Step Twenty to a Fortune:
From Backpacks to Greenbacks
Not far from the old molding in my garage was my son's old backpact calling out, "Opportunity!"
The main cash flow souce for a penny capitalist will be buying (acquiring) and selling, but old things in storage were bought long ago. They should be sold as soon as possible. Unused, things like this backpack are clutter. Clutter blocks our view of new opportunities, so we should clear it out. Throw it away if it is useless; sell it if someone wants it. Remember the ideal penny capitalist goal is that we learn to buy things cheaper than we can sell them for.
We can't always do this, but when we do, we eliminate the need for storing anything. Also, when we can buy cheaper than we can sell, the more we spend the richer we get!
I'll sell the backpack now, and use the cash to build my base. If I need a backpack later, I'll buy one cheaper than I sell this one, use it then sell it.
The next step (number 20) in the stairway to a fortune overview schedules an investment of up to $5.05 for a sale of $5.56 or more. A search on ebay reveals an active market for backpacks.
From $112.62 in reserve capital, I intend to risk up to $5.05 in hopes of expanding that to $5.56 or greater. That should yield a gross profit of $0.51 or more.
Starting capital $112.62
Planned investment risk $5.05
Investment receipt goal $5.56 or better
If I clear clutter for cash, I make money and clear space for greater opportunity.
I listed the backpack and sold it.
There were some black metal parts that I was able to paint with left over paint from the black frame deal (step 19). I used it to cover some scratches.
I have lost the original photo, so the one at the top of this page is not exactly the same backpack as I sold. It is for illustration purposes only. I've also lost the details of the expenses due to a computer failure, but the the money left over after the expenses and listing fee was $20.80.
We increased out gross capital by $20.80
Gross Profit or loss this deal
What benefits do I gain from clearing clutter? A The clear space left by cashing in the old items is nice. Imagine how nice it would be if all the clutter was turned into money.
What insights into future deals did I receive? I have a lot of junk that needs to be cleared. There could be a small fortune in this junk.
I started with $112.62 in capital. I was looking to risk $5.05 in hopes of growing it to $5.56 After the sale before tax and charitable deductions I had $20.80 to add to my purse.
35% tax on profit should not apply since I paid more for the backpack when it was new than I received when i sold it. That still leaves $20.80.
Trying to help the world that provides such a great market we pay 10% or $2.08 for a worthy cause leaving $18.72.
Now we have $131.34 for ongoing investment and safety surplus to cover losing deals.