WEBVTT - Having an Arbitrage Mindset Changes Everything #392 0:00:00.080 --> 0:00:02.800 Welcome to How the Money. I'm Joel and I am Matt, 0:00:02.960 --> 0:00:07.160 and today we're discussing how having an arbitrage mindset changes everything. 0:00:26.040 --> 0:00:29.200 So I cannot help but to think of sabotage. Every 0:00:29.240 --> 0:00:31.880 time we hear the word arbitrage, it makes me think 0:00:31.880 --> 0:00:35.000 of the old Beastie Boys song sabotage. I'm sure listening 0:00:35.000 --> 0:00:37.600 to Boys I did. I had the Airplane CD with 0:00:37.640 --> 0:00:40.280 airplane on the front. Okay, so it made me think 0:00:40.320 --> 0:00:42.680 of So we were just talking about before we hit record. 0:00:42.680 --> 0:00:45.839 You're talking about visiting Dollywood. He went to Dollywood with 0:00:45.880 --> 0:00:49.400 some family up in Tennessee, and uh, we're talking about 0:00:49.440 --> 0:00:51.720 roller coasters, and this makes me think of specifically I 0:00:51.720 --> 0:00:54.320 think it was called the rock and Roller or something 0:00:54.360 --> 0:00:56.960 like that. There's a roller coaster or whatever, Orlando, you 0:00:56.960 --> 0:00:58.240 know what I'm talking about. Yeah, I've been on the 0:00:58.400 --> 0:01:01.680 Aerosmith roller Coast. It's like you get to choose your 0:01:01.760 --> 0:01:04.440 music when you're on there, at least at least when 0:01:04.480 --> 0:01:06.000 when we went, you could you have the option. I 0:01:06.040 --> 0:01:08.759 don't remember that. Me and my buddy Steve, Uh, him 0:01:08.760 --> 0:01:10.160 and I were sitting next to each other. We're like, Hey, 0:01:10.200 --> 0:01:13.720 what do you want to rock? And roll to and 0:01:14.000 --> 0:01:16.600 we chose sabotage. But that's not what we're talking about 0:01:16.600 --> 0:01:19.960 this episode. We're talking about arbitrage, what it is and 0:01:20.040 --> 0:01:22.360 how you can use this concept to get ahead with 0:01:22.400 --> 0:01:25.160 your money. We're gonna talk all about arbitrage today. Man, 0:01:25.200 --> 0:01:28.000 I'm really excited for this episode. Uh. First, actually, I 0:01:28.040 --> 0:01:30.480 was talking to my neighbor the other day and it 0:01:30.520 --> 0:01:33.160 turns out man that he has had some really great 0:01:33.200 --> 0:01:37.479 success forging for mushrooms. So first of all, I want 0:01:37.480 --> 0:01:39.679 to get your thoughts on forging for mushrooms. Do you 0:01:39.720 --> 0:01:44.280 feel Uh you're looking at me with like a very 0:01:44.319 --> 0:01:47.120 skeptical eye, and I think I know what your answer is. 0:01:47.120 --> 0:01:49.120 I was gonna ask you, like, would you forge for mushrooms? 0:01:49.160 --> 0:01:51.240 Is that something that you would do? No, I don't 0:01:51.240 --> 0:01:53.320 like mushrooms all that much. I'm not not a big 0:01:53.360 --> 0:01:57.280 mushroom guy. Mushrooms are so good rated well, you know, 0:01:57.320 --> 0:01:59.800 to each stone. But I think if it was something 0:01:59.840 --> 0:02:01.720 out was into and there was like a place nearby 0:02:01.760 --> 0:02:03.640 and it was like a craft beer outdoor excursion, think 0:02:03.680 --> 0:02:06.080 if I could forage for yes, I would. I would 0:02:06.120 --> 0:02:09.320 do that. Uh, well, he would eventually like some waterfall 0:02:09.440 --> 0:02:11.959 a distance off and could flowed with craft beer. Oh yeah, 0:02:12.720 --> 0:02:14.560 three miles through the woods to get there. I would, 0:02:14.560 --> 0:02:16.080 I would make that track. If they like jumped out 0:02:16.120 --> 0:02:17.320 of the water, you had to catch them with your 0:02:17.320 --> 0:02:19.440 hand like wild salmon. Oh I got a big one. 0:02:19.480 --> 0:02:22.440 I got a seven fifty exactly. That would be quite 0:02:22.480 --> 0:02:24.480 the magical world to live in. But yeah, I was 0:02:24.520 --> 0:02:26.840 talking to my neighbor and he's he's a part of 0:02:26.840 --> 0:02:30.320 this forging group as well. But dude, he has found 0:02:30.360 --> 0:02:33.680 a good number of morales plus all these other mushrooms 0:02:33.680 --> 0:02:35.880 that I've never heard of. But of