Harvesting Hidden Wealth: From Theory To Practice (Part 2)

One man's junk is another prize egg.Hidden wealth can be found everywhere. It comes into being whenever someone loses interest in an item and values it less than its true market worth. As we saw in Part 1 of this series, it is a remarkable concept used by smart traders to increase their wealth. (See “Harvesting Hidden Wealth Part 1”)

 

The Basic Theory

 

The basic theory to harvesting hidden wealth is very simple and straightforward.

 

First, locate an unwanted or forgotten item that you believe has value.  Second, bargain for, trade for, or salvage the item.  Third, use the item to trade up for an even better item, or recycle it or sell it for cash.

 

Successful entrepreneurs know that the real money is made in buying low and selling high. If you can do that, making a profit is almost automatic.

 

Selling some things is easy, but most things take time and effort to sell, so it is best to acquire items in high demand. When those can’t be found, it is a good policy to acquire things for little or nothing, so that you can still make a profit even if becomes necessary to sell at a bargain price.

 

Turning Theory To Cash

 

Before you get ready to bargain or trade, it’s a good to remember that the intangible parts of a transaction can turn a good deal into a great one (See Part 1). When approaching a potential trading partner, it always pays to:

 

  • Be polite
  • Take the time to establish rapport.
  • Listen to your trading partner’s stories
  • Show genuine interest in their lives.
  • Make a generous gesture that costs you little—for example, offer to do a favor.

 

By treating others with a little courtesy and respect, it is often possible to obtain far more than you expected. Perhaps more important, you may even walk away with a friend.

 

The following are specific suggestions for getting started harvesting hidden wealth. These are “nuts and bolts” ideas that the ambitious trader can use.

 

Convert an old watch to cash.

The old watch you keep in the drawer may be worth more than you think.

I Need Cash. Where Do I Locate Hidden Wealth?

 

1. First concentrate on finding things that are easiest to sell, such as jewelry, old coins, old watches, firearms, vehicles, records or CD’s, scrap metal, cans, bottles, or other recyclable items. Many dealers that sell things such as cars, jewelry, or firearms also buy from individuals. That makes such items sure-fire sources of hidden wealth. Even if you can’t find a retail buyer, you can always unload them.

 

2. Look around your home, your garage, and your neighborhood. Anything that has been sitting unused for a long time may contain hidden wealth. Ask friends and neighbors if they would like to get rid of any items. Sometimes they will offer them free. If they ask for money and are unrealistic, write an offer on a business card that lists your name and phone number, and leave it with them. Say that based on what your buyers are paying, this is all you can offer for now. They may change their minds after further thought.

 

Buy low at an estate sale and then turn around and sell.

Look for estate, garage and yard sales.

3. Attend garage sales and yard sales. Arrive early, and ask if there is anything else they might want to sell that is not displayed—for example, old watches, jewelry, or a DVD movie collection. Ignore price tags. A price tag reflects what a seller wants, not necessarily what they’ll take. Always start with a polite but very low offer, to see what happens. Say things such as, “I don’t have any place to put this, but I’d give you $2 for it.” Remember you can never prejudge their bottom line so it’s worth starting low.  If someone seems offended by your offer, the best strategy is to offer a card and walk away. They obviously aren’t willing to part with their hidden wealth yet, but that can always change.

 

Get free stuff from people who are moving and turn it into cold hard cash.

People moving or storing items often underestimate the capacity of their truck or storage pod.

4. Watch for moving trucks parked at homes or apartments. It’s fairly typical for people to underestimate the capacity of their rental truck. That means they could end up leaving valuable items in dumpsters if push comes to shove.  Remember moving is exhausting and exhaustion creates the ideal fuel to nurture hidden wealth. In a polite way, you could approach and ask if there is anything they need to get rid of.

 

5. Put up free classified ads in Craigslist.org or in local “shopper” newspapers. In your ad, say you are an “estate buyer”, and you purchase X, Y, or Z. Include phrases such as, “I make cash offers,” and “Call for a free appointment”. Remember, you don’t need to accept anything except what you feel is easy to resell. When you visit a seller, be sure to start with low offers. Look for “diamonds in the rough” that are easier to resell. If a seller is eager to get rid of their item, he may offer it to you free when you are ready to leave. Be prepared for surprises, but even if you go away empty-handed leave your card.

 

6. If earning money fast is important, make up a business card or flyer saying you are an estate buyer, or a buyer of surplus merchandise. Knock on doors, say you live in the neighborhood, and hand out your card.  It’s helpful to frame this right: Remember you are not the salesman, here, you are a legitimate buyer of merchandise. If you look trustworthy, most people who want to unload an item for money will be eager to show you what they have and are ready to dispose of. Offer only modest prices, and don’t buy anything you can’t trade for something else or turn around and resell. If no one is at home, leave a flyer on the door.

 

Start a buying surplus business.

Visit businesses, talk to the manager and hand them your card.

7. The same strategy can also be employed with businesses. Visit a downtown area having small shops, or an industrial park with warehouses. Speak to an owner or manager, and hand them your card. Say you are a cash buyer of surplus or unwanted merchandise, fixtures, or other items. You may be surprised at what is shown to you, or offered free, just to get it out of their way. The serious trader in surplus or clearance merchandise can make money selling on eBay and Craigslist, obtaining things for little or nothing and reselling them at low prices to dealers or bargain hunters. If you are offered something and aren’t sure you can sell it, take some photos. Say you need to do some investigation, and then give them a specific time you’ll call back with an answer. Now, look for another business that may want the items. By showing your photos and asking people what they would pay, you can begin to negotiate a sale—one that comes with little risk as you can turn the items over quickly.

