Inflationary Items for No-Work Profit

If you are lucky enough to be one of those Neopians, what you will want to do is keep on increasing your wealth to buy the next great Battledome weapon or stamp for your collection the next time you're active on Neopets again!

You could put them all in the bank and pull a maximum return of around 12.5%; however, there is an issue with that. You have to log in every day to collect interest. Maybe you're on vacation, or cannot access a computer. In that case, your return will be exactly zero neopoints. You could put them in the stock market, but it takes a lot of time to invest 15,000 NP a day and turn that into a large portfolio. Again, you're stuck having to log in all of the time.

I have a different suggestion for you to try. Instead, you should invest all of that pure into inflationary goods. What are inflationary goods? Well, you're about to find out, and by investing in them, you'll join the upper echelon of rich Neopians.

Inflationary Goods in Neopets

Inflationary goods are items that increase in value over time. Generally, these items are retired stamps, books, and avatar items.

The reason that inflationary goods increase in value over time is based on the three-legged stool of scarcity, utility, and consumption.

Scarcity

Due to the fact that they are retired (i.e. no more will be released, ever), these goods are scarce. There is only a finite number in Neopia, and due to players quitting or being frozen, or the item being used, that number will decrease over time. However, simply being scarce does not necessarily mean that the item will be worth a lot.

The Advent Calendar is a good place to look for our case-study on inflationary goods. This is due to the fact that there is inherent scarcity in all of these goods, due to the fact that after the day they are released, no more will ever be put into circulation.

Consider the Advent Calendar in Y4 (2004). Kreludan Christmas Carols is a book that was released, and at the time of writing (1/8/14) it is worth roughly 40,000 NP. The same year the Cranberry Jelly was released in 2004, and it is selling for 4,000 NP. Finally, the Coconut Shy Quiggle Plushie was released, and it is worth 600 NP at the time of writing. The reason for this price difference is the concept of utility and consumption.

Utility

Goods with utility are almost always worth more that goods that do not have utility. Utility, by definition, means that the items can be used. Ceteris paribus, all things being equal, an item that can be used will be worth more than one that cannot be used.

"Use" has different meanings with different classes of items. For clothing items, "use" means that they are wearables. Imagine two r90 hats, one of which is wearable. We can predict that it will have 2-4 times higher value than the comparable item which is not wearable.

Similarly, books, stamps, and foods are exclusively usable items. They can be read to a pet, put in an album, or fed. Additionally, these three categories consist of consumption items. After they are used, they disappear from Neopia entirely. Stamps and books generally have among the highest utility out of all the items in Neopia due to the fact that they can be used to compete for trophies and prestige.

Consumption

Consumption goods, such as books, stamps, and foods are the third leg of the inflationary good stool.

Goods that can be consumed leave the Neopian economy far more quickly than non-consumable goods. Consider, for example, our Advent Calendar example.

Assume that 100,000 of each item, Kreludan Christmas Carols, Cranberry Jelly, and the Coconut Shy Quiggle Plushie were released.

Thousands or tens of thousands of Neopians would have read Kreludan Christmas Carols to their pets, either in pursuit of intelligence or the Neopian Book Award. We can reasonably guess that after a year, only 50,000 copies are left in Neopia.

Many Neopians may have fed their pets Cranberry Jelly, but beyond existing simply as a food, a majority of these will still be in Neopia. We'll say approximately 90,000.

The Coconut Shy Quiggle Plushie does nothing but play as a toy. The only way that it can leave the economy is by accounts being frozen, random events stealing it, or accidentally feeding it to a Skeith. After a year, there are probably 99,000 or more of the original 100,000 left.

We see now that the consumption principle can increase the scarcity of the goods. Over time, goods with greater utility will be consumed more often, driving an increase in scarcity. And, of course, if you haven't made the connection yet, a greater price. The combination of scarcity, utility, and consumption is what makes one item given out by the Advent Calendar worth 50-100 times more than another.

Now, how can the inflationary principle be used to earn money? Well, one of the key ingredients is time. We could have purchased several Kreludan Christmas Carols for 1,000 NP the day it came out. However, we would have to wait nine years to make a 4000% profit. In future articles, we will look at some of the trends that accompany events like the Advent Calendar to look at ways to capitalize and make investments that can pay off in the short term.

For now, though, if you've got a bunch of pure neopoints sitting around, you can make it work for you by purchasing inflationary goods like retired stamps and books. That way, the next time that you log into neopets, perhaps a year or two from now, you'll have amassed a ton of value in these items.