course you need 0:02:35.919 --> 0:02:38.040 to make sure that you're you're being informed when it 0:02:38.080 --> 0:02:41.320 comes to forging, I would accidentally pick the wrong ones. 0:02:41.440 --> 0:02:44.959 And yeah, exactly, and so yeah, so when it comes 0:02:44.960 --> 0:02:48.040 to the frugal ord cheap debate, it's frugal if you 0:02:48.040 --> 0:02:49.720 know what you're doing, uh, and you know, it can 0:02:49.720 --> 0:02:51.720 be a lot of fun because I love getting outdoors, 0:02:51.760 --> 0:02:53.480 hiking through the woods, and man, if you happen to 0:02:53.480 --> 0:02:56.080 also be looking for some delicious morals, you know, some 0:02:56.120 --> 0:02:58.239 great mushrooms while you're at it, I think that could 0:02:58.240 --> 0:03:00.920 be a ton of fun. But yeah, you could go 0:03:00.960 --> 0:03:03.240 from being frugal to cheap if you pay the ultimate 0:03:03.280 --> 0:03:06.400 cost with your life. Today, we're like, I don't even 0:03:06.440 --> 0:03:09.960 want to get sick from eating something I shouldn't have eaten, 0:03:10.240 --> 0:03:12.440 especially when it comes to something like mushrooms. And so 0:03:13.080 --> 0:03:15.680 it makes me think too. You've heard of the restaurant Noma, right, 0:03:15.680 --> 0:03:18.480 and yeah, I think it's a Danish restaurant and it 0:03:18.560 --> 0:03:20.840 wasn't It hasn't been like named the best restaurant in 0:03:20.880 --> 0:03:22.799 the world for a bunch of years. And the guy 0:03:22.800 --> 0:03:26.799 who started that restaurant essentially, uh, foraging is the major 0:03:26.880 --> 0:03:28.880 concept behind the food. There. They go and they get 0:03:28.880 --> 0:03:31.240 local stuff. It's not just local farmers, it's not just 0:03:31.280 --> 0:03:33.880 farm to table, but they're like harvesting the stuff themselves 0:03:33.919 --> 0:03:36.520 and they're like walking Yeah, was it the chef's table 0:03:36.600 --> 0:03:38.040 that they featured him as well? I remember they were 0:03:38.080 --> 0:03:40.240 walking like along the bay and you start he's just 0:03:40.240 --> 0:03:42.320 like finding stuff, like he's like this making for dinner 0:03:42.360 --> 0:03:43.760 to night, and it's like, oh, that's cool. I mean 0:03:43.800 --> 0:03:46.880 that if if you're able to then turn that into 0:03:46.880 --> 0:03:50.080 a profit, I mean that's actually kind of arbitrage taking 0:03:50.080 --> 0:03:52.400 the free stuff and making killer dinners. That calls a 0:03:52.440 --> 0:03:54.760 lot of money out of it, absolutely, man. Yeah, but 0:03:54.840 --> 0:03:57.240 we actually can link to this this great guide by 0:03:57.240 --> 0:04:01.360 wire Cutter. They've got The author of this article talked 0:04:01.360 --> 0:04:03.600 about how he started forging for mushrooms, and he had 0:04:03.640 --> 0:04:05.000 a lot of great tips in there, and and and 0:04:05.040 --> 0:04:07.160 the ultimate kind of cardinal rule when it comes to 0:04:07.200 --> 0:04:10.560 forging for mushrooms is if in doubt, throw it out, 0:04:10.800 --> 0:04:13.600 because obviously you don't want to not worth us. Yeah, 0:04:13.640 --> 0:04:16.599 you don't wanna put your life in harm's way by potentially, 0:04:16.640 --> 0:04:18.480 you know, getting something that may or may not be 0:04:18.640 --> 0:04:21.760 good for you. This is not foraging advice. Yeah, just 0:04:22.040 --> 0:04:23.680 you know, Well, here's the quick thing. If anybody out 0:04:23.680 --> 0:04:26.320 there listens to the show and they do forge for mushrooms, 0:04:26.320 --> 0:04:28.560 I would love to hear from you what it is 0:04:28.600 --> 0:04:30.839 that you're looking for. Maybe you live and I don't 0:04:30.839 --> 0:04:32.160 know where you have to live to find like the 0:04:32.240 --> 0:04:33.960 really good stuff. I actually see some picks of your 0:04:34.000 --> 0:04:36.280 shrooms too, Like, yeah, you know, that'd be awesome. I 0:04:36.360 --> 0:04:39.680 bet there's like some beautiful mushrooms out there that taste delicious, 0:04:39.760 --> 0:04:42.680 and I bet I could even be converted intellecting them. 0:04:42.680 --> 0:04:44.400 All right, Well, Matt, let's keep moving on. Let's mention 0:04:44.440 --> 0:04:46.240 the beer that we're having on the show. This one's 0:04:46.279 --> 0:04:49.280 called Pineapple Upside Down Shake by New Grass Brewing Company. 