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Investing isn’t all about assets and equities. Some investors see their wealth growing in unusual ways with unexpected additions to their portfolio.
Just ask Sheridan Renfield. A car dealer with a difference, Renfield has seen his Sedgefield Classic Cars become a popular tourist attraction on the Garden Route between George and Knysna. He’s also seen the cars on his lot add a few zeros to their selling price.
“I’ve been involved with the vintage car scene for the last 45 years, and I’ve seen car values appreciate over that period,” he says. “When I left Johannesburg to come to Sedgefield in 1997, I had two Mustangs. The best price for them in those days was R45 000 per vehicle, even though they only cost me under R10 000 when I got them. Today you’re talking R800 000 or R900 000 per vehicle.”
Renfield says that an old car could be as good an investment as antiques, jewellery or art. “But,” he insists, “a car is a more usable asset, and you can enjoy it as it appreciates. There are various car clubs around the country, and you can join their rallies and outings, and talk with other car enthusiasts. It’s become a cult thing over the years.”
Cash in on “cult” investments
Of course, cars aren’t the only “cult” investment. Sneakerheads will tell you that a pair of ultra-rare Yeezy 2 Red Octobers, which originally sold for USD250 (about R3 750) in 2015, will now cost you about R200 000 on eBay. And oenophiles will have you know that a bottle of Paul Sauer 2015 (original cost R595) recently sold on auction for a whopping R3 750 per bottle. In financial terms, both provided great ROI.
While wine writer Jamie Goode warns that, “Any wines bought with resale in mind [must be] professionally stored in temperature-controlled conditions”, Renfield notes that, “You can’t buy an old car and park it in a garage, because it will deteriorate if it’s not used.” Knowing the right way to care for your collectables holds true for other items too: for coins, stamps, comic books and vintage toys – or for any object where Value = Condition + Nostalgia. Keep it in good nick, wait a few years, and sell it at a tidy profit.
So, how many are a few years? When it comes to art, that depends, says Dr Same Mdluli, director and curator of Standard Bank Art Gallery. Like a classic car, though, the artwork should not be hidden away, but be put to use. “Part of building its value is [in] it being seen and shown,” says Mdluli. “A good dealer will sell you something you’ll enjoy. You have to live with it. If you show it, your guests will be intrigued and interested. They might want to find out more about who the artist is. You are part of creating an ecosystem for this artist. Nelson Makamo, for example, has become a household name because people have shown his work in their homes.”
Cars, coins… cows?
If you’re an investor who doesn’t want the headache of finding and keeping (or, in some cases, restoring) objects like cars or coins, there’s another surprising investment that promises excellent returns: livestock farming.
Since 2015, brokerage Livestock Wealth has attracted over 2 800 unique investors, who have collectively invested over R70 million and been paid out over R10 million in profits. A registered and regulated credit provider, Livestock Wealth promises returns that few other short-term investments could hope to match. Invest in a free-range ox for R11 529 today, and you’ll earn a profit or R576 to R701 (that’s 5% to 7%) in just six months. A 12-month investment in a pregnant cow, meanwhile, will earn you 10% to 14% returns on an initial investment of R18 730. If you’re looking at the longer-term, five-year investment in a connected garden could earn you 61% profits (R5 000) on an initial down payment of R8 200.
Handily, those profits are guaranteed as the assets are insured by the farmer. And very handily, you don’t need to know a thing about agriculture to make the investment.
To manage your investment portfolio, Standard Bank’s Shyft mobile app provides an easy-to-use virtual tool, which includes investments in foreign currencies. Permanent South African residents with a valid South African ID are limited to R1-million for “offshore activities” in each calendar year, and Shyft will help you purchase those funds and manage those activities.
Know what you’re investing in
Many investments are simply bought new and held until their value has increased enough to make them re-sellable. Again, to use sneakers as an example, a pair of Nike SB Dunk Low Reese Forbes Denims would have cost about $65 (about R650) in 2002. Today, you’d be lucky to find a used pair selling at less than R12 000 on eBay.
Items like classic cars or coins and stamps, on the other hand, are usually bought through a dealer, while investment art is best found at fairs. “Art fairs are your first port of call as an investor – personal or commercial,” says Mdluli. “They have come into prominence in the last 10 years or so. There you have the benefit of knowing that galleries and their curators support the artists being profiled. Fairs are meeting places that introduce collectors to artists, helping build the relationship between the two.”
Auction houses like Christie’s and Sotheby’s, which sell artworks for millions, are critical in the valuation of art. “The art arena is controlled by the auction market,” says Mdluli. “It takes time to understand how artworks are priced.”
But isn’t that true for any investment? You need to know the market, and you need a basic understanding of where the asset fits into your overall portfolio. If that asset hangs on your wall or takes you on a long Sunday drive, or sits on your mobile app growing quietly in the background, then all the better.
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