116. From Whiskey to Watches: Investing In Collectables With Rich Vinhais

Collections aren’t just for show and tell: they can investment as well as a passion project. The collector’s community is rapidly growing, and now might be the time to leverage the market potential to turn your hobby into a smart investment strategy. In today’s episode, Jim Pfeifer interviews Rich Vinhais, CEO of WAX Insurance Services, a company specializing in the collection and protection of rare items. As the collector’s community expands and becomes more main stream, Rich offers valuable insight on how to turn a collectors passion into an investment strategy. He delves into the unique world of collecting and how it is becoming an investment space that differs from traditional passive investing. Tune in now and learn all about the collectors’ community and how you can get involved!

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From Whiskey to Watches: Investing In Collectables With Rich Vinhais

I’m excited to have Rich Vinhais with us. He is the CEO of WAX. It’s a company specializing in the collection and protection of rare items. The collector’s community is a market that’s quickly gaining steam as it’s expected to be valued at over $500 billion by 2025. In this episode, Rich is going to give us a behind-the-scenes peek into how collectors can learn to leverage their growing market potential to personal advantage and also talk generally about collecting. This is going to be very different from the normal episodes. This isn’t real estate but this could be a type of investing. I’m super excited. Rich, welcome to the show.

I appreciate it, Jim. I’m happy to be here.

The first question we always ask is, what’s your journey? Usually, we’re asking, “How did you get into real estate,” but in this case, how did you get into collecting? How did you make this into a business?

I’ve been collecting a lot of random things ever since I was a child but I’m primarily into collecting watches or timepieces. That’s something that goes back to my early years, especially high school. For me, it’s always been more of a way to differentiate or stand out stylistically. There’s only so much you could do as a man in terms of flexing your individuality.

I always found that to be the case through the timepieces that you collect. What’s happened over the years, just like any type of special interest you get into, as you get deeper into it, you start realizing how big of a rabbit hole it is. It starts unlocking different levels of appreciation and different values with the types of collectibles you’re collecting.

What are collectibles? You said watches. I have some Star Wars cards from the ‘70s in my basement. I have some marbles, football cards and things like that. I even have a beer can collection so I’m a minor hoarder. My wife would love me to get rid of them but I can’t bear to throw them away and I don’t know how to sell them. I have an idea that your collectibles are a higher grade than what I collect. Can you talk about the industry of collectibles generally? What people are collecting? How does it work? Pretend like I have no idea what I’m talking about, which is true and explain the whole industry to me if you can.

First and foremost, before I get into collectibles, it’s important to note that I come from a management consulting background. I did that for about fifteen years and it was in the financial services space before I took a leap into a venture-backed startup experience, which is in the collectible space but also lends itself nicely to financial services and insurance because that’s part and parcel of behind what we do.

Collectibles in general, when you think about it, we’re talking about physical objects that anybody could collect. The things that you referenced are tangible assets that have the potential to appreciate over time. Usually, there are things that could often be physically engaging like trading cards, watches or handbags even.

The traditional view of collectible categories has always been seen as fine art, stamps and rare coins. That’s when you think of traditional collectible categories. Those are the big three. What’s happened since the start of the pandemic when there was a bit of a resurgence in interest and across a number of these collectible categories, that lane of interest has expanded into things like collector cars, watches, whiskey, wine, sports memorabilia, ticket stubs, comic books, sneakers and the like.

As you’d expect within each one of these collectible categories, there is a whole level of special interest group behind them. There are car guys and gals that are deeply entrenched in the collector car community that go to car events and different shows all over the world. Similarly, with watches as well. I go to, not as much as I used to, quite a few random meetups. I’ve met with people all over the world to talk about the watches that they collect, that they have and appreciate.

Very often, it’s one of those things where socioeconomic divisions are cast aside. You could have somebody that is there with a $250,000 watch and you could have another person that they’re engaging with that has a $250 watch. There’s a level of connectivity and interest behind why they are interested in their respective pieces. There’s usually a story, a milestone, an inspiration or an achievement that’s tied to it.