0:04:49.560 --> 0:04:51.840 You were just up in North Carolina, you picked up 0:04:51.839 --> 0:04:54.280 this beer for us, So thank thank you, my friend, 0:04:54.360 --> 0:04:57.120 and looking forward to having this one on the show today. Absolutely. 0:04:57.160 --> 0:05:00.240 All right, Well, Matt, let's get into the subject at hand. Today. 0:05:00.240 --> 0:05:03.600 We're discussing having an arbitrage mindset and how that changes everything. 0:05:04.040 --> 0:05:07.760 And it made me think about this Olympic high jumper 0:05:07.760 --> 0:05:10.720 from back in the nineteen sixties. His name was Dick Fosbury, 0:05:10.760 --> 0:05:14.600 and he basically changed the sport of high jumping forever 0:05:14.960 --> 0:05:18.840 the first time he jumped backwards over the bar. Until then, 0:05:19.080 --> 0:05:22.520 every competitor ever before had launched themselves into the air 0:05:22.560 --> 0:05:25.400 going forward belly over the bar. And uh, yeah, I'm 0:05:25.400 --> 0:05:27.760 not the last time anybody watched a high jumping event, 0:05:27.960 --> 0:05:30.840 maybe recently right with the Olympics called but but yeah, 0:05:30.920 --> 0:05:34.520 now every high jumper uses Dick's technique. So yeah, Dick 0:05:34.560 --> 0:05:37.799 Fosbury essentially exploited a flaw in the high jumping world 0:05:37.960 --> 0:05:40.640 that no one else was paying attention to. And yeah, 0:05:40.880 --> 0:05:43.800 to me, that's that's the basics of what arbitrage is. 0:05:44.000 --> 0:05:48.440 It's exploiting an opportunity. And once you start seeing arbitrage opportunities, 0:05:48.720 --> 0:05:51.680 you'll actually start to notice that they exist essentially everywhere, right, 0:05:52.080 --> 0:05:54.800 you can't unsee them. So like Dick and then every 0:05:54.880 --> 0:05:57.240 high jumper after him, you can't really go back to, 0:05:57.600 --> 0:05:59.320 you know, living like you used to. You can't go 0:05:59.360 --> 0:06:02.400 back to doing the high jump Billy first. It's like 0:06:02.680 --> 0:06:04.839 the game has changed now and I am now an 0:06:04.920 --> 0:06:08.279 arbitrage enthusiast. Yeah, that's right. It takes looking at different 0:06:08.360 --> 0:06:12.039 things that were presented within life with a different lens. Right. 0:06:12.360 --> 0:06:15.120 And when it comes to our money, obviously, life isn't cheap. 0:06:15.160 --> 0:06:16.680 You know, it doesn't have to cost a ton of money, 0:06:16.680 --> 0:06:18.880 but it costs some money, right, and none of us 0:06:18.920 --> 0:06:21.400 have a limitless supply of that money exactly. Well, that's 0:06:21.440 --> 0:06:24.080 kind of like the ultimate problem with life is that 0:06:24.120 --> 0:06:26.760 we can't just like summon money like the fed. The 0:06:26.800 --> 0:06:29.279 ultimate problem is what's the meaning of it all? And 0:06:29.279 --> 0:06:31.000 we're not gonna get into that, that is true, but 0:06:31.120 --> 0:06:33.640 we're just talking about money here. Uh. And you know, 0:06:33.680 --> 0:06:37.680 oftentimes we go through life just making the same default, 0:06:37.720 --> 0:06:41.080 standard issue decisions just because we've taken the path of 0:06:41.160 --> 0:06:44.320 least resistance, right, we haven't thought creatively about the different 0:06:44.360 --> 0:06:46.479 problems that we're faced with. And this is often the 0:06:46.480 --> 0:06:47.960 case when it comes to making money. You know, the 0:06:48.040 --> 0:06:51.400 questions that typically come up are like, Okay, where are 0:06:51.400 --> 0:06:52.880 you going to go to college? And what are you 0:06:52.920 --> 0:06:55.839 gonna study? But in reality, how much time is actually 0:06:55.920 --> 0:06:58.400 given to whether or not college is even the best 0:06:58.440 --> 0:07:01.200 path for that person And can often apply to the 0:07:01.240 --> 0:07:03.720 different expenses in our lives as well, not just how 0:07:03.720 --> 0:07:05.440 we make money, but how we spend our money. Someone 0:07:05.560 --> 0:07:08.200 might be moving to Atlanta, Oh, what what neighborhood are 0:07:08.200 --> 0:07:11.360 you going to buy a house in? Or maybe it's oh, 0:07:11.440 --> 0:07:13.240 you're wanting to get healthy, Like what, Jim, are you 0:07:13.240 --> 0:07:16.680 going to join? Uh? And so I want to question 0:07:16.760 --> 0:07:19.640 the question. We don't want to just assume the default answer. 