We all have regrets — money regrets, that is. But, like all mistakes, we wouldn't be who — or where — we are today without them. In our "Money Fails" series, real people share how they bounced back from financial slip-ups, and what they learned along the way.
Here, a newbie investor goes all-in on a work of art … that doesn’t turn out to be the investment she’d hoped for.
I was about to make the biggest purchase of my life so far, sight unseen, from my cubicle at Glamour magazine. It was 2005. I was a new mom, working full-time. I was tired and frazzled and only half-listening to my husband, Ted, on the other end of the phone. He’d called to tell me about a “possibly-great investment opportunity”— a $14,000 one-of-a-kind chair created by an “up and coming” furniture designer.
For context: This was before the Great Recession, when it seemed as if everyone and their grandma were investing in something. Everyday Americans were gambling heartily in tech stocks, real estate, even art and design pieces. Earlier that year, a different chair (made of stuffed animals sewn together!) had sold at the design store where my husband worked for about $18,000, only to be quickly resold through an auction house for over $100,000. Though Ted and I were far from wealthy and had little savings, we were each making six-figure incomes for the first time in our lives. We didn’t want to miss out on what seemed like a chance for easy money.
“My boss thinks it’s a really smart move,” Ted explained. His boss, the owner of the store, was a widely respected design expert and curator, whose good taste and instincts had made him a small fortune.
“Is it comfortable, at least?” I asked, paying attention now. “Will it look good in our place?” My husband explained that the chair wasn’t exactly “comfortable.” Nor was it exactly “good-looking.” The designer, Maarten Baas, had taken a reproduction art nouveau-style chair by Charles Rennie Mackintosh, set it on fire, sealed the charred remains and added an electric yellow sheepskin seat cushion. This wasn’t just a chair, you see — it was a work of art.
“Let’s get it!” I declared impulsively. And just like that, Ted and I made our first non-real estate investment as a couple.
How Our $14K Investment Became a Headache
As it turned out, there was no spot big enough in our home for the hulking thing, so the chair stayed in the design store’s storage facility for a year until they finally asked us to kindly pick it up. Ted did some research and learned it was too soon to resell the chair for a profit. So we made room for it in our living room, where it served as a conversation piece, at least. Visitors were asked not to sit on it. “Some of the charred edges are really fragile,” I’d explain when friends’ toddlers would bee-line, chocolate-fingered, for the bright gold cushion. Thankfully, my own children — I’d had a second son by the time the chair made it home — quickly caught on that climbing on “the crazy chair,” as my son Finn called it, made Mom and Dad really stressed. They learned (mostly) to keep their distance.
Unfortunately, while the crazy chair stayed intact through the early aughts, the economy didn’t. With the financial crisis of 2007 and the ensuing recession, the market for high-priced design objects dissipated, and the possibility of quickly turning around our investment looked dim. That might not have been so depressing if Ted and I really loved the chair and enjoyed living with it. But the thing was simply not compatible with our lifestyle. Come 2010, back into storage it went.
The $14K designer chair incorporated into the writer’s living room, birthday parties and all.
How We Finally Cut Our Losses — And What We Learned From It
Four years and hundreds of dollars in storage fees later (it may have been thousands, but I don’t have the heart to do the math), came our real moment of truth. We were packing our bags to move across the country, and it was time to decide once and for all: Were we going to cut our losses and sell the chair for whatever we could get, or invest more money to ship it and store it until its value (hopefully) rose? We decided on the former. The crazy chair sold at Philips auction house in December 2014 for $8,750 — just over half what we paid for it.
So, yeah, our big investment turned out to be a bust. But Ted and I choose not to regret the whole debacle. After all, it taught us some important lessons for the next time we’re thinking about investing in design or art:
1. Consider your risk: We invested in the work of an up-and-coming designer because: A) Ted’s research indicated that he was “on the rise”; and B) we could (if barely) afford him. But where we went wrong was buying a piece that would appeal only to a very particular collector — and not even to ourselves. In fact, Baas’s less flamboyant, more accessible pieces from the same series did increase in value over the same time period. Next time we invest in an unproven designer, we’ll play it safer.
2. If you don’t absolutely love it, don’t buy it. Had Ted and I loved the crazy chair, we would have gladly held onto it, regardless of dollar value.
3. Size matters: I’m sure we weren’t the first collectors to discover that our investment didn’t fit in our home. When investing in art or design, loving the work isn’t good enough — you’ve got to have the perfect spot for it.