The answer is not as straightforward as I wish it could be. While owning fine art may be out of reach for many investors, owning a fraction of that art is . That being said, I still think its important to read the reviews both good and bad to make sure you know what an experience with Masterworks could look like for you in the future. Your analysis above is good, thorough and squares with what I learned and understand about Masterworks pros and cons. I was sent a follow up email stating I understand you are not looking to get started right away, so your membership will remain pending for now as it is reserved for active investors. Im going to take you through my step-by-step guide on how to sign-up for your Masterworks account today. Masterworks Homepage. I will still proceed to invest but I think I will stick to my original preferred investment of 5k-6k and see how it goes. However, I would suggest you reach out to your customer service representative directly and ask them this question as well, so that they can customize the information for you (based on the painting(s) you are considering investing in). She has spent 10+ years studying finance, with the last 7 as a wealth and investment advisor. I enjoyed knowing the risks. Masterworks sifts through a collection of over 1 million auction documents to pick the paintings by bestselling artists. for many is that it offers the investor the opportunity to diversify their assets through artwork. This works for literally any service based business, tree service, plumbing, towing, etc. Thats just how I interpret how this process works. I didnt see this in your article, but can you just reinvest your profits directly, or do they send them to you and its up to you to do so? My representative and I had a long discussion about how Masterworks was one of the trailblazers when it comes to investing in female minority artists (aka female artists of color or other underrepresented artists). Heres what I love (and appreciate) about Masterworks: The major con when it comes to signing up to Masterworks is that you will have to undergo a phone interview (which takes about 15 minutes). This group is much more active. Interviews at Masterworks Experience Positive 54% Negative 23% Neutral 23% Getting an Interview Applied online 89% Recruiter 11% Difficulty 2.8 Average Hard Average Easy Interviews for Top Jobs at Masterworks Account Executive (2) Associate Creative Director (1) Marketing (1) Account Manager (1) See more interviews for top jobs For more information see our disclosure. Masterworks does not charge a signup fee but does require an investment of a minimum of $1,000, although most clients invest $10k to $30k, on average. So basically yes investors start 11% down. Thank you so much for your kind words Im so glad you enjoyed the article . is a new platform that gives the everyday investor the chance to invest in fine art, worth up to $30 million by investing in shares of fine art. Open a trading account. Masterworks allows frequent buyers to buy a portion of an artwork. I think you make a good point it can certainly be a little confusing when it comes to consistency since it appears that the minimums are different depending on your financial picture and it also typically depends on the value of the artwork you are investing in. The main downside here (which Ill explore further in the fees section of this article) is that Masterworks charges pretty hefty fees (similar to a hedge fund) where they take 20% of any profits upfronton topof your annual fee. Get exclusive wealth building strategies straight to your inbox. You provided a ton of good information here and I signed up last week. I should note that selling your shares is not guaranteed even on the secondary market. In other words, the minimum investment may be more or less for some folks based on their overall financial picture. "Biography of X," a fictional account of a shape-shifting conceptual artist, is an experiment in authorial ambiguity. Im curious if you know what that 11% is up front, are investors essentially starting 11% down? Where Masterworks is short on fees and account systems, it makes up for it in design and style. Not sure if investing in fine art is the right next step for you? However, depending on the artwork, the returns could very well be worth the money. The phone interview is about 15 minutes, and it looks like the Masterworks schedule is pretty flexible at least they were for me! Miscellaneous information (small groups, etc) Personal testimony. Masterworks makes it relatively easy for investors invest in contemporary artwork by famous artists like. As an example, below is a graph illustrating the consistent increase in value with the contemporary art index versus the interest rate environment over the past 2 decades: The art index (green) continues increasing which means more money in your pocket. It literally takes a few minutes to link your account before youre all set up. Glad you enjoyed it . View job. It was very informative. Hope this helps other people. If I was in this situation, Id probably take a closer look at the