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How I Would Turn $10,000 Into $100,000
Since my tweet got so much attention, let's talk about it.
The other day, this tweet came across my timeline.
So, I replied with this:
As you can see, it got a ton of interaction and I gained nearly 200 followers from it alone.
Clearly it contained something that people felt compelled by, so I want to spend some time and break it down even further.
This tweet lays out a playbook I have executed several times over.
Take some initial capital and buy in demand items
Take the return and buy more in demand items
Repeat and invest the unused profits into things that pay me
That’s it, it’s that simple.
Now, simple does not mean it is easy to do. If it was extremely easy, it wouldn’t be so lucrative.
I’m going to break down why I said this, why it works, and what it actually takes to accomplish something like making 1000% return on your money in less than a year.
Why Didn’t I Say “Buy Crypto”?
If you read some of the other responses to that tweet, you’ll find answers like “buy bitcoin and Tesla stock!”
Now, could that be a good investment that might turn into $100,000? Sure.
However, it purely relies on things entirely out of our control.
You are effectively rolling the dice and praying.
This is generally the answer you receive when the person hasn’t ever turned $10,000 into $100,000.
I don’t like putting all my money into things I can’t control and that only have a short term track record of success.
That’s why I gave the answer I gave.
It is something that you have complete control over and has/will always work.
You see, even if I felt really strong about an investment, that still wouldn’t have been better than my answer.
Money should always be deployed in something that actively multiplies it, way before you invest into something passive.
Put differently, you are much better off turning $500 into $50,000 with an e-commerce business than just putting that $500 into an index fund that will gain 9% yearly.
The way I operate, I allocate capital into active investments (like businesses) until my entire work day is full from operating them.
If I have leftover capital that I have no work for, only then do I invest it into something passive like collectibles.
As always, this is not investment advice and is for entertainment purposes only.
Why Sell Toys on Amazon?
There are a ton of things I could have picked, but I mentioned toys on Amazon.
2021 in particular will be legendary for all third party sellers, due to the supply chain issues all over the world.
The holiday demand won’t be fed with nearly as much supply as usual.
Given that America always procrastinates it’s holiday shopping, the prices toys will sell for this year will be astronomical.
Had this been any other year, I still would have recommended the same thing.
Amazon themselves never keeps most popular toys in stock, regardless.
This allows third party sellers who buy a few months early, to capitalize.
This right here is a chart from a chrome extension called “Keepa” for a specific LEGO set.
Keepa tracks Amazon price and rank data for specific products.
At different point, it has been available for $64 (yellow shaded area), but last holiday season spiked to $200 per set in December (orange triangles).
Knowing this, it is almost a guarantee that they at least sell for that price.
What would you do if you knew it was almost a guarantee that a stock was going to triple in a few months?
You would buy it.
Now do you understand?
Instead of hoping the asset you by will go up, we have a historical and predictable pattern that has occurred every year since the data was originally tracked.
This is why I will always put money into e-commerce, until I legitimately run out of time to deploy the rest of my capital.
Even then, it would probably be better to hire help over investing, but that’s a good problem to have.
I regularly do this every year and have a Discord group that is dedicated to sharing with members which items I’m buying to sell for a profit.
To join it, head here.
Why Did I Transition to Books?
The next part of the tweet discusses Books.
Right after the holiday season comes the new college semester in January.
Every time a new semester hits, demand for non-fiction books spikes, just like toys do during the holiday season.
You can flip books all year long, but that’s a slightly different story.
Check out my monthly Profit & Loss reports for more information on that.
Here is a Keepa chart for a specific finance book.
The green line represents sales rank or in effect, demand.
When it goes higher, the books sells more often.
There are periods where you can get books like this for pennies on the dollar, either on Amazon or eBay.
Periods like late December and late July.
Capping It Off
In the last part of the tweet, I mention letting compounding taking me from $80,000 to $100,000.
I actually don’t know if I would go that route, but I wanted the response to reflect something similar to the author of the original tweet.
Given that it’s a page about dividends, it only made sense.
The only time I would do that is like I mentioned before, if I didn’t have any more time to deploy leftover capital.
Otherwise, I’d likely continue this cycle indefinitely. I also wouldn’t stop at $100,000 and give up (neither would you).
For many years, I did not invest in anything outside of a max ROTH IRA contribution.
That is because I kept reinvesting all of my capital into building e-commerce businesses like mine on Amazon as well as standalone brands on Shopify.
One of them sold in early 2020 for well over six figures.
Looking back, I am definitely much further ahead than I would have been by investing a little here in there into ETFs.
It Isn’t “Easy”
Remember when I said doing something like this wasn’t necessarily easy?
Well it isn’t.
It takes time, effort, and patience. There are no guarantees, only probabilities.
With the toys and books, you are buying something when no one wants it and hoping people want it a month or two later.
Some things you buy won’t sell as well as you thought they would.
However, all things worth doing take effort and have risk involved.
To that, I would say going through life never taking any risks, is riskier. That’s just me though.
Oh yeah, to those who read this and think “selling on Amazon is saturated.”
Yeah, no shit it’s saturated. It’s saturated because it’s lucrative and it works.
Anyone arguing saturation is bad, has no idea what they’re talking about.
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