(intro)

Welcome to The Gold Collar Investor Podcast, with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host Pancham Gupta.

Russell Gray

Hi. This is Russell Gray, co-host of the Real Estate Guys Radio Show. And you are listening to The Gold Collar Investor Podcast.

Pancham Gupta

Welcome to The Gold Collar Investor Podcast. This is your host Pancham. I really appreciate you for tuning in today. My guest is Maria Brito. She has 13 years of experience as an art advisor after leaving her career as a corporate attorney in a big law firm in New York City. She has acquired more than 100 million in art for her clients, which include celebrities such as Sean “Diddy” Combs, Gwyneth Paltrow, CEO of Fortune 500 companies, hedge fund portfolio managers, investment bankers, private equity partners and more.

Art has been known to perform differently than traditional investments such as stocks and bonds. Some studies have shown that over the long-term, art performed the S&P 500 with an average annual return of 7% over the past 10 years, outperforming the S&P average annual return of about 4%. In recent years, the art market has seen a record-breaking sales and influx of new investors. With the rise of online art marketplaces and art secured lending, access to the art market has never been more democratized. Maria’s expertise supports why art is increasingly being viewed as a valuable asset class, not just for the wealthy but for investors of all levels that has historically seen a steady performer even during economic downturns.

(interview)

Pancham Gupta

Maria, welcome to the show.

Maria Brito

Thank you, Pancham. I’m happy to be here. Thank you so much for having me on.

Pancham Gupta

Yeah, I’m really excited to talk about the topic today, which is investing in art. I personally do not know anything about it, so I’m really, really excited for the show. Before we get started, are you ready to fire up my listeners break out of Wall Street investments?

Maria Brito

I am ready. Let’s do it.

Pancham Gupta

Let’s do it. Maria, let’s talk about your background, how you got started. Let’s talk about how you got started and your journey to where you are today.

Maria Brito

Yes, well, I am based in New York City. I’m in Manhattan. I have been here 25 years of my life, which is longer than I have been anywhere else. I was originally born and raised in Venezuela, and I moved to the United States to pursue a law career. I went to Harvard Law. I graduated, and I moved right after to New York to work as an attorney and take the bar exam and all those things. I worked as a corporate attorney for almost nine years, hating it with all my might. Not really wanting to be an attorney, I had taken that path because I grew up in a conservative family. You don’t really have many options when people think in a particular way. It’s this, or this, or that. So being a lawyer was the thing that I thought was going to be fulfilling, but it wasn’t.

But it gave me a lot of strength and speed and a way of reading and analyzing anything and everything that perhaps no other career would have given me. I was working in finance, corporate finance. So we represented the banks on very big leverage buyouts. At that time, we’re already in the many billions back in 2008. Actually, before 2007, 2006. Then things went sort of sour and crazy in 2008, which mimics a lot of what we’re going through right now. But when I moved to New York in year 2000 and I had my first salary as a newly minted attorney in New York City — which is always a whole lot of money no matter what because you worked for big law firms, and they owe you — I started going to galleries. I started buying art for myself at an emerging level. Little by little, I got more and more into the whole business, in the things and the artists and the curators, and understanding the system which has mutated and changed many times over since then.

I had informally worked with friends. I had offer them ideas of what to buy and what to do. They would call me and say, “Oh, my goodness. I have been following the artist you told me. I bought it. Now I’ve realized that the investment I made has multiplied because I’ve been checking the auction numbers. Oh, my god. You have this eye.” I was miserable as an attorney. This was something that was calling my name and I felt very passionate about it. So I opened my company in 2009, and I never looked back. The art market has transformed itself many times over, as I said before, ever since. But I have been incredibly lucky that I have had the opportunity to work with amazing people.

In 2011, I received a call that changed my life. One of the gaps that I found in the marketplace from advisors that do what I do is that back then, nobody really was using social media. Instagram did not exist. All the things that we had at our disposal were Facebook and Twitter. We also had all these very rudimentary platforms for blogging. So I started blogging my adventures in the art market and in the art world and in galleries and things like that. I was promoting them on Facebook and Twitter. And so a friend of mine who lives in LA — whose husband has worked in the entertainment industry for a long time as a producer in the background, someone with a lot of career but never front — this woman calls me and says, “Look. I love what you’re doing. It’s amazing how you’re demystifying the art world and making it simple for everybody. I have a friend of my husband who wants to collect art. I think that you should meet with him. If you don’t mind, I’m going to put you in touch with the team of Sean Diddy Combs.” That was like the phone call that changed my life. Because Puff Daddy is an icon of hip hop and New York and how he transformed so many things in the industry, and how he became — he was the original guy who was primed to be the first billionaire in that arena and whatnot.