0:07:20.000 --> 0:07:22.080 And in many areas of our lives, it's almost as 0:07:22.120 --> 0:07:25.200 if there's this invisible template that we're following. But we're 0:07:25.240 --> 0:07:29.680 trying to challenge these assumptions, particularly because they impact your wealth. 0:07:29.720 --> 0:07:31.920 And so that's a huge reason we're focusing on building 0:07:31.920 --> 0:07:35.680 an arbitrage mindset. We want you to think creatively about 0:07:35.720 --> 0:07:38.720 the different money problems that you're going to encounter. Yeah, 0:07:38.720 --> 0:07:41.920 so let's give a little bit of a definition around arbitrage. 0:07:41.920 --> 0:07:43.760 Maybe we have like a basic concept based on what 0:07:43.800 --> 0:07:46.360 we discussed already, but Matt, when it comes down to it, 0:07:46.440 --> 0:07:49.120 arbitrage is basically the difference between the price that you 0:07:49.120 --> 0:07:51.200 can pay for something and then what you can get 0:07:51.600 --> 0:07:54.840 for that thing from somebody else, right, And so when 0:07:54.880 --> 0:07:57.160 we're talking about arbitrage, it's basically the idea of taking 0:07:57.200 --> 0:08:00.880 advantage of an inefficiency. The main way arbitrage has been 0:08:00.960 --> 0:08:04.200 used in the past is in currency trading, but currency 0:08:04.200 --> 0:08:07.760 trading is a risky thing that we're not really into, 0:08:07.840 --> 0:08:10.720 you know, it's not something that we would recommend. That's 0:08:10.760 --> 0:08:12.320 not what we're talking about today. Now, we're not gonna 0:08:12.320 --> 0:08:14.240 talk about that. There's other ways though, that you can 0:08:14.320 --> 0:08:17.200 use that concept, that idea to your advantage. We're gonna 0:08:17.200 --> 0:08:19.520 get practical today, but we'll also discuss your mindset the 0:08:19.560 --> 0:08:23.560 same time. We'll give concrete ideas for specific areas in 0:08:23.560 --> 0:08:26.160 your life that you can start pursuing arbitrage. And then 0:08:26.200 --> 0:08:28.520 also you know ways in which to kind of see 0:08:28.640 --> 0:08:32.079 arbitrage around you everywhere you look. So, yeah, we would 0:08:32.080 --> 0:08:35.840 say that developing that arbitrage mindset is something that anybody 0:08:35.880 --> 0:08:38.280 listening can begin doing immediately and they can start to 0:08:38.320 --> 0:08:42.560 see results. Right. Becoming more arbitrage minded essentially means that 0:08:42.600 --> 0:08:45.480 you're thinking more like a business with inputs and outputs 0:08:45.600 --> 0:08:49.000 and less like a purchasing consumer. That's also completely separate 0:08:49.040 --> 0:08:52.080 from the side of you that is an income generating employee, 0:08:52.080 --> 0:08:54.439 because they are one and the same, right exactly, And 0:08:54.559 --> 0:08:57.360 uh just makes me think of a recent purchase I 0:08:57.440 --> 0:08:59.360 was making. I'm heading to the beach with the kiddos 0:08:59.480 --> 0:09:01.840 and there's the spot it's perfect for kayaking, and I 0:09:01.840 --> 0:09:03.120 want to take them out, And so I'm looking for 0:09:03.160 --> 0:09:06.559 this inflatable two seater kayak and I'm scaring Craigslist and 0:09:06.600 --> 0:09:08.880 Facebook yard sale for a used one. And in my mind, 0:09:08.880 --> 0:09:10.960 all I'm thinking is can I get it cheap enough 0:09:11.240 --> 0:09:13.199 that when I'm done with it after this trip, I 0:09:13.240 --> 0:09:15.400 can actually flip it and make more money. So, like, 0:09:15.440 --> 0:09:18.160 if I can buy this inflatable kayak for eighty bucks, 0:09:18.320 --> 0:09:20.080 can I then sell it for a hundred when I 0:09:20.120 --> 0:09:22.400 get when I get back to town by taking better 0:09:22.440 --> 0:09:26.040 pictures or you know, just by making a better listing. 