A beginner’s guide to investing

A beginner’s guide to investing

Investing for beginners

Watching movies is one of the world’s favourite pastimes. It can be thrilling, educational and is one of the best ways to temporarily escape the mundane. Due to this, investment in film could be one of the most exhilarating (and savvy) ways to make money – see the evidence for yourself in this Forbes article on film investment. 

Film financiers have created the ultimate way to make money in an industry which shows no sign of slowing down. With so many different genres and new ways of viewing content, investing in movies could be an accessible and lucrative opportunity that few people have ever seriously considered – until now.  In this article we’re going to take a deep dive into what investing actually is, and what options are available to you.

What is an investment?

Put simply, investing is the process of allocating resources (generally money) with the expectation of generating monetary profits. In the context of movie investment, becoming a film financier means using your own finances to fund all or part of the production and distribution of a film.

A significant part of this process is selecting the project you want to work on. Films4U have a highly selective process when it comes to choosing their titles and commercial appeal is a huge part of this. They have also taken steps to ensure their distribution channels are well established – which is a huge part of the movie business. This includes targeting different territories globally, ensuring the widest reach for your movie investment.

Of course, we all hope that our investments are positive experiences with successful outcomes but there is always an element of risk which is partially why the very term ‘investment’ can ignite a palpable sense of excitement.

How do I invest?

Once you have made the decision to invest your money, you will need a platform from which to do it. Film is an industry that made a record-breaking $101 billion dollars in 2019 (Forbes, 2020) and to become a part of this success, you’ll need to find a trusted film finance company to help you on your way.

Films4U operates as an ‘EIS’ which is an Enterprise Investment Scheme. This scheme was created in 1994 and offers tax relief to individual investors who buy shares in a new company which is not listed on the stock exchange. With regard to a film EIS, and specifically Films4U, it means that you will get a 30% refund of your investment back against your tax bill.

The company identifies routes to deliver a successful investment exit from the outset – which is normally planned for between three to five years from the initial investment in film. This could mean a significant return within as little as three years.

To take the first step, simply go to https://www.films-4u.co.uk/get-started/ to register your interest and get started. Here you will find all the information you need on expertly selected current projects and the application process.

What returns should I expect?

This is the exciting part. The Films4U EIS promises a 60% total return over a three year period, this includes tax relief. The gains you make on this investment would also be completely free from Capital Gains Tax and Inheritance Tax so there are no hidden pitfalls with this investment format. As a worked example, if you were to invest £5,000, your total return on investment after 3 years (including tax relief) would be £8,000. Not a bad return for investing in a project you could be genuinely passionate about and have an inherent interest in developing.

We want the best for our investors and we have a well-considered due diligence process for all their projects. We use our industry experience to maximise every opportunity. With this in mind, as with any movie investment, commercial success is not guaranteed but you know you are giving yourself the best possible chance.

How much should I invest?

Investment in film, like many potential high return sectors, can be risky. Keep in mind that you should never invest more than you can afford to lose. If you decide that your finances are in a sufficiently healthy state and you would like to take up the exciting role as a movie investor, you can do so through the Films4U EIS with as little as £5,000 (the maximum is £1,000,000).

How much you should invest is a highly subjective question and you should take some time to consider your own personal circumstances in order to dictate your approach. You don’t need to take the plunge with a huge initial investment, especially if you are new to the concept of film investment companies and the movie production world generally. It is wise to keep your investments smart and sustainable, allowing you to learn about the industry over time and any potential obstacles you may encounter. The more confident you become about your new chosen sector, the smarter decisions you should make.

Is investing right for me?

Whenever you invest money in any endeavour, it is important to ask yourself why you are investing and what you are hoping to gain. This will allow you to keep your perception of reality in check. For instance, if you are struggling to make repayments on loans and you think investing could be a quick fix solution, you need to rethink your strategy. Unfortunately movie investment is not exempt from this. It is far more important to work on the current management of your financial situation than risk making it irrevocably worse.

That being said, if you have substantial savings that you are looking to put to use in a direction that could reap hefty rewards, investment in film just might be the option for you. Of course, you will want to do your research, but given that Films4U haven’t lost money on a film to date (that’s over 500 films and £6bn in budget), it’s not a bad place to start.  

The information contained on this website should not be taken as financial advice or as a personal recommendation by Films4U. Before investing you should always seek appropriate legal and financial advice from an authorised person specialising in investments of this kind.

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