So I ended up meeting him a few months later. He hired me on the spot, and I was able to build his collection from scratch. That, obviously, it’s the phone call that changes your life. Because Sean and I showed up together at Art Basel in Miami for many years, hand in hand working together. I was able to go to all his homes. It was obviously a very incredible opportunity for me. We continue to be connected. And so that, obviously, I got a head start in that way. I do not have any family money. I’m married, but my husband is not paying for my life. So that was something that actually gave me so much credibility. I took it. I took it with me.

I continued receiving so many incredible clients. Majority of my clients are people in finance, actually. I do have people in every industry, in real estate. I have clients who are doctors. But the majority of my clients are finance people for a variety of reasons. Because, well, first of all, I serve people everywhere around the world. But because I’m in New York, it’s easier for people to meet with me in person and things like that, and for me to go out with them. So I sell to all the finance people in New York in different capacities. I also think it’s because they fully understand the idea of both diversifying their investments and, second, actually getting the culture and the education and the value that is living with art in owning a piece of culture, which is a different thing. I mean, it’s not necessarily just the money, but it has added benefits. So that’s my journey.

Pancham Gupta

That’s an awesome journey right there. Let me ask you this for anyone listening, and I have this question myself. Your company, basically, what you do is you help clients to identify the art which is genuine and original. I don’t know. You fill in the blanks there. Basically, you help them identify the blank, whatever that is art for their portfolios, right?

Maria Brito

Well, it’s for their portfolios, but it is also for their lives. Because this is a real asset that is hanging on your walls, and it doesn’t have to go in — I mean, you could pay a storage for it and keep them, but the point is to enjoy it. Because a lot of these people like to entertain. A lot of these people like to live well in half a house and an apartment in New York and a house in the Hamptons, and another one in Miami, et cetera. Not every client of mine has 20 houses. But what I’m trying to say is that, yes, what I do is that I help build art collections for people, either from scratch or someone who already has been collecting and can’t do this full time.

The art market is vast. It’s the same thing as you require someone who is a full-time trader in a bank. Because big companies are not just going to just give this to any Tom, Dick, and Harry. You give it to a professional too. And so my clients have full-time jobs, and I do the full-time job of being in the art industry. I talk to galleries. I talk to artists. I talk to people who are curators in museums. I talk to people in auction houses. Because there’s not really insider trading here. The things that I know from the background are perfectly legit. So I just tell people what I know from the background. If I know that a particular heavyweight collector is buying at young artist and is investing in that particular young artist, then I can bring that information to my clients without breaking any rules. It’s very dynamic. It’s a market that moves and shifts really fast. It is a market that has, as I’m saying, in the past 10 years has grown exponentially. It is an excellent way, especially in recessionary times and inflationary times, to diversify investments. Because you own the asset. If you know what you’re doing, you buy a really good one.

Price? It’s really never that big of an issue with me. I have had clients who’ve bought things with me for $20,000. That was, for example, 2016. Somebody bought something with me for $20,000. It just got appraised for purposes of insurance for a million dollars. That is the type of asset that is also quite irrational in a way when we talk about the irrationality of the markets. The art market is the craziest one I always say. Because a lot of things do have a reason. If you have an artist who has had a particularly long career, and the artist is getting retrospectives in museums and things like that, well, you can see that there is a 50-year career, and the artist deserves to have that kind of upgrades in the market or things like that. But you also have this whole new boom of what we call “ultra-contemporary,” which are female and black artists who are young and, for the first time, hating the auctions and things like that. They’re getting to a million, a million two, a million three, and they only have a five-year career. These things are to be analyzed with a lot of care and with also a lot of what I just said.

Every markets are irrational. There is always a really good time to buy. There is really a good time to sell. I also feel that while we rely on auction numbers a lot to make informed decisions for certain things, I do not recommend most people to go and buy at auction. Because you end up paying much more than you should. You end up paying 25% premium. Auction houses, at the end of the day, their business model is: the only reason they exist is to make money actually, which is not a bad model. But they don’t advocate for you. Well, they actually make money from buyers and sellers, right? If you have one real estate broker, and he makes money from both sides, who is he actually representing? That’s the way auction houses work. I think that while it’s fine that you can get some opportunities, if you don’t really know what you’re doing, I would steer clear.

