A few years ago, I discovered a completely new way to make money in retirement...
It has nothing to do with stocks, options, or any other conventional financial strategy.
Instead, it's a way you can invest directly in a company's most successful product lines without having to buy a stake in an entire business.
As you'll see, this strategy is simple. It requires no trading experience... You just need to be prepared to do some extra homework. And you only need to "invest" a little capital in each transaction.
This strategy is fun, carries little risk, and is highly effective if done the right way. In fact, the percentage gains you can make using this strategy are often larger than traditional stock market returns. However, you can only allocate a small amount of money in each transaction – usually just a few hundred dollars at a time.
This strategy helps you safely generate extra income regardless of which direction the markets move. I call it "Thrift Arbitrage."
Arbitrage is the art of taking advantage of price anomalies to make a profit. To do this, you typically buy something in one market, immediately sell it in another market, and profit from the difference.
For example, let's say you buy a chair for $100 that someone else out there is willing to buy for $150. That means you can immediately sell the chair for a 50% return. When you execute deals like these, you are earning guaranteed profits. This is arbitrage.
In the stock market, people try to find arbitrage opportunities by looking for price discrepancies on stocks... say, trading in different markets... or around merger or acquisition deals.
However, you can take advantage of the same phenomenon without venturing into the stock market. The second-hand market, where people trade thousands of different products every single day, offers endless arbitrage opportunities.
I call it Thrift Arbitrage because you'll be taking advantage of price anomalies you can find in thrift stores, garage sales, and other second-hand markets. The key is, just like the stock market, you must know which products you can buy and sell for a profit.
And one of the best products for this kind of strategy is a brand that you probably know well...
One of My Top Thrift Arbitrage Brands: LEGO
Most of us are all familiar with LEGO's brightly colored, interlocking building blocks...
Many of us spent a good part of our childhood building with LEGO bricks... And we later bought the popular sets for our children and grandchildren.
The LEGO group was founded in Denmark in 1932 by Ole Kirk Kristiansen.
LEGO products are immensely popular. The company sells about seven sets every second in more than 130 countries. Valued at around $15 billion, LEGO has long vied with rival Mattel for the title of world's most valuable toy company. Last year, LEGO posted sales of $5.4 billion... just behind Mattel's sales of $5.5 billion.
Unfortunately, you can't buy LEGO stock. The company is private.
But there is a way for you to profit from LEGO's success...
LEGO regularly creates special sets, often based on successful movies or television shows. These sets aren't in production for more than a few years, limiting the number of available sets. So a large – and growing – number of collectors covet these LEGO sets.
Let's say you purchased LEGO's Millennium Falcon set back in 2007, which at the time sold for $500. (The Millennium Falcon is a spaceship featured in the hugely successful Star Wars franchise.) Right now, that particular Millennium Falcon set is selling for $3,000-$6,000 on eBay. Keep in mind, LEGO regularly produces different Star Wars sets (including the Millennium Falcon.) So not every set will yield the same results. You must know which were produced in limited numbers...
In June 2013, a fellow named Arthur M. wrote on BrickPicker.com (a LEGO price and investing guide) that he made a 400% return in less than one day on the Star Wars LEGO set. Arthur says that he averages a little more than 100% on all his LEGO investments. "It comes out to about a 30% annual return," he said.
So, can you make a living selling LEGO? Well, unless you can dedicate 40 hours per week, probably not.
However, buying and selling LEGO sets is a great way to generate extra income... if you do your research and stay informed on which limited edition sets are likely to rise in value.
But there is one crucial rule to trading LEGO sets you need to know. An opened LEGO box is rarely worth more than its original sales price... if that. Collectors typically demand that these sets be in mint condition, meaning the box is unopened and shows no sign of wear and tear.
My suggestion for generating income is to only focus on specific LEGO sets. The most coveted sets are based on popular movies and comic books. Recently, for example, a LEGO set sold on eBay for $3,200 because it featured a pair of figures from The Avengers movie. The LEGO City, Pirate, Castle, and Atlantis series are also popular. These sets are typically cheaper than sets modeled after movies like Star Wars and The Hobbit.
And most important, make sure you don't overpay...
Again, I call this Thrift Arbitrage for a reason.
Avoid shopping for LEGO sets at regular retail stores like Toys"R"Us. The markups are too high. Rather, I would suggest going to your nearby discount chain stores first... places like Ross, Marshalls, Five Below, Big Lots, T.J.Maxx, and even Target. And remember, a used LEGO set is worth very little in the second-hand market. Make sure that the box is in good condition and unopened.
Of course, these arbitrage opportunities don't crop up all the time. And they won't make you rich on their own.
But by keeping your eyes open to a few top brands (including LEGO) that are good for this kind of arbitrage, and dedicating a few hours out of your week, this strategy can help you safely generate extra income... no matter what is happening in the financial markets... And it's a fun hobby, too.
Retirement Millionaire subscribers can read my special report on Thrift Arbitrage... including a full seven of the best brands to focus on... right here: How to Make 1,000%-plus Gains Outside the Financial Market.
And if you're not yet a Retirement Millionaire subscriber, what are you waiting for? Learn how to join us right here, risk-free. (This does not go to a long video presentation.)
What We're Reading...
- The most valuable LEGO set of all time is a Star Wars fan favorite.
- Something different: Elvis memorabilia is plummeting in price.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
May 17, 2017