What has happened over the years is that these categories have gained not only popularity but a level of interest in value. They’re being seen as legitimate alternative investment strategies. That’s never been the case before. In years past, when I would buy a watch, it was almost like buying a car off the lot. It drops in value immediately. That’s no longer the case. You buy a watch or if you’re fortunate enough to get access to a rare piece, it’s not uncommon for that watch to sometimes be worth 2, 3 or 4 times the next day of purchasing it at retail.

PILF 116 | Collectors’ Community — Collectors’ Community: What has happened over the years is that these categories have gained not only popularity but a level of interest in value. They’re now being seen as legitimate alternative investment strategies.

The rub is being able to get access and understanding what those pieces are but what’s happened is that there’s been so much money that’s been thrown into these collective industries. People are investing in them because they get to invest in things that they enjoy and like. It’s a little bit more interesting than investing in the stock market where you’re looking at a ticker bouncing up and down. If you could hold on to a watch, a comic book or something that strikes you, you could tangibly appreciate it and use it in many instances.

That led to a deeper level of engagement in the community. That community has then propelled interest in the group. It’s turned into a space that it’s drawn a lot more capital into the space. You see a lot more institutional capital being thrown into the space. That’s why I see a lot of startups that are in these types of categories but it’s turned into a legitimate business all by itself. I’ll reference a couple of examples of collectible categories that have done well in the news over the past couple of years.

Ironically enough, I’m talking about you going to a football game or a baseball game and getting the physical ticket stub. Those ticket stubs are no longer given out like they were in the past. They’re usually digitally created now. There’s not a physical item that’s handed to an individual as they’re entering a facility.

In years past, if you go to Michael Jordan’s last game and you have a ticket stub from his last game, there’s a level of appreciation for those items. Back in February 2022, there was a ticket stub from Jackie Robinson’s debut in 1947. It sold for $480,000. A collector car, it was a Mercedes Benz, a 1955, 300 SLR that sold for $142 million.

Spirits, that’s also an extraordinarily popular space. A lot of our clients invest heavily in wines and spirits, like a 1975 single malt from Ardbeg Distillery. It was about 440 bottles sold for about £16 million. The list goes on where you see these pops of interest and investment in these categories because of the scarcity and presumably the potential upside of these things over time. As with any type of investment category as you’d expect, as you start throwing more money into a collection that you’re building, very often it needs to be protected.

That’s where WAX comes into play. We’ve carved out a niche for ourselves where we specialize in investing or protecting collectibles. We’re backed by Chubb, which is one of the largest and high net worth insurance carriers in the world. We provide the tech and the understanding of the collector mindset to make sure that we’re appraising them correctly and giving them the protection that they need.

I want to get into the WAX and the insurance part of it but I have a bunch of questions. You talked about some of the different types of collectibles. Sports tickets and concert tickets are going to become rare because they don’t have tickets anymore. Everything’s digital. Let’s say you’re not a collector like me. I have a basement full of stuff that I’ve been accumulating my whole life because I don’t throw stuff away.

How do people know, “This ticket is worth something and this ticket isn’t,” or whatever you have? People were collecting baseball cards as kids or different things. How do you know if you have something worthwhile? That’s part one. You talked about these communities. How do you find these communities? eBay is always the place I thought you go at least. For a while, I was trying to buy some old tickets. Where do you go? What are these communities like?

Two important questions, certainly. I hate to answer a question with a question but seeing that you folks specialize in real estate, how do you know a piece of property is truly valued what it’s valued at? You get a sense of the comps in the space and what type of investments are made in a particular area. It’s no different when you’re talking about collectible categories.

Some of them have a tendency to fluctuate at certain periods during auction seasons or tend to be a flurry of activity where people are trying to prop up the values of these collectible categories. At the end of the day, it comes down to the scarcity of the item and how difficult it is to obtain it. The more difficult it is to obtain, generally speaking, there’s somebody that wants it, especially if it’s something that they’re genuinely passionate about.