Pancham Gupta

Got it. So let’s start from — I want to structure this conversation with two, three pieces. One is the artist side. You have an artist. He could be a young guy, or he could be a renowned, very well-known person. So there is that one piece of the puzzle. Then there is art itself, what you’re buying, which is created by one of these guys. Whether it’s original, whether it has value or not, and that’s an art in itself, you really figure out how much is it worth. If there is a young artist and he’s just up and coming, how would you value that versus the other one? How do you figure out whether it’s original or not original. That’s the second piece. The third piece, you addressed a little bit, which is the marketplace for these to be sold. Whether you want to buy them or you want to sell them, which is at the auction houses? I’m sure there are a lot of online places where people can buy this. I’m just not aware of those.

These are the three categories I can think of while you were talking. So I want to quickly, go briefly on all these three and start with the artist part. How do you identify? I don’t know if you’ve even worked with people who are just up and coming and just new to the game when they’re starting. So do you work with those, or do you work with only—

Maria Brito

I don’t work directly with artists. I just want to make that clear. 

Pancham Gupta

No, I didn’t mean that. Would you buy someone from— 

Maria Brito

Yes, I would. It’s about the diversity of the portfolio, for example. It’s like, okay, if I encounter a young artist whose work is wonderful and it’s, let’s say, showing with a young gallery or a gallery that is known for finding great talent, I’d take a bet. Because it’s $10,000 or 15. Because that’s like I’m giving you the ranges, right?

Pancham Gupta

Yeah, I get it. Right.

Maria Brito

So then I would tell my client, “Listen, this artist I found, and I did all this due diligence—” Because it’s not just like I found something, and I went crazy. That is not necessarily how I work. A lot of people do that, and that’s okay. But I go and I do a lot of due diligence. I check the artists. I may look on their Instagram. These artists are very entrepreneurial. We’re talking about millennials and Gen Z who know very well what they’re doing. So I go and I check them out. I research them.

There’s nothing hidden anymore. If I need to make a phone call to someone because I saw that person was connected, I’d make a phone call and say what’s going on with this person. I may get in touch with the artist directly. This just happened to me very recently. I have a client in Dubai. I posted a picture when I was in Miami for Art Basel. He immediately called me, which is super rare. He’s like, “That artist is amazing. He had a show here and a foundation in Dubai, and I missed the opportunity to buy.” So I went directly to the artist. I checked him out. I saw everything he did. I say, “Look. I have this amazing client in Dubai who is looking to buy your work, and he couldn’t get it the last time. Do you have anything in your studio?” He said, “Yes, I’m in London. I have two paintings available. If your client wants them, it’s $25,000 for both.” So these are things that happened because I have also — my finger is on the pulse of the market.

If I were to be in my ivory tower with books and sort of like meditating in Zen lotus position, that wouldn’t happen. But I am consistently and constantly going to art fairs, to gallery. I mean, in New York City alone, it’s filled with galleries. There are a thousand galleries in New York. So what I’m trying to say is that yes. To give you the short answer, young talent is worth betting on, especially when they are five years into their career. Because they have refined themselves sufficiently to show that they have the skill and the thinking behind to put something out there that is of value. And if you are betting on an artist for $10,000, and you have your idea that it’s going to be a million the next day, that’s the wrong thinking. But if you think, “I like this. I like the background. I like the trajectory. I think this could go places,” then the risk is sort of minimal.

Pancham Gupta

Got it. So let me ask you this. You said that, in the very beginning when you were trying to explain young artists, you look at the art and you see if there is any value. I’m an engineer by background, so really far from anything artistic. This is a very subjective question. You can tell me if there is no answer to this. But how do you know by looking at this painting if this is a young artist, whether this is of value or not? It could be done very well, as in it’s nicely created. But how do you really see whether this is very valuable or not?

