So now what?
I have grown tired of reselling used books. While I’m quite certain that I could easily use this method to get up to a pretty big stake, it’s a hassle to find, post, wrap, and ship them, and it’s getting boring, so it’s time to move to something new.
I have $6.04. In a sense that’s a pretty extraordinary sum – I have increased my starting stake by over 6000% in a very short period of time. That’s the power of trading value for value. But as you can see, I’m starting to run up against one of the inherent limits of any business – time. You see, if it takes me an hour to do all the work necessary to buy and resell a single used book, I am really only earning an hourly wage for doing so, and a pathetically small one at that.
The Magic of Leverage
So how do we get around this problem? The answer is leverage. We must find a way to work once, but be paid many times for it. There are many ways to achieve this. Having people work for you is one – you do the management job once, while being paid for the work of many. However, $6.04 is not going to get me very many employees.
Another method is to use debt – you borrow someone else’s money, and invest it in a way that generates more profits than the interest you pay. In a sense this is another way of profiting from the work of others, in the form of the money they have been paid. Using debt is not against the rules, but you must be able to pay the interest out of your stake, and again, I don’t see any banks lending against $6.04 any time soon.
The Ultimate in Leverage
So how can we create leverage with so small a stake? The answer lies in the Internet. The vast fortunes that it has created are due to the fact that it is the most efficient creator of leverage in the history of human civilization. How does this work?
The answer is that if you write something once, then publish it on the Internet, you can create and distribute what is for all intents and purposes an unlimited number of copies at little to no cost. If you provide advertising or promote a product on that page, then so long as some non-zero percentage of your visitors clicks or buys, each page view is worth a certain amount of income (on average). Now it may be (and probably will be) a very small amount of income, but the power of leverage is such that even the tiniest amount of income can make you very, very rich if it’s leveraged sufficiently. In other words, if you can grow your traffic sufficiently, a single Web page can generate practically unlimited income. Don’t believe me? Check out Million Dollar Homepage. The creator of that site found a way to work once, and be paid $1 a million individual times for his efforts.
Archimedes famously said that with a large enough lever, he could move the entire Earth. We need not be so ambitious. We’re only trying to double a $6 stake, here. And I have a plan for how to do it. More to come soon.