It’s often been asked, “Why do the rich spend on luxury?” Many people would settle on the simple answer – because they can, to flaunt status. But recent reports suggest that there are more compelling reasons to buy luxury items – with mere status often quite far down the list.
If you’ve been looking to make some luxury purchases, and are wondering about the best reasons to do so, some of the most relevant trends reflected in the surveys include pursuing personal satisfaction, return on investment, and a diverse portfolio. Here are some of the trending luxury investment tips from the past year.
Prime real estate
The elite get to choose how and where they live – and usually, the place is also the lifestyle. Financial hubs such as Singapore, Hong Kong, London, and New York offer world-class infrastructure and amenities along with a diverse, cosmopolitan culture, bringing the level of comfort that the wealthy have come to expect from everyday living.
Although political and economic stability is desirable, history shows that even cities like Madrid and Barcelona that have experienced recession will bounce back – and that makes real estate a shrewd investment. You can be sure that the value of your property in these cities will continue to appreciate, with demand continually outstripping supply every year.
Certain cities also offer a significant level of privacy and security, while others are also known tax havens. Monaco properties are highly prized because of the combination of these factors. If you’re considering relocating to this idyllic principality, start looking now because prices are only going up in the future.
Buying fine art is one way to gain personal satisfaction through ownership if you’re an art enthusiast. But beyond the enjoyment of adding works by the masters to your collection, there’s a practical reason to start collecting art. In its 2018 report, the Knight Frank Luxury Investment Index (KFLII) showed that art was the biggest performing investment class from the previous year as well as over the decade.
As global awareness and appreciation of art have increased over the years, there’s an excellent opportunity for you to pick up masterpieces from other cultures before they rise even further in value – the report already indicates that Chinese and African art is among the notable sales of 2017. It’s a great way to diversify your portfolio and another means of increasing the value of your property as well.
Travel and education
Discreet luxury purchases are a trend on the rise. Instead of flaunting accessories, apparel, or sports cars, you can follow the lead of some of the world’s elite by investing in a lifestyle of enrichment that sets you apart.
Travel is one such area of luxury spending that has seen a significant increase in recent years. While many people across all demographics can enjoy the experiences that travel brings, you could use travel to re-center your life, find balance away from work, and learn more about the world.
Education is a significant investment – and often not merely a personal one; the elite can spend several times the national average on their children’s education. Giving your kids an extra advantage in life is arguably the best return on investment you can expect.
When you have the money to spend on luxury, the motivations behind the purchase can be quite complex. These recent trends point the way towards luxury investments that can bring you personal satisfaction, practical value, and opportunities for enrichment.