Surprisingly, yes.
Let's break down unusual investments and
whether they actually make sense.
This first investment is one of the most despised
on the Internet because people have always looked for
new ways to make money, from filling their cellars
with wine, keeping figurines in their boxes, or
hoarding obscene quantities of beanie babies.
The latest move is virtual land, and
I see where the hate comes from.
It's right there in the name.
It sounds like it means fake land.
♬🌿Smoke weed everyday!🌿♬
But is virtual land a scam, or is it
a genuine real estate opportunity to get a plot
in the Metaverse - real estate of the future?
Virtual land is in short supply,
and this pushes prices sky high.
Yeah, virtual land is limited, just like real land.
However, unlike real land, Metaverse land
is purposely limited to create scarcity.
But on the other hand, it kind of isn't
limited because the Metaverse isn't a single space.
There are many Metaverses being built.
So an investment here is not only betting that
people will use the Metaverse, but you're also betting
on which Metaverse will have a strong future.
Now, there is something else virtual land
has in common with real land - location.
Location, quality of your neighbors,
and I don't know whether there's an HOA,
massively affects price.
No one wants a patch of land in the middle of nowhere.
Well, some people do, but prices aren't
as high in the middle of nowhere.
The most expensive plots in the Metaverse are
next to celebrities and where there's high traffic.
But is all of this worth it?
It's a lot like asking, is regular land worth it? Sure.
But truth is, some land sucks.
The most obvious way to make money with
virtual land is to buy and sell it.
There are stories all over people getting
four and five times their money doing
exactly that, and it goes deeper.
People are now leasing virtual land to
make money hosting virtual parties, creating art
galleries, virtual stores, restaurants, amusement parks.
But, of course, to do any of this,
you need land that's actually visited - location.
So, we know it's totally possible to
make money, but doesn't really make sense.
I get the reason why digital
ownership of space is a thing.
I see the Metaverse is getting bigger and bigger
as we all basically live our lives online already.
But it seems to me like we're taking
rules from the physical world and just plunking
them down in the digital world.
But it's digital.
There's no reason there can't be a digital
skyscraper with a million condos in it,
taking away scarcity and location constraints
and probably giving a better user experience at the same time.
I mean, YouTube doesn't say,
Sorry, only 50,000 people can view this video because
that's how many people fit in a stadium,
and that's just how we do things.
Just doesn't work that way.
I think the winning Metaverse will likely
have a focus on abundance, not scarcity.
The current Metaverses are built to be investment
vehicles, not a step forward in technology.
Which is fine, maybe I'll even invest in one someday.
But let's just see them for what
they are currently - investments, not solutions.
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Moving on, it's an unusual asset with little intrinsic
value that people pay millions for.
And there's a connection to a world famous music icon.
Am I still talking about virtual land? No.
What could be further from virtual plots of
land selling for millions of bucks than the
humble postage stamp selling for millions of bucks?
Could the history of stamp collecting show
us the future of the Metaverse?
People have been collecting stamps
since the 19th century.
The official term for this, which I
just learned is Philately, which basically translates
to love, which is tax free.
And despite that, you still have to pay
capital gains tax on your stamp collection.
But anyway, this market is dominated
by a few stamps worth millions.
These notable stamps include the earliest ones issued and
those with kind of quirky errors on them.
But what's interesting is there are still loads of
lower value stamps that are relatively easy to buy,
and prices generally grow at a good rate.
The space is split between hobbyists
and investors and Freddie Mercury, seriously.
First, what are the positives
about investing in stamps?
Well, this is an established field where you can
grow your cash if you're diligent the downside.
You need to spend quite a bit of
time to become an expert if you're going
to spot the most valuable stamps, like Penny
Blacks, headless Queens and Sicilian errors of color.
Okay, maybe I made one of those names up,
but that was a test.
You need to be able to spot liars if
you want to get into the stamp world.
This is a ruthless world.
I've seen it suggested that stamps have
risen in value by 15% annually.
Or it's difficult to work out average returns
because every stamp gains value at different rates.
And the market is skewed by these stamp whales.
I'm not sure if stamp whale is even a thing but,
we're just going to use that name.
This stamp whale has the biggest
collection of upside down stamps.
Now, what in the world does Freddie
Mercury have to do with stamp collecting?
Two things he collected stamps as a kid and
his collection has been sold for a charity.
And he appeared on a very controversial stamp.
Yes, there could be drama in the stamp world.
In 1999, a bridge stamp rocked the Philately ecosystem
when it featured queen rather than the "Queen".
But this wasn't the issue.
The problem is, you're supposed to either be dead
or a royal to appear on a stamp.
The drummer who is very much alive can be
seen in the background of this contentious stamp.
The stamp world was set on fire.
