Looking to invest? Here are some fun and easy alternatives to consider
Historically, cows are a significant marker of wealth and prosperity. This is still true, but investing in cows is difficult for anyone who doesn’t have a plot of land or a large sum of money at their disposal. Add urban migration to the equation, and a cow isn’t always practical as a store of wealth. However, a company called Livestock Wealth is making it easier.
“Cattle has always been used as a store of value in Africa and Livestock Wealth wants to tap into that wealth to grow an investment model that can compete with conventional forms of investment like shares and stocks,” says Luleka Mnguni, its head of marketing. The company, which has three farms in KwaZulu-Natal and one in the Free State, offers two investment options. You can opt to invest in a free-range calf that is reared to be sold off into the retail market. This investment runs for a period of six months and costs R10 980. The second option is to buy a pregnant cow and hold your investment for 12 months. The calf is then sold off to a farmer for rearing.
It’s not only about shares and stocks anymore; art and livestock are budding markets for investment. Investing in a free range calf will cost you about R18 730 and you can reinvest in a new cow once the investment holding period is over. However, this doesn’t mean you cannot hold multiple investments at once. For those who do not have a lump sum to spare, Livestock Wealth is working on an investment option that will allow people to invest as little as R2 700 a month.
“This investment option will be useful for groups like stokvels and society groups. It will also allow us to open up this form of investment to people in all income brackets,” adds Mnguni.
While investing in a cow might seem less complicated than investing in shares, it’s a good idea to keep tabs on agricultural trends and news so you understand what it takes to rear cattle. This will help you better understand the risk factors you need to consider before you choose to invest. Livestock Wealth insures its cows in case of illness or death during your investment holding period. However, Mnguni adds that the exception is if death is caused by farm-wide natural disasters beyond its control. “Such a risk would not only be affecting us, but all the farmers in that area.”
When you want to start small, alternative investments are a great way to begin investing. But don’t be naïve about the simplicity of investing in these alternatives. Art, antiques, and wine all require you to do thorough research. Finding the right vintage wine or art piece can be a lucky strike, but doing your homework will make it a lot easier for you to run into the right kind of luck. Remember, these tips are a mere starting point.
Investing in art — be it a sculpture or painting — can be complicated. If you’re looking at investing in an emerging artist, make sure you love the piece you’re putting money into because you have no guarantee the artist you’re investing in will be the next Frida Kahlo. Also keep the following in mind:
1. Artists’ reputation, the valuation of their work, and overall research on the artists and the series of work they do.
2. It’s best to go through a credible curator or gallery.
Just like art, antiques can fetch a handsome amount at a later stage. But authentic pieces can be hard to come by, so before making that purchase:
1. Use antique shops, auctions and museums as anchors for your research.
2. Work through reputable and authentic antiques dealers and avoid buying from markets where items cannot be verified.
3. If you can, go for items that are scarce. It’s basic economics in action: limited supply will fetch a higher price.
Disclaimer: The content in this article is provided for information and discussion purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to invest in a product. Always seek professional advice before making an investment decision.
This article first appeared in print in the Sowetan S Mag September 2019 edition.