Jordan returns vs the stock market

Sneakerhead Economics: Shoes as an Investment

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This Ted Talk by Josh Luber, the creator of Campless (now called StockX) brings up an interesting proposal of sneakers as an investment.

Historically, the stock market returns 9% yearly.

For those who want to see these kind of historically safe and reliable numbers as a return on their hard earned money, stashing your money away in something like a Vanguard index fund is an attractive opportunity.

*Important note: Although the statistics are real, this article is not meant to be taken as direct investment advice! Always act on your own decisions and consult authorities when investing any sum of money*

However, this is a boring grandpa version of investing.

Newer generations like millenials and the upcoming Gen Z’s are looking for alternatives. One reason is a lack of trust in investments that are heavily based on national economical performance (which some may argue is going downhill, very soon).

Another reason is that these younger generations are fiercely independent, demanding control and transparency over investment vehicles.

Also, selling and investing in Jordans and Yeezy’s for a living is probably the coolest way to make money, ever. So learning how to get a piece of this billion dollar pie and to join the crew of six figure resellers as a young person is totally understandable.

Investing in sneakers: an entrepreneurial venture

With the entrepreneurial movement in full swing right now, many young people are being told that the best investment is in themselves.

One of the best ways to invest in yourself as a young professional or a college student is starting your own sneaker resale business.

This is the kind of investment that you can control and that can pay out in dividends much greater than the historic 9% per year.

In fact, it’s not uncommon to make 100-200% on one single pair of shoes.

Some insane winners, like this data from the Off-White Air Jordan 1 return more money than most stocks do in years:

Off white jordan resale value
StockX has great tools for understanding prices. Head on to their website to check out data like this.

Active vs Passive Investments

Active investments like selling shoes are really cool because you learn skills that transfer into other business ventures which may mean experience you can put on a resume for a future job, or priceless skills like customer service and business building as your first taste in entrepreneurship.

A passive investment, like buying stock in an established company in the S&P 500, may be a good option, but you don’t learn much by doing so.

It’s better to dive into the exciting market and to learn along the way with skills that will transfer to any other career you choose to transition to later in life.

To start a business selling sneakers is the ultimate self investment for many of those who want to take the wheel of their financial future.

Be warned: if you don’t know what you’re doing, there may be plenty of risk is involved in such ventures, and many paths with unclear directions can make it hard to know where to start or when to pivot into something new.follow us on instagram

A lot of risky or boring opportunities exist, but there’s one that seems to check all boxes as the ultimate investment opportunity for young people today–imagine that you can buy the goods that you want, and to get paid by doing it. That sounds awesome doesn’t it!

 

Being able to afford the swag you want and making money at the same time can be done with investments in sneakers.

Forget 9% per year, how about 9% per hour?

To see a return of 50% or even 100% on money invested in sneakers or streetwear is not only common, it’s often the norm for those participating in this fun game. You can also make these returns in a matter of days or even hours, if you are fast and you know what you’re doing.

As stated in this article by streetwear news authority Complex, you could would have gotten a better 4 year return having bought a single pair of Jordan 3 Black Cements than if you had purchased stock in one of the best performing companies on the market, Apple, and more than double that of the same return of the S&P 500, which as a representative of the performance of the top 500 performing American companies is a good indicator of the overall economy.

Air Jordan 3 black cement inveestment
Who knew a single shoe could beat the return of the America’s top 500 companies

 

Ultimately, a good bit of knowledge will come in to play for those who want to use sneakers and streetwear as an investment vehicle.

You can build the knowledge over time, but posts like this beginner’s guide to selling rare shoes for profit are a good starting point.

One awesome thing to note is that at the time of this writing in January of 2018, there exists another opportunity this year to acquire this exact pair of shoes in this example, the Air Jordan III Black Cement, with an expected return in as soon as one day that is sure to beat the yearly return of the stock market in 2018.

Alternative investments to the stock market: Sneakers vs Cryptocurrency

If you’re only interested in earning money by holding and flipping shoes you can skip this section, but there’s a method to this madness.

It may seem random to bring up cryptocurrency like Bitcoin, but millenials are looking for alternatives to the stock market, and tons of them have more faith in Bitcoin for retirement than almost anything else, according to Forbes.

That article about bitcoin above was written in March of 2018, just before a huge slump in bitcoin and cryptocurrency returns, leaving many burned. I personally know people who have lost literally hundreds of thousands of dollars in paper value by holding onto cryptocurrency through the bull run of January 2017-January 2018 up until now.

Although it’s good to consider alternatives like cryptocurrency, the volatility (i.e. the frequency and magnitude of price change) makes it possible to lose money just as quick as you can make it.