Maria Brito

Art does not exist in a vacuum. Things have a consistent dialogue and conversation with cultural moments. When Picasso, for example, started painting in his Cubist style, he was actually rejecting the Impressionist and people who were painting landscapes and beautiful things. He also had a lot to say about women and a lot to say about wars and a lot to say about things that nobody wanted to talk about. And yeah, he’s the most incredible genius of the 20th century with all his issues. When we look at 2023, there are a lot of things that are happening. There are issues of globalization. There are issues of race. There are issues of power dynamics, all sorts of things. So we tend to gravitate towards things that speak volumes of what’s happening, or we also tend to see what is the continuum of art history. Our history actually is very important because it allows us to see what are the ideas that are informing a particular artist.

Nobody, Pancham. Nobody is 100% original. This is the truth for absolutely anything. Steve Jobs used to say this. Whomever thinks they are coming up with the idea that it’s only theirs is missing out. The iPhone was not the first phone in history. It was not the first created in history. We are recombining what already exists, and these artists are doing the same. So I look for ideas that connect me to something else. These things are subtle clues to people’s subconscious too. I mean, there are things that you gravitate towards. If, for example, I show you a contemporary artist who’s working this amazing type of paintings and she finishes with bindis because she’s Indian, you would probably be attracted to that. I know artists who are doing that type of thing. So every time you see something that you either connect with or that expands, you don’t necessarily have to be related to something that is exactly you. Because the other thing about art is, how do you expand?

Expansion is very important for my clients and for me. How do I understand the other point of view? How do I understand the idea of someone who’s black? How do I understand the idea of someone who had to cross the border? An artist that I very well respect had crossed the border from El Salvador with his mother when he was six, and he lived undocumented in California. Most of his life, he never got his papers. He had to move to London. Now he’s a big sensation in London and in the art world in general. So the things that I consider that are factors, important factors, is expansion, education, knowledge, and connections to art history, and how is this person sort of disrupting what exists.

Obviously, this is subjective, like you said. At the end of the day, we are not always going to be 100% right on all the recommendations. But I can say that I recognize quality. I see things how they’re finished, how they are done. You would be surprised also that 90% of all the transactions that are happening in the art market happen through a flat image on a JPEG or a PDF. Because this is one of the reasons why the digitalization of the art market and eliminating friction, if you will, you don’t have to go to places. If you are in Indonesia and you don’t want to go to Art Basel in Miami or in Switzerland, you may establish a relationship with a gallery that sends you previews, which is what we call right of every show every eight weeks or whatever.

What I’m saying is that there are so many things that have facilitated the growth of the art market. Even when looking at a flat image, I already know if that’s worth seeing more and acquiring or not. That is like how I have been trained. I’ve been trained on opening those emails, of which I get 25 or 30 a day, seeing what’s beautiful and what’s not. Knowing already the type of gallery that is offering it to me, and whether I’m going to be badly surprised, which rarely, if ever happens. I mean, usually, it’s much, much better in person than it is on the picture. And seeing which is the client that I would offer that as a viable because it sort of goes with them. I get to serve my clients by getting to know them. I don’t impose my taste on them. It’s, I tell them, “This is good, because—” Then they get back to me. “Yes, no, tell me more,” that type of thing.

Pancham Gupta

Got it. Yeah, I think I got what you’re trying to say. It’s really a lot of things. At the end of the day, it’s subjective. Like they say, beauty is in the eyes of the beholder. But at the end of the day, you have to really take into consideration all the things that are going on, the background of the artists and how they are coming up with the art that they’re coming up with. That makes sense.

So now let’s talk about — this is the second piece which is the art itself. I have another question there. In your profession, I’m sure there’s a lot of copy, like duplicates. In the world of digitalization, like you said, right there, it’s very easy to mimic an idea. Go out and do it, make it your own, for example. How do you make sure that this is original or not original? Is there an issue with that, generally speaking? Let’s say you have an artist. You found an art. It’s probably not from a well-known but a young artist. There’s another guy who likes it and copies it. How do you figure out what’s original and what’s not?

Maria Brito

Look. As I said before, it’s very hard to find something that is 100% original.

Pancham Gupta

That’s true. Yeah, you mentioned that, yeah.

Maria Brito

But we see movements and trends all the time because this is the business. As I said before, my job is to be going to all — I go to galleries every day of my life. I can tell you that. I go to art fairs around the world once every two months or even more than that, because I have to. And so you see trends bubbling up, for sure. Then you see who executes the best within what you have, the ability to get this information from where you’re getting it, visual information that you’re receiving.

