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08/24/2005: "Collectors & Investors"

It's the age-old question. Should you buy art because you love it or
because it could become a nice little nest-egg?

Hmm. Well, let's face it. NOBODY wants to LOSE money. We all buy things
hoping that they'll appreciate in value. Unfortunately, not many things do.
However, if we're touched by the fickle hand of investment, our homes and
hopefully, our artwork will rise in value. Hopefully, a lot!

But that's not really why I buy art.


People who buy art basically fall into two categories. Collectors and
Investors. There's no way around it and we all know it. It basically comes
down to motivation. If Cupid slings you with his arrow while you're looking
at a piece of art in a gallery, art fair or online, it's love! You're a
collector, my friend! On the other hand, if you're looking at a painting
and your eyeballs turn into cash register displays, you're probably more of
an investor.

"Chuh Ching!"

Of course, this doesn't mean that investors don't love art or that
collectors aren't aware of the importance of investments. I'm merely saying
that when I buy art, I pretty much think I'll hold onto it for life.

But for argument's sake, let's assume that something I bought were to
suddenly become worth ... oh, I don't know ... $3 million! Great! I would
definitely be tempted to sell and probably would ... but not without talking
it over with the artist, with whom I would share some of the proceeds. This
would allow me to ... BUY MORE ART! Still, I would be sad that I no longer
owned a piece that I loved. The best case scenario would be to loan the art
to museums if it grew tremendously in value. I would love to help my
artists that way.

Again, it comes down to primary motivation. Love or money? For me, it's
love of art. If I were an artist, I would feel a bit exploited if someone
told me that they were buying my art because they believed the re-sale value
would be big one day. However, there's also a compliment and vote of
confidence involved in the sale. Who doesn't want that? If my work
increased in value, hopefully that would mean my reputation is on the rise
and I could make a great living doing what I love. Catch-22.

I don't think most people who run galleries are thrilled when potential
buyers ask them about re-sale value. It's tough to predict. In fact, one
gallery operator in New York City and another in Chicago told me that! It's
really a pain in the neck to deal with. Of course, we all know that
high-priced art that sells helps galleries more than anyone else in the
equation, including the artist. One artist whose work I collect told me
that an artist friend of his had a painting sell for $1 million. Guess how
much of that the artist got? $35,000! Of course, I wouldn't turn that
down, but $35,000 on a $1 million sale? That's ridiculous.

Despite whatever strategies galleries may employ to drive up the price of
art and boost profits, it's still a tough game for everyone. Money is
always the main factor. Even though I love something enough to buy it, I
still have to come up with the money. Wouldn't it be great if love could
pay the bills?

We can debate collecting and investing forever, but the fact remains that
they don't have to be mutually exclusive. Let's remember that MOST people
don't buy art from living artists. That's the real shame.

Which is why I ultimately say that whenever you buy art, regardless of your
motivation, you're helping the artist. Maybe not much in many cases, but
some.

That makes sense (cents)!

MICHAEL CORBIN IS A WRITER AND AVID ART COLLECTOR

Replies: 22 Comments

on Thursday, September 8th, walt said

Gabriella,

Visual artists are the only artists who don't think like this. Actors, Playwrites, Novelists singer songwriters, commercial photographers and illustrators all have guilds, unions, or associations that help them capitolize on their creations so they can afford to continue doing what they do best. Those visual artists who do well figure out early in their careers how to know the right people who can help them along the way. Truly that is how they do it. And while it doesn't hurt to be talented and create an art that catches a large audience even some god-awful artists do well because they understand how to hustle, schmooze and get connected thereby confusing the path for a lot of young and gifted wannabees.

Andy says we're all about ego on these blogs. I would argue that art is all about ego. And I don't think that is a bad thing. And here I'm not moralizing just stating the facts. How we pursue our idea of spiritual perfection in our studios is one thing. But when we come out of our sanctum sanctoriums and try to enter the larger world to share our art we have entered a different world. It is a commercial world and it may well be offensive to us but you know, if you lived in Africa you'd have to watch out for man eating lions if you want to stay alive. And in Australia you keep your kids and small animals away from certain bodies of water to avoid the crocs. In Oklahoma there are rattlesnakes, water mocs, scorpions, poisoness spiders and centipedes to avoid not to mention the tornados.

