How to Invest in Formula 1 and Make a Killing on the Track

How to invest in formula 1 and make a killing on the track. Formula 1 racing has been thrilling fans since the inaugural world championship race was held in 1950 in Silverstone, UK (though it’s only officially been known as Formula 1 since the ‘60s).

The thrill of driving at high speeds may not appeal to everyone, but you don’t have to be an adrenaline junkie to appreciate the skill and precision required to drive these speed machines around a track as quickly as possible.

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If you want to learn how to invest in formula 1 and make money while watching others do the driving, keep reading!

How to Invest in Formula 1?

Formula 1 is a well-established sport, but it’s surprisingly straightforward to buy in. Formula 1 teams are privately owned and sell shares to finance their development costs. Several websites exist which link buyers with sellers, and share prices fluctuate regularly based on performance and forecasts.

For example, in 2015 Lotus Group (the team behind Kimi Raikkonen) sold around $61 million worth of shares, while 2015 champions Mercedes Benz sold slightly less than $166 million worth.

Formula 1 is also becoming a big business in itself—in 2017 Liberty Media Group completed a purchase of Formula 1 for more than $8 billion! In addition to buying stock in existing teams, new investment groups have been created which allow you to back multiple cars at once or bet on individual drivers winning races.

Does F1 Make Money?

If you’re wondering whether F1 makes money, then wonder no more. The short answer is: yes it does. By most estimates, annual revenues are upwards of $1 billion.

Those numbers are driven primarily by TV rights deals that bring in around $700 million annually (think NBC Sports), along with some sponsorship revenue from companies like Rolex and Marlboro, which help add another $120-ish million or so.

In 2014, there were 19 races that took place across six continents, with over 700 cars participating globally—more than any other series worldwide—which meant revenues for hosting tracks was also likely substantial (though we don’t have an estimate).

Why Formula 1?

Everyone knows that NASCAR is America’s favorite racing sport. But, did you know that not only is it one of America’s most popular sports—it’s also one of its most profitable? In fact, NASCAR made over $3 billion dollars last year (and it doesn’t even include ticket sales)!

Not only that, but Forbes magazine has ranked stock car racing as one of America’s Most Promising Industries. Why? Because everyone likes spending money at races!

According to USA Today, 35 million people attended or watched a race in person last year—and they spent an average of $112 per head! Add it all up and you have a business worth millions!

The History of Formula 1

Formula One racing was born over 50 years ago, when an organization called Fédération Internationale de l’Automobile (FIA) standardized car regulations.

The first official race took place in Silverstone, England in 1950; while no one can be exactly sure who won that day (the records were lost), you can bet that it was driven by a man.

Until 2007, only men were allowed behind wheel—women had been fighting for decades to get into races but their pleas went ignored until legislation enacted women-only events.

You’ll never see two lady F1 drivers racing against each other or even on the same track at once—it’s still illegal!

The Basics

Before you get started, it’s important to understand exactly what a Formula One team is. This isn’t just one business – but two.

On one side, there is an operating company. This is where a team’s headquarters are located, and it coordinates all of its race operations like transportation, engineering and logistics.

On another side there is an investment holding company that includes ownership rights of both current teams as well as future entry positions into races (entries are sold through a bidding process).

Both sides have their own investments (owning shares), board members and operational procedures; making for quite a complex ecosystem for new investors to enter into blindly.

The Teams of Formula 1

There are 10 teams racing with each fielding two cars. The team that performs best over a season is awarded Constructors’ Championship points, and these points are then split between its drivers.

In 2017, Mercedes topped both of these categories – making them Constructors’ Champions as well as winning both World Championships.

Ferrari placed second, while Red Bull Racing, Williams Martini Racing, Force India F1 Team (backed by Sahara Group), Renault Sport F1 Team and McLaren rounded out the top 10.

The rest of the teams – Sauber F1 Team (2nd-placed constructor), Haas F1 Team (5th), Toro Rosso (6th) and Manor Racing (10th) will have their sights set on overtaking those ahead next year.

F1 Sponsors and Manufacturers

Some of F1’s biggest sponsors have traditionally been car companies, with brands like Shell, Petronas, Gulf Oil, Ford and BMW all having had a big say in proceedings over the years.

These days it’s not quite as simple; rules introduced since 2012 mean that teams can sell up to 70% of their advertising space through sponsorship deals.

This means that if you want to buy into an F1 team you need more than just money – you need to be able to offer sponsorship deals too.

The Risks

Losing money is a real possibility for anyone who invests.

The higher risk investments carry higher rates of return, but also carry greater chances of losing your money.

The biggest risk you take when investing is not learning enough about what you’re doing. If you buy stocks without learning about how stock markets work, without understanding what different companies do and without researching them thoroughly, there’s a good chance that you will lose some or all of your investment.

The Opportunities

There are some very legitimate reasons to invest in Formula One racing. For example, Forbes has stated that F1 makes more money than all but three football clubs worldwide (Manchester United, Real Madrid, and Barcelona).

In addition, Forbes reports that F1 makes more revenue per race than any other sport on earth. And how much could you earn? Well it depends on how much you’re willing to invest of course.

$500 is a good place to start if you don’t have any experience investing but want something with just a little risk.

Investing upwards of $5000 would earn you a pretty penny depending on how your investment pays off over time.

Final Thoughts

If you’re looking for a quick way to grab cash and don’t mind taking risks, investing in something like F1 might be right up your alley.

It’s not without its pitfalls, but there are plenty of investors who have made serious cash through F1.

If that sounds appealing, then you should probably look into it further—there are several reputable websites that offer good advice on how to get started. (And if you’re worried about us being biased…don’t be; we don’t recommend anything we haven’t personally used or seen success with.)

Happy racing!

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