Step Five to a Fortune:
Acquiring and Selling an Old Repair Manuel for Profit to Build a Capital Base
Someone gave me this old repair manuel. I can see liquidating it for a little money to add to my capital. I visualize someone with an old truck, grease on his hands and a problem, searching the net for just the solution to his problem. In my vision I can solve a frustrated mechanic's problem and my own capital problem at the same time. That would be win/win for both of us!
From $5.03 in reserve capital, I plan to risk up to $1.21 for a target return goal of $1.33 or greater.
Starting capital $5.03
Planned investment risk < 1.21
Investment return goal > 1.33
If I sell this repair manual I should be able to add to my capital base and move forward toward my larger goal by selling it on ebay.
Research: A seach of completed auctions on ebay shows that books like this sell from a dollar to twenty dollars. Some of them go without anyone to bid on them, but there are more sales than no bids. I believe it is worth the risk of an ebay listing fee.
I Listed the old Chiltons repair manuel on ebay with the expectations of bringing in at least a twenty cent profit. It was a seven day auction and cost $.55 to list.
Capital and Equipment
(What tools, equipment, or financial investment will I need to conduct this business experiment? What expenses do I expect to incur? )
I used equipment on hand. I used a digital video camera, and a computer. I used a pre-existing ebay account.
I sold the book for 5.50 the cost was .55 for listing plus 3.44 for actual book shipping. So we net 1. 51 in cash. Our new total is $9.90. I continue to bring in a little more than scheduled. That extra will be important when I have the inevitable loss.
With a capital surplus I'll easily be able to repeat a similiar investment at the same level without having to having to go back several steps should I lose money on some deal in the future.
Actual investment $3.99
Total expenses $.55 ebay fee and $3.44 for shipping =$3.99
Profit or loss this deal $1.51
Before Deductions I have: $6.54
What is my expected gain? I expect to gain at least $.12 and the experience to handle more deals at this and higher levels.
What do I want to learn? These repair manuals may be good for a few more deals until I rise to higher levels.
There is a clear interest in repair manuals. I will be on the look out for these repair books at garage sales in the future
I sold the book for 5.50. The cost was .55 for listing plus 3.44 for actual book shipping. So we net 1. 51 in cash so our new total is $9.90. I continue to bring in a little more than scheduled. That extra will be important when I have the inevitable loss. With a capital surplus I'll easily be able to repeat a similiar investment at the same level without having to go back several steps.
I started with $5.03 in capital. I was looking to risk $1.21. I had to risk a little more than that but when it was all over I had $6.54
As a good citizen we pay 35% of $1.51 or .53 for taxes = $.98
As a good person we contribute 10% or $.10 to a good cause leaving
$.89+$5.03= $5.92 capital for investment and surplus in case things go wrong.
Note: Notice that I pay tax first and contribute after taxes. That is reverse order from most people. Most people contribute first (tax free) then pay taxes off that amount. It nets more to churches and official tax deductible institutions, but you have to let the government tell you who you donate to. My way, I pay taxes on the amount I donate. I can give to whoever I want. I do not need to prove anything to anyone since I paid taxes on the money before I gave it. In the future, I may vary the way I handle donations depending on my mood. Unflexible people may be confused by the variance. A penny capitalist must learn to be flexible. Life does not happen in a straight line. Life is organic and moves in curves and circles with many twists and turns.