If a young artist is to survive and do well both in the art making and their lives they have to learn to swim in the deep end and watch out for the alligators. And it doesn't hurt to have someone in a boat alongside you watching out and ready to throw you a life line.

on Thursday, September 8th, Gabriella Morrison said

Michael;

Walt makes an intersting point in suggesting artists have in their contracts a provision for making more money when their work re-sells.
Actors in the film and television industries have in their contracts provision for residual payments from whenever their work is re-played or re-sold. Visual artists in any media should have this kind of inclusion in their contracts with galleries and buyers.

on Tuesday, September 6th, walt said

Michael, I've known some artists who've told terrible stories of galleries who sell the work for more than it is listed then pocket the difference, in one sale to a museum of a piece by a young artist the museum didn't like the stretcher bars and wanted aluminum stretchers so the gallery had it re-stretched, billed the artist out of his half of the sale and in the end the artist actually owed the gallery money...and a number of major New York Galleries charge far more than the usual 50% commission on sales with the argument that they will get the selling price up much higher because their clientelle are willing to pay it and that this (and it does to some extent) help the artist. I've had my own share of horror stories on a smaller scale.

Michael, I like your idea of sharing further profits with the artist. Actually there have been attempts by artists and several art organizations to develop contracts (in some cases groups have pursued legislation) in which it is agreed that the purchaser will notify the artist of resale and pay an agreed upon percentage of the resale value. Actually the way copyright and contract law works I believe this is completely legal and legit. It isn't that much different than leasing an automobile in some respects. The problem is that it is always a buyers market when it comes to art. So convincing a client to sign such a contract isn't all that easy.

Most artists get ridden hard and put away wet. Frankly, I believe that if we really appreciate and love art, then feeding and grooming our artists so they can continue to create seems only correct. We do it for our domestic animals. We have a similar system to keep our businesses afloat in capital (the stock market) so why not re-invest in our artists?

on Tuesday, August 30th, Medora said

See MedoranPaintings:

http://medorapaintings.tripod.com

Regards

Medora

on Monday, August 29th, john said

$35K on $1.000.000
I doubt it, unless the art suddenly appreciated.

Jack Vettriano sold his "Singing Butler" for 2000 pounds - probably only saw half of that: lets say USD $1500 - that was in 1990 or so. The same work recently sold at auction for $2.000.000 and he got none of that . . . but every artist knows that thats part of the business . . .perhaps f he had never made the original $1500 he´d have quit . . .who know! (BTW - great site!)

on Friday, August 26th, Andrew said

I'm with you on that, Jose, if you say 'yes' when someone makes an offer, take the money, and don't look back.

on Friday, August 26th, jose said

Ah, Andrew, but what you have done I do not call speculation. You invested at many levels and sought to gain the price you felt you deserved for all your effort and for having gone out on a limb. That should be respected and has its price, however high you as an artist feel is fair and leaves you satisfied when letting go of such a unique piece. I can say the same of some of my best deals and yes, like you say, they arise from a certain speculation in that we generate a certain mystique around the piece in question - I normally hold on to a few special pieces for a year or two and sell them at higher prices when the figure I have in mind is met. However, the incident I had in mind when writing that first response was a discussion I witnessed between a friend of mine and a gallery we both worked with back in the 90’s. A discussion which brought him down to his knees and locked many doors for some time thereafter. This friend had agreed to sell a bulk sum of paintings to the gallery in exchange for what he considered at the time a fair (and generous) amount of money which allowed him to contemplate the next 5 or 6 months with some ease. However, when he heard for how much the gallery had sold them he confronted them and asked for compensation. This was what I was aiming at. We should not waste our energies on these kinds of worries. Yes we should fight to get the best deal possible for the work we do but we must realise and accept that the work the gallery or the collector or whoever buys our work does with what we have parted with is no longer of our concern and that we gain from this other form of speculation in an indirect way – especially if the increase in value is achieved through galleries or cultural centres or auctions – in that our credibility rises and hence the selling-power of our work becomes greater. This I believe is as important an asset as the money we can get out of the work. And to go just one step further I would add that if ever we were so lucky to see our prices rise so high it need not necessarily mean that we should at once raise our prices beyond the reasonable. But then again, this is a very personal view on how I see growth happening on a sturdy foundation. referring to is the practice i witness more and more of

