Step Thirty Four to a Fortune:
Back to Backpacks
The backpack I sold in deal twenty worked out well. If I come across a good deal on backpacks I should try to make a little more money on these things.
I stumbled upon an auction where several backpacks were offered. Among them was a really nice black leather briefcase which I needed to carry my laptop to claims adjuster certification classes I had to attend on a regular basis.
The ideal penny capitalist will buy things he needs for less than he can sell them for. In this way, the more we spend, the richer we get.
The next step (number 20) in the stairway overview suggests an investment of up to $19.17 expecting $21.09 or more. I would like to invest in backpacks and acquire a leather satchel for my laptop at the same time. If I buy well, I should make a cash profit and acquire a satchel without expense at the same time.
From $264.62 in available capital, I intend to risk up to $19.17 in hopes of growing that to $21.09 or greater. This would be a gross profit of $1.92 or more. In addition to the cash profit, I'd like to acquire the leather satchel as boot to the deal.
Starting capital $264.62
Planned investment risk $19.17
Investment receipt goal $21.09 or better
If I buy for less than I can sell, the more I spend, the richer I get.
I bid $25 for 5 bags at auction. I won, but there were really only four bags. When I reported the oversight to the auction house, the refunded 10% so the cost was reduced to $22.50. One of the bags I wanted to keep for myself. This left three bags. For purposes of breaking it into steps, I'll allocate $4.50 cost to the Jansport bag, $9 to the Oggio bag, and $9 to the Tumi Ariba carry on bag.
This step will account for the Jansport bag.
I listed the bag ; it sold for $5.50 plus $9.45 for shipping and handling. All of my costs for acquistion, ebay, and shipping came to $8.45.
Total recieved: $14.95
gross profit = $1.50
What other benefits do I gain from this deal? I get a leather satchel for my laptop that would cost up to $100 if I had to purchase it retail.
What insights into future deals did I receive? I didn't make a lot of money; I didn't even make my scheduled profit, but I did get the really nice leather satchel for my laptop.
Did spending this $22.50 really make me richer than I was before the purchase? I still have two more bags to sell, but if the next two deals go as well as this one, I'll make a few dollars more than the $25 I started with and I'll have a super nice bag for my laptop. Yes, if I can buy for less than I can sell, the more I spend the richer I get!
I started with $264.62 in capital. I was looking to risk $19.17 looking for $21.09 or more. After the sale before tax and charitable deductions I had $1.50 to add to my treasury.
35% tax would reduce this to $.97
Giving back to the system that enriched me, 10% or $.09 goes to someone who could use the help. Now I have $.88 in keepable gains.
We can't always depend on small gains like this to get us to wealth, but no one ever went broke making a small profit. We'll do better!
We have $265.60 to invest in the next idea!