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Martin Lewis gives advice on investing inheritance
Roger Parfitt had a long-term strategy oriented around investing in unique casks of whiskey, generating returns he would not be able to find anywhere else.
Mr Parfitt said: “I remember thinking, if it doesn’t appreciate in value, the worst that could happen is that you would have to get it out of the warehouse, bottle it and drink it.
“It always had that fall back for me – you could drown your sorrows if it didn’t work out financially.”
He invested £3,200 in a cask of single malt Macallan and another £1,500 in a cask of Tobermory all the way back in 1994 and is enjoying a return of 4,700 percent.
This has translated into a significant profit of £220,300.
This return on investment rewarded a bold strategy which identified whiskey as an investment with the potential to create better returns than many other luxury industries.
The 59-year-old bank manager from Coventry was then able to use these investments to pay off his mortgage.
This boosted his retirement plan, so he could give up his job three years early, a situation most dream of.
Despite lacking any knowledge or experience of the whisky investment industry, he was able to identify whisky as an asset which has the ability to create immense returns for those who are patient.
Waiting approximately 27 years for the investment, Mr Parfitt appeared to be the model of this patience.
The news only got better for Mr Parfitt, whose investments in whiskey are classed by HMRC as a “wasting asset”, meaning they are free from Capital Gains Tax.
Unsurprisingly then, Mr Parfitt is keen on keeping whiskey investments in the family and plans on buying a cask for his two children.
He wants to dub this “the cask of mum and dad”.
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Even if the next cask doesn’t soar to the heights of the previous two, they will hope it will realise a healthy return.
As with any investment, it is impossible to predict what returns it may yield.
With whiskey it varies from cask to cask and also depends on how long the whiskey is allowed to age for.
Investing in this industry can seem an immediately appealing prospect, but any potential investors are advised to educate themselves so they can make an informed decision.
It is certainly a lucrative market, as a 2020 report showed with growth over the last decade of 564 percent, outperforming other luxury assets.
Nick Green, the Managing Partner of Elite Wine & Whisky, said “we are seeing more and more customers celebrating achieving margins on their investment which they have never achieved when investing in other commodities.
“it delights us to be able to be part of our investors’ journeys and enable them to grow their assets along with their knowledge”.
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