(See the Welcome & Intro and Vision & Rules Pages if you’re new here.)
I really like the idea of borrowing stuff from people, trying to sell it, then paying the proceeds to the seller as I do. This won’t scale indefinitely, but definitely seems like a good strategy in the short term. Plus, now I have a whopping $17 (plus that can of Pringles) burning a hole in my pocket so I can deploy that cash too if necessary. Going to post on my employer’s Facebook employee page, asking if people want to donate items to me to try to resell. One skill I have is that I can wipe computers clean and install a new operating system, so can resurrect old and unwanted computers back to life.
I’ll also continue to keep an eye out for Craigslist opportunities like the one I found yesterday. Stay tuned!
Update (2017-07-16)
Up to now with my $2 + Pringles, it wasn’t theoretically possible to trade stocks or options because of the $4.95 and upwards fee for each trade. But with my $17, it’s now theoretically possible, albeit difficult with this tiny amount, especially given the trading fee for both buying and selling. That said, on a whim, I searched for brokers which require no minimum opening balance and found ally.com. (Disclosure – I’m not affiliated with them, am not receiving compensation by mentioning them, and don’t even know whether I like them yet.) I went through the account opening process and sent my bank account details, which are pending approval. Not sure whether I’m going to try to trade the paltry $17 or wait till I have more money. Stay tuned!
Update (2017-07-17)
Transferred $17 to the Ally Investment account.
Not sure whether I’m going to trade this money right away (once the deposit clears) or wait till I accumulate more before making a trade. $4.95 is a pretty hefty chunk of $17.
Update (2017-07-19)
Against my better judgment, I decided to do an options trade today. I tried doing this in the Ally account but the cash wasn’t available to trade, so I cheated and did this in another brokerage account I have, transferring $17 there and then buying 1 VXX September 15 $23 call for $0.11 ($11.04 total) plus the $4.95 commission, which brings the total cost to $15.99:
Click here to learn more about what options are and how to trade them.
I believe this contract is going to expire worthless because volatility keeps imploding and that buying this contract is tantamount to buying a lottery ticket or going outside and trying to get struck by lightning. I also think I should have waited to accumulate more money before squandering the $4.95 commission on a $11 trade. That said, I still have $1 left and with the “borrow first, pay later” strategy, I now know I can stay in this game forever. Plus volatility has been unnaturally low for weeks now so I can’t see it not spiking sometime in the next two months, although I doubt it will spike enough to affect this $23 contract substantially.
Update (2017-07-28)
Placed a Good-Til-Canceled limit order for $1.05, which, as you could see from the screenshots below, would put me at just shy of $100 if filled.
Again, I think this is a silly bet and a silly sell price, and I definitely might readjust into the $0.80 or $0.90 range if needed, but I’m suspecting we haven’t seen the end of a possible VIX spike given that the VIX has been at rock-bottom levels for months now. I’m willing to lose my entire position on this trade because I’ve validated that I can create money out of thin air via the item borrowing and selling arbitrage method.
As mentioned here, I’m not going to worry about the tax implications of any money I make until I’ve exceeded say the $1000 mark.
Update (2017-08-03)
Options position is slowly deteriorating, although it jumped from $0.08 to $0.09 today. September 15 is just a few weeks away, and I’m not going to sell an $9 position for a $4.99 commission, so I’m suspecting that this is going to expire worthless. You never know, though.
Update (2017-08-09)
Yesterday, my options position spiked 99% and this morning, another 6%. VXX is at almost $12 and climbing. If it weren’t for the commission I’d have to pay to sell this position, it would be solidly in the black:
This shows not only how volatile these options positions can be, but also how susceptible they can be to the fickle winds of politics and global events.
I’m tempted to sell because I might be able to get out of this trade unscathed, but for now, I’m going to let it ride because the market hasn’t seen the kind of 10-20% jump in the VIX that I’m expecting might happen anytime soon, maybe even today judging by the action in the first few minutes this morning. That said, I’ve lowered my limit sell price from $1.05 to $0.80 because September 15 is just around the corner.
I personally believe this VIX spike is a head fake and I’m going to lose all my money, but my years of trading experience are overriding my personal beliefs and doing the right thing for the trade.
Update (2017-08-10)
VIX has spiked this morning and I decided to liquidate my options position at $0.34. With a $4.95 trading commission, this brings my original $17 account to $30.01, which is a not-too-shabby 76.5% increase. The looming September 15 expiration date made me too uncomfortable to hold past this spike.
Update (2017-08-16)
Not really sure what to do now other than wait. I’m not inspired to do any trades and Craigslist is coming up dry for laptop bargains. I actually bought a laptop for $25 for the same person I bought the tablet from, but it was so nice I decided to keep it for myself so it’s out of play for this experiment. I was thinking of going to a garage sale some weekend but I think I’d need to get up early for that, so haven’t been inspired to do that either.
