CTRL ALTZ: The Tannery

Alternative assets are investments that aren’t stock, bonds, or certificates. Those are known as traditional assets, leaving everything else the “alternative:”

  • antiques
  • precious metals
  • stamps
  • coins
  • baseball arts
  • shares in privately held startups

“An alternative investment is anything that you wouldn’t hear a financial advisor at a bank steer a client toward. These investments are not considered mainstream and, as such, are not easily managed as part of a traditional investment portfolio.” says James Chen of Investopedia.

I’ll always have a love of stocks, bonds, and certificates my personal interests have always been more alternative.

My First Alt: The Tannery

Other than starting to sell shares of myself on 2008 my first alternative asset was when I had the opportunity to invest in The Tannery, a neighborhood bar in Portland, Oregon. Buying into a bar felt like playing Grand Theft Auto where you’d earn enough to purchase a business and then go collect your money. I didn’t make a lot from my restaurant investment but there were some dividend checks and I was able to eventually sell my stake back.

This investment came after years of Kickstarter support, where I not only supported the projects of my own interests, but those of friends, and even a few just to “complete the wheel” of making investments in all of Kickstarter’s categories. No matter the success or failure of a Kickstarter project there was no financial upside. No matter what happened to The Tannery it was a better investment that supporting someone on Kickstarter.

But while I knew it was high risk to invest in a restaurant I was excited to be a part owner. I was excited to go and in be met like a regular, even though it was across town from me. It didn’t hurt that it became one of my favorite places to get an amazing whiskey cocktail. I was happy to make money, but the real ROI was that it was fun. You don’t hear people talking much about fun when it comes to making investments, and I think that is a mistake.

With traditional investments there are expectations of returns on various timelines and you can compare stocks and bonds to those expectations and index funds and averages to know if you made a good choice or not. But with alternative assets there is the added element of fun! You add risk because there might be to way to sell your asset, and the odds of a restaurant paying off as an investment are a long shot, but you do it because it’s fun. You do it so you can host an after hours event or come in and film on the day they are closed. You do it so you can say you own part of a restaurant and they are excited to share a new whiskey they just started serving.

Thinking about other alternative investments I have three things I look for:

  1. hROI, which is my hopeful Return on Investment, is my own best guess of how much I might make on the investment.
  2. Liquidity is how easy the asset can be turned into cash.
  3. Fun is how much enjoyment I’ll get out of ownership. This could be by using the asset, like a pair of high end sneakers, or it could be how much fun it is to talk (like how I own a few shares of a Kehinde Wiley painting). It might even be just a small fun investment to help “complete the circle” and get some real estate in my Alt Assets portfolio.

The other criteria I have is to keep my Alt Assets at no more than 10% of the total value of my portfolio. So if I really want to buy a few shares of a first edition copy of ‘The Catcher in the Rye’ on Rally and I’ve maxed out my alyt assets at 10% I’ll need to put a little more in my 401K or something before I invest.

I really want to invest in tree farms and fishing rights…


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