Art as an Alternative Investment: Factors to Consider

Financial Advice Posts No Comments

Reading reviews here and there, I have discarded the notion that my desire to venture into art investment thrives on the common aim as other businessmen that I just turn up to a gallery, buy the artwork and wait for its value to soar. Unfortunately, that isn’t the case. There are numerous factors that I must consider before taking up art as an investment. They include but are not limited to the following.

 

Monetary barriers

There’s a limitation to the amount of money that I can access to diversify my investment into art. Credit to the tune of hundreds of millions is certainly out of the equation. Capital is one of the major constraints to my entry into investing in art. Of course if I was to believe that some large profit could come from a particular investment and the buying price is a little too steep, there is a potential to finance the purchase in other ways, such as finding secured loans that could be suitable. Quite a few people I know have taken out loans to purchase art, so this is certainly a viable financial option for investing. However, this is not the only cost as auction houses can claim commissions as high as 25% when buying and selling. Still, I have to be very careful lest I invest into a white elephant.

 

Liquidity risks

From a simplistic viewpoint, investing in art entails buying a piece of art, waiting for its value to appreciate, and then cashing out. Unfortunately, it’s not as easy as it sounds. I will venture into this diversified art business knowing that it’s highly liquid, and can be dictated by other external factors that can bar me from cashing in on my assets. Factors that can make it difficult for me to sell my piece of art or access my money include the genre of the piece of art, the country that I’m trading in, and the wider economic climate.

 

Provenance risks

Differentiating genuine and fake artworks is difficult and requires expertise. Although the gallery that I buy from ought to be well-placed to tell which one is legit or fake, they cannot always be 100% certain. For instance, in 2016, Alain Dreyfus was alerted that Alfred Sisley’s painting bought at Christie’s in 2088 was looted by Nazis in 1940 from another family. The failure in provenance documentation led to a suit to return the money.

 

Extra costs

Besides the existing high commissions demanded by auction houses when buying and selling a piece of art, I’m likely to deep further into my pockets when choosing art as an alternative investment. This is partly because about 80% of secondary market volume belongs to Christie’s and Sotheby’s auction houses. In addition to these scary fees, there are many other costs such as transport, insurance, and storage that I must consider for every piece of art that I purchase.

 

Ownership models

Although this is not a major factor that I should dwell on, it’s worth considering it. Ideally, venturing into art can provide an excellent opportunity if I have money to participate in auctions, and I can identify high-performing pieces of art. But if I have limited capital, then I may consider being more judicious to use a shared ownership model as an alternative entry point to this investment.

 

Frankly, while conceptualizing ideas around investment in art, shared ownership didn’t cross my mind. But through blockchain technology, I can now get all the vital information through the mainstream outlets. However, there are fears that this infiltration could be the source of major discontent in market dynamics.

 

For instance, if I decide to invest in digital shares in a painting instead of an entire piece of artwork, it might substantially lower my cost of entry into art investment. It can also be the perfect avenue for me to bypass the liquidity risk (trading artworks in small fractions is easier than selling the artwork itself) as well as avoiding auction houses.

 

Since blockchain underpins the above principle, I will invest in the paintings knowing that I have a better long-term assurance of provenance than previous or current investors have had in their engagements. This is because the centralized ledger is secure.

 

Working with an investment firm

Another consideration is to purchase and sell artworks through a credible investment firm. Most of them thrive on the ideology of shared ownership in a democratized environment. Still, they can connect me to other lovers of art from different backgrounds who also want to trade in the artwork. There are many platforms that can aid in the buying and selling regarding investments into art pieces, and as stated before, some look to trade in art shares instead of whole pieces of art. Depending on your financial standings, either option could be worth looking at.

 

Another advantage of investment firms is that they can spread their investment capital with ease because purchasing numerous works helps them to diversify their portfolios.

How to Earn an Income as a Freelancer

Industry Insight Posts No Comments

More individuals are actually working from home than ever before due to the Coronavirus (COVID-19). If you’re interested in becoming a freelancer, following these steps will help you establish a successful freelance career.

