Bensman Risk Management, Inc.

Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Insurable Interests

Vol. 5, Issue 3November 2009


The Art of Collecting Wine

For more than a decade, per-capita wine consumption has increased every year in the United States. In fact, in 2008 the U.S. passed Italy and now is second only to France in the amount of wine we drink per person. This growth in wine consumption has helped promote a growth in the number and quality of wines that are readily available, often at reasonable cost. Which, of course, has helped to increase the number of wine drinkers.

Many of those wine drinkers have become collectors. They might be driven by the idea of wine as an investment, since many wines increase in value – sometimes substantially – as they age. Or, wine collectors might simply want to buy wines to enjoy themselves and with friends.

Sergio Amato, Chief Financial Officer for The Bensman Group, has significant experience in the sale of fine wines and the design and construction of in-home wine cellars. He says that some people are born into wine collecting -- their parents collected and enjoyed wine, and they have a lifelong experience with fine wines.

But most people, he says, become wine collectors because they have learned to love wine. They start drinking inexpensive wine, which Sergio defines as $8 to $12 a bottle, in their 20s. They find that they enjoy wine, he says, “And they start reading more about it, might subscribe to a wine publication.”

As they get older and make more money, they begin to drink more-expensive wine. And by the time they graduate to high-end wine -- $50 or more a bottle – they decide that it makes more sense to buy multiple bottles, especially since the wine improves in taste, and grows in value, as it ages. For example, Sergio says, many fine wines are significantly less expensive when they are released than after they have aged for 10 to 20 years.

You can, of course, collect wine as an investment, letting it age and then selling it at a sometimes-substantial profit. But most collectors plan to drink at least part of their collection. So, Sergio says, you should collect what you like. He suggests that you try different kinds of wines, that you read up on the subject, and that you develop a relationship with one or two wine merchants who can help you expand your wine knowledge.

Regardless of whether you plan to sell your wine or drink it, though, you need to store it somewhere where it can age properly, in a temperature- and humidity-controlled environment. One option is to buy a stand-alone storage unit, which usually holds 100 to 300 or 400 bottles. “The main advantage is that these are literally plug and play,” Sergio says. You bring one into your house, plug it in, put in your wine bottles, and you are done.

However, many collectors soon find they have outgrown these units. “If you continue as a collector, being able to store 200 or 300 bottles is not going to do it for you for very long,” Sergio says. Serious collectors often have a customized wine cellar built -- at a cost of tens of thousands of dollars, he says.

Obviously, serious wine collecting is a major investment. “If you are doing it correctly, you have appreciation – and potentially very significant appreciation,” Sergio says. As a result, you should make sure that you have the proper insurance coverage, in sufficient amounts. (See this month’s Message, above.)

That way, you can relax and enjoy that perfectly aged bottle of red.

This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.


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