Unable to work in the current climate, bartender Alex Williams has used his whisky collection to fund himself through the COVID-19 pandemic. He explains how you can too.
Investing in whisky as a commodity provokes debate. It is one that I have engaged in on numerous occasions. The common refrain ‘whisky is there to be drunk’ simply doesn’t cut it in the current economic climate.
In our industry, we are not afraid of experimenting with ingredients, techniques, or presentation: why should we be reticent when it comes to trying to make our money work for us?
The reality is that, like fine wines and vintage spirits, whisky is a valuable commodity that can be invested in. The concept is simple. In a manner akin to stocks and shares, one tries to buy low and sell high – though as with the stock market, doing one’s due diligence is essential.
Mitigating risk is key: however, the returns can be significant
Mitigating risk is key: however, the returns can be significant. In my case, I took £3,500 sitting in an ISA, seeking to test my mettle and increase my profit margin. I invested in a number of bottles – predominantly Japanese whiskies – both through retail and online auction houses, found a safe place to store my wares, sat back, and waited.
While it was originally my intention to sit on this stock for at least three years, the current global pandemic forced my hand somewhat. Unable to work, I decided to sell, with the aim of providing myself with funds to weather the storm.
There are a number of reputable online auction houses in the marketplace currently, such as Scotch Whisky Auctions, Whisky Auctioneer, and Whisky. Auction; while the number of specialist spirits retailers abounds.
Buying bottles at auction is deliciously simple. To register as a buyer at various auction houses costs very little – at Whisky. Auction it costs £5. In return, unlimited access to their monthly auctions awaits. If your endeavours yield success, online payment is easy and won lots are delivered to the door via courier. There is no need to invest in storage: simply store your wares upright at reasonably consistent room temperature and pay for insurance.
The money I have made has made a significant contribution to my financial solvency
When selling, auction houses will collect your items from your home – again by courier. One can mitigate risks involved with selling at auction by placing reserve prices on lots (£4 +vat at Whisky.Auction). Listing fees and commissions can be charged on sold items, which impact profits. However, the process of selling is very simple overall. Investing in whisky, then, is accessible to all – finances permitting.
To sit here and brag about the return on my investment would be crass. Suffice it to say that the money I have made has made a significant contribution to my financial solvency during the current crisis.
Investing in whisky may not be for everyone. It likely will not yield significant returns in the short-term. However, it is a viable alternative to traditional savings or investments: and, importantly, it is an option that is open to many, not just a few.
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