Are you bored of the daily ritual of checking your investment app hoping for a miraculous surge in share prices? In the U.K, 33% of adults have invested money in traditional stocks and shares. A study, conducted by finder.com, found that the number of adults in the UK who own stocks and shares had increased by 50% between 2018 and 2022. The data also showed that Generation Z, that’s you if you were born between 1997 and 2012, are expected to be the most prolific investors post COVID pandemic. They are followed closely by the millennials and Generation X. Men are also more likely to either have invested or be considering investments. So, let’s just boil it down to this, if you’re aged between 18 and 60 and you are living life as a man, it’s highly likely you are an investor, or will soon become one.
There are many options when choosing how to invest your hard-earned dough, but there are some things you need to consider. Firstly, an investment isn’t the same as putting money in a savings account. Typically, if you invest money, you are locking that money away for a period, sometimes many years. Secondly, it pays to do your research. Making uninformed investments can lead to financial pain later down the line so if you are in any doubt, you may consider seeking professional advice.
But let’s talk about something different. Whisky. In 2021, the global Whisky market was estimated to be worth $60 billion with some forecasts predicting an increase to around $90 billion by 2027. Who wouldn’t want a sliver of that pie! And shrewd investors have already caught on to the opportunity with limited release bottles of Macallan often selling out within minutes of release and going on to be sold at auction for far more than was originally paid. Some of the more serious investors look to invest in entire casks. And with returns of between 12%-15% per year, it’s clear why the opportunity is so attractive.
Whisky even has its own trading platform. Rarewhisky101.com are the administers of an enormous database of performance indices dedicated to Whisky. Want to know which brand or type is going to perform the best as an investment? Rarewhisky101.com is the place to look. Their data shows Whisky is only going up in value which makes it a unique and fruitful investment.
The easiest way to get started is to have a look at some of the whisky auctions, such as whiskyhammer.com, and get a feel for what sells and what doesn’t. Once you find something which interests you, register with the distillery for updates on limited releases and try your luck on one bottle. If it goes well, repeat. Alternatively, if you manage to find a particular whisky rocketing in value, you might be able to bag yourself a bottle by bidding on the auctions.
It all sounds great, and it is. Still, you need to be aware of some drawbacks. Firstly, in general, if you invest in a bottle or several bottles of Whisky, you will normally have to take physical ownership of the asset. Not a big problem if you only have one bottle, but if you end up with hundreds, you may need to start looking at a bigger house! You also risk the bottle being damaged or stolen. And of course, there’s always the risk you might end up drinking it which is a terrible end to your investment with a hangover to follow!
We recently spoke with a U.A.E based Whisky investor who gave insight into what’s involved. After making his first significant investment in Whisky, the arrival of his first 100 bottles paved the way for a large-scale loft clear-out to make storage space, and a logistical operation Amazon would be proud of. Storage and preservation was a challenge in the early days. The experience led to a rethink of strategy, and, along with some friends, he invested in a cask. This brings a few benefits, perhaps most significantly, the distillery store and maintain the cask on your behalf.
Recently, a cask of Ardbeg Whisky, produced by the Ardbeg distillery on Islay in 1975, sold for a staggering £16 million at auction. According to Edinburgh Live, the price paid is more than double what the Distillery owners paid for the entire distillery in 1997. And earlier this year a lucky investor, who sunk £5000 into a cask of Macallan back in 1988, reportedly on a whim, enjoyed a 20,000% profit when it sold at auction for a staggering £1 million.
If you’re considering a cask investment, you’d better have deep pockets, or be part of a consortium. Scotchwhisky.com recently reported that to purchase one of the latest releases of InchDarnie casks, you’ll be investing around £8500 per cask. So, what do you get for your money? In the case of InchDairnie, you’ll be invited to the distillery three times during the twelve years of maturing. Your cask will be stored by the distillery and then bottled once fully matured. The cask will be personalised to you. And perhaps best of all, each year of maturation, the distillery will send you a sample case. Inside you will find a tasting sample and a display sample to proudly show off.
Whisky is a viable investment. And it’s fun too. Investing in Whisky means you need to learn about what makes a whisky investable. You can even head to the distillery which produced your whisky, many of which can be found in Scotland. You don’t even need to be a Whisky drinker, or even a drinker at all. The Whisky is an asset like anything else, so it’s truly a global market. Even countries such as the U.A.E, where consumption of alcohol is essentially banned for local people, have a prolific and blossoming whiskey investment culture.
Whisky is not only an investment, but it has a strong and long-standing tradition among those who produce it and those who drink it. Adding Whisky to your investment strategy is fun and a realistic alternative to the traditional stocks and shares approach. And it just might make you the next Whisky Millionaire!