Owning a record store is not unlike managing a long-term investment portfolio. I’ve come to realize that principles from Benjamin Graham‘s The Intelligent Investor can apply as much to my store as they do to stock market investments. Especially when it comes to jazz and classical records. The key is thinking long-term, not just chasing quick profits, but building a foundation that can sustain and grow over time. Running a record store is an investment in its own right. And like any investment, it requires patience and strategic thinking.
The Importance of an Emergency Buffer
One of the most important lessons I’ve learned is the value of having an emergency buffer. Three months’ worth of cash reserves can make all the difference. More than a financial cushion, having that extra money is a huge stress remover. There’s nothing more anxiety-inducing than watching the end of the month approach with rent due, hoping for a big last-minute sale. Or hoping a collector won’t walk through the door with a rare collection to pass on because you’ve just been hit by an unexpected bill. Having that financial buffer allows me to breathe easier. It gives me the assurance I can weather the unexpected.
Growing a Record Store Beyond Cash Reserves
However, I’ve also realized that simply holding onto cash isn’t the best way to grow a record store. Inflation erodes money over time. Why not put it to good use? To that end, I’ve decided to invest part of the store’s funds in stocks.
Modern ETFs, such as those provided by Vanguard and Betashares, offer the ability to move small amounts of money in and out of the stock market at little to no cost. While most record store owners might keep their cash or reinvest solely in inventory they might not really need other than for the sake of spending regularly, I’ve taken inspiration from music companies like Rough Trade and XL Recordings. Studying the financial statements of these influential British companies informs me that both make strategic investments outside of their core focus in recorded music. By doing this as well, I can mitigate inflation and potentially earn returns that help support the store’s growth.
Building Long-Term Stability and Liquidity Through Investment
Glitter Records may be one of the few record stores with an investment portfolio, but I believe this modern approach offers more security and liquidity. Liquidity, in this context, refers to how easily assets can be converted into cash without affecting their price. An issue many record store owners know only too well.
This way I can access funds quickly when I need them—like for purchasing rare collections or expanding inventory when the timing is right. It’s a way to build long-term stability, not just for the store, but for my peace of mind. Let’s see how it goes.
Glitter Records Investment Portfolio December, 2024
- BGBL:AU – Betashares Global Shares ETF: $199.07
- CRYP:AU – Betashares Crypto Innovators ETF: $91.36
- DHHF:AU – Betashares Diversified All Growth ETF: $1,539.17
- MOAT:AU – VanEck Morningstar Wide Moat ETF AUD: $100.47
- QUS:AU – Betashares S&P 500 Equal Weight ETF: $397.63
- RCAP:AU – Resolution Capital Global Property Securities Fund (Managed Fund): $98.54
- ROYL:AU – Betashares Global Royalties ETF: $199.63
- VGE:AU – Vanguard FTSE Emerging Markets Shares ETF AUD: $98.69
- VGS:AU – Vanguard MSCI Index International Shares ETF: $100.68
- VTS:AU – Vanguard US Total Market Shares Index ETF AUD: $200.27
Total Value: $3,025
An Overview of The Glitter Records Investment Portfolio
The Glitter Records portfolio reflects a cautious and diversified approach. I aim to keep enough funds close at hand to cover unexpected expenses and opportunities while supporting the record store’s long-term financial health. The focus remains on stability and growth, with the flexibility to pivot funds into areas of my record store when necessary.