In order to gain financial freedom, you have to earn more money than you spend. This statement sounds stupidly simple (and it is), but a lot of people don’t put this into practice because they simply don’t have the steps or proper guidance to do so.
Budgeting and pinching pennies is one way to go about this, but saving $200 or even $500 per month by not eating out or ordering $5 coffee drinks is far diminished by the possibility of increasing your income drastically through reselling sneakers, which can earn you this amount in just one pair.
Of course you can use this newfound money from shoe selling success to blow on whatever you want, but if you want to build a wealthy life, think before you just spend the cash on whatever.
As you have more money saved, you won’t need to sell shoes as quickly, and you can begin to accumulate some favorite pairs.
Others may criticize you of this habit, thinking that you’re wasting money, but if you do this right, interestingly, your growing collection of shoes might be something billionaire investor Warren Buffet would be proud of.
Let me explain:
If you have the knowledge of the history of shoes and build a good collection, you are actually behaving like someone who is truly rich, and this isn’t because you now have all of this gear to flex on people with.
You are actually building your net worth, and that’s why we spent so much time on the first part of the knowledge section in this Playbook to let you know what to buy as an investment.
Spending money on things that are truly valuable
One secret of the rich is that they spend money on things that at the least hold value, but ideally rise in value. There’s a difference between something that’s simply expensive, and something that is truly valuable.
A lot of people who don’t have tons of money find it hard to understand why rich people buy Rolex watches or really expensive artwork, but they actually do this because these are tangible assets (physical possessions that are worth money and that make up part of someone’s net worth) that hold value or rise in value over time.
Having Assets: Depreciating vs. Appreciating
When someone has a $5000 Rolex Datejust watch, that person can sell his watch for $5000 fairly quickly 3 months or 3 years later, so it’s the same as having money in your bank account, but you get to actually use and wear the watch.
Spending money in this way is better than simply having money in your bank account, and far better than just going to the mall to buy random clothes.
What a lot of ordinary people do is they take their money and go to a department store and buy items that lose value instantly when they walk out of the store.
Even if you buy things on sale, you’ll see a hoard of these clothing items or gadgets on eBay for a lower price than they were in the store.
So, these are depreciating assets, which are assets that lose value over time (often instantly).
Appreciating assets, on the other hand, are physical possessions we can buy that rise in value over time or instantly.
One of the secrets of the smartest, richest and savviest of investors and the top 1% is that the majority of the money they spend is put towards appreciating assets rather than depreciating assets.
This makes perfect sense because it’s simple math: if you can turn $100,000 into $150,000 with appreciating assets, you’re literally 3 times richer than the person who takes $100,000 into depreciating assets and turns that into
Spending money strategically on assets is better than simply having money in your bank account, and far better than just going to the mall to buy random clothes.
The very wealthiest of people put their money into what is called alternative investments, which are investments outside of the usual investments in the stock market.
Because alternative investments have such incredible money making potential compared to the stock market, most people who are allowed to dabble in alternative investments are ultra wealthy and accredited investors with net worths of at least $5 million.
Technically, buying limited release sneakers like the Air Jordan 3 Black Cement is an alternative investment (that can actually outperform the stock market), and you don’t have to be someone super special to do this !
Realize that although it’s super cool to have these kicks, that at the end of the day, you should view these as collectible assets that are worth money and to not be so attached to them that you irrationally hoard them to your own financial detriment.
For that reason, in the beginning when you’re just starting, don’t start building a collection right away. Selling shoes quickly is the best way to build bank.
Wait until you’ve made enough profit to justify putting some money aside that you don’t need to touch for day to day life, and be patient and let your collection grow slowly and do your best to only buy models that are timeless classics, and buy them at the best price you can find even if they’re not in your size.
Building your sneaker portfolio
Now that you’re armed with the knowledge section of this book, and the skills to buy and sell both new and used sneakers, you have enough knowledge to build a tremendously valuable collection of sneakers that can help you become wealthy.
It’s even possible to argue that having a collection of hot sneakers is a better investment than putting money into the stock market, because historically the prices of these shoes remains pretty stable, with many models actually rising in value much faster than the stock market.
Start with only models that you know could sell quickly (based on the Flip Factors and overall hype and history of the different colorways and models) so that your portfolio is highly liquid (means that you could sell for cash quickly if you need to).
Depending on your network, if you buy a shoe worth thousands of dollars, it won’t be highly liquid, so even if you got it at a really good price, you would have to wait some time before it actually sold.
So you need to hit the sweet spot in the beginning and buy shoes in the lower range, typically between $200 to $600, to have shoes that could sell more quickly and to have a liquid portfolio.
Having a shoe collection can be a fun way to balance your financial well being and to make money doing so–if your parents or friends are dubious about your shoe “problem”, show them this article then see what they have to say!
***This article was an excerpt from our new 2019 Hypemaster Playbook, which is releasing at the end of the month. Current customers will get the 2019 version for free.***