How to invest wisely?

Of course, I always recommend investing in real estate. But hey, it’s also good to try different things. A healthy mix of real estate, stocks or ETFs, plus maybe art, cars or watches? What do you think makes sense?

Handbags as an investment

Let’s look at something out of the ordinary: Handbags. A real luxury fan and experienced investor in Hermès bags, JTT Wong, shares his thoughts in an interview with ExpressVPN:

“Even if I’m on the waiting list, I’m willing to pay a premium to expedite the process. Whenever I encounter a salesperson willing to sell a bag, at whatever location, I jump at the opportunity, regardless of the model or my personal preference. Duty-free locations like the airports in Frankfurt or Tokyo have proven particularly fruitful.”

And here’s the thing: handbags like these have increased in value by 74% over the last 10 years. That’s really remarkable, isn’t it?

More on handbags, art & co. in a moment, but first to rank 1: Rare whiskey.

Other exciting investments

There are many other interesting things to invest in. Take a look at the “Luxury Investment Index”!

The investment landscape is constantly changing, and the last 10 years have seen something surprising. One particular thing has overtaken traditional investments like real estate, art and luxury cars. Surprisingly, it’s not what you would immediately suspect. According to Knight Frank, a well-known real estate consulting firm, rare whiskey has made a surprisingly good return, even outperforming the real estate market.

Why is whiskey so hot? 373% increase in value

Demand for rare whiskey has increased for many reasons. Limited bottles are rare and coveted, and interest from collectors and investors is driving prices up. In addition, well-matured whiskey has an aura of exclusivity that adds to the fascination.

Why diversity is important

The fact that rare whiskey is so successful shows how important it is to invest in different things. Sure, traditional investments have their advantages, but adding unconventional investments can protect against market fluctuations and provide great returns.

From bottle to asset

One cool thing is that auction houses like Sotheby’s play a big role in the rare whiskey trade. Bottles like “The Macallan The Reach,” an 81-year-old single malt, are becoming sought-after treasures that fetch incredible prices at auction. Whiskey has evolved from a beverage to a valuable collector’s item – an exciting change!

So, what are you going to bet on? A mix of real estate, stocks, or maybe a bottle of whiskey? The world of investing offers so many exciting possibilities!

Art: 91% increase in value in the last 10 years

Art is an exciting investment and delivers 91% returns. Over the last 10 years, art has delivered an impressive 91% return. For example, “Andy Warhol Shot Sage Blue Marilyn, 1964” sold at Christie’s for an incredible $195 million. Works by artists such as Jean-Michel Basquiat, Pablo Picasso and Banksy have also fetched high prices.

• “Salvator Mundi” by Leonardo da Vinci – Sold for 450 million US dollars
• “Les Femmes d’Alger (Version ‘O’)” by Pablo Picasso – Sold for $179 Million
• “Untitled” by Jean-Michel Basquiat – Sold for 110.5 million US dollars
• “Devolved Parliament” by Banksy – Sold for 12 million pounds

Watches: Impressive 147% increase in value

Jewelry as an investment and watches with a full 147% return. Watches are not only timepieces, but also valuable investments. In the last 10 years, luxury watches have achieved an impressive 147% return. One example: the “Gobbi Milano-signed Patek Philippe Ref.2499” was sold at Sotheby’s for 7.7 million US dollars. This shows that watches are not only chic, but can also add value to your portfolio.

• “Patek Philippe Henry Graves Minute Repeater” – Sold for 4.5 million US dollars
• “Rolex Paul Newman Daytona” – Sold for 5.4 million US dollars
• “Patek Philippe Henry Graves Supercomplication” – Sold for 24 million U.S. dollars
• “Audemars Piguet Royal Oak” with diamonds – Sold for 51.4 million HKD

Handbags: Value increase of 74

Handbags as an investment bring a full 74% return. High quality handbags are not only accessories, but also good investments. In the last 10 years, the prices of such bags have increased by 74%. One example is the “Hermès Himalayan Crocodile Kelly” which sold at Sotheby’s for $353,000. So, if you have a penchant for stylish bags, they could bring you financial joy as well!

• “Hermès Birkin Bag” made of Nile crocodile leather and diamonds – Sold for $ 500,000
• “Chanel Diamond Forever Classic Bag” – Sold for $261,000
• “Louis Vuitton Capucines Bag” made of crocodile leather – Sold for 50,000 US dollars
• “Fendi Selleria Bag” made of sable fur – Sold for 223,000 US dollars

Furniture: Antique furniture with +34% increase in value

Furniture as an investment brings only 34% return. Antique furniture from the Ming Dynasty has seen a 34% increase in value over the last 10 years. One particular chair from this period sold at auction for an astounding $15.9 million at Sotheby’s. So if you have an eye for special pieces, antique furniture could be an interesting investment.

• Ming Dynasty Chair – Sold for 15.9 million US dollars
• “Badminton Cabinet” from the Medici family – sold for 36 million US dollars
• “Dragon Armchair” from the Ming Dynasty – Sold for 11.1 million US dollars
• “Rothschild Fabergé Egg” – Sold for 13.5 million pounds

Why set up a family foundation?

