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How To Get Free Stuff / Trading Chains / Challenge

If you’ve been reading this blog, by now you should have some pretty good ideas about how to make a killing with collectibles.  But even with plenty of “wins”, buying collectibles can put a strain on your wallet.

 

I recently bought a dog-eared copy of Amazing Spider-Man #1 at a comicbook convention. 

 

 

 

 

This comicbook is considered a collector’s Holy Grail.  Yet, the reality is that I didn’t pay much for it.  I did shell out some money, yes, but more than half of my purchase was taken in trade.  I traded four very nice comicbooks, plus a handful of cash for my Spidey #1.  But I’m sure you can guess, I didn’t pay much for the comicbooks I traded.  In fact, much of the money that I spent on that comicbook came from sales of other comicbooks over the internet, and even those were purchased at a discount.  In total, I estimate that I probably actually pulled about ¼ of the purchase price from my household income.  The rest of the money came from labor…buying and selling collectibles of all types. 

 

So let’s follow this method of buying great collectibles to its conclusion and put it to the test.  Imagine this.  I have a collectible worth close to $100.  I sell it for $100.  Then with that money, I focus on buying another collectible worth 50% more than my purchase price.   I then turn around and sell that item worth $150 for $130 to facilitate a quick sale.  Now, what do I do with the money?  I pull my original investment of $100 off the top.  That leaves me with $30 profit.  Next, I take 1/3 of the profit ($10) and put it with the $100, so I now have $110 to spend.  So if I keep doing this, I will get to dabble in more and more expensive collectibles.  The other $20 is saved for a future purchase of a collectible I want to keep.  Here are the steps again laid out:

 

1. Sell a collectible (rare currency) for $100.  This is my “purchase money”
2. Use the “purchase money” to buy another collectible (a comic book) that is worth at least 50% more…so let’s say I buy something worth $150 for $100.
3. Now I sell the new collectible (the comicbook) at a discount to its value for $130.
4. I take back my “purchase money” ($100) and I add 1/3 of my profit to it ($10).  So now my new purchase money is $110.
5. I put the $20 aside for the next item that I want to buy and keep (after all, I am a collector of things!)
6. Now I keep going.  I take my purchase money of $110 and I get lucky and buy something worth $200. 
7. I sell the $200 item for $170.  My profit is $60.  So I take 1/3 of the profit ($20) and add it to my purchase money ($110), so now I have $130 of purchase money for the next flip.
8. And I set aside the remaining profit of $40 and add it to the previous $20 I already set aside…so now I have $60 to buy and hold the next item I really want.

 

Is this REALLY getting collectibles for free?  No, because I’m earning the money.  I just don’t think of it as work because I enjoy buying and selling collectibles.

 

The eight steps above are what I would call a “Trading Chain”.  I just made that up…nifty, huh?  The thing is, if you do a trading chain, it can get downright boring waiting for your item to sell.  But there is a solution to that problem….two trading chains!  A guy could run multiple trading chains and have some fun doing it.

 

So what about putting it to the test?

 

Here’s what we’ll do.  I have about ten comicbooks.  They are the Walking Dead comicbook series. 

 

 

 

 

 

The beautiful thing about them is that I bought them all for a cover price of $3 each after I knew they were worth at least double what I paid for them.  Since then the price has risen some more.  So I will donate those comics to this test.  I have a person who is indicating that they want to buy them now.  So as of today (3/19/13) they will be my seed money.  Whatever I sell them for will become my “purchase money”.

 

So check back with this thread on my progress.  I will document the steps below:

 

1. About a year ago, I bought ten comics for $30.
2. The ten comicbooks are now for sale and proceeds will be my “purchase money”.
3. ???  What’s next?  Stay tuned.