are advised to turn your attention to wines you
would drink. Make sure that all the storage conditions are
adequate, since this is one of the most important aspects that guarantee for the quality of your wine. Try to
ensure that you have gathered all the needed information about storage conditions and don’t forget to pay
attention to provenance.
Never purchase a wine whose provenance and authenticity is uncertain, because it
is one of the least inspired decisions you can make. Plus, try to purchase only from people who have some
experience in this field and don’t let them talk you into spending impressive amounts of money on wine. Analyze the
market and do some research on your own in order to avoid buying something that you’re simply passionate
For example, Canadians enjoy no less than 220 million wine bottles annually, and
all of them are produced by their own wine industry. Wine investments have become extremely appreciated nowadays on
a global level, even though the greatest wine consumer in the world is the U.S. However, China is expected to
exceed the U.S. by 2023, when it will probably become the biggest wine market in the world.