Author Topic: "Alternative Investments"  (Read 3823 times)

Sulame66

  • 5 O'Clock Shadow
  • *
  • Posts: 55
"Alternative Investments"
« on: May 25, 2017, 02:23:57 PM »
I am 18 weeks away from being debt-free, and looking towards the future in terms of how I want to invest more of my money

But, rather than just dump it all into an index fund, why not have fun with it and potentially see even bigger returns?

I'm talking things like:

- Buying 20 PS5s and flipping for a $500 profit each week 1
- Picking up some Star Wars Lego sets and holding for 5 years to sell for 4x the original value
- Getting a Beta Black Lotus and watch as it increases to $50k over the next several years
- Using Prosper.com to help somebody go through school and charge them 8% interest

etc.

Anybody have any experience, good or bad, doing things like this?

RWD

  • Magnum Stache
  • ******
  • Posts: 4182
  • Location: Mississippi
Re: "Alternative Investments"
« Reply #1 on: May 25, 2017, 03:02:22 PM »
- It may be difficult to buy 20 of the same console yourself at launch...
- I bought a Lego X-Wing (kit 7191, I believe) for my wife about 10 years ago for ~$300, new in box. Since we built it it is probably worth $200-300 today. Maybe $500-700 if we had left it in the box. Hard to see 4x the value in just five years. Granted we bought it after it had already gone up in value.
- Magic the Gathering card collecting sounds risky...
- I put $7000 into Prosper.com. It happily turned that into $5000 ($2k loss)...

The main problem with these is it's much easier to see in retrospect what would have been good buys.

ketchup

  • Magnum Stache
  • ******
  • Posts: 4248
  • Age: 29
Re: "Alternative Investments"
« Reply #2 on: May 25, 2017, 03:28:22 PM »
Have cash ready, and exploit an inefficiency in the market (of whatever) when you see one in one of your specific areas of knowledge.

In 2011, there was major flooding in Thailand that disrupted every major hard drive manufacturer.  Hard drive prices doubled overnight.  A drive that was $70 on Tuesday was $150 on Wednesday.  Some retailers were slow to react, my local Best Buy being one.  They had the drive for $80.  I bought four, kept two, flipped two on eBay for $140 for a quick hundred bucks profit.  I should have bought more (or sold those other two).  But I was 20.

2012, housing market was in the shitter.  I bought a house for $18k at the bottom of the market.  Now worth $25-30k after the market bounced back and my tenants paid it off for me.  Could have made out like a bandit if I had had the resources to buy bigger/multiple.

Know what's over/under valued.  Don't speculate.  Buy low, sell high.  Don't buy high and hope to sell even higher.

EDIT: Also make sure the potential upside is enough to warrant the wackiness.  Buying something for $5 and selling it for $10 probably isn't worth the hassle/risk of something stupid going wrong unless you're unloading a thousand of them.
« Last Edit: May 25, 2017, 03:37:52 PM by ketchup »

Scandium

  • Handlebar Stache
  • *****
  • Posts: 2317
  • Location: EastCoast
Re: "Alternative Investments"
« Reply #3 on: May 26, 2017, 07:00:45 AM »
I am 18 weeks away from being debt-free, and looking towards the future in terms of how I want to invest more of my money

But, rather than just dump it all into an index fund, why not have fun with it and potentially see even bigger returns?

Why not? Because you'll most likely loose money. And when you loose money you're not "having fun".. All but one of your options were speculation in items that have no inherent value. You're relying on the greater fool

Also; when I invest at least $2,000/month it would be very hard to do that with PS5s or magic cards

Car Jack

  • Handlebar Stache
  • *****
  • Posts: 1656
Re: "Alternative Investments"
« Reply #4 on: May 26, 2017, 08:19:15 AM »
Out of all of these ideas, I only like the Legos one but not the high cost "buy and wait, then profit" because in 10 years, they might be worthless.

My son is home from college and since he doesn't start his summer job till next week has been going through the old legos.  Everyone in the family bought both my kids lego sets for birthdays, Christmas, random in-law and grandparent gifts.  We now have about 10 cubic feet of them.  No, I mean literally.  He's been going through them specifically finding Star Wars figurines, finding all of the accessories and selling them.  An average figurine that he puts together brings about $20 with free shipping.  I know we have a few Boba Fetts hangins around (only kidding), but in any case, every single piece has the kit number listed on them, so it's just a matter of pulling out the magnifying glass and loading up the box with star wars pieces.  He's told me that a standard box of random pieces is worth $15-$20 where a box of star wars pieces are worth $150 to $180.  He's done sales before with nintendo games picked up at Goodwill and flea markets.  His best sale was to pick up a bucket of games for $5 and have a rare one in there that he sold for $105.  This is labor intensive, however.  With the mass quantity of pieces we have, it can take him hours to find a complete figurine with all the accessories.

Also beware of eBay scammers who sell bulk star wars figurines when in reality, they only have the body and the rest of the pieces are from random other non star wars pieces.  Wrong arms, head with hair, random legs (remember the kit number is on every piece) make them worthless crap.  Well....$1 a pound crap.

trollwithamustache

  • Pencil Stache
  • ****
  • Posts: 777
Re: "Alternative Investments"
« Reply #5 on: May 26, 2017, 08:27:14 AM »
1. buying and selling things sounds more like a business than an investment.

2. note the fickle nature of collectables.

RWD

  • Magnum Stache
  • ******
  • Posts: 4182
  • Location: Mississippi
Re: "Alternative Investments"
« Reply #6 on: May 26, 2017, 09:07:27 AM »
1. buying and selling things sounds more like a business than an investment.

2. note the fickle nature of collectables.

I was thinking that too. You can do what ketchup said and exploit inefficiencies in the market and if you do your research you'll probably make money. But that is a job, not a passive investment. You're getting paid for your time.

Yep, don't forget Beanie Babies.

YttriumNitrate

  • Handlebar Stache
  • *****
  • Posts: 1001
  • Location: Northwest Indiana
Re: "Alternative Investments"
« Reply #7 on: May 26, 2017, 09:15:55 AM »
In grad school I had a friend who bought Wiis and then resold them on Ebay. While the sales were pretty good, he ended up spending a lot of time on it figuring out when Wiis would arrive at Toys R' Us. Also, since they were limited to one per customer, he had to employ several people as buyers. All in all, it was a lot of work and eventually he moved on to more profitable ventures.

Frankies Girl

  • Magnum Stache
  • ******
  • Posts: 3222
  • Age: 82
  • Location: The laboratory
  • Ghouls Just Wanna Have Funds!
Re: "Alternative Investments"
« Reply #8 on: May 26, 2017, 09:22:01 AM »
Two things:

1. You associate "fun" with "money."
2. You want to make more work for yourself on the off chance it might be more profitable.

These are two concepts you might need to work on if you want to be successful long term.

Money making mostly should be boring. If you want entertainment, go outside with friends or play a game or something. Trying to interject excitement into it is usually where the crazy collectors, gambling addicts, or day-trading epic fails happen.

Why on earth would you want to expend time/energy/floorspace storing, cataloguing, and prepping for sale physical objects that may or may not retain even their purchase price when you have a tried and true method of making money over the long haul that requires none of these things from you?