Step Thirty Nine to a Fortune:
Fourth Record Player to Find a New Home
Same Vision, New Unit!
I've got a closet stacked with phonographs, but there is growing space in my closet as my wallet grows thicker.
Step 39 is all about how we sold the fourth one.
Step 39 from the overview lists a risk less than $30.88 seeking $33.97 or more. Regardless of how we get there, we need a profit of $3.09.
From $334.33 in reserves , the plan is to invest an amount up to $30.88 expanding it to $33.97 or more.
This deal will mark the fourth of the 13 record players.
Starting capital $334.33
Planned investment risk $30.88
If you always do what you always did, you'll always get what you always got.
I have 10 remaining phonographs to move; I paid $3.50 each.
I listed the fourth record player on ebay.
Same as the first three, the fourth unit cost only $3.50 to secure.
It sold for $62.34 total.
$62.34 - $3.50 cost = $58.84 I had to expend another $21.54 I had usual expense of postage, ebay and pay pal fees. When the ink was dry I had $37.30 before deductions for tax and contributions.
Having done what I always did, I got another profit. This unit sold for less than the others. I'm not sure why. So the hypothesis, though valid, is not an absolute. With the many variables of life, things never happen exactly the same way twice.
gross net profit before deductions was $37.30.
Ending gross capital (before deductions) $371.63
What did I learn from this step? I learned that if you always do the same thing, you will most likely get similar results. It is impossible to know all the variables, but results are consistent enough to make the difference between a calculated risk and a gamble.
Identify the problem, formulate a solution, implement the solution, observe the results, and modify the solution when the results are not what we want.
I began with $334.33 in capital. I was looking to risk $30.88 in hopes of getting back $33.97. These units were purchased in bulk auction for $3.50 each plus the expense it takes to sell them. This one nets $37.30. After expenses before tax and charitable deductions I have $371.63
35% tax on $37.30 comes to $13.06. The amount we get to keep of that will be $24.24.
10% for contribution from $24.24 whittles that by $2.42. We are rewarded with $21.82.
Add $21.82 back into our bank and we now have $356.16. We continue to be adequately capitalized with cash on hand to meet emergency events. It also provides ample investment funds to handle whatever great opportunity presents itself in the range of our current experience. The more we reach beyond our planned experience range (ten percent more than previous experience) the more of a gamble and the less of a calculated risk the opportunity becomes.