0:09:26.320 --> 0:09:29.360 That to me is like just a small example of 0:09:29.400 --> 0:09:32.040 like how I think about arbitrage in my life, even 0:09:32.120 --> 0:09:34.880 if something as mundane as the purchase of a used 0:09:34.880 --> 0:09:37.960 good online, that's excellent, dude, I love how you are 0:09:38.000 --> 0:09:40.880 thinking about that um on a personal level, right. But 0:09:41.040 --> 0:09:43.040 you know, at a very high level, arbitrage is just 0:09:43.080 --> 0:09:45.960 one of the basic building blocks of markets. And so 0:09:46.040 --> 0:09:48.560 by really zooming out, you can see how arbitrage is 0:09:48.559 --> 0:09:51.960 really just at the core of most businesses. You know, 0:09:52.040 --> 0:09:55.120 that is taking on raw goods, creating something either better 0:09:55.320 --> 0:09:57.599 or something simpler. It's something a little more unique in 0:09:57.760 --> 0:09:59.679 order to sell it at a markup in order for 0:09:59.720 --> 0:10:01.760 that bi us to make a profit. And so by 0:10:01.800 --> 0:10:04.840 this definition, you know, something as simple as the smoothie 0:10:05.040 --> 0:10:07.880 that you may have purchased while running some errands, like 0:10:07.960 --> 0:10:10.680 smoothie like I P A or um what is it? Yeah, 0:10:10.679 --> 0:10:13.679 pineapple upside down to Jake, I P A. Even something 0:10:13.720 --> 0:10:16.080 as simple as that is a form of arbitrage. So 0:10:16.120 --> 0:10:17.480 maybe you can't make a beer at home, but like 0:10:17.480 --> 0:10:19.240 with a smoothie, you know, maybe at home, could you 0:10:19.280 --> 0:10:22.559 have taken some strawberries of some spinach, some milk ice. 0:10:22.920 --> 0:10:24.600 Could you have mixed that in your own blender and 0:10:24.640 --> 0:10:27.760 made something delicious and healthy, like, yeah, you definitely could. 0:10:28.080 --> 0:10:30.600 But the company selling you a smoothie, you know, they're 0:10:30.640 --> 0:10:32.320 betting on the fact that they can make either a 0:10:32.360 --> 0:10:35.200 better one or they can make a smoothie that's more convenient. 0:10:35.440 --> 0:10:37.280 It's like, don't get all your kitchen stuff dirty. Come 0:10:37.280 --> 0:10:39.800 by a smoothie her exactly while you're out running errands. 0:10:39.800 --> 0:10:42.000 It's super easy, and they're betting on the fact that 0:10:42.040 --> 0:10:43.960 it's going to be worth the trade off for you 0:10:44.000 --> 0:10:46.000 to pay them for that SMOOTHI instead of you making 0:10:46.040 --> 0:10:47.679 one yourself. All right. So that's a good example, Matt. 0:10:47.720 --> 0:10:51.480 Let's talk about other maybe businesses that in particular specialized 0:10:51.559 --> 0:10:55.960 in arbitrage, like Ali's Bargain Outlet. Big Lots is another story. 0:10:56.080 --> 0:10:57.960 T J max And is another story that they're just 0:10:57.960 --> 0:11:03.479 like Council, countless examples of different stores that specialize in arbitrage. 0:11:03.720 --> 0:11:06.400 So Ali's, for instance, Ali's Bargaining Outlet. I'm not sure 0:11:06.440 --> 0:11:09.360 if people have them where they live. I I've been 0:11:09.360 --> 0:11:11.880 into a one a couple of times with my father 0:11:11.920 --> 0:11:15.040 in law. I never have. He likes Ali's Bargaining Outlet. Um, 0:11:15.080 --> 0:11:17.000 it's a mixture, Matt, I would say, I don't think 0:11:17.040 --> 0:11:18.840 it would be your style. Uh, and it's not even 0:11:18.880 --> 0:11:23.200 necessarily my style. But what they do, you know, it's 0:11:23.280 --> 0:11:25.720 it's arbitrage at its finest, and it appeals to some folks. 0:11:25.720 --> 0:11:28.320 So Ali's, for instance, sells all sorts of goods that 0:11:28.360 --> 0:11:31.320 were unwanted other retailers. And and I looked up what 0:11:31.400 --> 0:11:33.240 Alie says on its website. I wanted to figure out, 0:11:33.480 --> 0:11:36.760 you know, how they build themselves. What's your mission statement? Right? Exactly? 