Update (2017-08-19)
Visited a couple of garage sales and one estate sale this weekend. One and a half hours of my life I can never get back. The garage sales were pretty depressing for the most part, but they at least gave me the clarity that I think this is a waste of time, not to be pursued any further. The one estate sale I went to was a bit more promising, but I arrived there later and might have missed out on the good stuff. One thing I felt is that with certain items, if I have more knowledge of what they were worth or how to resell them, I could make money, but I’m sticking with laptops and other electronics because that’s what I know.
eBay shipping make it nearly impossible to find a decent used laptop for $30, and most of the things on Craigslist for that price are junk. However, that one good deal that I got on that $25 laptop a couple of weeks ago (that I kept for myself) makes me think that I should stay patient and keep looking.
Update (2017-08-26)
I found the following ad on Craiglist:
I hesitated with getting this for the following reasons:
- I had already found a decent laptop with 4G of RAM on Craiglist for $25. This was $30 and a desktop with unknown specs.
- I have a tendency to develop a raging obsession with fixing desktops and didn’t want to go down that rabbithole.
One thing this system had going for it, however, was that she appeared to be offering the system with a monitor, keyboard, mouse, speakers and WiFi dongle for only $30 and she also was ignorant of the specs. I decided to take a look at it and after helping her put it together, I saw that it had 2G of RAM and an okay enough processor. She tried connecting to her WiFi and the dongle recognized nearby networks and listed their names, but they couldn’t remember the WiFi password. I decided against the purchase.
By the next day, the obsession started to kick in, however, so I texted her again to see if she would be willing to part with the system for $20, while being completely honest and transparent that I thought it was worth $30. I don’t want to resort to deceptive tactics for this experiment:
I brought the computer home, booted it up and got this:
My heart sank. I had just bought a paperweight and I could either try to fix it or else just walk away from this $20 loss. I texted the woman and she promised me that the computer hadn’t been moved since I last inspected it.
And so the obsession began. I spent hours trying to diagnose the issue and finally concluded that it was a failed primary hard drive. I told my colleagues at work and asked if they had any old desktops they wanted to get rid of and one of them kindly donated her “dinosaur” to me. I then spent hours and hours trying to figure out the right Linux distro, figure out why the WiFi didn’t work, see if I could remove the HD from the dead computer and install Linux on a USB drive. It was horrible. I lost track of the number of hours I spent on this and am definitely not proud of myself.
In the end, I used my colleague’s computer as well as the keyboard, mouse, monitor and speakers I had bought from the Craigslist ad, and cobbled together a complete system using Puppy Linux and Google Chrome. I got Netflix, Youtube, LibreOffice and that stupid WiFi dongle that didn’t work on the other machine to all work on the new machine.
On a whim, I put an ad on Craigslist targeting Spanish speakers because I know there are many lower-income Hispanic people in Santa Barbara:
I figure if I can sell this, I can reinvest the earnings in a hard drive, monitor and speakers for the dead computer. Or not. In any case, I’ll be happy to put this chapter behind me.
Update (2018-01-06)
Happy New Year!
Still haven’t sold that desktop, despite my best efforts. So far, my current inventory is:
- $10 cash
- the above desktop computer
- one can of Pringles
I’m starting to have second thoughts about being able to passively grow such small amounts of money. Selling things is necessarily going to involve work, and the work I put into that could be easily used to earn money in more efficient ways.
I’m open to feedback but am thinking that I might as well try to earn $100 of seed capital as quickly and randomly as possible, then worry about trying to double that amount from there.
Thoughts?
Update (2018-01-15)
OK – so the goal now is to earn $100 of seed capital through just normal work. The rationalization behind this is that trying to sell something also involves work, and so far, I’ve put in way more work trying to sell something for $1 than the work that would be required to make money from some of the sites I’ve seen online (none of which I’ve ever tried).
After some web searches, I found usertesting.com, which promises $10 for 10-20 minutes of work. 10 sessions like these = $100 for some three to four hours of work, if they deliver on their promise. (Disclaimer, I am not affiliated with and have no prior exposure to this site, nor have I communicated this experiment to them.)
I applied on their site, which forced me to download and install a screen recorder tool. I installed this on a Windows Virtual Machine within a Sandboxie sandbox. I restricted this sandbox to not have access to my Windows data directory. I then went through their application test and got a notification that they’d get back to me in a few days to tell me whether I was approved. We’ll see what happens.
Update (2018-02-05)
Two updates:
-
- So far, I haven’t been impressed with usertesting.com. For mobile device tests, they want you to install an untrusted
.apk file on your Android device and bypass the App store. And so far, I haven’t qualified for any of the desktop tests. Some of the screening questions for the desktop tests seem to want to know my current job title, which makes me wonder if the people creating those tests are using them as an excuse to get my contact information. I can’t substantiate this claim, but my initial vibe is one of not being impressed.
- Someone contacted me out of the blue yesterday and asked if the desktop computer is still available for $30. I said yes and they said they’d come and look at the computer this morning. We’ll see what happens.
Update (2018-02-06)
- Sold the desktop yesterday for $30. We’re at $40 (plus a can of Pringles) now! We’re up to a new power of 2! Finally!