So you have a very excellent question that can only be answered by someone who has had so much experience by seeing things. I’ll tell you. Look, I have seen 2 million images in the last five years. It’s maybe even an understatement because I have seen so much. However, to give you credit that it’s a really good question, a mind that is preoccupied with like, “Is the one I’m getting so unique or so original,” there are also clusters of artists who are friendly with each other who have communities, who live in Brooklyn and also rent studios in the same building. There is a dialog that gets to be exchanged. There is nothing wrong with that, because that’s how movements are formed.

So then, to give you the same example I was giving you before, when Picasso was painting, he was super rival with Matisse. He was really good friends with Georges Braque. There were all these ideas that got to be exchanged that were transformed by each of the artists in their own specific way. Now, if somebody is verbatim copying something, we already know that person has no value. Let’s say, like no value. To be honest with you, it’s like what I’m telling you. It’s the recognition. It’s also trust. People who invest in art and people who invest in the stock market have to have trust in their intuition too. Because we know that data alone and being extremely logical is not necessarily the path to wealth. You have to also trust your gut to identify opportunities. If it’s already over the press, it’s too late. If it’s already on CNBC, we already know. You have to have this trust in either your advisors or yourself that you know what you’re doing. I feel very confident to say that I trust what I’m doing.

Pancham Gupta

That’s great. You answered this question. As an engineer, I always think how you figure out if the gold I’m buying is original. Well, there is a machine for that. Or you go to a goldsmith, and they will figure out whether it’s original or not. You pick anything in life. You can figure that out. But art is one thing. Like you said, there’s a lot of experiences that comes in handy in order to really have that validated. So if I’m going out for art shopping, I obviously need someone like you to help me find that. Otherwise, it’s a big issue.

So let’s talk about this. I want to quickly talk about storage, which you kind of alluded too. That if most people would enjoy, they will put it in their houses, wherever they own, on the walls, on wherever, on the floors to enjoy it. But you have people who store them in storage, for instance, just for investment purposes.

Maria Brito

Yeah, a lot of my clients have a storage because sometimes they can’t physically have everything hanging. Sometimes their sole purpose of buying one thing or two things or three or 10 is for investment. So they already know that they will sell the asset. I mean, they’ve already disclosed that to me in advance. Because there are certain rules that we have to follow, ethically speaking. The secondary market with these things that have traded hands already, it’s like fair game. You want to buy things on secondary market which go from a private collector to another private collector or from a gallery that is holding on to an asset that came from a private collector. You can do whatever you want with it. Primary is different because there is a protection of the reputation of the ops, particularly young artists, that they don’t want that asset to end up at auction the next day.

But just to answer your question, yes, storage is a fine art. Believe it or not, it’s not that expensive. There are obviously certain facilities that will tell you, “Oh, we have the white glove, and then we have your special butler. We have your special room. Every time you come, you’re going to have a bottle of champagne.” That exists. It’s going to be super expensive. But there are other storage facilities. For example, I’m in New York City. So I send my clients to one in New Jersey, so they don’t have to pay the real estate of New York or Long Island City. Some of these storages are in Long Island City. So those people have integrated businesses where they have trucks. They can go and bring your thing. They have people inside if you need to have a condition report, for example — which is a document that is usually necessary when you want to sell something, and that person is asking before seeing that in person. Those storages are usually commingled. Meaning, you’re not going to get your private room because you’re not necessarily needed, and you don’t have to pay that much. I have a client in LA who has 10 paintings in a storage, and he pays $200 a month or something like that or $300. I’m not sure right now. I hooked him up with this. I have this network of storages. I explained to my clients which are the advantages. Almost every major city in the United States has these things. If it’s not in the major city, then it’s the next city.

It’s not as complicated as people think. It is really not. But there is an associated cost, because you also have to insure it. That’s separate. Most people who have a home owner’s insurance, they can request that as part of the homeowner’s insurance, the art gets also insured. And it doesn’t really matter where it is. It can be in your storage. It can be in transit. It’s also like once you’ve paid for something, the title passes on to you. So you don’t want the thing to be traveling. Let’s say, if you bought it in London, you don’t want the thing to be traveling and drown in the ocean or whatever without having an insurance. Usually, all the homeowner’s insurance, you can upgrade the policy for not a lot of money. Because insurances like access don’t happen all the time. Rarely, in all my 14 years working in this business, nothing has ever happened. Thank God. But I’m just saying that it’s less expensive than storing wine, for sure.

