So, the glamorous world of Hollywood has taken first taken your interest but now has your full attention.  You have realised that investing in movies would make a rather good portfolio diversification.  The box offices around the globe hit new records almost every year as not only do the plots become better but technology advances and takes the whole theatre experience on a new level.

It’s only natural that the increased demand would lead to higher profits in the industry and many people are starting to consider the options of investing in movies. This begs the question of how could the normal person do that?

Understanding the Industry

Right off the bat, we want to make it clear that a film investment is a long term one and it usually takes at least three years for the investor to see a return and that could expand up to a period of ten years, even. There are many factors behind it. Essentially you would be investing in the production, which means that the movie would not have even began to shoot at the time of the investment, at least in most cases.

It is the producer of the movie that manages the funds and uses them he sees fit to create the best possible end product for the viewers. It only makes sense to run the process in such manner without bureaucracy standing on top of the producer and disturbing his work.

The other factor which you should be aware of is the usual minimum threshold of an investment in movies regardless of whether it’s a TV series or a box office – it is essentially around ten thousand dollars or pounds depending on the country you are investing in.

Ways to Invest in Movies

As a retail customer, the most and the only legitimate way to invest in a movie is through and Enterprise Investment Scheme or known as EIS. The EIS originally came to existence in the early 90s and were necessary to enable people to invest in shares with high risk with small amounts and the expectancy of enormous returns. Additional benefit to the Enterprise Investment Scheme is that it has 30% tax relief and does not pay tax on any profits. You can certainly realise why this instrument would attract investors.

How to Purchase an EIS

Which leads to the question of ways to purchase the scheme.  There is a variety of firms which specialise in structuring enterprise investment schemes for movies. Most of them would provide a financial advisor and explain the procedures behind the investment. All of that being said we still believe that you should hire an authorised, independent financial advisor which will surely only act on your interest and provide you with all info necessary regarding pros and cons of the EIS.

We hope to have shown you a new safe asset to invest in and helped in the process of understanding it. Direct investments could be risky, but proper knowledge diminishes the risk by a great deal.