At the start of last year, I decided that I wanted money for investments.
I am a man of very modest means though.
I have a wife, a couple of mortgages, and a very unimpressive 9-5.
Where would I get money for investments?
Firstly, I looked around my house for items of value that I wasn’t using.
My camera, my midi-keyboard, my kindle.
I listed them all for sale, and turned them into money.
When all of my goods were gone though, I had nothing else to sell.
Not only that, but I actually suffered deep losses on all of that stuff.
I’d bought it at retail price and sold it into the second hand market like a total chump.
I needed more stuff to sell. But what?
If you know me in real life, you will know that I am a nerd.
A nerd disguised as a 90kg heavyweight punching machine. But anyway.
My nerdy ways kept me in the second hand market for Nintendo games.
I was always watching to see if I could get some Mario action on the cheap.
What I noticed though, was that Mario never got any cheaper.
Even when he was from a superseded generation, Mario held his value.
So did all of his buddies – Zelda, Pokemon, Donkey Kong, whoever.
None of them ever really got cheaper.
So I wrote my own valuation for these games, and applied it to bundles that included consoles.
In my model I bought consoles at a higher price, and games at a lower price.
The consoles earn only 10% profit, but are still easy enough to sell back.
The games earn 100% profit, and thanks to their strong brand, are also quick to sell.
The thing I noticed here is what Warren Buffet describes as a “moat”.
The strongest businesses have a moat around them, protecting them. That moat is their brand.
The cultural capital of the business. The goodwill and identity stored within the brand.
These are the things that the consumer uses to value a brand.
And Nintendo’s got it in absolute spades.
Other brands you might know that perform similarly: Apple, Rolex, Disney.
You don’t think of the brand. You think of how you feel about the brand.
I took these observations and applied them to my favourite niche – video games.
Then I picked my niche-within-a-niche: Nintendo.
Lastly, I wrote a profitable pricing model that allows me to win every time I play.
Every time my offer is accepted on a bunch of games or whatever, my profit is already priced in.
I am guaranteed profit.
So how did I turn $40 into $25000?
Time, hard work, and dedication. Oh, and using credit cards for liquidity without ever lapsing into interest.
Before the virus changed everything, I worked every day in a city office.
In my city, 120000 people wash in and out every day for work and entertainment.
This gave me access to a huge number of people right where I was every single day.
They would message me, ask to buy, and then I’d bring their goods in to trade at lunch break.
You should have seen me those mornings – running to the train station with my backpack on.
In each hand, a grocery bag filled with consoles and games.
Maybe my fellow commuters had a name for me. Giant Nerd or something.
I couldn’t care less – most days I made $100 in profit just from carrying some extra things into the city.
I did this all year, turning $25 purchases into $50 sales.
This is why I urge people here on twitter – don’t disrespect a $20 profit.
You’re a sucker if you look past the potential of a small profit that you can repeat.
I realise that $25000 is not a fortune, but I made a starting point out of nothing more than my own wits.
You can do the same, with some dedication.
For a full and clear roadmap of how to do what I do, get my textbook
In it, I share my full procedure for trading second hand goods.
My procedure mitigates risk entirely – follow my instructions and you will only make money.
You don’t need talent, you just need a system to follow. Read Garbitrage and learn my system today.