Buy Low, Sell High
Income Minus Expenses Equals Profit
This adage is as old as the hills, and it is still a working philosophy
today. If you are a retailer or dealer of some kind, (flea market,
etc.) you already know the importance of this concept. It is within
the many “shades of meaning” that we need to explore
and discover new territory.
Sell high, buy low. Buy high, sell higher. Lease option, sell higher.
Buy low, lease higher. You get the picture.
The most important part of this concept is to make sure that there
is a profit. How many Internet businesses were able to do that?
How many people who invested in these companies were able to understand
this principle? How can you apply this concept to make sure you
make a profit?
Many of us get this simple formula backwards. Take the typical
tag sale. We buy high (retail) and a few years later have a yard
sale (sell low). We spend a weekend putting up signs, lugging all
of this “treasure” from our basements and garage, and
sit on our lawn watching cars go by. Then we move all the unsold
stuff back or leave it by the side of the road for trash pick up.
Does this seem like the road to fortune for you?
Buy high, sell higher is a variation that works, although is does
carry higher risk. This is aptly named “the greater fool theory”
because you assume a greater fool (than you) will come along and
pay more for what you bought. Neat trick when you can do it: whether
rummage, houses, or stocks. Just make sure you have a seat when
the music stops, or you will be regarded as the fool.
You can’t get hurt too badly jumping out of a basement window.
You limit your risk when you invest little of your capital. Profits,
as they are realized, can be scaled up into your growing business.
Keep trying until you find the right formula.
Apply This Concept
Identify a service or product that makes sense for you to sell,
utilizing the concepts discussed in this site. Make your mistakes
on paper first. Try to calculate your expenses and expected income.
Make sure there is a sufficient profit to be gained. If not, move
on and keep looking.