One major perk of art as an asset is that its value doesn't rise or decline with the stock market. Even if your stocks aren't performing well, your art investment may be doing great—good news for the savvy investor who wants to diversify a portfolio and minimize risk.
If you love art and you're looking for ways to diversify your investment portfolio, art investing can be a solid choice. “Not only does [art] appreciate over time, but it's a strong way to diversify,” said Blair Haden, registrar at Restoration Division, a company that restores art pieces.
The arts are expensive and artists are typically poor. ... If you're among those who believe that spending money on creative ventures and the arts is a waste and that people could spend that money much better elsewhere, that's ok. But you'll need to do some things first before you can really make that kind of a statement.
Six expert tips for choosing the perfect artwork
Value appreciation
When buying original art straight from a gallery or an artist there is always a good chance that the piece will grow in value over time because of its uniqueness and the successful development of the artist who created it.
Pay yourself a reasonable hourly wage, add the cost of materials and make that your asking price. For example, if materials cost $50, you take 20 hours to make the art, and you pay yourself $20 an hour to make it, then you price the art at $450 ($20 X 20 hours + $50 cost of materials).
10 contemporary artists to invest in right now
Although artists, dealers and investors can deduct business expenses related to producing and selling art works, they do pay taxes on the sales of their art. ... As such, those sales are subject to the capital gains tax rate, which is 20% for taxpayers in the highest tax bracket.
There is no guarantee that your artwork is going to increase in value — much art is doomed to go out of fashion. An individual work or series of works can even decline in value while other works by that artist appreciate. Art can be appraised, but it's not liquid enough to actually mark it to market.
Prints are often seen as mass-produced copies of famous artworks that are just not that valuable or worth investing in. But nothing can be further from the truth. Prints can be just as valuable as any other artwork and certain prints are known to reach seven or eight-figure prices at auctions.
Owning original artwork has a positive effect on the environments of people who own it, which inevitably makes life more enriching. Enough said. Happy walls make happy people. Even if your art choices are on the "darker side," your visual enjoyment of it will make you happy and ultimately enrich your life.
If your basic cost per painting is $50 for fixed costs plus $20 for materials, then you add the 10 hours that it took you to paint the piece, then that's another $200. How many prints do you want to sell before you make that back? 20 prints? That's $90 per print.
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