C. $2.7 million?
- $2.
Now the question is,
will stamp collections really be worth more in the future?
I mean, we all have email now, and that's
the thing about collectibles we really don't know.
The classics will always have some value to other
collectors, but the value of any stamp is based
on factors like backstory, condition and rarity.
The most valuable stamp ever sold fetched $9 million.
But that was thanks mostly to the story behind it.
The stamp itself looks a bit like a used band aid.
Anyways, a twelve year old Scottish schoolboy
discovered this $0.01 stamp and sold it
for the equivalent of $10.
And that drew in value over the years.
Eventually, three kings bid on it,
setting a world record stamp price.
And that's how I would sum
up this unusual way of investing.
It's only worth doing if you have a
passion for collecting and the time to investigate
what makes each one worth money.
Just like virtual lands, you should be fooled
by news stories about massive sales that are
a tiny fraction of the overall market.
Most investors grind away with small sales,
winning on some and losing on others.
Now, I don't know how to transition out of this
segment, so I'm just going to ask a question instead.
It isn't always the person who actually created the song.
And this is why two of the biggest stars in
the music industry stopped talking to one another.
Before looking at that feud, let's get the basics covered.
Music royalties have become an increasingly popular
asset class for a few major reasons.
Greater stability, thanks to streaming.
It's not correlated to other types
of investments so you get to diversify.
And music sales aren't affected
by overall economic conditions.
If you pick the right songs, you'll
get sweet reoccurring income year after year.
Now, it isn't all perfect, though, because songs
make a fraction of a cent per listen.
If your songs bomb, you'll be lucky
to scrape together even a single dollar.
Or if you go full on Sweet Caroline,
you'll make half a million bucks a year.
So the right songs make a killing.
As Paul McCartney learned the hard way
when he worked with Michael Jackson.
Being a friendly sort of ex-Beatle,
Paul told Michael the massive benefits of
owning the rights to popular song catalogs.
So the King of Pop did
what any ruthless capitalist would do.
He went out and bought the rights
to Beatles songs, written by McCartney.
This turned their relationship a bit sour.
Now, how much could you earn from royalties?
Most new songs peak in the first year
and then decline rapidly before reaching a level
of stability about five years later.
But the classic pays out year after
year and the market is growing.
So how do you get started?
You can actually buy fractional shares of music, or you
can join a fund that invests within the space.
What is the most profitable song of all time?
- Probably the ABC's.
Great idea. You want a second guess?
"I Believe I Can Fly" because it's inspirational.
- It's Happy Birthday.
🎵🎵I believeee-🎵🎵
Most songs don't make Happy Birthday level cash,
but this can be a really solid investment
that's available basically any investment size.
And the best part is that this may be
a rare investment area where you could actually have
a passion for the subject you're investing in.
Now, people are up in arms over the
latest art investments, but it's not about cows
being cut in half or destroying artifacts.
It's digital art.
But why does it make people so angry?
And how is it linked to the world of cryptocurrencies?
Can $69 million for an NFT possibly be justified?
Maybe it can't.
But can you also justify $450 million for a painting
that may or may not be a Da Vinci?
Art investments just don't play by the same rules.
And I'll show you in a minute
how good that fruity investment turned out.
The value of art is entirely subjective.
It makes a statement and it's a status symbol
that only certain people can afford - art being controversial
or regarded as stupid actually makes it more valuable.
That expensive banana has already been eaten,
so it has no value now.
But the funny thing is, buying the world's most expensive
banana and then eating it is also kind of art.
So, yeah, art pieces aren't based on real value
or any practical uses that it could have.
Spending millions on an NFT isn't any more or
less stupid than buying infamous pieces of art.
Do I think Beeple's work is worth $69 million? No.
Would I pay thousands of dollars for a banana?
Probably not.
If you would, then DM me, I can probably hook you up.
The thing about digital art is it doesn't
matter if you like it or not.
People want to hold up their phone and say,
hey, I just spent 200K on a JPEG lol.
But that doesn't mean that
it's always a good investment.
It can be incredibly risky and volatile.
Look at Board Ape NFTs.
So many famous people own them, they're almost like
Picassos or Rembrandts at this point, that prices can
be all over the place from month to month.
What are they really worth?
No one really knows until someone buys one.
If all those millionaires decide to move on
to something else, those Apes will lose value.
But to be honest, apes are probably here
to stay, at least for a while.
Either way, I think that this is just the beginning.
Boring old NFT pictures are just too easy
now, and we'll see much more creativity flow
into the space because of that.
And again, the tech makes sense.
Verifiable digital ownership is absolutely
needed in a digital world.
The most consistent strategy I've seen to make money
with NFTs is to spend your time in
discord servers, grabbing new projects right when they launch.
- That's right.