Investing in sneakers can be volatile, but it’s basically impossible to lose more than 40% or so of your original investment, and even though Nike wouldn’t be happy to hear this, honestly you could always just return shoes that aren’t selling and get 100% of your money back.

If this is your first time hearing about this crazy investment vehicle, you might have some questions. Here are some of the most common that have come up.

FAQ:

 

We missed the opportunity for these Air Jordan III’s mentioned in the article. Are there other shoes that I can buy for good returns?

This is just one of many shoes this year in 2018 that can promise immediate returns that will beat the historic stock market yearly returns of an average of about 10%.

Check out this list of shoes in November 2018, and subscribe to our email list below to be notified of the most profitable drops every month:

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Is reselling sneakers illegal?

The sneaker resale market has been around for many years, and although it’s controversial, reselling sneakers is not illegal, and this market is here to stay. People have been flipping shoes for 20 years so this market won’t go away any time soon either.

I’d argue that even if it were illegal, reselling brands like Nike Jordan and Adidas Yeezy would remain part of the economy in the same way that selling drugs does.

It’s a good thing that this market is legal, since there are many platforms like GOAT, eBay, and StockX that you can gather relevant pricing data, invest in, and sell sneakers in.

How much can I make on average off of one pair of shoes?

It is common to make returns of 100% and more off of individual pairs of shoe–that is, once you know what shoes to buy and how to acquire them.

You can find expert advice in our exclusive, highly reviewed 5 Part Hypemaster Playbook that you can get right here for shoe resale success, whether you already sell shoes and want to sell more, or if you are a total beginner and want to start investing in shoes as a full or part time business.

Although it’s rare to see this in real life, there are also teenagers making millions from this insane market.

Are all Jordans worth investing in?

No.

The Jordan brand has spanned far beyond its retro roots that started in 1984, and has since released many lifestyle and fashion shoe models that have no value above their retail price. Shoes like the Jordan Eclipse, Jordan Future, and countless others are not worth buying as an investment.

You will lose money if it is your intention to buy every single Jordan hoping that they’ll go up in price over the next coming years.

On the contrary, models like the Nike Hyperadapt and some of Kyrie Irving’s signature shoes have resale value even though they are not Jordans.

So as you can see, it’s critical to have the knowledge foundation before you invest in sneakers.

How much money do I need to invest in sneakers?

The recommended dollar amount if you want to participate in this market is $200.

Why $200?

Well, most shoes that are worth getting to flip for a profit are in the $200 price range.

This is also an amount that you can basically only invest in sneakers to resell, because if you were to throw this amount in the stock market, you’d be eaten up by commission and broker fees. It may feel like a big chunk of change especially if you’re younger, but considering that most people buying stocks put in tens of thousands at a time, this is chump change.

What if I don’t have $200 yet?

If you don’t have this few hundred yet, just start by setting aside $20 here and there, and once you have the money, do your research and pull the trigger on a pair that will give you a profit.

Alternatively, you can be really picky with what you buy and search for cheaper sources like second hand stores or even department stores to get a pair of shoes in the $40-$100 range that will still sell for a profit.

How long do I need to keep the shoes to see a good return?

Some shoes you will see the best return when you sell them immediately around the release day, others like the original Adidas Yeezy Boost have aged well and gone up in value, peaking over the course of 2-3 years after seeing some ups and downs along the way. The Yeezy 750 in February 2015 first sold for around $1500, then dropped below $1000 for a while, and years later now in 2018 is worth record prices of up to $3000 a pair.

You’ll need to watch the market over a long period of time, or study the history to get a good grasp of what shoes are good investments, and how long you should keep them.

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Final wrap up: Pros and Cons of Investing in Sneakers

Pros:

  • Probably the funnest and coolest way to make money
  • A good alternative to the stock market
  • Potential to make a greater return than traditional investments
  • Less volatile than alternatives like cryptocurrency
  • Learn entrepreneurial skills and gain confidence for your future career

Cons:

  • You might buy shoes that are not profitable
  • Wasting tons of time trying to get rare shoes because they sell out too fast. These things are profitable because most people can’t get them even when they try.
  • If you get really successful, you can be a target for robbery
  • Buying too many shoes and ending up losing money
  • Losing or damaging the shoes
  • You have to be really dedicated and pay attention to the latest news to make money doing this

For those who love the potentially pricey hobby of streetwear, strategic purchases as an investment can absolutely be worth it.

The best part is that now you can share this article with those who doubt that this is possible, like your parents, so you can shove the statistics that prove the truth of this investment in the face of any haters! đŸ˜›

 

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