data to see what the long-term potential would be of the artwork and how that would factor into my overall financial plan. Your writings are great: cogent, strategically repetitive (repetitive on important points), light and high-yield. Thanks for your detailed explanation of workings of Masterworks. on the art you invest or on the money in the Masterworks account? If you want to learn more about the historical trading numbers for artists and paintings, click on the Trading tab at the top. Im not a Millenial but a Gen-Xer (cooler name I have to say)..but I just had my interview prior to doing my official research. A friend of mine who had invested a few days earlier knew I was having my membership interview and asked me later that day if I invested. With these cautions, if you want to invest in high-end art, Masterworks is the place to do it. Masterworks still approaches art investing with an air of exclusivity, since you technically have to be invited to join the art investing world by completing a phone interview. They almost got me! Thank you so much for your kind words! If you prefer to keep your cash and not reinvest, you can also ask Masterworks to send your profits directly to your bank account. When we attempted to register, we were informed to wait as wewere at the 310th spoton Masterworks waitlist. If Masterworks is unsuccessful in selling the painting to individual investors for a reasonable profit by year 7, then Masterworks reconsiders its strategy. Thank you so much for your kind words! Yes, the fees are one of the biggest drawbacks in my opinion to this investment platform. Im glad you bring this up. Scam Risk is here to help you protect yourself and fight back, Art investing is not affected by market conditions, Takes a long time for one art work to pay out, Requires annual management fee of 1% on investments plus the 20% commission on the sale of the artwork. Having a few exits makes the data a bit less reliable, but this is still a promising rate of return. She has also co-founded a local non-profit community teaching financial literacy and her work is featured on Forbes, FinCon, and MSN. To be very honest, thats a tough question. For decades, high-quality artwork has been a popular investment among the affluent. Maybe art investors are different, but if someone with a title of Vice President Membership acted like this to potential investors in a real estate deal, they wouldnt have a business. The historical returns for most of the Masterworks artists range between 12.70% to 19.80% which is just about double to triple the returns you often see in the stock market. I feel more confident and like you really have your readers backs. All Rights Reserved. Im glad to hear that you found this article helpful . Masterworks charges a management fee of 1.5%, which is comparable to management fees charged by professional investment advisors. A fixed amount of shares is set for each painting, and a Masterworks member can only own up to 10% of a single painting. Yes, you can be a Masterworks investor even if you are not a multi-millionaire. As it relates to your subscriber agreement question, I think this would be a great question to ask the customer service team over at Masterworks. Good luck with your future ventures! in 10 years its $15, which is 15% of my principal. Although its not real estate in the traditional sense, its all digital. Nevertheless, when Masterworks sells an artwork, your expected profit could be pretty high. Investor Qualifications: All investors qualify, Fee Structure: 1% annual fee plus 20% commission on profit when artwork is sold. I am dinked with a fee of USD 38 every time I invest a USD 1000 on an art piece. To my knowledge, I would say that if an investment shows 90%, then it is my understanding that this means the investment is almost fully invested (in other words, only 10% of the remaining shares remain for investors like yourself to invest). While the concept of investing in fine art might be novel and exciting its important not to get carried away and invest your lifes savings with Masterworks. Get Exclusive Tips, Strategies, and Techniques that I Only Share with My Email Subscribers . But it isntin fact, business owners wish they had this skill! It was mentioned that anything below $500 wouldnt really be worth it (pretty sure this is a sales tactic but whatever). To contact Masterworks, you can give them a call at 203-518-5172 or send them an email at support@masterworks.io. I appreciate you sharing your experience and story here so that other readers can also learn more. Reports covering the macro level of art investing, including the wellbeing of the art economy, historical auction data, and other art world trends, Masterworks offers candid FAQs, where the platform lays out the pros and cons of investing in artwork, Keep in mind you have your own dedicated customer service representative, who can also help direct you to additional resources, should you have any questions. Investing in art is a great option. I guess I am lucky to be one of the chosen ones that could buy only 25 shares (500$) I guess they