The Financial Wisdom of Art Collectors
When you’re an art dealer or collector, money is a big part of the picture. But that doesn’t mean everyone on the art scene comes from big money. Rather, the truth is that those in the art scene are often wise beyond reason when it comes to finances. Just ask Albert Scaglione, founder of Park West Gallery. From a middle class background, Scaglione began his career in the art world simply as a thoughtful young man buying art for others. The rest is history.
So what do art dealers and collectors know about money that the rest of us don’t? The first thing to know is that big money may not be the ultimate answer.
Small Money And Big Payoffs
The most common assumption about art collectors is that they have a lot of money. A few decades ago, that would have been entirely true, but today the scene is changing. Millenials are entering the art market and they don’t all come from old money. Many of them only have limited access to funds. With less money, they’ve had to learn to buy differently.
Sometimes this means buying lesser-known artists, creating the foundation for a different kind of art collecting than the popular vision. Haggling and networking with dealers is also important – the better your connections, the better your chances of making a big purchase at a lower price.
It may not be acceptable to haggle at your local supermarket, but that doesn’t mean the practice is without use. Rather, what art buyers know is that sometimes you have to put yourself out there to purchase art you really love. The good deals aren’t just going to present themselves. The big payoff will only come if you push harder and in ways that may not always feel comfortable.
When people think about buying art, the names that come to mind tend to be the big auction houses. Locations like Sotheby’s and Christie’s dominate. But while most people see this as a good reason to shop there – clearly the goods are well vetted – some art collectors aim to avoid the big names.
Take the Pappajohns as an example. John and Mary Pappajohn made their name as investors and philanthropists, and while they’ve bought big names in the past, they’ve shifted their emphasis to buying from galleries instead. But why take the risk?
Collectors like the Pappjohns buy art from galleries because art tends to go straight from the studio to the gallery, rather than filtering through a series of museums and individual collectors, and possibly even the black market – gallery pieces present a unique opportunity. They offer the chance to buy something new and fresh, to make the market rather than rely on external forces. Buying outside the big auction houses saves money and can help collectors make their name, which can be more worthwhile than owning the biggest names in the long run.
Know Why You’re Buying
Art collectors lose – both financially and personally – when they buy with the wrong intentions in mind. Whether they think art is a safe investment or that buying art will make them look good, buying for the wrong reasons leads to a warehouse full of mediocre investments. Instead, it’s important to ask if there are other things you would rather spend your money on. If you have other priorities and passions, then pursue them. A successful art collector doesn’t just buy art as an investment. There has to be a passion there, too.
Ultimately, there’s a hierarchy. Stuff is okay, money is better, and freedom is best of all. If you’ve got enough money to be buying art and that isn’t what you really want, then that art is really just a bunch of stuff that’s getting in the way of what you really desire. Successful art collectors know that and they see the opportunity to buy art as a manifestation of this freedom.