Two weekends ago, the retro release of the Nike Air Max 90′s Infrared colorway was the only thing on my mind on that Saturday morning.

It is a timeless style that any sneakerhead could not afford to miss – that’s right, I still consider myself somewhat of a “sneakerhead” even though I’m not that punk in high school anymore.

Luckily, the local Footaction and Modell’s still had my size in stock and I picked up a few pairs.

This may seem like the obsessive jibberjabber of a compulsive spender deeply immersed in a subculture suffering from a sneaker fetish. But, there is nothing weird about it when it presents a business/investment opportunity.

Economics of “The Shoe Game”
The top echelon of the this subculture includes classic Air Jordans and limited edition Nike sneakers. Like all commodities in the world, they’re part of an economy that is governed by the laws of supply and demand. More and more young kids are being introduced to “the shoe game” and I see everyone trying to be part of the cliques rocking $300 pairs of sneakers. Demand continues to grow and I don’t see any resistance.

Supply decreases as everyone starts to wear their new sneakers. Demand increases as more people adopt this fashionable subculture – and from my personal experience, it becomes an obsession and addiction. The natural effect is a price increase as quantities of the limited sneakers begin to dwindle while the amount of buyers continue to grow.

Any pair of unworn Air Jordan sneakers from the 1990s can easily be worth thousands of dollars (since there aren’t many of them lying around).

Any investor can identify this recipe for a profitable market.

Why Kicks Are More Profitable Than Stocks
My favorite unique property of a popular sneakers is that they have the ability to retain or increase in value despite having been worn and used. Most people feel that it is disgusting to wear shoes already worn by someone else. To the sneakerheads, worn shoes is not a significant issue. On the other hand, condition and appearance is most important. After all, these sneakers are worn to make fashion statements.

If the sneakers are worn but kept in good condition, it is possible to still make a profit after a year or two.

The main reason popular Nike sneakers remain popular is because there is an ever-growing consumer base. If you have the right sneakers, there will always be buyers. The subculture has a loyal following that is passed on to future generations and spreads like wildfire. It is contagious among family members and friends. Soon, everyone is competing with each other to see who has the rarest pair of sneakers among the group.

Although I’m an advocate of frugality, I can’t help but admit that I’m glad that the subculture breeds an addiction that keeps people spending even though they’ll probably never wear the 50 pairs of sneakers in each of their closets. It’s a trait supporting my confidence in sneakers as a great investment opportunity.

Each pair of Air Max 90′s that I bought two weeks ago cost me $94.99. Assuming Nike doesn’t release this classic colorway again in the next two years (and history has told us that it most likely won’t), I can guarantee each pair will sell for at least $130. That is equivalent of a 16.98% annualized return – topping the S&P 500 average return of roughly 9 to 10 percent. But, I wouldn’t be surprised to find myself getting $150 for each (25.66% annualized return).

Disclosure: I do not own any shares of Nike (NKE).

(Photo credit: AchimH)

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School is about to start and it seems like the time to start selling some stuff help ease the costs of back to school supplies. Let’s take a look at some of my ventures and expected incomes, if everything sells.

As you may know from an earlier post of how I make money through my hobby, I have quite a stash of popular sneakers that can bring in a good amount of cash. From the photo, you can see shoes that I’ve put up for sale on popular sneaker forums. I’ll put them on eBay if they don’t sell there. And yes, people will even buy shoes that have been worn because it’s all about the style.

Expected income: around $900

Next comes the textbooks. Since everyone is hunting down the best bargains for textbooks, it seems to be a great time to sell them also. I’ve made a huge list of the books and relevant information. It took a while to estimate the prices I should charge. I went straight ahead and made a flyer for the books. Once I get back to school, I’ll print a bunch and stick’em to all the walls.

Other places where I listed were Amazon.com, Facebook’s Marketplace, and various other textbooks sites. Never sell back to bookstores because they will rip you off.

Expected income: at least $200

Wow. Putting up so many things for sale is quite tiresome and time-consuming but this will allow me to put more into my savings or Roth IRA.

Textbook photo by Open Up My Head

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Everyone has their own hobbies and interests where they will begin to gain knowledge and expertise in whatever that activity may be. Some love playing sports, some collect stamps, and some prefer to grow their own plants and vegetables. Often, hobbies and interests are areas where many people’s careers revolve around. Sports players go pro, video gamers become programmers, and collectors open their own stores. Hobbies can be an opportunity to make money.

My Hobby
I was an avid collector of exclusive sneakers, namely Nike Air Jordan. Exclusive sneakers have created a culture among many of the youths that are out to make a fashion statement. I could look at someone’s shoes and tell the price range of the shoes.

What is unique about these sneakers is the amazingly large demand for a rapidly growing consumer base, which makes these sneakers appreciate in value since they are released in certain styles and colors for limited times in limited amounts. People get on lines in front of sneakers stores many hours before release time for a chance to own a pair of these exclusive shoes. A brand new pair of Nike Air Jordan III White/Cement (as shown in the picture) retailed for $100 in 2003 would now sell for more than $350. THAT IS A 250% INCREASE IN VALUE!! There is no mutual fund out there that can match that type of growth.

How I Make Money From My Hobby
I’ve spent hundreds of dollars on these sneakers and I’ve stopped buying them as I grow older. But luckily, many of the pairs that I still have are brand new. Since I’m home from school, I have put them up for sale and business is going great. One pair that I bought last year for about $145 was sold for $170. Sure, it may seem like a bad idea to tie up cash on a pair of sneakers for a whole year but I’ve come to see it as buying a share of stock with a 17% increase in stock price. If I had bought many pairs (as in buying many shares), it seems to be a much better option compared to the many low cost index funds available, which lately carries no stable guarantee.

Photo credit: Tony M….. and mr.l

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