0:11:37.080 --> 0:11:39.400 They say if a manufacturer makes too much of an 0:11:39.400 --> 0:11:42.840 item or changes their packaging, Ali's will buy overstocked or 0:11:43.000 --> 0:11:46.840 old packaged items. So basically, at its core, Ali's is 0:11:46.880 --> 0:11:50.959 exploiting arbitrage opportunities. And um, yeah, I don't even mean 0:11:51.000 --> 0:11:52.920 to use the term exploit in a negative way because 0:11:52.920 --> 0:11:54.760 I think it's actually a good thing. It's a healthy 0:11:54.800 --> 0:11:58.000 thing for the market, making use of right exactly exactly 0:11:58.320 --> 0:12:00.719 like your mushrooms that are going bad giving them to 0:12:00.760 --> 0:12:04.520 your neighbor. Um, that's he's exploiting you not liking mushrooms 0:12:04.600 --> 0:12:06.240 or may not like mushrooms. You've got your head and 0:12:06.320 --> 0:12:10.120 the whole forging for mutionoms things. Yeah, I know. So yeah, 0:12:10.200 --> 0:12:14.160 it really much of what alise cells might have otherwise 0:12:14.240 --> 0:12:17.839 been thrown away or basically been completely useless, but they're 0:12:17.880 --> 0:12:20.360 reusing it in a way um. And all these customers 0:12:20.360 --> 0:12:22.640 they know what to expect. They love the cheap prices. 0:12:22.640 --> 0:12:24.839 And really it's the same with stores like TJ Max 0:12:24.880 --> 0:12:27.320 and big Lots too, right those stores are scooping up 0:12:27.480 --> 0:12:30.280 last season's items for pennies on the dollar um, And 0:12:30.320 --> 0:12:33.199 they've established a successful business model doing it. So when 0:12:33.200 --> 0:12:35.760 you think about it like that, there are thriving businesses 0:12:35.960 --> 0:12:39.240 that have made arbitrage the very center of their business. Absolutely. Yeah, 0:12:39.280 --> 0:12:42.200 But you know, arbitrage it's not just about big companies 0:12:42.240 --> 0:12:44.880 and massive store phone operations. We think that by thinking 0:12:44.920 --> 0:12:47.360 of your own personal finances through the lens of an 0:12:47.480 --> 0:12:49.959 entrepreneur or as a business owner, we think that you'll 0:12:50.000 --> 0:12:52.880 be able to take advantage of the benefits of arbitrage 0:12:52.920 --> 0:12:55.880 to boost your net worth, to make you more profitable 0:12:55.880 --> 0:12:57.960 as a person, sort of like a business would. And 0:12:58.000 --> 0:13:00.520 so we'll get into some of the specifics how you 0:13:00.559 --> 0:13:03.400 can implement arbitrage, how you can adopt more of an 0:13:03.440 --> 0:13:05.640 arbitrage mindset, and we'll get to all of that right 0:13:05.679 --> 0:13:17.199 after this break, all right before the break, you said, 0:13:17.280 --> 0:13:21.280 we want to make people more profitable, like human beings, 0:13:21.559 --> 0:13:23.480 more profitable people. I thought that was kind of a 0:13:23.520 --> 0:13:26.280 cool way to each individual to be more successful. We 0:13:26.320 --> 0:13:29.760 want your your your stock valuation go up. I want 0:13:29.800 --> 0:13:32.360 I want Joel LLC to be worth more tomorrow than 0:13:32.360 --> 0:13:34.320 it is today. Okay, I like that. I like that goal. 0:13:34.480 --> 0:13:37.040 So yeah, let's talk about like a specific ways people 0:13:37.080 --> 0:13:40.200 can first, before we get into some of the specifics 0:13:40.200 --> 0:13:42.600 on mindset, let's talk about some real, physical, tangible ways 0:13:42.640 --> 0:13:45.680 that people could use arbitrage without being a big business 0:13:45.760 --> 0:13:48.880 in order to make money. Right. That's right. So before 0:13:48.960 --> 0:13:51.360 before the break, we talked about how arbitrage is this 0:13:51.400 --> 0:13:53.840 core principle of a lot of businesses, but on a 0:13:53.880 --> 0:13:57.240 smaller level, you know, it's it's something that basically anybody 0:13:57.240 --> 0:14:00.440 can participate in as an individual. You know. There was 0:14:00.440 --> 0:14:02.920 this interesting post on this website dollar Sprout Mat a 0:14:02.920 --> 0:14:04.880 couple of months ago, and this guy named Ben he 0:14:05.000 --> 0:14:08.360 bought a hundred thousand dollars worth of Pokemon cards during 0:14:08.360 --> 