Real estate, mutual funds, stocks. These are some of the most common (and lucrative) investments that people make. Investments are designed to increase your wealth over time, but which ones are the best and most secure?
With a little research and know-how, you can make a smart investment that sets you up for financial freedom.
Looking for alternative investments to traditional stocks and bonds? All you have to do is look down.
That’s right. A sneaker investment might just be the smartest financial move you’ll ever make.
Keep reading for tips on combining investment strategies with your passion for stylish footwear.
What Makes a Good Investment?
You might be wondering, “Are sneaker investments a good idea?”. The real question is, what investments make you the most money with the least risk?
There are no guarantees when it comes to investing your money, but there are a few things to consider before parking your life savings in a bank account (or shoebox).
A general rule of thumb is good investments are low risk and have a high probability of success. It’s normal to experience periodic fluctuations where you lose and gain money.
In the end, you want an investment that not only holds its value but increases over time. You never want to lose the initial invested amount.
That means if you purchase a pair of Yeezys for $300, you want to at least make your money back if you decide to turn around and sell them.
Ideally, you’ll double, triple, or even quadruple your payout — or more!
When Did Sneakers Become an Asset?
So how and when did sneakers make the shift from stylish accessory to smart investment?
Supply and demand plus a greater appreciation for the overall design and composition of shoes have catapulted the sneaker industry into a whole new realm.
One reason for this shift is the influx of celebrity endorsements.
Celebrity endorsements are nothing new to the sneaker industry. Case in point: Michael Jordan.
In recent years, though, rappers have bypassed athletes as the poster children for rare and stylish kicks. Everyone from Kanye and Drake to Jay-Z and Eminem is getting in on the growing sneaker phenomenon.
These collaborations transform everyday sneakers into highly sought-after and valued commodities.
Sneakers Are Now Viewed as Collectibles
More and more sneakerheads are purchasing their favorite pairs as collectibles rather than everyday street shoes.
Don’t think you can rock a rare pair of Air Jordans on the court and then turn around and sell them for a cool million.
Sneaker collectors take their sneaker habit very seriously, dedicating entire closets and rooms to their addiction.
Preserving these sneakers over time helps hold and increase their value. It’s a price that many sneaker enthusiasts are more than happy to pay.
Supply and demand is a concept that’s been around for centuries. The less there is of something people want, the more they’re willing to pay for it.
The sneaker industry quickly used this concept to its advantage. They’ve mastered generating plenty of hype around new releases and only producing a limited number of pairs.
Sneakerheads and potential investors are willing to pay top dollar for these rare shoes.
The more time that goes by, the more rare and hard to find these sneakers become, increasing their value and making them a smart, reliable investment.
How to Make a Smart Sneaker Investment
Are you ready to put your money where your feet are?
Now’s the time since experts predict the business of flipping sneakers will reach $30 billion by 2030.
Before you drop $1,000 on a pair of Jordans, you’re probably wondering how to determine sneaker value and which kicks will give you the largest kickback.
Here are a few tips for making a smart sneaker investment.
Understand It’s an Unpredictable Market
While this probably isn’t what you wanted to hear, flipping sneakers is a risky game. Like any investment, there’s no sure-fire way to predict if sneaker value will rise or fall.
On a good day, some sneakers sell for 50 times their original price while others tank — fast.
Never spend more than you’re willing to lose. Some sneaker trends are predictable.
For example, a limited-edition sneaker will most likely gain value or at least hold its original value. Then there are those rare times when a sneaker worth $250 ends up being worth nearly $5,000 only a few years later.
This fluctuation and “guessing game” is what makes the sneaker trade so exciting.
The Resale Pool is Tiny
Keep in mind that the only way you’ll make money on a sneaker investment is if there’s someone willing to pay top dollar for what you have to offer.
Unfortunately, the pool of prospective buyers is tiny. You have to find a buyer that is desperate for the pair of sneakers you have.
That, or you can try to sell them at auction.
Either way, you may experience a financial windfall for your favorite pair of kicks but you’ll need to be patient.
It’s All About the Hype
At the end of the day, the biggest thing that impacts sneaker value is how badly people want them.
If Nike mass produces a single pair of sneakers, the supply is there, which causes the demand to go down.
On the other hand, if they only produce a few hundred, the demand instantly skyrockets. When people know a pair of sneakers is hard to get their hands on, it makes them all the more appealing.
The old adage, “You want what you can’t have,” applies to sneaker investments, too.
Limited supplies, celebrity endorsements, and prolonged-release dates all add to the hype surrounding certain sneakers, their worth, and resale value.
Choose Wisely When Making a Sneaker Investment
Some people want to see exactly where their money’s going. What if you could see your investment sitting on your closet shelf?
While a sneaker investment might’ve sounded foolish years ago, the growing popularity of rare and highly sought-after kicks has transformed the sneaker trade into a viable investment option.
The best part is, even if you can’t get top dollar for your shoes, you can still enjoy them! The same can’t be said for stocks and bonds.