Unfortunately you can’t place this investment inside your RRSP, but it will probably give you a better return than most of those Mutual Funds you have.
Wine is one of those rare commodities that actually improves with age. Wines available from the store are at least 6 months old and most are several years old. The problem with young wines is that they frequently have undesirable flavours that need a little time to combine with other elements and mature. Tannin is a good example: in its youth it is quite harsh. But after combining with the pigments in the wine they will drop out as a light sediment and make the wine much smoother.
Consumer made wine is a cost-effective way to build a cellar, but the wine needs time to mature. The problem with letting wine age in your basement is that when you need a bottle, you can’t resist the supply on hand, to allow it the time it needs to age. The only way to avoid this is to make more wine than you can drink (a real challenge for some of us)! What you need to do is to start 4 batches of wine at the same time. You would do 1 batch of easy drinking 4-week wine and the rest would be long term/age worthy wines. You will have the easy drinking wine to enjoy while waiting for the more full-bodied wine to mature. The other issue you need to realize is that you will need to start another batch every time you have 30 bottles available, not once all 120 bottles are empty. That way you will always have at least 90 bottles on hand that are ready to drink.
Now here’s the investment part. I realize those 4 batches of wine, plus probably an extra 90 bottles, is going to require a principal investment of about $700 today. But let’s fast forward a year from now and look at the return on investment (ROI). A bottle of one-year-old, full bodied wine, would cost you about $20 in the store. You’re going to have 120 bottles of aged wine that will be worth about $2,400, for a ROI of about 350%. Compare that to your mutual funds! As well, you will now have an extensive selection of wine you can chose from, as each time you start a new batch you can chose a different varietal.
This doesn’t require you to spend any more money or start any more batches than you would normally, except for the initial investment. After that you simply start a batch when you have 30 empty bottles, as you would normally. You just don’t have to drink wine aged in the trunk of your car on bottling night. You can chose from your wine cellar that will be the envy of all your friends.
Blog provided by: Ray Vezeau, owner of Chateau Vezeau Wines, a ferment on premises winemaking facility in Brooklin. www.ChateauVezeauWines.com