I know a variety of collectors out there that are obsessed with like, for instance, all things Michael Jordan. Sotheby’s had an auction where they auction off one of MJ’s game-worn sneakers and it sold for $2 million, a pair of sneakers. You have to put yourself in the shoes literally and figuratively of the individual that made the purchase.

In their head, they’re probably thinking, “MJ’s still alive. Extremely rare item. I bet you in the next 5 to 6 years, I could sell that thing for 2X or 3X what I’m purchasing it for now.” That’s how a lot of these individuals think. Ironically enough, a lot of these folks that invest in collectibles are doing it because they’re genuinely passionate about it.

I collect watches and I have for a long time. A lot of my watches are way above what I paid for them but that wasn’t by design. A lot of these things are purchased because you’re passionate about them. You care about these things. For instance, I bought a watch, Audemars Piguet to commemorate my son’s birth. I went to a lot of lengths to figure out how to get access to this watch and it was fairly pricey at the time. It was a little under $20,000.

I got it because I thought it would be something beautiful to hand down to him one day. That’s precisely why but since the purchase of that watch, at its peak, it was closer to $60,000. This is how you know it’s a real market. There are ups and downs in the market at this point because more people are investing in it. If you’re in the game to engage in the secondary market, I have a lot of friends that do that.

They do very well as a little side hustle and some of them are full-time businesses where they’re watch dealers. They are making significant money but like anything, you need to know what you’re doing. That level of education and understanding of the rarity of the items, the exclusivity and how difficult it is to get access to them comes with engagement in the community.

That goes to the second part of your question. All of these communities are wired a little differently. When you look at the watch community, there are meetups every week all over the world in the most interesting situations and circumstances. There’s this group called RedBar and they are one of the largest watch collector communities in the world.

They have about 130 or 140 different chapters. A lot of them are based out of the largest geographies that you could think of and major metropolitan areas but they’re scattered all over the place. Each one of these groups meets up to 15, 20 and sometimes 30 or 40 people. They get together over drinks, bring watches, talk about watches and it’s a hang. It’s no different than going to a collector car meetup or things of the like but every one of these communities has a different wiring.

For me, it’s more about the watch community because that’s something that I could engage with but it’s certainly turned into a space of significant investment. It was done with all the right intentions initially but you have so much more money thrown into this space that it’s popping the market up and pricing out certain individuals that are buying for very different reasons than speculators.

Speaking of speculators, if someone wanted to get into this as an investor, is there a way to do it? Left Field Investors are always looking for passive cashflow or passive appreciation. This is more on the speculation end because it’s not going to produce cashflow like a real estate investment might. That doesn’t mean it’s bad. You have to understand what is going into it.

If an investor wanted to get in, how do you do that? I’m not passionate about watches but our community is passionate about finding ways to make money. Is this another way that we could invest? If so, how do we do it passively? When we look at real estate, I don’t care what the building looks like.

It’s been in nice condition but I’m not passionate about that particular piece of property. I’m looking for the cashflow and the appreciation. We’re coming at it a little bit differently because it’s not necessarily something we’re passionate about. The question is, if we don’t have this passion for a particular collectible asset class, can we still get in and invest passively in something like this?

Investing passively is an interesting statement, especially in this space. I would never advise somebody to invest in collecting anything if you’re doing it for financial reasons. However, I know many people that do. When you start seeing firms like Morgan Stanley issuing reports that talk about the state of the watch collecting market and all the top brands, the returns that you’re seeing year over year, there are people that are investing in this very heavily and significantly.

Don’t invest in collecting anything if you’re doing it for financial reasons.

There’s nothing wrong with it. What I would say is that it’s imperative that you understand the types of brands out there. There are modern brands and independent brands. There are high-production brands like Rolex that are producing a lot of different pieces every year, almost 100 pieces every year, where the average price point is rather modest. It’s not too heavy, even though most people associate Rolex with a top-tier brand, which it is.