0:14:10.880 the pandemic. I'm not sure if he was just bored 0:14:11.000 --> 0:14:13.240 or this is like, uh, it sounds like he's his 0:14:13.280 --> 0:14:15.800 new favorite thing now because he is making money doing it. 0:14:15.800 --> 0:14:18.080 He started flipping them on eBay um and as he 0:14:18.280 --> 0:14:22.640 learned about the pricing dynamics of specific Pokemon cards, he 0:14:22.680 --> 0:14:24.920 was able to make a really good profit. He even 0:14:24.960 --> 0:14:27.440 began to buy single cards on eBay that were listed 0:14:27.480 --> 0:14:30.320 poorly and then he sold them himself, making real money 0:14:30.320 --> 0:14:32.640 in the process. So he not only was he like 0:14:33.080 --> 0:14:36.040 doing the most basic form of arbitrage by like dividing 0:14:36.080 --> 0:14:38.760 something up and then reselling it, he said, you know what, 0:14:38.880 --> 0:14:41.360 I see another way in which I can make money. 0:14:41.560 --> 0:14:43.600 These people don't know what they're doing, and I'm going 0:14:43.640 --> 0:14:46.040 to capitalize on their poor listing. I'm gonna buy it. 0:14:46.120 --> 0:14:48.480 I'm gonna create a good listing, and then I'm going 0:14:48.560 --> 0:14:50.640 to make money. Right. So, yeah, he was able to 0:14:50.720 --> 0:14:54.320 exploit a few different inefficiencies, uh and make money from 0:14:54.320 --> 0:14:58.040 this imperfect market of the online sale of Pokemon cards. 0:14:58.040 --> 0:15:00.080 So I feel like, yeah, reading that it made you 0:15:00.120 --> 0:15:03.240 realize that arbitrage possibilities are kind of endless. They can 0:15:03.280 --> 0:15:05.040 be found in a whole host of places. Yeah, there's 0:15:05.040 --> 0:15:06.960 a lot of different advantages and angles that we can 0:15:06.960 --> 0:15:09.520 take when it comes to arbitrage. And you know, one 0:15:09.520 --> 0:15:12.400 of Ben's tips was to look for cards at non 0:15:12.440 --> 0:15:16.480 peak hours when there's less competition. But he's also mentioned 0:15:16.560 --> 0:15:20.200 some pitfalls like avoiding payment scams and the folks selling 0:15:20.280 --> 0:15:22.840 fake Pokemon cards. You don't want that. Yeah, and so 0:15:22.920 --> 0:15:25.520 over time, obviously you need to have some knowledge, uh 0:15:25.560 --> 0:15:29.280 that that's required in order to actually profit. But still, 0:15:29.440 --> 0:15:32.960 retail arbitrage is a common way to make extra money, Joel. 0:15:33.000 --> 0:15:34.360 You know, I we had a friend who used to 0:15:34.360 --> 0:15:36.400 go to thrift stores. He bought the best stuff there 0:15:36.480 --> 0:15:38.600 at the thrift stores and resold it on eBay, and 0:15:38.640 --> 0:15:40.440 he actually made a living by doing this and supported 0:15:40.480 --> 0:15:43.280 his family for years. Uh. And now he basically does 0:15:43.320 --> 0:15:46.200 the exact same thing, but with mid century furniture, and 0:15:46.480 --> 0:15:49.000 through that process he really knows his stuff. He's got 0:15:49.040 --> 0:15:52.280 really nice, high end stuff, stuff that you know, I 0:15:52.480 --> 0:15:54.760 follow on Instagram and I see stuff up there and 0:15:54.800 --> 0:15:58.480 I'm like, oh, I want that in my house, some 0:15:58.520 --> 0:16:03.240 mid century pianos. Recently, I'm like, oh, And it's stuff 0:16:03.280 --> 0:16:05.240 that he has found sometimes on the side of the road. 0:16:05.280 --> 0:16:07.120 Literally one time, there's just one show that you found 0:16:07.160 --> 0:16:08.920 on the side of the road. It's amazing. This is 0:16:08.960 --> 0:16:11.280 also what our friend Katie Woke Stanley does she buys 0:16:11.280 --> 0:16:13.960 stuff at goodwill or even she snacks stuff also on 0:16:13.800 --> 0:16:16.360 the side of the road for free and resells it 0:16:16.400 --> 0:16:18.640 on eBay as well, And so the possibility is to 0:16:18.680 --> 0:16:22.800 profit from arbitrage are virtually endless here. Granted, this is 0:16:22.840 --> 0:16:25.560 a form of arbitrage that starts to look more like 0:16:25.600 --> 0:16:27.600 a side hustle or even a part time or full 0:16:27.600 --> 0:16:29.640 time job. But I don't