Wildlife Art and Financial Investment

Examining the range of animal artists in the world today, it is hard to guess which may be the most lucrative investment. Most art collectors buy their artwork primarily for the enjoyment of seeing it on the wall, but of course it is always good to have the knowledge that a certain painting has held it’s value, or even more exciting, the painting has become more valuable.

Unfortunately only a very few artists will achieve international recognition. Even though a lot of artists are professional and produce superb pieces of art, they will generally go unrecognized or enjoy just a short period of celebrity status. Less than one percent of artists will see their work rise in value over the years, and it is important when investing considerable sums of money primarily for the reason of commercial investment that the correct decisions are made.

Such artists are rare and it is essential not to be influenced by a retail outlet that wishes to sell a particular artist’s work, or alternatively, not to be pushed into buying because a shop does not or is not able to purchase such work, that it is of no demand in comparison to the paintings being exhibited in the gallery. Usually this is because a lot of retail outlets are bound by arrangements with publishers, who want only their paintings to be sold, even if the artists are recognized or unheard of. Another reason is that the paintings and signed prints by internationally recognized artists are so sought after that it is usually hard to obtain original paintings because of rarity and ever increasing costs.

Contemporary paintings create much attention, but usually disappears as quickly as it has appeared, and of course the losses can be enormous. From a financial angle, it is generally best to stay with the most established names that have a long term proven track record. Artists that have had many sell out exhibitions in prestigious galleries throughout the world, and that have been internationally praised and the media.

There will always be an element of the latest fashion involved with picking the right style of paintings. The key is to find the paintings just before it becomes the latest fashion. This can be seen in many subtle ways, the change in music give hints of what will be in vogue tomorrow.

Occasionally, we see a move towards the nineteen fifties. This is usually a passing fashion, a stopgap, as the art world moves towards its the next big statement. It should be noted that in difficult financial times, as we have noticed over the last year or two, that the established end of the art world actually sees a good growth, due to the lack of commercial interest in financial institutions.

A painting by a well known British artist, purchased by the Football Association six years ago for just under two million pounds, was recently valued at six to ten million should it go under the hammer today. An amazing percentage increase in these financially difficult times, which goes to prove the solidity and viability of investing in art.

Get Relief From Timeshare Myths by Debunking the Idea That a Timeshare is a Financial Investment

The number of owners who are trying to get rid of their timeshares remain to be significant especially during this time of financial crisis. They want timeshare relief but they are having some hard time doing so. Their vacation packages remain in the market and the liabilities associated with their timeshare properties continue to tie them down. Selling the said properties is doubly difficult these days because of the financial downturn that the economy is experiencing. And they can not just run away from the responsibility they have with the packages they purchased. So, regardless of their circumstance, they are forced to keep their timeshares and pay its maintenance and other associated fees.

Rationalization for Buying a Timeshare, It is an Investment

Most people who purchased timeshares were enticed with the idea that owning one is an investment. They were made to believe that owning a similar property can greatly benefit a person, especially in the long run. The said idea is usually used by timeshare agents or companies who are trying to sell these packages to people for a profit.

Debunking a Myth, Timeshare is Not a Financial Investment

However, what these people are unaware of is that timeshares may be considered as investments but not financially. Timeshares can not be considered as financial investments because its worth decreases in time. This is because timeshares simply mean vacation packages that anyone can avail of for a more worry-free vacationing. And since personal houses nowadays are not to be considered as financial investments anymore, it is even more impossible to consider timeshares, which are only vacation packages, as economic investments.

Timeshare is More of an Investment for Good Health

Timeshare can only be considered as an investment if it is related to the health benefits that a person can get from having time for a regular vacation. And because it is already a vacation package, timeshare owners find it more beneficial to have timeshares because planning, scheduling and having a regular vacation is made easier with timeshares. These are the real benefits that timeshares offer, easy and yearly vacationing.

Get Relief from the Timeshare Myth

Having laid down all facts and possibilities, timeshare owners and even those who are still looking at buying the similar package should keep in mind that timeshares are not financial investments. It is a vacation package and it can not be considered as an asset. It is more of a liability because of the maintenance and other associated fees being regularly collected by timeshare companies. So, when the time comes and you consider selling your timeshare property you are already aware that you can not earn from the transaction because it is not an investment and never will be. Therefore, it is necessary that one gets timeshare relief before they realize that it is already too late.

Does Real Estate Still Make Sense As a Financial Investment?

For many people, the only real estate investment that they make will be in the home they live in. Homeowners can do well in this market provided that they meet these two conditions:

1) They need to be patient when buying so that they are able to wait for a “Great” deal to come along.

2) Keep your home for at least four to five years after buying so you can create some equity from your initial investment in the home.

Using Real Estate as a Way to Increase Your Wealth for Investors

From an investor’s perspective, you can get better deals in real estate right now than you could at any point in the last fifty years, IF you know what you’re doing. For example, some investors are buying distressed homes that sold five years ago at $120,000 for as little as $20,000. With a bit of fix up each of these homes becomes a viable property because they can be rented out for more than twice the monthly mortgage payment. The other reason these homes make a good financial investment is because the purchase price plus the cost of fix up is considerably less than what other similar homes are selling for.

The difference between making a good deal and a poor deal is often dependent on the motivation of the seller. Learning how to negotiate a short sale from a lender who does not want to foreclose on the home, or discovering how to use creative financing when dealing directly with a motivated home owner can make all the difference in the world when you are looking to make a good return on your investment.

