Investing in Whiskey - Alternative Investments

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The major reason whiskey it is an investable asset is because it improves over time. Whiskey gets better and better. So it isn’t a depreciating asset.

It is actually quite a simple investment. When investing in whiskey there are three options,
1. Buy a physical bottle and store it yourself…
2. Buy a barrel and pay a fee for storage. But you get a better price/litre because it’s a bigger quantity.
3. Invest in whiskey like a commodity, where you buy x Litres but never receive the whiskey, it’s traded like a commodity like gold.

This is a big reason why I like investing in businesses. The business produces cash and my investment not only will become more valuable on the stock market, but I get to share in the cash along the way.
Investing in whiskey won’t provide any yearly returns.

Instead of trying to pick a particular blend that you think will appreciate stronger than the others, there is a fund in Hong Kong called the Platinum Whiskey Investment Fund.
But they want a $250,000 minimum investment into the fund.
It has appreciated around 15% since 2014, but this isn’t for an investor like me.
This is for those high flying, banking executives who want to show off to their friends by going to expensive whiskey parties on rooftops in Hong Kong.

Well in 2015, a platform called Whiskey invest direct was launched where you can invest in whiskey without having to do any of the management yourself, plus provides a trading platform so you can sell your Whiskey whenever you like.

Fees are still high compared to an index fund, but you are buying whiskey which is an alternative asset and all alternative assets are generally going to be higher in fees.
This is because they are far lass popular investments and the work required to organise these investments is far more involved than an index fund.
For me personally, The idea is that Whiskey would be an alternative investment as a diversification from my other assets. I would never put more than 2-3% of my portfolio into an asset like this.

The platform has only been around for 5 years now, and I don’t like having a lot of my money sitting in a platform that doesn’t have a strong reputation yet. If I buy whiskey and watch it every month to see it increasing in value, to have something go wrong with the platform, than this is as much of a risk as something going wrong with the whiskey market itself.
I would like to see the platform around through a financial crisis or two to see how it holds up, before putting big money into it.
But because the platform treats whiskey like a commodity, you don’t have to by VAT or duty tax, which you do have to pay if you buy a bottle or a barrel.

It isn’t as fast moving as the stock market, but it does give you a far better option to sell your investment if you need to.
It also shows how your whiskey is increasing in value over time. So you can actually see what it is worth at any given moment.
This is a big improvement from buying a bottle or barrel yourself and having to hire experts to value your whiskey.
I also like that you can start off small, if you want, you can buy just 1 litre of Whiskey. This is far better than the $250,000 Hong Kong fund I mentioned earlier.

I hope you enjoyed exploring the world of whiskey with me and maybe you will be a whiskey investor one day.

If you like alternative investments, Please subscribe to my channel to get more investment ideas.
Also leave a comment if you have any questions and I’ll see you in the next video.