They specialize in scale, bringing luxury products at scale to individuals. They’re paying $10,000 or $15,000 for a watch while significant and it’s a great watch. You can’t go wrong with it. There are independent brands that have come out there like MB&F or Urwerk, where their production volumes are a few hundred pieces a year but the entry-level price point for these watches is $75,000 to $100,000.

You’re talking about a very different level of investment and understanding because if you’re dropping that money for a watch, gone are the days where you’re accepting that the value is going to drop off the day you buy it. Now, there’s a level of understanding that there is a level of liquidity in the purchase that you’re making. The deeper you get into this space and this is why it’s imperative that there is research and homework. I’m talking about watches because that’s a little bit of where my passion is.

There are tons of blogs out there that educate and inform on the different brands and what their releases are. It’s important to understand the brands that are out there, the volumes that they’re introducing to the market, the limited editions, the scarcity of these pieces and understanding the tone or temperament of the market. Some pieces get hot at random times and it’s usually dictated by the collectors themselves.

When you’re on Instagram, for instance, a lot of the people in the watch-collecting community, especially those that invest heavily in watches, you almost know who they all are because they’re very well-known. They have significant multimillion-dollar collections. People are following them because it’s aspirational like, “I love the way this guy collects. His collection is incredible.”

Very often, ironically enough, those big collectors end up sparking greater interest in certain brands and models. Before you know it, a watch that costs $50,000 at retail is now valued at $100,000 plus and there’s a 2 or 3-year waitlist. The only way I could say to get into that space is to get yourself entrenched in the community, understand it and be smart about it.

Like any type of investment, nobody’s going to be trying to lay out a blueprint for you so you could make money on your own. There are a lot of them out there that that is their intention. They’re trying to make some money. I know plenty of people that are making $250,000, $500,000 or $1 million a year doing this on the side, flipping watches.

It’s not as hot as it was because of economic conditions. Things have slowed down a little bit. That’s more of a macroeconomic trend if I’m being honest. There’s money that’s being made there because people are constantly on the hunt and prowl for new pieces that they could potentially sit on and flip for some significant returns.

This is all so interesting. A couple of more questions. If you look at watches as an asset class, a collectibles class, wine or liquor or trading cards, do each of those have a central marketplace? I mentioned eBay before. It’s the place where I thought you could sell anything. You probably don’t want to sell your $100,000 watch on eBay but is there a central marketplace for all of these? Are there rules and regulations? If you’re doing real estate, there are a lot of rules, regulations and syndications. The SEC is involved and all that. Is that the case with collectibles as well?

This is the way I look at it. Every collectible category tends to do better on different platforms. When you look at collector cars, there is a lot of activity and transactions that happen on sites like BringATrailer.com. They tend to specialize in collector vehicles, some high-end and some middle of the road but they have a lot of volumes.

You start talking about real auction events for collector cars. That’s where the big swinging investments for those multimillion-dollar vehicles that are looking to win best in class and things of that nature. Whereas watches, the market is somewhat fragmented. There’s a platform called Chrono24, where a lot of individuals go to this platform to list their watches.

At scale, you could see the data and get a sense of what the market trends for different references are and how the value of these pieces is going. There are other sites out there like Get Bezel, which is a similar marketplace where you could buy watches on the secondary market. A lot of these are dictated by transactions that are happening through the platforms themselves. They have it on eBay but I’d say the Chrono24s of the world are probably the biggest for watches and it’s no different for other platforms.

There are tons of them like PSA, for instance. They’re the ones that do the grading for trading cards. They acquired Golden Auctions so they have their marketplace for all things collectible. You see a lot of sports memorabilia there and trading cards. You see a bit of a bifurcation of these different platforms. There’s no one platform for all of these categories. There tends to be a natural gravitation to where the communities are engaging the most.

I’m going to get in trouble with my wife if I don’t ask this question and then we’ll move on to the serious stuff and talk about WAX. Where do I go to sell my beer can collection that I started in 1977?

I don’t know if I can help you with that one. I’d ask you to go find other fellow beer can collector enthusiasts to see what they do because that’s a space I’m certainly not familiar with.

