Collecting Art For Fun And Profit
by Anastasia Zoldak

"Making money is art and working is art and good business is the best art.," Andy Warhol really understood the business side of art. What he created made him one of the most well known artists of the 20th century, but he also enjoyed a rich life unlike many artists who become famous after they die.

It's always best to think of collecting art as a hobby for pleasure than the investment. However, it's clear that collecting art can have considerable financial rewards. Investing in art can be a long-term investment or a quick short-term fix depending on your investment strategy. Just remember art is not usually a get rich quick investment. Define the reasons why you have decided to purchase art before your first purchase.

There are many benefits in creating a small business to support and finance your art collecting. A major benefit of treating your art collection as a business is the tax benefits you will receive. By using your hobby of collecting as a registered small business, allows you a slew of tax deductions. For example: the 1995 Tax Act allows you to donate to any IRS-approved charity works of art at their fair market value, not at their cost basis. Just remember to check with your tax accountant for the most up to date tax advice.

Now that you have decided to start an art collection, how do you begin? You certainly want to fine art for your collection but you also want it to be a good investment as well. Art, like anything else, is marketed. As a society, we are conditioned to want the popular artist's work and we can be influenced to believe we want it through good marketing. For this reason, basing your collection solely on the art you love is not a good investment strategy. "When you don't know what to do, it is far better to do nothing than to do something you do not understand." Suze Orman said it best about investing. Educate yourself before you start collecting!

Take advantage of art magazines, museums, galleries, auction houses, and schools. Books are another way of educating yourself on the business side of art collecting and investing. The Intrepid Art Collector: The Beginner's Guide to Finding, Buying, and Appreciating Art on a Budget by Lisa Hunter shows you how to start a fine art collection without spending a fortune.

Another great book is not only about art aesthetics; it is also about the economics called Art Dealer's Field Guide: How to Profit in Art, Buying, and Selling Valuable Paintings by Ron Davis Art. This book is good place to start in learning how to make money investing in art.

Finding organizations such as the Greenwich Workshop, which supports and encourages up and coming artists, is a good way to find new artists. Remember, for investment and collection purposes a mixed collection is important and getting a good education on the basics of art collecting is essential to the success of your collection.

Here are some of the areas you should know prior to starting your collection:

* What are the advantages to buying real art instead of reproductions
* How do you determine if a piece of art is fairly priced
* What are the techniques you need to know in order to predict if an artist's work will go up in value?
* Learn the techniques for negotiating a price with a dealer
* How do you develop your artistic taste, so you'll know if you'll still love your purchase ten years down the road
* How to preserve art in your home

Once you define what your investment goals, research the artists. Let us review the career of June Carey. June Carey has been painting for the past 25 years and has often placed among the Top 100 artists in the famed annual national Arts for the Parks exhibition. "A large part of what drives me to paint," June Carey says, "is a passion to create a place I want to be." Greenwich has been selling her art for about few years and in that time prices of the limited editions have gone up in value. By doing your research you can find artist like June Carey for your collection and benefit from their future success.

Collecting art is one of the few rewarding things in life that can satisfy you both spiritually and financially and offer you a life long experience in discovery. Who knows you may even discover the next Picasso, Thomas Kinkade, or Rembrandt and earn your place in history as a great patron of the arts.

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