Nation makes property and bond purchases with its financial resources
New and Original Article:
Artists, Writers, and Musicians: Navigating the World of Finance
Hear the saying "an artist must be hungry" often? Creative minds might argue against it. Wealthy artists, authors, and musicians find themselves wondering, "Can I safeguard my earnings from inflation and other unexpected challenges?" But the more success they find, the more puzzled they become: are they financially literate enough? After all, being a master of one craft doesn't necessarily make one a guru in finance. We dived deep into the wisdom of economist Denis Raksha and financial coach Maxim Temchenko as they shared insights from the financial habits of famous names from the past.
INVESTORS AMONG THE MASSES
In today's digital era, citizens have plenty of options to invest their spare cash, if they happen to have some. With just a few clicks on a cellphone, you can now earn up to 20% annually on basic bank deposits. The stock market, foreign currency, real estate, agriculture, and even Bitcoin are all within reach. If you're unsure where to sink your savings, there's no shortage of websites offering detailed financial guidance (for a fee, of course).
Back in the day, around 100-150 years ago, investing opportunities were as scarce as hen's teeth in Russia. According to the 1897 census, only about 0.25% of the population, around 330,000 people, relied on capital and real estate income. They were fairly cautious investors, focusing mainly on government bonds with guaranteed returns and commercial company stocks, and real estate investments were few and far between due to the lack of construction.
SERGEI RACHMANINOFF: A SUCCESSFUL INVESTOR
Composer Sergei Rachmaninoff was undoubtedly the most financially successful among the Russian intelligentsia in the first half of the 20th century. He found prosperity not in his homeland but in the United States. He left Russia in late 1917, when loud cheers welcomed the Bolshevik coup, and thrived in his new country, becoming an in-demand artist with astronomical earnings.
Rachmaninoff didn't aim for wealth for the sake of it. He was known as a "philanthropic fund," donating a third of his earnings to fellow Russian emigrants, sending aid to those suffering in Russia, and financing the Red Army during World War II. He supported another Russian émigré's venture – the pioneering aviation genius Igor Sikorsky – with a $5,000 check, helping him start Sikorsky Aero Engineering Corporation and launch the world's first mass-produced helicopter.
Rachmaninoff's wealth grew through diverse investments, including American government bonds, municipal bonds, and stocks of major corporations like General Electric. He also bought a house in Beverly Hills and an apartment in New York and invested in California land, predicting rising prices in the region.
EXPERT OPINION
Rachmaninoff's strategic thinking shines through in his approach to investing, says Maxim Temchenko. - His investments were diversified, encompassing bonds, real estate, and stocks. Rachmaninoff didn't chase sky-high returns but chose reliability, a strategy that proved successful. Plus, he foresaw market trends and made strategic bets, distinguishing himself from other examples we discuss today.
IVAN TURGENEV: LIVING LARGE, SPENDING LIKE CRAZY
If you search for information on Turgenev's investments, you'll primarily find articles about his contributions to Russian literature. Yet, Ivan Sergeyevich was a wealthy man, despite his expense-heavy lifestyle. His ancestral estate brought in several thousand rubles a year, which he managed through an overseer. Turgenev also earned a hefty income as one of Russia's highest-paid writers.
When he had spare cash, Turgenev attempted to invest it. He invested in railway company shares, earning dividends, and purchased bonds from the Kharkov Land Bank.
Turgenev was a careless landowner, often overspending, earning the nickname "the most careless of Russian landowners." However, his travels and living abroad consistently swelled his expenses.
EXPERT COMMENT
Turgenev chose railway companies, a flourishing sector at the time, for his investments, and the Kharkov Land Bank was a conservative choice. Plus, his estate likely generated income from selling agricultural products. Turgenev, like Rachmaninoff, diversified his investments, a wise financial move, - comments Maxim Temchenko.
ANTON CHEKHOV: WISE INVESTMENTS
Anton Chekhov knew the value of money from an early age. His grandfather was once a serf, and his father wasn't the most successful merchant. Even as a student, Chekhov supplemented his family's income with tutoring jobs. After university, he earned a living as a doctor and through his literary endeavors, leading a comfortable life, but not without lean years. In 1898, he splurged almost all his savings on a plot of land on the outskirts of Yalta. He later constructed a house there, investing 25,000 rubles. This, you might say, was sound timing.