I’m not either and my wife wants to get rid of them but I don’t have the heart for it. Rules and regulations, we forgot that. Is it the Wild Wild West? Do you sell it on a platform or are there financial rules, governmental rules or anything like that?

No, there’s no regulation. Think about it. You’re selling. At the end of the day, we’re categorizing these things as collectibles but they have multiple labels. When you see a comic book, it could be seen as a collectible very often because it gets fallen into that tranche. We see watches as collectibles. Certain components of them are collectible. At the end of the day, they’re also luxury products. Luxury products, depending on the scarcity of how they are managed, the inventory that they have and the brands that are out there, it’s Wild Wild West.

The real regulation takes place at the authorized dealer. What I mean by that is that they have a such limited supply. You can’t just go into most of these authorized dealers and say, “I would like to buy that $100,000 watch or that $25,000 bag.” The immediate default response from the authorized dealer is, “Who are you? Where is your buying history? Why would I give you access to this piece above people that have been buying from me and my brand for the past X number of years?”

This is how the scarcity of these products continues to drive demand in the marketplace because for a lot of people that are high net worth or even Henry market individuals, high earners not rich yet, these are individuals that want what they can’t get and it’s a nice little token of status for some of them. Some of them see it as an investment but some of them see it as status but there’s no regulation. It’s getting access to these things at retail that’s usually the hardest part because once it makes it to the secondary market, then you’re at the whims of predatory flippers that are trying to make a buck.

That’s usually where things could go sideways. A watch that you spend $10,000 or $11,000 for, if it’s the right hot piece at any given moment, you could buy it in the retail shop. The next day, you could list it on a platform and try to sell it for $20,000 or $30,000. Some people might bite on that because it’s so difficult to get. There’s no other way to get access to it unless they have to invest how much money to build up a buying history for these authorized dealers.

I want to turn to WAX. What is WAX? What problem is it trying to solve? Give us an overview of what you’re doing at WAX.

For WAX, we started ourselves out as a pure insurer tech play in the sense that we wanted to be geared towards the collectibles services market and be at the center of a collector’s journey. We’ve identified that when it comes to ensuring collectibles themselves or luxury items, larger incumbent insurance carriers have a hard time understanding or appreciating the value of these items in the secondary market, which makes sense because the trend of these items, a carrier very often will say, “Give me a receipt of what you paid for it.”

It’s like, “I paid $12,000 but it’s worth $30,000. What are we talking about?” That has led to a lot of friction in the marketplace. Where we came in is to introduce a product that it’s an app-based experience, answer a couple of questions and take a couple of photos. We give an instant quote, have the ability for the individual to pay and bind all within 1 minute or 2, depending on how large your collection is.

We handle the understanding of the secondary market values. We’re connected to so many of these secondary market websites and we’re pulling tons of data sets so we feel like we have a pretty good grasp of what the value of these items are. In many cases, it’s better than the insurance carriers themselves because we are ourselves collectors and we built a tech product that’s aligned to making sure that we’re reducing the friction for a collector.

Think about if you’re in a situation where you’re sitting on a substantial collection. This is one of our founders when we were first kicking around the idea of WAX. He was sitting on about a $2 million watch collection. He went to his homeowner insurance and said, “I want to ensure my watches.” They laughed in his face and said, “You’re going to have to get all of them appraised and send us appraisals.”

He’s like, “I’m going to take my uninsured collection down to 47th Street, expose myself, put myself at risk for $2 million, come back to you and then you may or may not insure at that level?” That’s what was the impetus behind WAX coming in and offering a product that’s geared toward the collector’s mindset and making sure that it’s tech-driven and rapid to get a quote and bind.

Our app is designed in such a way that a lot of our collectors in our ecosystem have large collections and very often they collect more than one thing. It’s watches, jewelry, trading cards, you name it but it’s a lot of different things. We’ve created an app that allows an individual to track their collectibles for free. We don’t want to be charging them for the usage of organizing their stuff because it’s only beneficial to them. It’s certainly beneficial to us if they have a clear idea of what they have and don’t.