Do Short Sales make good financial investments?

A short sale is when the lender decides as the best choice, considering its various options, to take less than what is owed on a property instead of waiting to go through foreclosure. Most investors who work short sales look for an opportunity to get a home way below even its current value, then immediately resell the property to a homeowner at or just below the current market value. This allows the investor to make a decent return on his own, or a friends investment capital. This return is significantly better as a financial investment than most other alternatives that are available today.

Lease Options as an Investment Vehicle

One of my favorite methods of buying a house, using a lease option, allows you to make a great return on your money while also limiting your risk. To structure a lease option you’ll need:

1) A motivated seller. No shortage of these in today’s market.

2) A loan payment that is low enough for a typical rental payment to cover the entire payment including principle, taxes, and insurance.

3) An agreement where you can buy the house at any point in time over the next ten years for either what’s owed or no more than about 80 percent of the current value. Of course, not every seller is going to agree to this which is why you focus on working with motivated sellers.

Next, you turn around and offer the home on a rent-to-own basis and get your “Tenant Buyer” to agree to take care of all the maintenance and repairs in exchange for the right to buy in two or three years. From the Tenant Buyer’s perspective this is a good financial investment because they can get into their own home even if they have less than perfect credit.

If your Tenant Buyer ends up buying the house, you’ve just made money on the small financial investment that it takes to set up a lease option. If they don’t buy or move out, you simply find another Tenant Buyer and do it again. Then after another two or three years you are able to finally collect on your financial investment.

Internal Rate of Return: How to Measure Financial Investment

The financial analysis principle of net present value enabled us to first calculate the present value of an investment and then subtract the actual cost of the asset from its present value. The N.P.V. calculations were made with a minimum rate of return already established by the firm. In this section, in- stead of solving for the N.P.V., we solve for the internal rate of return (I.R.R.). The I.R.R. calculation measures the yield or rate of return on an investment rather than its present value. The present value is assumed to be the initial cost of the asset. The I.R.R. calculation measures the yield from a series of cash flows across a specified period of time and includes the cost of the asset, the cash flows from the asset, and the salvage value of the asset at the end of its useful life. In the case of plant and equipment, an asset’s useful life may be exhausted at the end of a period due to functional or technical obsolescence. The useful life of real estate, which may actually increase in value over time, is said to be exhausted when the property is divested.

Let’s look at an example. Assume Investor Lincoln wants to add an additional space to a small retail strip center. Construction costs to add the space are estimated to be $100,000. As illustrated in Table 7.3, Lincoln has two choices. In Scenario 1, he can lease the space to Tenant A, on a lease-option agreement for three years at a rate of $10,000 per year and then sell the space at the end of the three-year period for $110,000. In Scenario 2, he can lease the space to Tenant B on a lease option agreement for six years at a rate of $10,000 per year for the first three years and $12,500 for the next three years, then sell the space at the end of the six-year period for $120,000.

The internal rate of return in Scenario 1 is 12.94 percent. The income generated from three years’ worth of cash flows is the equivalent of earning an annualized rate of return of 12.94 percent on Investor Lincoln’s initial investment of $100,000. If, however, Investor Lincoln chooses to hold the property for six years, his yield increases to 13.40 percent. Because the I.R.R.s in this example are marginally close, there may be other factors such as tax issues that could affect Lincoln’s decision to choose one scenario over the other; however, with all other things being equal, the higher yield in Scenario 2 suggests that Investor Lincoln should choose this alter- native over Scenario 1.

Does a Cheap Financial Investment Advice Service Exist for the Rest of Us?

If we had someone who worked for us offering financial investment advice and he did as poorly as we usually do with our own money, he would be on the street in 5 minutes. Most of us have so little understanding of how finance works that our instincts are usually way off base. We end up buying when the prices are at their highest and selling when they are at their lowest point. We trust our instincts and impulses and just buy anything that seems to have an aura of excitement about it. In short, we aren’t any different from Monica in Friends who tries to play the stock market and buys the company listed as ZXY because she thinks it sounds sexy?

A part of why we do this comes from ego. We all have to believe that we possess some kind of secret instinct that always leads us right. And we refuse to acknowledge that we don’t have such an ability no matter how often it’s proven to us with our own money. But a more important reason why we fail is that as abundantly available as financial investment advice is in the magazines and in financial TV shows, when it comes to advice from an actual person who is familiar with your circumstances, it just isn’t easy to come by.

There just isn’t cheap financial advice available that is any good. Most financial advisors only exist to serve millionaire clients. When it comes to moderately priced advice, such a thing almost doesn’t exist. Whoever realizes that there is such an unserved market out there is certain to hit it big. Consider the new financial investment advice company called Flat Fee Portfolios.

If all you have is a $1000 to invest, you’re still welcome at a service like this. And these services don’t charge you a commission either. They charge you a flat $129-a-month fee no matter how much money you bring in. That’s the complete opposite of the kind of money-grabbing practices evident at financial investment houses usually. For that kind of fee, you can either get an actively-managed mutual fund or a passively managed index fund.

But for someone who has just a couple thousand dollars to invest, $129 a month would be an impossible burden to pay. The average account size at one of these financial investment advice firms is about $5000. Will these services manage to make enough of a profit that they may stay in business? That’s anybody’s guess.