Later, in January 1900, Chekhov bought a small house in Gurzuf with a small bay and a plot of land for 3,000 rubles. Ten years later, both properties skyrocketed in value multiple times. Chekhov passed away in 1904, but his family continued to benefit from his real estate investments.
EXPERT OPINION
- Investing in Crimean land is not about striking it rich, but a long-term conservative strategy, says Maxim Temchenko. As the saying goes, "Buy land - because they're not making it anymore." Dennis Raksha advises: if you feel jittery watching the stock market gyrate, it's best to avoid it altogether. Instead, invest conservatively, like Chekhov.
FEDOR SHALYAPIN: FLYING HIGH
When some whispered that Chaliapin earned his wealth, he was widely known for his generosity, donating a stunning 430 kg worth of gold to charity. Chaliapin's annual earnings reached an impressive 100,000 rubles before World War I, while a Russian worker made about 200-250 rubles a year.
It's no wonder his free funds often ended up in real estate, both in Moscow and Italy, or bonds and stocks. Alas, the Revolution took most of his wealth and securities. But even under Soviet rule, he continued to earn well from concerts and record sales, and ultimately opened a starch factory with wealthy peasants. He was still envied and labeled a "bourgeois" behind closed doors. Eventually, Chaliapin left Russia, rebuilt his wealth abroad, and invested in American securities. Unfortunately, he lost a substantial sum during the 1929 stock market crash in the USA.
EXPERT OPINION
- In essence, Chaliapin employed a diverse income strategy, but political risks worked against him. Such risks can't always be predicted, - comments Maxim Temchenko.
IVAN BUNIN: TRUSTING TOO MUCH
Ivan Bunin is an example of an investor whose passive income was hindered more by indifference towards financial affairs than external factors. Although Bunin was born into a noble family, he didn't live extravagantly in his younger years. At 18, he became an assistant editor at a newspaper.
By his 30s, Bunin had become a celebrated writer and earned a considerable income. But he continued to complain about poverty in his letters. Nothing is known of his investments before leaving for Europe, as he likely couldn't afford them at the time. After the Revolution, he lived frugally in Europe, consistently in need of funds.
In 1933, when Bunin was awarded the Nobel Prize in Literature, he couldn't even afford to attend the ceremony in Stockholm and borrowed money from friends to cover the expenses. The prize money amounted to 170,322 Swedish kronor, equivalent to over 44 million modern Russian rubles. Bunin donated some of the cash to needy acquaintances, fellow Russian emigrants, and invested the remainder in a Russian restaurant and securities. Sadly, he was swindled in both ventures. By the end of his life, Bunin was near destitution. He received a monthly pension of 10,000 francs from American philanthropist Frank Attran until his death.
EXPERT OPINION
- The ability to manage money and smart investing doesn't depend on occupation, whether you're a writer, artist, or laborer – it's more about character, temperament, and cultural background, says Dennis Raksha. Bunin seemed to lack financial acumen and placed too much trust in others.
Artists and thinkers of the past managed their capital via various investment strategies, shaped by their time and circumstances. While they might not have been "financial experts" in the traditional sense, influential figures such as Benjamin Graham and Warren Buffett have left an indelible mark on investment philosophies. These lessons carry value for today's investors:
- Disciplined Approach: The strategies of Benjamin Graham and Warren Buffett emphasize a disciplined approach to investing, avoiding emotional decisions driven by short-term market fluctuations.
- Analysis Over Emotion: Extensive analysis of a company's intrinsic value is crucial for making informed investment decisions, a stark contrast to relying on market trends and emotional instincts.
- Long-term Focus: Investing with a long-term perspective can help investors avoid short-term market volatility and foster sustainable financial growth.
These principles endure today, providing guidance for investors seeking to navigate complex financial landscapes with reason and wisdom.
- The article delves into the investment practices of artists, writers, and musicians, showcasing how they managed their finances, such as Sergei Rachmaninoff who chose a diverse portfolio including American government bonds and stocks, real estate, and expanding into businesses like aviation.
- Ivan Turgenev, a fellow writer, invested in railway companies and bonds, straying from his careless spending habits, demonstrating a mixed financial strategy, with Maxim Temchenko highlighting the value of such diversification.
- Anton Chekhov, a successful writer and doctor, adopted a long-term conservation strategy by investing in land, following the advice of financial experts like Maxim Temchenko and Denis Raksha, who recommend considering investments such as property, particularly land, as a stable and enduring choice for financial growth.
