Assets that can give above-average returns and make you rich
Alokesh Bhattacharyya June 20, 2012"It's a rich man's world," famously crooned Swedish pop act ABBA in 1976. Everybody wants to be rich. But for most of us, getting rich is a matter of effort - landing a good job, succeeding in a business venture. Or chance - you win a lottery or become a movie star! There are also some, of course, who have earned great wealth through investments, especially in stocks or property.
In this package, we take a look at some unconventional assets - art, land, diamonds, fine wines and whiskies, and some high-growth stocks - that can give great returns but also entail huge risks. A recent Barclays report says 'treasure assets' such as art, wine, and classic cars comprise three per cent of the net worth of wealthy Indians. Where do they invest most? It is still in gold and real estate, according to Muralidhara Kadaba, Chairman of Altamount Capital Management, which advises the rich on investments.
The rich are better at it, but experts generally discourage others from getting into exotic assets. At the very least, they can be illiquid and opaque in terms of valuations, according to Satya Narayan Bansal, Chief Executive - India, Barclays Wealth and Investment Management. So, if you do invest in these areas, cover your bases first - ensure you own a home, have sufficient life insurance, enough debt and equity investments, and other assets you consider important, to cushion you from life's vagaries. Second, do not put in too much money, so you can bear a loss if it arises. Third, do your homework, and take professional advice.
Finally, go where your heart takes you. If you love art, buy art. You will likely do a good job of it.