want to make it sound 0:16:29.640 --> 0:16:31.640 like that that's a bad thing. Being a collector and 0:16:31.760 --> 0:16:35.680 understanding the mid century furniture market is one that every 0:16:35.680 --> 0:16:38.640 Boddy's found incredibly fulfilling. He has gained a lot of 0:16:38.640 --> 0:16:41.080 knowledge through this process. He's now an expert on mid 0:16:41.080 --> 0:16:44.200 century furniture and it now allows him to work for himself. Yeah. Man, 0:16:44.240 --> 0:16:48.400 it can be so basic to arbitrage, right. Like I've 0:16:48.600 --> 0:16:51.040 mentioned on the show that we're doing some renovations to 0:16:51.080 --> 0:16:53.040 the house. When we were getting rid of some of 0:16:53.040 --> 0:16:54.440 our scrap metal, he was put it on the side 0:16:54.480 --> 0:16:56.560 of the road. Guess what, there are people that drive 0:16:56.600 --> 0:16:59.560 around town looking for this scrap metal because they can 0:16:59.560 --> 0:17:02.120 turn a off it from it. There's it's It's truly 0:17:02.200 --> 0:17:05.320 the principle of one person's trash the other person's treasure, 0:17:05.640 --> 0:17:08.400 And yeah, I feel like too talking about retail arbitrage, 0:17:08.600 --> 0:17:11.000 It's becomes so much easier for the average person to 0:17:11.040 --> 0:17:15.520 participate in that process of like buying something at a 0:17:15.520 --> 0:17:18.280 discount and then selling it for a profit. And it's 0:17:18.280 --> 0:17:21.360 a legitimate way for people to even purchase brand new 0:17:21.400 --> 0:17:24.760 items immediately to resell if they're discounted enough. Right, you 0:17:24.760 --> 0:17:26.840 don't even need a storefront in order to make it happen, 0:17:26.880 --> 0:17:28.879 because the Internet can make it easy to find the 0:17:28.880 --> 0:17:31.080 deals and then to read list those items quickly, and 0:17:31.119 --> 0:17:32.879 even before you buy it, you can check on the 0:17:32.880 --> 0:17:35.240 internet to see, oh, what is this item typically selling 0:17:35.240 --> 0:17:37.520 for their even specific apps you can download to make 0:17:37.560 --> 0:17:40.399 sure that the item that you're buying sells quickly and 0:17:40.520 --> 0:17:42.399 will sell for a profit based on the price that 0:17:42.440 --> 0:17:44.960 you're paying. But there are also a few important things 0:17:45.040 --> 0:17:46.680 that you're gonna want to pay attention to if you're 0:17:46.680 --> 0:17:49.679 opting to try retail arbitrage. Income potential, Like I just 0:17:49.720 --> 0:17:52.200 mentioned obviously one of those what about quantity, like how 0:17:52.240 --> 0:17:54.160 many of them can you buy? And then the size 0:17:54.160 --> 0:17:56.840 and the weight, because if you're selling one off items, 0:17:57.119 --> 0:17:58.480 you know it's gonna be a little more difficult. You 0:17:58.520 --> 0:18:00.680 have to create that listing for every single item that 0:18:00.760 --> 0:18:03.240 you buy. But if you can buy a hundred of something, 0:18:03.680 --> 0:18:07.240 then you can magnify your your profits. Right. Size and 0:18:07.280 --> 0:18:09.760 weight are also important so that your profit isn't consumed 0:18:09.800 --> 0:18:12.760 by the shipping costs. That is something that could bite 0:18:12.800 --> 0:18:15.960 you in the butt as you're attempting to pursue retail arbitrage. 0:18:16.000 --> 0:18:19.119 But yeah, if you keep all vintage bowling balls or 0:18:19.119 --> 0:18:23.440 something like that, man I chose the wrong market exactly exactly. 0:18:23.840 --> 0:18:26.679 And if it is yeah, if it is highly profitable 0:18:26.920 --> 0:18:30.160 but it also is a substantial size, well it might 0:18:30.200 --> 0:18:32.520 work out right because then you can hire someone to 0:18:32.520 --> 0:18:34.159 take it across the country for you. But you're right, 0:18:34.240 --> 0:18:38.000 vintage bowling balls would probably be the quintisential worst way 0:18:38.040 --> 0:18:40.720 you can go about retail arbitrage. Yeah, so we're talking 0:18:40.800 --> 0:18:43.399 yeah specifically, and we're talking about retail arbitrage, right, and 0:18:43.440 --> 0:18:46.960