4 more ways the wealthy make money on fun

July 13, 2011

In June, Reuters Wealth reported on how the wealthy make money from their hobbies, in areas from rock-star guitars to rocks from Mars. This month, we examine four more instances where passion can yield payoff for those with means.

To make a healthy profit from a hobby, experts stress starting with a genuine love of the collectible. Noted art collector Alfred Barnes wasn’t thinking of the bottom line when he bought his first Picasso for less than $100. To borrow from the art world adage, he knew what he liked — and had a hunch the rest of us might catch on someday. How did he turn that initial purchase into the world-class collection now held by the Barnes Foundation, and how can you pull off a similar feat? Here’s how it works:

Art by emerging artists
How it works: The rich have always adored fine art, but the trick is to find tomorrow’s Picassos and Van Goghs before everyone else.

The bottom line: Works by promising unknowns might sell for a few hundred dollars. If you’re wealthy and influential, you can boost an artist’s reputation by purchasing multiple works and mounting public exhibits — increasing your collection’s value.

Quotable: “Emerging artists may take decades to catch on, so often the best thing to do is to buy with your passion,” says Grant Rawdin, president of Wescott Financial, a Philadelphia-based wealth management firm. “But you have to be very careful in terms of [an artwork’s] authenticity.”

Kickstart it: Art schools, galleries and collectives in major cities are great places to spy new talent, as are online sites such as Deitch Projects and the street-art portal Wooster Collective.

Fun Fact: Albert Barnes, who made his fortune in the medical field, bought his first Van Gogh and Picasso paintings in 1912. Once dismissed as eccentric by the art establishment, Barnes is regarded today as a visionary. His collection, now in the hands of the Barnes Foundation, is worth an estimated $25 billion.

Comic books
How it works: For some, comic collecting offers the added bonus of avenging parents who tossed the serials they loved as kids. Celebrity collectors include Kevin Smith and Nicholas Cage, who tapped Marvel Comics character Luke Cage for his stage name.

The bottom line: It’s been a buyers market since 1997, but since comics are susceptible to light and moisture damage, prized copies will only get scarcer. Biggies include books that introduce beloved superheroes such as Batman and early issues of Mad, which began as a comic in 1952.

Quotable: “At least once a year I’ll get someone in who has a comic book collection,” says Steve Mindel of the Southern California law firm Feinberg, Mindel, Brandt & Klein. “One guy came in recently who had a collection valued at $250,000; it’s a warehouse of comic books.”

Kickstart it: Attend San Diego’s legendary Comic Con, July 21-24. Also, the Comic Book Database also lets you check specific issues and search eBay for auctions.

Fun Fact: Action Comics No. 1 (June 1938) is the comic holy grail. It contains Superman’s first appearance and is valued as high as $2 million. It originally sold for 10 cents. Cage had a copy stolen from him in 2000; the LAPD recovered it in April.

How it works: Here’s another pastime that welcomes kids and wealthy kids-at-heart. Beginners might start in childhood buying triceratops teeth for $20 and work up to the full skeleton for $800,000.

The bottom line: Rich collectors now give museums competition at auctions, routinely running bids into six figures. Prices have increased roughly ten-fold since the late 1990s, thanks partly to famous collectors such as Leonardo DiCaprio.

Quotable: “We are happy for people to collect fossils responsibly. We could encourage it as good practice. Always get permission from the landowner, and avoid dangerous cliffs.” — Colin Prosser, principal geologist at the agency Natural England, in The Independent.

Kickstart it: Check auction houses such as Christie’s, Chait or Sotheby’s to see what’s for sale. You can also hunt your own, though legally the fossil belongs to the landowner unless you arrange a split beforehand.

Fun Fact:  Sue, the largest, most complete T. rex, was unearthed in 1990. Sotheby’s sold it to Chicago’s Field Museum in 1997 for $8.4 million.

How it works: If you have suits for each day of the month, why not watches? Part-fashion statement, part-collectible, part-investment, the high-end wristwatch is also known as “the only universal currency.”

The bottom line: Modern watches are prized for durability, vintage ones for rarity. Rolex, Cartier and Patek Phillipe are coveted, along with the Piaget Altiplano ($19,000 to $20,000) and the TAG Heuer Carrera ($3,000 to $4,500), originally for timing Formula 1 racecars.

Quotable: “Men have very few opportunities to wear jewelry after wedding rings,” Mindel says. “So you go out and buy a watch — and wealthy men still tend to wear very expensive watches.”

Kickstart it: Askmen.com runs down its list of the top 5 international watch boutiques in the world, including New York City’s Kenjo on 57th Street.

Fun Fact: Got time to spend a quarter million? Betteridge.com offers this Audemars Piguet Jules Audemars Chrono Minute Repeater Tourbillon Platinum for a cool $250,000. It comes in a platinum case with a black crocodile strap. Do note, though: it’s used.

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[…] vintage cars, or Debbie Reynolds amassing 40 years of movie memorabilia, that’s one thing: money is no object. For the rest of us, living on more modest means, a pricey collection can be a budget […]

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