on Friday, August 26th, Andrew said

Jose, consider this. My most speculative move ever resulted in the best piece I've ever done. Why? Because I decided to compete with what I saw all around me. Here, everyone hires artisans to do their work for them, I'm sure you've heard me talking about this before. I wanted to do a piece you couldn't afford to pay someone to do. So I spent three and a half years making a statue, and then inlaying the surface. Sort of like an Eiffel tower made of toothpicks, in a way, but hopefully, better than that. It was speculative in that I risked everything, went into massive debt, and my only hope of redemption was the sale of the piece. I had no connections to count on. Speculation, a long shot risk, was everything for that piece, and if I look at everything I've ever done, it's my best piece. I do agree however, that tailoring your work to a cheap ass market, is a reduction of it's quality that will bring you down with it.

on Friday, August 26th, jose said

Andrew i agree with what you say and you may have misunderstood what i meant, or i didn't express it correctly. the first paragraph refers to the buyers side and view of things - if focus is more on enjoyment and elevation, gain is always the outcome. In the last paragraph i do say that from the artist's point of view excessive focus on the market can be detrimental and i'm sure that you can agree with that. in these modern times the artist needs to be a shrewed businessman but focus has to be kept on the real and possible goals he can achieve - speculation and gain beyond the realm of the reasonable should be left to other agents (and the artist can benefit from this only if he keeps his head on his shoulders). any speculation coming directly from the artist himself i believe can be harmful to his career

on Thursday, August 25th, Nancy Kruse said

You keep sending me your blogs about art. Hey, why don't you go to 4 Star Gallery on Mass Ave. in Indpls. and buy some art? I have an oil painting hanging there until August 31st and it's begging for a home. The gallery is open until 10 p.m. every night.

Struggling artist,
Nancy Kruse

on Thursday, August 25th, Andrew said

Jose, I don't agree that the issue of money serves only to blur the artist's vision. In any profession, be it acting, dancing, or one of the less creative fields like dentistry, money is one of a number of elements that make up the whole. An artist has to buy his materials. He sells for the best price he can get. If he's a good businessman, great, that part of his profession is taken care of, and he'll waste less time on it, and hopefully put more into the creative part. If it's something he does poorly, then he'll waste lots of time on strategies that don't bring results, and his work will suffer. In the end, we are the ones who create the world we find ourselves in.

on Thursday, August 25th, jose said

Money, money, money. Always the money. Where does enjoyment and elevation come in? Buy something because of the fulfillment you feel you will get out of it and you will come out a winner. The Art market may be a thing of the bourgeoisie but Art and appreciation for artistic manifestation is not limited to the bourgeois… unless of course you are focusing on its financial appreciation which inevitably poisons the enjoyment of the object that attracted you in the first place.

I must however disagree with something you say Michael. You are kind but unwise when suggesting that you would share the bounty of your profit with the artist. If the artist wishes to remain truly free - creatively and otherwise - he must be satisfied with the contract he establishes with the purchaser and not expect any further gain from future sales of the object he agrees to part with. The price that the artist sets for the sale of his work should be the price he feels is equitable in view of the work put into it and being separated from his creation. If he does this he is more likely to keep his sanity – it is money that rewards him for his work and allows him to get on with life without falling into the trap of speculation. Yes he may sell to elements of the bourgeoisie but he will not be giving in to the game it so much enjoys and he will retain his independence.

Paul, I believe we had this debate sometime ago? I do not believe we can reduce Art to the phenomenon of speculation we are witnessing in our times and which – this I do agree – is a product of the more well-off. The Art market is an illusion proper of the times we live in [whether it is better or worse than previuos arrangements is not an issue], a market that deals with a merchandise we artists aspire to perfect – a product of the human genius and therefore quite valuable if indeed genuinely perfected. Art comes from a deeper place and serves a much more powerful purpose, but the present insistence to focus on the market and its outcomes only helps to blur the artist’s vision and lead him, and others, astray.