We’ve created a collection management platform that allows them to organize their stuff. We are opportunistic enough to say, “Once it’s in there, we could protect it through insurance.” We also have a lending product that we launched as a pilot program to unlock liquidity and collections that they have and also physical vaulting.

In some cases, these individuals don’t want to have all the boxes and papers at their homes for a variety of reasons. We have a Delaware-based facility where these items could be vaulted there. It’s also a nice balancing act where sometimes they have so many watches or things they’d rather vault half of it and ensure the rest that they’re using. It’s a nice bit of optionality that we offer our clients.

Talk more about the collectible-based loan. Let’s say I have $1 million worth of beer cans in my beer can collection. I do the app and fill it all out. You tell me how much the insurance costs for my beer can collection. This might not be the best example so maybe we’ll switch to watches. I want a loan. You’ll give me cash based on the value of the property.

The way it works, it’s structured like a typical collateral-based loan. I will preface that with the interest rate market being what it is. This is a space that we’ve backed away from a little bit because the interest rates and the cost of capital is so significant but the underlying context is as follows. Let’s say that you have a watch or a collection that’s valued at $100,000.

We come up with the appropriate LTV or Loan-to-Value that we think is appropriate for the item. That could be anywhere from 35% to 65% of the value of the item. Let’s say $100,000 watch, we land on 60%. We give you a loan of $60,000 for the item. That item gets sent to our vaulting facility where it will be physically appraised. It will be analyzed to make sure it is what it’s supposed to be.

If everything is kosher, the cash is released and the item is securely vaulted. It’s a standard recurring payment to pay off your loan. It’s one of those instances where if you’re looking for cash, you’re sitting on several hundred thousand dollars in watches in your collection that’s collecting dust. It’s one of those things where you could put some money to work by unlocking some liquidity in the collection that you have.

That’s a neat idea because that’s one of the issues with these assets. You might be into watches and you don’t necessarily want to sell them. You want to own them but you also want to not have all your capital tied up so giving a loan based on that is a great idea. I suppose whatever you’re going to do for that loan has to be something that is enough value or there has to be a large market for it. I assume if they default, you sell the item. It’s got to be the large or the frequently collected and tradable items. Can you talk a little bit about maybe what the top five collection asset classes are? You’ve mentioned watches, trading cards and things like that but what are the most popular ones for our entertainment?

I’ll tell you a little bit. If we look into our digital vault where our individuals are tracking their stuff within our app, we have about $500 million worth of stuff that’s being organized in there. This is where people use our app to organize their things. I’d say about half of that is maybe watches but a good fraction of that is jewelry. Ironically enough, in many instances, jewelry is not considered collectible but the reality is it’s complimentary to the service offering that we offer.

In many instances, jewelry is not considered collectible. But the reality is it is complimentary to the service offering that WAX offers.

If we’re protecting an individual’s watch or their other collectibles, very often their significant other may have jewelry and we want to be able to act on that. We have a lot of engagement rings and wedding bands that we protect. We have a nice fraction of trading cards, handbags, art, sports memorabilia and other category. I’m talking about vintage shotguns from the 1600s. The range is so vast. That’s why we have it captured in another category because it’s a hodgepodge of different things.

That’s good news because I’m sure I’ll find someone to buy those beer cans eventually.

Keep at it.

Anything else that we need to know about collectibles before we close up here?

No. I appreciate you making the time. I’m not the typical guest that’s not talking about real estate. I hope I didn’t bore your audience to tears. What I could say is that very often individuals that are opportunistic and are willing to put in the work to understand how a market works, whether it’s collectibles or whatever else, there is an angle to make money but it’s the work that’s required to put in because you have to understand and remember that there’s a lot of people that have been in this space for a very long time.