 

8. Visit all recycling centers in your area that pay for items such as scrap iron, aluminum, old appliances, old batteries, cardboard, and so on. Find out exactly what they buy, and how much they pay. Then put a large sign on your truck saying “I haul away metal FREE – [phone number]”. You can get a magnetic sign if you don’t want to paint something directly on your truck. Also, go into local businesses and hand out flyers so people become aware of your service.

 

There's lots of hidden wealth in FSBO's.

A house in need of cosmetic repairs might hold significant hidden value.

9. With some experience under your belt, you can start to think bigger. A vacant lot or a neglected, empty home may contain enormous hidden wealth that you could harvest by finding a partner who has money to invest. You can be a valuable partner without any money if you can locate a seller who wants to get rid of his property for a true “fire sale” price, or if he is able to sell on contract for a low payment. You can find money partners by inquiring at real estate companies, checking classified ads, or placing ads of your own.  A well-orchestrated wealth harvesting real estate strategy is going to require a significant amount of preparation and research.  Real estate offers the potential of high reward, but it also comes with higher risk. You may want to read, “What Kind of Investing is Best?

 

10. Attend local auctions, such as for distressed merchandise, vehicles, or contents of storage units. If an auction has high turnout, it’s harder to get a great deal. Be sure to know in advance exactly what you are bidding on, and don’t bid on a whim. It’s important to have a good handle on your emotions at an auction.  It’s very easy to get caught up in all the excitement and bid on items you weren’t planning to.   If you start to feel anxious or excited, it’s a good sign you’re ready for a break.  Don’t bid on an item unless you have a good idea what the item is worth, know in advance that you can sell it, and have a preset limit on the price you’ll pay. Don’t forget: Certain items  such as cars, boats, houses, land, and so on, should always be researched and/or inspected in advance.

 

11. Instead of buying things for cash, don’t forget to try trading as Kyle MacDonald did? (See Part 1). Place ads in the barter section of Craigslist.org. Offer things people like, such as camping gear, tools, cameras, and so on. Be sure to say what items you are looking for.

 

How To Convert Acquired Items To Cash

 

Once you’ve acquired hidden wealth you’ll want to trade it for other items of even greater hidden wealth, or else convert it to cash.

 

1. One easy method for converting to cash is to run yard sales or garage sales on a regular basis. Advertise them on Craigslist.org and in local newspapers. Make up signs at least two feet tall. In giant black letters, paint “Huge garage sale” or similar wording, with an arrow pointing to your location. Place one on the nearest main street. Place more along the way, as needed. Such sales can generate hundreds of dollars per day if you have merchandise to sell, and if it is what people want. Be sure to follow all local ordinances for legal sales. For many great tips on garage sales, see our Great Savings Tip #83: Hold A Garage Sale.

 

Sell your articles at a flea market for cash.

Sell, trade or buy at a flea market.

2. As Kyle MacDonald showed us, the internet is a powerful tool for people who understand trading. One of the best ways to advertise is to tell a compelling story. To close the sale, offer a surprise, such as a discount or free bonus. You can sell items on eBay and other auction sites, or list them for sale free on Craigslist.org. Some local newspapers offer free classified ads for items less than a certain value.

 

3. If you have collected a number of desirable items, set up a table at a flea market or swap meet. Make sure you have a neat display, reasonable prices, and a convenient layout. If your presentation is attractive and non-threatening, customers are more willing to buy from you.

 

How far can you go harvesting hidden wealth? It’s up to you, but once you master these methods, you could end up with your own consignment shop or surplus store, or you could start an eBay sales company.

 

Realistic Strategies For Ebay

 

Turn your garage sale finds around and sell them on eBay.

This garage sale score at $10 could go for several times that on eBay. Do the research to find out.

The first hurdle in selling on eBay is having merchandise that people are searching for. No one will find your item without a search, and people only search for certain things. Study the online help to learn how to search “completed sales”. By trying various keywords, you can see what has sold, what items sell well, and how sellers list them.  Note: Even if you don’t plan to sell on eBay, this is a great method for researching the true market value of a particular item.

 

Another main hurdle people have in selling on eBay is finding enough merchandise at low enough cost. As a rule, wholesale companies won’t sell the hottest brand name merchandise to smaller, untested eBay sellers. Over time, as you develop a good rating on eBay selling the items you’ve bargained or traded for, you’ll have more leverage to negotiate with wholesalers. In the meantime, you can also harvest hidden wealth by finding an interesting product in a “niche” market made by a small manufacturer that has a high interest, such as unique tool for hunting or fishing. People buy products like these even though they aren’t necessarily brand name items.  Plus, the people who make them are usually hungrier for business. Most small manufacturers welcome all interest, so are a much better bet for those starting out.

 

Need Cash Immediately?

 

If you need to convert your hidden wealth to cash in a hurry there’s almost always someone ready to help, but expect to sacrifice part of your item’s hidden value in return for a quick sale. As we’ve learned, certain items are in greater demand so are easier to sell when you need to.  You can sell a watch to a local jeweler. You can sell an old firearm at a local gun dealer. You can offload a tool, an electronic gadget, or some jewelry at a pawn shop. It may also be possible to sell an item to a friend, or to borrow money from him using something you own as security.

 

Ready To Get Started?

 

It’s important to note that buying and selling items on a regular basis may require you turn a wealth harvesting “hobby” into an actual business.  You’ll need to check with state and local authorities to make sure you comply with all laws and ordinances.

 

Are you ready to harvest hidden wealth?  If it sounds hard, start small and take your time with it.  Concentrate on a few items and get to know their value by visiting local pawn shops, talking to friends, looking online or visiting estate and garage sales.  Never be afraid to start low when you buy and ask for a high price when you sell.  You can also start with something you already own and  don’t want anymore.

 

Expect the process to take practice, but once you master it you’ll be harvesting hidden wealth like an expert.

 

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