have issues finding people able to invest 15000$ and have probably open the market for anyone willing to invest. However, from what I was able to find out, it does look like there is an 11% markup fee. Masterworks FEES: "Masterworks charges a 1.5% annual management fee, plus the company takes 20% of any profits from an artwork's sale. Next to every painting available for investment, Masterworks provides what is known as a Deal Sheet for the investor to review the artist, painting specs, etc. There are four parts: Biographical information (Address, phone, spouse, children, etc) Gospel presentation. Truly passive income! Masterworks does the rest of the work the analysis, the artist pre-vetting process, the storage, the insuring of the artwork, and ultimately the sale process as well. Masterworks expects more hours/work from their new hires than they convey in the extensive interview process. They complete appraisals every year and I am very happy with the way my investments in arts by Jean Basquiat, Warhol, Gerhard Richter, Banksy, etc are going. The Masterworks customer support team is available Monday through Friday, 9 a.m. to 6 p.m. EST. Thanks to Masterworks, based out of New York, virtually anyone can now have access to the exclusive and high-roller art investing world. In fact, the chart below reveals how the annualized performance of contemporary art investments was better than the annualized performance of the S&P 500 (which is the 500 largest companies of the US): Between 1995 and 2020, contemporary art investments returned around 14% while the S&P 500 (and Im a huge fan of the S&P 500) returned about 5% less, at 9.5%. Interviews at Masterworks.io Experience Positive29% Negative57% Neutral14% Getting an Interview Applied online88% Recruiter13% Difficulty 2.5 Average HardAverageEasy Interviews for Top Jobs at Masterworks.io Sales Associate (2) Product Manager (2) Sales Development Representative (SDR) (2) Analyst (1) Marketing Manager (1) Anonymous (1) Thanks for sharing your insight that your rep wasnt pushy and that he was patient with your questions. Masterworks holds the artwork, and sometimes even displays it in their members-only gallery in New York City. No need for an interview possibly due being based outside US. Once Masterworks purchases the artwork, it registers the art with the SEC and then issues shares in $20 increments. Step 3: Holding Period. Interview. BE FIRM & DECISIVE on the amount you want to invest. Thank you so much for your kind words Im so glad you enjoyed the article! I usually invest in SP500, property etc but had wanted another inflation protected investment so contemporary art seems to fit the bill. Im mostly curious if masterworks pockets that 11% and thus would be making a lot of money regardless of painting appreciation, or if that fee is going towards the purchase outside the company. If you plan to open a Masterworks account, use it to support another regular brokerage account. You will not be liable for any administration information since the company will do them for you. This is for the insurance, storage, and handling/ transfer of the art piece. Based on everything I read, it looks like after you earn your profits, you could invest in other fine art or withdraw your profits. I really appreciate it and Im so glad to hear this article helped you! But what if you could make even more money off of little local websites without having to spend tens of thousands to set up an affiliate blog? Thank you so much for your kind words Im so glad you enjoyed the article! So, youll see that its not that I couldnt afford $15k, its that the minimum set off alarms in my head based on my research. Among the artists you will encounter are Andy Warhol, Keith Haring, Jean-Michel Basquiat, Claude Monet, Willem de Kooning, Yayoi Kusama, Banksy, and Joan Mitchell. Your article gave me the information I needed to feel confident about starting a membership with them. Sound too good to be true? Investors who want to get into the art market quickly should sign up now to secure their place. I put 10k on hold, spread across 3 artworks, but certainly glad I came across this article. I couldnt find anyone writing about this and I was really wanting to dip my toes into blue chip art investing. With a cumulative 75 plusyears of art collecting experience, Alberto Simon,Scott Lynn,and Hai Minh Tran established the organization. Commission and fees. Im glad the blog post could help . Masterworks, based in New York City, was established in 2017 with the aim of making rare art available not only to the rich, butto everyoneof all financial means. Thanks to Masterworks, virtually anyone can now partake in high-end art investing. Masterworks could be worth your time and money if you: If you feel like these points are you, then Masterworks could very likely be one of the best investment platforms for you. Just remember to never invest more than what you are comfortable losing. Save my name, email, and website in this browser for the next time I comment. Here's how the platform works: Masterworks will purchase a painting and file it with the