You might think you’re about to make a quick 1X or 2X on a particular investment, whether it be a watch or some other collectible. The individual that’s selling it might know something you don’t and that’s the competitive advantage of that knowledge and education. I would not advise anybody to enter this aggressively or lightly. Passion usually leads the way but if you are looking to make a buck, there’s certainly money to be made in this space.

That’s why this is interesting to our community. We are investors and it’s typically real estate but we talk about chasing the shiny object and that’s what this is. It’s not a passive thing but if someone has an interest and is super passionate about watches, beer cans or trading cards, then this could be for them and it could be a way to make money. That’s why it’s always interesting to have something different on the show. Rather than boring anybody, this is fascinating. It’s going to be very interesting and different from our normal show. It’ll probably be a relief to everybody to get something new. The last question I always ask is what’s a great podcast that you listen to?

The podcast that I’ve been obsessed with and it’s primarily because I’m in the startup space is I listen to the All-In Podcast. This has probably been recommended because they’ve gotten so popular. That panel is comprised of some top-tier VCs, entrepreneurs and investors. They have great chemistry. It’s also one of those things where they go deep into some very complicated investment categories that help you think and look at things in a slightly different way.

I have that one on my playlist as well. That’s a good one. Thanks for that recommendation. Finally, if readers want to get in touch with you or learn more about WAX, what’s the best way to do that?

You could check us out on Instagram, @WAXCollect. It’s a quick way to check us out. If you want to engage with me directly, it’s Rich Vinhais. Hit me up on LinkedIn. I’m happy to answer any questions that you might have but I genuinely appreciate the time, Jim. It’s a great time.

This is fascinating. Thank you, Rich, for being on the show. We appreciate it.

It’s my pleasure.

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That was different and not something that we normally talk about but I thought it was interesting. There may be some of you out there that have fancy expensive collectibles like watches, cars or whiskey collections. I happen to have beer cans, Star Wars cards and Ohio State football ticket stubs. If anyone’s interested in that stuff, hit me up and I can sell you something but it’s an interesting thing.

It’s a different asset class. There are opportunities there but through that conversation, what I learned is if you’re not passionate about whatever it is, be it the trading cards or watches like Rich, then you’re probably going to struggle and have a hard time. I compare everything to real estate. If you don’t know anything, then you need to hire somebody who does. That’s what we do when we hire asset managers to manage our investments for us. It doesn’t look like that’s something that you can do in this space. What do you do?

If you’re passionate about whiskey, maybe you start collecting whiskey but you got to start slow and make sure that you’re doing it in the right way, as Rich said. Otherwise, there are going to be people that have been doing it for years and take advantage of you. I did think it was interesting that you could free up some of the liquidity on these things if you’re collecting art or you have any of this.

It’s got to have significant value to be worth it but similar to how we use our whole life insurance or HELOC to go invest in ATMs or other syndications, if you have a sizable collection, you could do the same thing where you’re using arbitrage. It’s harder with higher interest rates but maybe it’s possible. Probably it’s possible.

What was cool is that Rich found something that wasn’t working, him and his team. You go to your homeowner’s insurance and say, “I want to insure these watches.” They have no idea how to handle it and that’s where a specialty company like WAX comes in. I thought that was interesting. It was an interesting episode and topic. Hopefully, you got something out of it. That’s all we have for this time. We’ll catch you next time in the left field.

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About RIch Vinhais

Rich joined WAX, a watch collecting community, in 2021 after a 20 year career spanning management consulting in technology, financial services, and the occasional startup. A longtime watch collector, Rich’s obsession began in high school after a friend gifted him a Swiss army watch. From there, the fine details of these mechanical marvels captured his imagination. Eventually, it led him to exploring the people and communities that shared the same fascination. In late 2018, Rich published Discovering Time: Stories from a Collector Community, in which he shared an intimate glimpse into the global subculture of watch collecting and the phenomenon of “watch meet-ups” that are common today. In addition to watches, Rich is a collector of many other things, such as art, sneakers, and the occasional bottle of rare whiskey. He relaxes by making random art of his own and spending time with his family, who reside firmly at the center of his universe.

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