Pancham Gupta

Yeah, I know. I interviewed someone. Wine needs special temperature control. It’s very, very expensive to store one.

Maria Brito

Yeah, it’s also volume. It’s like the volume of the bottles.

Pancham Gupta

Yeah, heavy.

Maria Brito

Right. This is like a bunch of paintings and like some rocks. It is temperature controlled because those are the types of storages. But it doesn’t really require a lot of manpower. Because people are not taking those things out of the storage. Galleries, for example, do pay a lot of money in storages because they need to take inventory in and out and things like that. But collectors, unless you have a 500-piece collection, do not spend a lot of money in storage.

Pancham Gupta

Got it. So I have two more questions for you before we move on to the second part of the show. Let’s talk about the market for these. You mentioned that there’s auctions. There’s art galleries. I’m sure there are online websites where this is happening, as well. Is there a go-to place in the online? Is there a marketplace for art where everyone goes to online? Does that thing exist?

Maria Brito

There is more information rather than direct sales. Because direct sales, while many different platforms have tried to tackle that, none of them have been successful. There are a variety of reasons for that. Because, first of all, you don’t really want people who are in sanctioned list buying art with their credit. That’s one thing. That’s one big preoccupation of the United States. It’s like, who are we selling this assets to? Those rules are becoming more and more strict. Already, Europe has a know-your-customer. You have to show up your passport, all sorts of things, your electricity bill. They are strict. In the US, we are not there yet. But the online marketplaces are usually for low-value art. Let’s say prints and additions or things that are not that expensive.

Then you have websites that aggregate information like Artsy. Artsy is a website that galleries are affiliated with, and then you can do a search. You, for example, can get an idea of what’s available where and what are the amounts. But it’s not necessarily 100% accurate with everything. Because the galleries that are putting things there are not necessarily updating that in the minute. Usually, the things that are there either have been with the gallery for a while, and they are just there as placeholders or some marketing machine. Oh, somebody is interested in this. They will get in touch with the gallery, and the gallery will get in touch with them. In other words, there’s not like let me just click here and buy a drink.

Pancham Gupta

Got it.

Maria Brito

It’s a very big curiosity of mine why it has never worked out. But I think the answer is because people have to know where things are going. It’s like, there are too many interests that need to be protected. But every day there are great people in technology that invent new things. There will be, at some point, something that is a little bit more interesting and dynamic.

The information that we get as what’s going on in the market, we get it through Artnet, artnet.com. ArtNet News, ArtNet.com is a place where you can buy and sell art too like an online auction house. Also, it’s not necessarily the expensive things. It’s mostly additions and photographs and things like that. Then you have Artnet News. There is a twice-a-day newsletter. That’s how much information we get, this twice-a-day newsletter with things that are happening in the art market. It’s very interesting. But as I said before, once it’s in the press, it’s already too late. A lot of these things, we already know before. But it’s good. Anyway, it’s already very good if somebody wants to dedicate their full time lives to do this. Because as I’m telling you, you can do it as a hobby for sure. Most of the people, friends of mine who do it as a hobby full-time collectors have already retired. Because it’s a very complex market that takes a lot of time. But you can go on your own and do it at your pace and visit art fairs and go to this web sites and see if you can get it done. I mean, there’s nothing that says that smart people can’t start buying art on their own.

Pancham Gupta

Yeah, got it. Thank you so much for answering that. My last question for you before we move on to the second part is, let’s say, I listened to this interview. I’m super interested in working with Maria, anyone listening. How do you get compensated in this process? Is it only after you buy art?

Maria Brito

Yes, I usually have in place a retainer for a certain amount of hours. It’s a one-time payment thing. Because I can’t give all my time to someone who’s not committed to working with me. So there is a retainer that people pay. I give them 10 hours of my time or even more. I don’t get to charge that consistently so that I get to dedicate myself to understanding the client’s goals and to offer things and to understand their spaces, or their objectives, or their goals. Then from every purchase, I get paid 10% after the purchase is done directly to the gallery. For all the reasons I told you about money laundering and all the rules, the galleries have these rules where they want to get paid directly from whomever is buying something and not from me. Also, it creates a whole lot of transparency. I’m not making the prices up. The galleries are not in cahoots with me. This is crystal clear.