Back to you again Michael, we can only hope to come across more people like you with whom we can feel that there is a genuine interest in what we are trying to achieve and hope to reach an equitable bargain that will allow us to move ahead. Thanks.

on Wednesday, August 24th, Paul Douglas said

Michael,as you say we buy what we like,so if we see a painting,and we like art,or it just catches our eye,we buy it,for those who buy and sell for investments,well probably we all would be like that if we could,and possibly are,on a lower level than the big boys thats all.If I could buy a van gogh,then I would,or anyone else you can mention,and sell it again possibly when the time was right,or maybey never if I loved it enough,luckily for us starving artists such choices arent within our remit,so we can play at being rebels,and rant against the powers that be.Art is a bourgeois concept,and its all about capital,in our system where anything and everything is for sale,and we are all as guilty,wether we are buying it or producing the rubbish that pollutes and clutters up the world.

on Wednesday, August 24th, Gabe Langholtz said

In Michael’s defense, what difference should it make to any of us what type of art Michael buys, or anyone buys for that matter? Nonessential purchases are all based upon personal preference. Would you buy it on the street, would you buy it in a tree, would you buy it in a house… you get the idea.
If a person likes a work of art they’re not going to not buy it because it’s something that was being sold on the street. They might not buy it due to certain limitations and / or inconveniences this adds to the situation, perhaps they don’t have enough cash on hand and perhaps the seller doesn’t take credit cards, etc.
Certainly, there are reasons and circumstances to factor in when considering why people buy or don’t buy a work of art, but the most reasonable of all, and perhaps the hardest to accept is that it’s a good possibility that they personally think what you consider to be “art” is worthless all around.
From the moment we begin our process of creation, we’ve started creating something someone will think is crap, it may be Michael, it may be someone else, either way it’s of no significance to us, because at the same time we are also creating something that someone else will think is absolutely amazing.

on Wednesday, August 24th, Lidya Tchakerian said

I am an artist and it is nice to know what is happening on the other part of the cycle, the art world is like a circle collectors and investors complement the artist to make a full circle. Privileged artists are those who meet their collectors or investors in their life time to see the appreciation and celebration of their art by art lovers.
Best wishes to Michael Corbin
Lidya Tchakerian, Artist

on Wednesday, August 24th, Michael Pasko said

I have artwork for Collectors, what'a a good way of getting the "word" out?

Thanks,

Michael Pasko, Artist

on Wednesday, August 24th, olga said

Interesting question, John. I am wondering, what art you buy, Michael. To prove that you do it because of love, show us your collection (www?).
I am sure, people here are very curious about your collecting interests.

on Wednesday, August 24th, john davis said

As you proclaim you are a collector who buys art because you like it. I sell alot of my art on the street and the beach and I know these people
buy my art because they like it. I very much enjoy this type of selling. I have recently started selling in a gallery and i'm very grateful to this lady for giving me a chance,but the people who seem to visit this gallery are not my kind of people though I'm sure I would like thier money. So I guess my question is would you buy art off the street because you like it. when you have no idea it could ever be worth more than the enjoyment you would get from it.

on Wednesday, August 24th, Gabe Langholtz said

I always compare the two, real estate and original art. Not many things have even a remote chance of appreciating in value, and the things that do, often don't. But at least we can be certain they're not depreciating in value from the moment we've made our investment.
The thing with art is it pays off immediately when you buy for yourself and not for the bank. Another plus is there is a chance that it may appreciate in value, but the big pay off is that it's highly unlikely that it will become of lesser value than what you initially paid for it. And if it's something you appreciate, that's the ultimate value.

on Wednesday, August 24th, Olga Dmitrenko said

"Love or money"... "Be or not to be"...
O sure, Andrew.. It'll be popular, this blog!

on Wednesday, August 24th, Andrew said

A populist viewpoint! I think a lot of people are going to love this blog!

on Wednesday, August 24th, matt said

Well said!