When a foundation is established, the founder transfers assets to the foundation. The assets can be invested in the form of cash, real estate, businesses, stocks, and time deposits to meet the foundation’s long-term funding needs. In the case of a family foundation, the purpose is to transfer the assets to future generations, to protect assets from being accessed and to save taxes.

3 good reasons for establishing a family foundation.

1. Transfer assets to the next generation
2. Protect assets from access (prenuptial agreement, children, company insolvency, etc.)
3. Save tax, pay only 15% tax

The costs of establishing a foundation consist largely of the invested assets. These costs also cover the administration costs. To ensure that the amount available for the foundation’s purpose remains as high as possible, it is advisable to keep administrative costs as low as possible. Additional costs arise from consulting services, for example from lawyers.

The most important facts about the foundation: Overview

Here’s what we discuss in this guide.

Consultant yes or no?

Expert advice is important in this context, especially on tax aspects and transfers, as the establishment of a foundation is a complex and unique process that involves planning asset succession, optimizing tax implications and considering legal aspects in order to achieve long-term financial benefits and minimize potential risks.

More about that in a moment.

First of all, let’s talk about the minimum capital.

Minimum capital of a family foundation

The German Civil Code (BGB) does not specify a specific minimum capital requirement for the establishment of a foundation. However, the capital must be sufficient to ensure “the permanent and sustainable fulfillment of the foundation’s purpose” (§80 BGB).

The competent authorities that check the recognition of the foundation’s formation usually set their own minimum amounts. These are usually at least 25,000 euros. However, many authorities only recognize foundations with assets of at least 50,000 euros. It is assumed that long-term fulfillment of the foundation’s purpose is not possible with an amount less than 50,000 euros less administrative costs.

Some authorities even require minimum assets of 100,000 euros. This often depends on the purpose that the foundation is to pursue.

The assets invested in the foundation may not be reduced in order to ensure that the foundation’s work is continuously financed and that the income can be used to fulfill the foundation’s purpose. Another advantage of foundations when we talk about annual allowances to beneficiaries.

Important: These regulations do not apply to the special form of dependent family foundations. These so-called trust foundations are not legally independent foundations, but rather a contract between a founder and a trustee. The assets are transferred as special assets to the trustee, who has the task of realizing the foundation’s purpose with the income.

In summary:

• BGB: No minimum capital requirement, but sufficient capital needed for long-term foundation purpose
• Authorities: At least 25,000-50,000 euros required for foundation recognition, sometimes 100,000 euros.
• Assets: May not be reduced to ensure continued funding and fulfillment of purpose

Tax disadvantages as a cost factor

The same applies to the founder of a family foundation. In most cases, the founder’s priority will be to optimize the tax implications of the foundation. In other words, for the founder it is much more important to transfer his assets worth millions to the foundation as tax-efficiently as possible or even tax-free than to worry about the formation costs of around 20,000 euros for consulting services.

Establishing family foundations with strategy

My experts can help you set up a family foundation:

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Consulting costs

If someone is unsure about setting up a foundation, they can seek advice from an expert, for example. Foundation law is not uniformly regulated throughout Germany, so the help of a specialist can be useful.

Depending on the foundation’s assets, tax advice may also be beneficial. Although this initially incurs costs, good tax advantages may ultimately result.

The minimum amount of assets required, administrative costs, tax consultancy fees and legal fees vary depending on the individual case. Charitable foundations that are endowed with a sum of money are generally “less expensive.” Foundations that own real estate assets, on the other hand, are more expensive. This is due, among other things, to the fact that dealing with authorities is easier in the case of monetary assets.

In some cases, a simple start-up can be covered with as little as 15,000 euros. For more complicated situations, such as the transfer of a company, there is no upper cost limit.

Not all consultants are the same

Last but not least, not every consultant is the same. Establishing a foundation is usually a one-time and non-reversible process. For example, if you want to sell your car to a private buyer, you can certainly use a template for the contract – the risk is limited. However, if a founder’s succession planning concerns providing for his three children and spouse, ensuring that his 300-employee business can continue, avoiding inheritance disputes over compulsory share rights within the family, and saving a seven-figure amount in taxes, this is not something that can be done with the click of a mouse.

No consultant with only theoretical knowledge of foundations is suitable for such a project. A reputable consultant without the relevant experience would never accept such a mandate for liability reasons. In such cases, advice from genuine experts with many years of experience in theory and practice is required. As a rule, a founder is also well advised to call on the expertise of a team of specialists (foundation law, tax law, corporate law, inheritance law, etc.).

• Foundation formation requires sound and experienced consulting experts.
• Experience in foundation law, tax law, corporate law, inheritance law is important.
• Serious consultant with practical knowledge and many years of experience required.

Establish a family foundation in Germany

A family foundation offers an excellent opportunity to secure assets for future generations, optimize taxes and make orderly succession arrangements. However, establishing a foundation requires comprehensive planning and strategic decisions. Cost factors such as the invested assets and administrative costs play a role.

In case of doubt, professional advice from experts with experience in the areas of foundation law, tax law and asset planning is of great importance. By setting up a family foundation, it is not only possible to take advantage of tax benefits, but also to create clear structures for succession planning. This makes it possible to protect and preserve family assets in the long term.

Foundation questions

My experts can help you set up a family foundation:

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