For the most part, I try to negotiate a discount for the client. This is something that used to be customary 10 years ago. We used to get amazing discounts. But as the market got hotter and hotter, the discount got traded for access. So it is who gets to have access to this particular artist. Let’s give it to her. Let’s give access to one client of Maria Brito because she’s been a loyal customer of this gallery for 20 years or whatever. Well, obviously, the higher the price, the easier it is to get a discount. If something is $10,000, probably you’re not going to get a discount there. If something is 200,000, you’re probably going to get a really good discount. The discount is something that I negotiate. I help my clients with shipping. I help my clients with, if they want to display and I am in their proximity, or I can do it on Zoom or whatever, I help them with that. I go with them to art fairs. There are a variety of things that I do, that we work on the background. It’s like if it’s international shipping, paying off customs and tariffs, we help that process move along for them in a way that they wouldn’t be able to do it with the efficiency that me and my team does. But yeah, that’s how I get compensated. That initial retainer, a one-time fee, that never gets to be paid again. Then 10% of all the acquisitions.

However, there are certain situations where the asset is very expensive. Let’s say, I’m trying to get something from another collector to my collector. So in this case, sometimes that 10% gets to be negotiated down, obviously. Because clients have shown loyalty, I have shown loyalty to the clients. Something is very expensive. Can we lower this to 7% or 5%? It depends. I say yes because it’s on a case-by-case basis, and it all depends on what’s at stake for everybody. I’m someone who is pro doing the deal, pro-transaction. I don’t involve my ego. I think it’s better to make the thing happen rather than walking away with zero.

I think that I’m in service of the wealth, multiplying the wealth of my clients and, at the same time, to getting them what they want. A lot of collectors become fixated with certain things that they have to have. And if I can make that happen, it’s great for me. It’s great for them. And it’s a win-win situation. It is definitely an open market where we do things to benefit the clients and for the good of everybody who’s involved. At the end of the day, the art market is vast, but the relationships and the players are not that vast. So we want to have strong relationships instead of burning bridges with people, which is not necessarily something that in this business can be conducive of anything good.

Pancham Gupta

Got it. Well, thank you, Maria for that. We will be back after a short message.

(break)

If you’re an accredited investor and have been thinking about putting your money to work for you, then I have a good news for you. I have created an investor club which I call the Gold Collar Investor Club. I will be putting together investing opportunities exclusively for the group. These are the opportunities where I have done the due diligence for you and will be investing my own money alongside you.

If you are interested, please sign up on thegoldcollarinvestor.com/club. I repeat, thegoldcollarinvestor.com/club. I will reach out to schedule a 30-minute phone conversation to discuss your investing goals once you sign up. This can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some passive income.

And in case you are wondering what is an accredited investor, an accredited investor is someone who has earned more than $200,000 as filing single or more than $300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401ks, IRAs, cars, et cetera—just not the equity in your personal home. If this is you, I would highly encourage you to sign up.

(interview)

Pancham Gupta

Hey, Maria, let’s move on to the second part of the show which I call Taking the Leap Round. I ask this four questions to every guest on my show. My first question for you is, when was the first time you invested outside of Wall Street?

Maria Brito

Well, I think it was year 2000 when I moved to New York, and I bought my first piece of art. That was it.

Pancham Gupta

Did you have any fears that you had to overcome when you bought that?

Maria Brito

I think that for anybody, when you’re just 24 and you said I’m going to spend $2,000, that was back in 2000. It was funny. It’s 2000. I think that I went with all my heart, and I said I needed it. I want it. I made the money. Let me just do it. So when you’re that young and that fresh—

Pancham Gupta

You have no fears.

Maria Brito

You have no fears. You’re right.

Pancham Gupta

Yeah, right. Exactly. So my third question. Can you share with us one investment that did not go as expected?

Maria Brito

Yes, when I started, actually, maybe year 2006 or 2007, I bought a couple of very expensive artworks that were photographs. Little did I know that when Instagram came to be, it really killed the market for photography. Not really killed it, killed it. But it diminished it. Because everybody thought they were photographers, and the technology on the iPhone got better and better. We got an entire move and trend. Not trend, but I would say a recognition that painting really is the ultimate medium for the arts. Because it’s like the traditional 700 years of artist in Europe and how we know our history. From the Renaissance up until today, the most valuable pieces of art are those that are paintings. And so I still have them. I have not given up on them, I think. I still love them. But they are not the asset, that they have really low — they have lost a lot of their value. It’s not zero, but it’s not what it used to be.