Getting Started

Working from your home is not as simple as you might think, especially as a freelancer. You may be working from your computer a lot, meaning that your eyes are going to be strained, to help reduce eye pain that could cause you to take frequent breaks or finish early, you may want to look into companies such as Felix Gray to see about blue light blocking glasses so you are prepared. To get started as a freelancer, you need to think about your skills and how they can benefit individuals and companies. Popular freelancing skills include graphic design, writing content, accounting, and more. Once you find your niche, you can start preparing to enter the freelance world.

Research Different Platforms

The next step in establishing yourself as a freelancer is finding the right platform to offer your services. As a freelancer, I use Google to help point me in the right direction. It’s best to find a platform that best suits your service niche. Say you’re a content writer looking for freelancing opportunities, you might want to check platforms like Contena. This online platform connects freelance writers with businesses looking to hire them, which can be useful to kickstart your freelancing career. Now, if questions like “is Contena legit?” are running through your mind, you should do your own research to be sure. Researching different platforms and making a note of the reviews they’ve received and their overall layout is very important. Therefore, it’s a good idea to check out their terms of service, prices, and features that will help you sell your services.

Choose Your Services

Now you need to figure out what services you’re going to offer. I would start with the things you’re best at, whether that be consulting, home repairs, interior design, and other services. You need to put your best foot forward. Advertise the services that you know you are excellent at doing.

Consider Your Prices

You need to consider how much you will charge for each of your services. If you’re comfortable with offering only one service to get you started, that’s fine. Ideally, I would offer three services to begin with or two versions of the same service, each one offering more than the first. You can use a unique pricing system or use a base cost. A unique pricing system features prices that you set based on what you think each job is worth. A base cost is a system you use to price your services based on a particular platform’s prices.

The Legal Aspect of Things

As a freelancer, you need to consider the legal aspect of operating your business. Most beginner freelancers believe you can provide a service, get paid, and move on to the next customer. While this is true in a sense, you need to have some legal perimeters. If you choose to offer your services on a freelance platform, you take the hassle out of the legal work. Freelance platforms cover all the legalities, some of which you can find in the company’s terms of service.

If you’d rather go it alone, you can, but you need to provide some legal documents for the work you provide. These legal documents don’t have to be extravagant. Still, they do need to state your terms of providing freelance work and your customers’ role in the work you provide.

In addition, do not forget to factor in the taxable aspect of your income, generated through freelancing. Each nation may have its own set of rules and regulations. To make yourself knowledgeable about the same, you can look at some verified online freelance and personal finance resources or you can talk to a finance expert as well. This remains immensely important because at the end of the day you want to be paid fairly.

Share on Social Media

One of the things I recommend is sharing your work on social media. Millions of people use social media every day, and it is one way you can advertise your services. Use multiple social media platforms for promoting your services. The more social platforms you use, the more growth potential you have, so use them wisely.

Find Customers

Finding customers is easier said than done, but not impossible. Most freelance platforms bring the clients to you, so that takes a lot, not all of the work out of your day. If you find clients elsewhere, you can bring them to your platform of choice and earn money. Most freelancers make use of a reliable VPN to work with international clients. If you are a freelancer, you should also consider using a virtual private network that has the choice for a diverse server network. Research and compare between different providers that suit you the best. For example, nordvpn vs expressvpn is a popular choice among remote workers.

Tell Customers About You

Your customers want to know as much about you as possible. I would disclose your education and special skills that help you perform your services better. You can also include certifications you’ve obtained and the goals you’ve achieved. I would also tell customers what you like to do in your free time, such as your hobbies.

Further Your Knowledge

There’s always room for improvement. Further your knowledge as much as possible. Improving your experience in the services you offer allows you to earn more money. Clients are willing to pay more for your services if you can prove you’ve had training or education that certifies you know what you’re doing and can help them in some way.

Becoming a freelancer during a pandemic is a smart idea. Still, you need to make sure you execute your plan correctly. Use these tips to help you get started on your freelance journey.