Who cares about reunions? Everyone lies at those things anyway. There's always that one guy or gal who made it big. There are a dozen or so who are in the eyes of the world successful, but truly still trapped in the rat race. The rest that actually show up look like they never left home, and most of them probably didn't.
You catch that guy or gal who made it big hiding out in a hallway. Everyone has been asking him or her money all night long. They all want get rich quick secrets.
But I approach and ask a simple question. And believe me, if you want to get anywhere in life, you just have to ask the right questions.
My question is: what is the best way to spend a dollar?
The real successful ones will all answer a little bit differently, but the sentiment is usually the same. Basically, spend it on something that makes you money.
That sounds pretty smart, doesn't it? Most people don't think like that, though. People need to think of things that they buy, besides the obvious necessities like food, clothing. And the like, as assets. Yet we keep throwing our money ät luxuries. Yeah rich people buy luxuries. But it's with money that they made for free.
But wait a minute. How do you make money for free? Well, it's not free, exactly. It does take a lot of time and effort. But it's usually just about putting your dollars in the right place.
Seriously, savings accounts don't cut it. The high yield ones only offer about 1 percent. The stock market is usually too risky for the layman to dive into. Real estate is great, but it's not for everyone. The truth is there is hidden money everywhere. You just have to learn to see it.
I haven't found my hidden cash cow just yet. But I know it's there. It goes beyond just wishful thinking. And yeah it's not easy. Rarely can you do it all yourself. But I have had this idea for a long time. How far can a dollar go?
A candy bar? No, that's not the answer.
High yield savings aren't the answer either. Sure there are plenty you can start with a dollar, but one percent interest isn't going to beat inflation.
The stock market, if you play it safe, can make you between 3 to 5 percent. If you take some risks and are smart about it, you can make 7 to 10 percent. If you're super into the wall street world, you can retire in your 40s.
Real estate is great if you can shore up the capital and find the deals. People that know what they are doing can get 100 to 300 percent returns a year. If you know people, it can be good business.
There are other riskier investments, too. High yield bonds and such.
But the finance I've been most fascinated by is with trading cards. In particular, I’ve focused on Magic the Gathering cards. It's funny because while most of the playing population hates Magic Finance, understanding it actually saves people money. It's because Magic cards have created their own micro-economy.
That's what I'm most fascinated with, the idea of micro-economies. Every industry and hobby has them. That's what I've learned. It's figuring out how to make your entry and learn from others successes and failures.
“You Can't Retire on Trading Magic Cards”
No, but you learn a lot about how people value certain things. How people misevaluate things is where the money is. Magic card finance is just like the stock market. But the returns can be incredible. I've seen people make 600 to 1000 percent return on investment on their Magic card collections.
There is finance for every hobby ever. Someone profits from just about any product that has some sort of widespread appeal. Understanding supply and demand is only a small part of knowing how to win. It's all about seeing the patterns and the trends and the causes behind them.
I haven't made it big yet. I've made some mistakes. But I always manage to turn a profit every time I buy back into magic cards. Some of it is luck, sure. But there is a such thing as making your own luck.
My strategy: buying bulk.
“Bulk is Beautiful”
There is a lot of money in bulk. It’s where most retail businesses make most of their profits. The rest is just good merchandising and marketing.
That's the secret of big retail businesses, buy in bulk, then charge as much for the individual product as the market will bear. That's how big trading card retailers make it. Service businesses are a bit different, right? They sell packages. Yeah, that's nice income. But the bread and butter of these businesses are offering little conveniences. These can include discount consultations or cheap social media updates written on demand. Yup, even then, money is made in volume. That's how you turn a little money into a lot. You do the legwork, you can get anything cheap and sell it at a sweet profit.
But hey, big businesses don't make as much as you think. Most capital comes from investors. That's right. People with money that want to make more money. A lot of them are private, too, not listed on any stock market. It also includes bank loans. Those are investments for the banks, you know.
How do banks make money? Personal accounts. Volume. Bulk.
It’s all about the bulk, baby.
For me, this is what Magic cards are worth, based on relative rarity
$0.003 each common
$0.005 each uncommon
$0.10 each rare
$0.25 each mythic rare
These are the median bulk rates most major Magic card retailers pay for Magic cards. There are bulk rates for other popular games like Yu-Gi-Oh and Pokemon. Yu-Gi-Oh is usually much lower,for a variety of reasons. Pokemon can be higher, but the margins are lower than Magic in both cases.
Magic is just a really well made game. Almost every card in the game will have a buyer.
(Magic Online is a whole different animal, and I am no expert at it yet. But I haven't lost money overall there, either. I'll get to that another time.)
What makes Magic cards worth money is how badly people want them. Once you understand the floor, you basically can't lose money on Magic cards, unless you're doing it on purpose. It's all about opportunity cost. You want to play with specific cards, then you pay the price. It's the same as with any good, it's just that if you manage your collection correctly you can often break even with your hobby.
Magic cards are a liquid asset. You can always find someone to buy them. That's what makes it such a great hobby.
Then you just have to know what cards can be good. Some are always going to be crap. But any that have potential, if you get them at bulk, you keep them.
So yeah, bulk is good. Stores make a lot off of it.
So when it comes to any investments, I know where to spend my dollar, bulk cards. At least, until I find something better.