Pancham Gupta

Got it. All right. My last question for you is, what is one piece of advice would you give to people who are thinking of investing in Main Street that is outside of Wall Street. So art would be one of those categories, I would say.

Maria Brito

Listen. Investing outside of Wall Street is no different. Because risks are inherent of any investment in anything that you are going to put your money in. So if you want to get into the art investing, I would suggest that you consider it as an alternative. That’s why we have alternative investments. This one is one of them. I think that you should go in with an open heart and an open mind and think about not only the flipping it or making money out of it, but to understanding if you have the desire to own an asset that is not liquid, that it absolutely with the right strategy and the right research you can multiply your money for sure. But it’s a risky market. Like anything, it does have a lot of different modalities and things that can happen.

You’re also dealing not with machines but with humans. Artists can do all sorts of crazy things, right? I mean, people can start really great half 10 years of up and up. Then, I don’t know, lose their cool factor. Things happen that we don’t control. There are other things that if you want to start investing and go and buy artists that are already dead and proven by history, that is fantastic. I think it’s great. But you do have to have the money to do that. It’s a different thing to buy an emerging artist or a mid-career artist from $10,000 to $100,000 than to go and buy Jackson Pollock for $100 million, right? I mean, it’s a very different thing.

But I think what is important is to also open up or demystify the idea that to invest in art, you have to be a billionaire or that you have to follow the front page of the Wall Street Journal when they come and say, “Oh, the collection of Paul Allen sold for $2 billion.” You have to understand that there is only one Paul Allen. There is only one Bill Gates. Those people did build amazing art collections like Paul did. It all went to auction. There is one follow-up coming right now in May. But that’s not how 99% of our collectors start. To be honest with you, I’ve known plenty of art collectors myself who started with the equivalent of $100,000 now, and they multiplied their money by being shrewd, by being passionate, by being smart. But again, there are people dedicated themselves almost 100% to do that. Not everybody has the luxury of dedicating 100% of their time or their waking hours to understanding a market that became gigantic and complex in a matter of years. It used not to be like this.

To tell you a funny anecdote, in 1950, New York City had 20 serious art collectors or 30 at most. Fast forward to 2023, New York probably has 1,500 serious art collectors, like serious. That’s a lot if you think about it. If you go worldwide, you’ll find thousands of people who are serious. Like I said before, things about Indonesia, there are collectors there who have foundations. They employ people. They show their art to everybody. So when you think about how this has extended to every corner of the planet, you realize how big of a market it is and how it became really the hottest market. I mean, it is really one of the hottest markets on Earth if you consider that the growth and the return that it can give to people, if you’re doing the right thing.

I hate to say this. But if you’re doing the right things, it will always be the S&P 500 by many, many, many, many points. But people don’t like to hear this. It’s not every asset. It’s not every artist. But there are plenty of artists and assets that have an annualized rate of return of 30%, 40%. But people hate to hear these things. But I’m telling you. Because if folks who are listening love numbers and love to hear this things, that is the truth. I have the data to prove it. I have the numbers to prove it. But people don’t necessarily love to hear that because it sounds like it is too good to be true.

Pancham Gupta

That’s so true. Thank you for sharing that, Maria. We’re running almost at the hour. How can people connect with you if they want to find out more about you? How can they work with you?

Maria Brito

Yes, I am at my website. It’s mariabrito.com. There are forms there. There is an email form that you can fill out, and it’ll come to me and my team. So that’s fine. We have all the links to Facebook and Twitter and Instagram and LinkedIn. Those are the platforms that I am active on. That’s it. It’s all there. It’s easy. It’s no complicated things. Everybody who would want to know more about the art market and reach out to me, say that they came through you. And it’ll be fun.

Pancham Gupta

All right. Great. Thank you, Maria, for your time.

Maria Brito

Thank you, Pancham. It’s a pleasure. Thank you for everybody who listened.

Pancham Gupta

Thanks for tuning in today. If you have any questions, do not hesitate to reach out to me at p@thegoldcollarinvestor.com. That’s p@thegoldcollarinvestor.com. This is Pancham, signing off. Until next time. Take care.

(outro)

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com and follow us on Facebook @thegoldcollarinvestor. The information on this podcast are opinions. As always, please consult your own financial team before investing.