My Grandpa Ben told a heck of a good bedtime story.
With a Scotch in one hand, and a well-worn book in the other, he’d put on a show as he popped his dentures in and out and acted out all the parts.
This was about fifty years ago, well before Harry Potter. At the time, his favorites, and ours, were Where the Wild Things Are and Alice's Adventures in Wonderland.
It’s possible this is how I developed a love for books. But it’s definitely how I developed a taste for Scotch.
I started slowly, in high school, with Chivas, Grandpa Ben’s brand. I moved to Jack Daniel’s in college. And when my grey hair started coming in, I switched to Macallan.
In New York City, where I live, a bottle of Macallan generally goes for about $100. It’s worth it, but I still get sticker shock whenever I buy one.
So imagine my surprise when I recently saw a bottle of Macallan sell for $1.4 million.
Today, I’ll explain what’s going on here…
Then I’ll reveal how you can take advantage of it to earn big profits outside of stocks.
An Alternative to Stocks and Bonds
To kick things off here, let me explain how most people invest…
Most folks stick with stocks, bonds, and ETFs. If they’re adventurous, maybe they’ll add some bitcoin.
But the rich invest differently. And this difference might explain why they keep getting richer.
You see, according to recent research from Motley Fool, the rich mainly invest in “alternative assets.” What are these alternatives? Well, for starters, they include private startups and private real estate deals — the kind we focus on here at Crowdability.
But they also include “collectibles” like art, baseball cards, and you guessed it, rare scotches.
As of 2020, the wealthy held about 50% of their assets in these alternative investments, and just 31% in stocks. The remainder was in bonds and cash.
Why would they do such a thing? Let’s take a look.
Three Reasons the Wealthy Invest in Alternatives
For starters, investing in alternative assets provides diversification. So even if the stock market keeps crashing like it’s been doing recently, these assets can keep growing in value.
Furthermore, they offer a hedge against inflation. In inflationary times like we’re in today, that’s a valuable trick.
But perhaps most important of all, they can provide market-beating returns.
For example, over the last 25 years, early-stage startup investments have delivered annual returns of 55%. That’s about 10x higher than the historical average for stocks.
And meanwhile, according to the Motley Fool, over the last decade:
- Wine has shot up 127% in value.
- Classic cars have gone up 193%.
- And rare whisky is up an astonishing 478%.
But few whiskies are as rare as “The Intrepid”…
Over the past half-decade or so, many whiskey records have been broken:
The most expensive cask, the oldest single malt, the most valuable collection.
But now a new record has been broken. As confirmed by Guinness World Records, it’s literally the world’s largest bottle of whiskey. It’s called “The Intrepid.”
Here’s what it looks like:
Equivalent to 444 standard-sized bottles, it’s filled with 86 gallons of 32-year-old Macallan.
Standing at nearly 6 feet tall, its contents were distilled at the prestigious The Macallan Distillery in Scotland in 1989.
On May 25, 2022, the auction house Lyon & Turnbull put it up for sale. Interest in buying it came from across the globe, and in the end, it sold for a cool $1.4 million.
Its original investors made a fortune — and they didn’t even have to touch stocks.
So, how can you get access to alternative investments like this?
Let’s take a look.
Access for All
Recently, a new type of website has popped up to give ordinary investors the ability to invest in everything from fine art to rare whiskies.
Essentially, just like you can buy a $100 stake in a startup, now you can buy $100 worth of a vintage Bordeaux or Macallan, or of a classic piece of art from Keith Haring or Basquiat.
Here are a few of these websites you can explore today:
Otis — On Otis, you can invest in collectibles including baseball cards, limited-edition sneakers, comic books, and art.
Collectable — This site specializes in sports. Its offerings include everything from a sports jersey worn by Willie Mays, to the sneakers Kobe Bryant wore in his 1996 NBA rookie game. It also offers a secondary market, so you can aim to sell your investments at any time.
Rally — Here you can find everything from vintage Porsches to one-of-a kind offerings like the double-necked guitar used by Slash from Guns N’ Roses. And similar to Collectable, Rally offers investors a way to sell their shares.
Keep in mind, all the typical caveats about investing apply here:
For example, don’t invest more than you can afford to lose; invest in what you know; and be sure to dip your toe into the water before diving in.
Furthermore, many collectibles aren’t “liquid.” And no, that doesn’t mean your shirt will stay dry if you spill them. It means these investments can’t necessarily be converted into cash at the snap of your fingers.
So don’t invest your rent or grocery money into these offerings.
But if you’re looking to invest like the rich, these platforms are a great place to start!