SEC as a public offering, or IPO, similar to how a company goes public. My money is just sitting there..the painting did not sell 100% and I tried to sell my shares on their secondary market but no bites. Great analysis and lots deep dive details. My advisor says he has other clients invested in Masterworks and did not put me off. You canchoose whichinvestments you preferbecause Masterworks keeps a wide range ofart pieces at all times. If you are an owner of a share, you have the option to list it. Youll pay a 1% monthly management fee for portfolios that will generate no investment revenue, as well as a 20% commission once the artwork is sold. The Better Business Bureau has given the company anA rating on a scale of A+ to F. Art is a very rareinvestment choice, and the average person is typicallyunable to see it that way. Im glad to see that you found this review helpful and absolutely, I can completely understand that giving out so much personal information could be a negative. Im so glad this article was helpful and thank you very much for sharing your thoughts on Masterworks as well . hope you accept male members, Thank you so much for your kind words! They help support the company and keep the works safe as they sit, safe and protected, waiting to be sold. Way better than the stomach churning volatility of S&P500 for sure. I am in Spain and just purchased some shares for a Banksy and my experience is totally different to what most people are saying. By Phone: 205-518-5172 Monday to Friday from 9am to 6pm EST, U.S. residents and non-U.S. residents can invest. Masterworks does all of the behind-the-scenes work to find the best art investments possible. How much does it cost to join Masterworks? Investing should be a rational and analytical process. You can also buy and/or sell painting shares under the Trading tab, as shown above. They ask all kinds of questions to figure out an amount. This one actually allows you to collect HUGE FLAT RATE DEALS. I actually thought that the interview was to help me understand the Masterworks model and decide whether it was a good investment for me and possibly how to use it. Fractional Art Investing is when investors can buy into artwork shares in increments. May be exactly what I have been looking for. Typically, the only reason you would want to resort to the secondary market is that youre looking for liquidity (aka you need the cash) before the painting itself is sold. Service is available by email at support@masterworks.io or by phone at 203-518-5172 from 9 a.m. to 6 p.m. Eastern. Thank you so much for your input I think your feedback adds a lot of value here. This is an interesting diversification play. Masterworks pricing and fees. Note that only US investors would be available to buy/sell shares using Evolve. Additionally, you can check out data onwhats available on the secondary market. Wishing you luck in resolving this issue soon. Masterworks makes it possible for almost anyone to start investing in blue-chip art worth up to $30 million+. Deposit a minimum of $15,000. Required fields are marked *. So how would you decide which piece of art to invest in? With a very small amount, you can buildyour own rare art portfolio. It must be said that Masterworks claims to have a rigorous diligence process, with only 1.8% of artworks passing their tests. Membership Coordinator (Weekend Position) Remote. Learn more here. Unlike Masterworks, more people have been able to walk away from their 9-5 job as well. Fiona Smith is the founder and CEO of The Millennial Money Woman. Im really happy to hear that your representative was not pushy personally speaking, that makes a big (and positive) difference to me. Couldnt have written it better meself, thanks. On the bright side, however, at least Masterworks gives international investors the opportunity to invest (and there are several alternative investments that do not offer this option). Conduct a phone interview. From the get-go, the first assignment should have been sufficient but it appears it wasn't even properly reviewed. Masterworks will be responsible for collecting and supervising investments. Via email: You can reach Masterworks by sending an email to support@masterworks.io. Thank you so much for your kind words I am so glad this article helped! Artwork is a hedge against inflation and stock market volatility. The majority of your portfolio should be invested in traditional assets such as fixed income securities andstocks. I was skeptical at first but now I feel confident with investing with them. Ease of use. Since there is no way to determine the inherent or potential worth of any particular piece of art from published sources, you will have to focus on managements judgement. Then he included four deal sheets on current offerings and instructed me to contact him if I would like to invest in one. Heres what the phone interview is really for: And heres what all of this means in plain English: Investing in fractional art shares is revolutionary its new, its disruptive, and it could be pretty profitable.

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