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Alba Iulia
Friday, September 25, 2020

The secret behind investing in non-traditional assets

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Roxanne Sarthou
Roxanne Sarthou
Roxanne Sarthou graduated from the University of the Philippines, Diliman. She is an Australian-qualified Financial Planner, Private Banker, Lending Manager and Property Investor. The information provided in this article is that of the author. Readers may get in touch with her via email on sarthou@honourbrothers.com.

Mention the words “non-traditional investment” to someone, and that person will automatically think of something that you put your money into, without completely knowing what it is, or fully understanding how it works.

This, by definition is no investment strategy at all—it is, in fact, a recipe for financial ruin. 

The first rule of smart investing is to know exactly what you’re getting into. You have to know where your money is going, what other inputs are required, and what chances you have of actually getting your money back when it’s all over.

Having said that, it’s best to forget about diversifying into crypto currencies, forex trading, and trading options and derivatives.

Like it or not, your best shot at non-traditional investments will involve things that you are already intimately familiar with. These investments will usually spring from some lifelong hobby that you have indulged in, or involve some special skill you have developed throughout your life.

We have all heard stories about people who make a splash in areas totally unrelated to their nine-to-five jobs, or in fields that have nothing to do with the degrees that they earned in university, and this is the real substance behind “non-traditional” assets and investments.

One gentleman we know has a passion for wrist watches. He is totally familiar with every model of a particular brand of luxury watch, and whenever he has extra cash, he indulges himself by buying one of them. “This is my version of forced savings,” he likes to say. He actually uses these watches, but they are so durable that they show very little sign of wear.

Collectible luxury watches | Image by <a href=
Collectible luxury watches | Image by Henry Fokuhl from Pixabay 

Because this gentleman knows his watches, the pieces he has acquired have managed to appreciate in value over the years, and his “forced savings” are now worth significantly more than what he originally paid for them. But this is only one example of a viable “non-traditional investment”.

To prove his point, he cites the example of a U.S. Air Force vet who purchased a Rolex Daytona Cosmograph for $345.97 while he was stationed in Thailand from 1973 to 1975. When he finally decided to dispose of the watch not long ago, he was flabbergasted to discover that it could be worth up to $700,000 (!)  You can check out the full story.

Another lady we know collects some of the most expensive, high-end designer handbags in the world. Unlike the disposable fashions that most people wear, which continually change with the seasons and are soon worth next to nothing, the demand for the handbags in her collection has soared, and she now sits on a gold mine of coveted collector’s items that she can sell for two to four times what she originally paid for them. Just another example of a hobby that has paid off handsomely in investment terms.

“You could buy a Hermès Birkin for $4,000 in 2000,” she says. “Now they’re worth from $12,000 to $17,000 apiece.” (Read the full article).

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So if you have a hobby that you are passionate about, now may be the time to turn the knowledge that you have into a profitable investment. Maybe you are fond of jewelry, and know how to determine the purity of gold and how to classify precious stones. You may already have some pieces in your collection, and you are considering adding more. If so, you have entered the world of non-traditional investing, and have portable, easily liquidated assets in your possession. When a financial crisis strikes, you can dispose these items as needed, to provide ready cash to tide you over.

Think about what you enjoy doing most, and what you are truly passionate about. Have you been collecting anything? Over the years, people who collect paintings, comic books, vintage cars, coins, phonograph records, rare books and even memorabilia have discovered that there are markets for what they have, and that they can cash in on the demand for items in their collections at moment’s notice on the world wide web.

Remember that the key to proper investing will always be understanding where your money is going, and knowing what you are getting into. If you have a genuine interest in some hobby or activity, it might just pay to feed your passion, and to engage in your hobby with renewed interest. You can turn what you are passionate about into your very own non-traditional investment, and the odds are good that in the end, you will be successful. Even if you don’t make a ton of cash out of it, you will at least enjoy yourself!

(Editor’s note: Roxanne Sarthou graduated from the University of the Philippines, Diliman.  She is an Australian-qualified Financial Planner, Private Banker, Lending Manager and Property Investor. Aside from traditional financial investments, she also owns the Handbag Salon on Collins – curator and purveyor of  high-end luxury designer collectibles).


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