Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're discussing how having an arbitrage mindset changes everything.
Speaker 1: So I cannot help but to think of sabotage. Every
Speaker 1: time we hear the word arbitrage, it makes me think
Speaker 1: of the old Beastie Boys song sabotage. I'm sure listening
Speaker 1: to Boys I did. I had the Airplane CD with
Speaker 1: airplane on the front. Okay, so it made me think
Speaker 1: of So we were just talking about before we hit record.
Speaker 1: You're talking about visiting Dollywood. He went to Dollywood with
Speaker 1: some family up in Tennessee, and uh, we're talking about
Speaker 1: roller coasters, and this makes me think of specifically I
Speaker 1: think it was called the rock and Roller or something
Speaker 1: like that. There's a roller coaster or whatever, Orlando, you
Speaker 1: know what I'm talking about. Yeah, I've been on the
Speaker 1: Aerosmith roller Coast. It's like you get to choose your
Speaker 1: music when you're on there, at least at least when
Speaker 1: when we went, you could you have the option. I
Speaker 1: don't remember that. Me and my buddy Steve, Uh, him
Speaker 1: and I were sitting next to each other. We're like, Hey,
Speaker 1: what do you want to rock? And roll to and
Speaker 1: we chose sabotage. But that's not what we're talking about
Speaker 1: this episode. We're talking about arbitrage, what it is and
Speaker 1: how you can use this concept to get ahead with
Speaker 1: your money. We're gonna talk all about arbitrage today. Man,
Speaker 1: I'm really excited for this episode. Uh. First, actually, I
Speaker 1: was talking to my neighbor the other day and it
Speaker 1: turns out man that he has had some really great
Speaker 1: success forging for mushrooms. So first of all, I want
Speaker 1: to get your thoughts on forging for mushrooms. Do you
Speaker 1: feel Uh you're looking at me with like a very
Speaker 1: skeptical eye, and I think I know what your answer is.
Speaker 1: I was gonna ask you, like, would you forge for mushrooms?
Speaker 1: Is that something that you would do? No, I don't
Speaker 1: like mushrooms all that much. I'm not not a big
Speaker 1: mushroom guy. Mushrooms are so good rated well, you know,
Speaker 1: to each stone. But I think if it was something
Speaker 1: out was into and there was like a place nearby
Speaker 1: and it was like a craft beer outdoor excursion, think
Speaker 1: if I could forage for yes, I would. I would
Speaker 1: do that. Uh, well, he would eventually like some waterfall
Speaker 1: a distance off and could flowed with craft beer. Oh yeah,
Speaker 1: three miles through the woods to get there. I would,
Speaker 1: I would make that track. If they like jumped out
Speaker 1: of the water, you had to catch them with your
Speaker 1: hand like wild salmon. Oh I got a big one.
Speaker 1: I got a seven fifty exactly. That would be quite
Speaker 1: the magical world to live in. But yeah, I was
Speaker 1: talking to my neighbor and he's he's a part of
Speaker 1: this forging group as well. But dude, he has found
Speaker 1: a good number of morales plus all these other mushrooms
Speaker 1: that I've never heard of. But of course you need
Speaker 1: to make sure that you're you're being informed when it
Speaker 1: comes to forging, I would accidentally pick the wrong ones.
Speaker 1: And yeah, exactly, and so yeah, so when it comes
Speaker 1: to the frugal ord cheap debate, it's frugal if you
Speaker 1: know what you're doing, uh, and you know, it can
Speaker 1: be a lot of fun because I love getting outdoors,
Speaker 1: hiking through the woods, and man, if you happen to
Speaker 1: also be looking for some delicious morals, you know, some
Speaker 1: great mushrooms while you're at it, I think that could
Speaker 1: be a ton of fun. But yeah, you could go
Speaker 1: from being frugal to cheap if you pay the ultimate
Speaker 1: cost with your life. Today, we're like, I don't even
Speaker 1: want to get sick from eating something I shouldn't have eaten,
Speaker 1: especially when it comes to something like mushrooms. And so
Speaker 1: it makes me think too. You've heard of the restaurant Noma, right,
Speaker 1: and yeah, I think it's a Danish restaurant and it
Speaker 1: wasn't It hasn't been like named the best restaurant in
Speaker 1: the world for a bunch of years. And the guy
Speaker 1: who started that restaurant essentially, uh, foraging is the major
Speaker 1: concept behind the food. There. They go and they get
Speaker 1: local stuff. It's not just local farmers, it's not just
Speaker 1: farm to table, but they're like harvesting the stuff themselves
Speaker 1: and they're like walking Yeah, was it the chef's table
Speaker 1: that they featured him as well? I remember they were
Speaker 1: walking like along the bay and you start he's just
Speaker 1: like finding stuff, like he's like this making for dinner
Speaker 1: to night, and it's like, oh, that's cool. I mean
Speaker 1: that if if you're able to then turn that into
Speaker 1: a profit, I mean that's actually kind of arbitrage taking
Speaker 1: the free stuff and making killer dinners. That calls a
Speaker 1: lot of money out of it, absolutely, man. Yeah, but
Speaker 1: we actually can link to this this great guide by
Speaker 1: wire Cutter. They've got The author of this article talked
Speaker 1: about how he started forging for mushrooms, and he had
Speaker 1: a lot of great tips in there, and and and
Speaker 1: the ultimate kind of cardinal rule when it comes to
Speaker 1: forging for mushrooms is if in doubt, throw it out,
Speaker 1: because obviously you don't want to not worth us. Yeah,
Speaker 1: you don't wanna put your life in harm's way by potentially,
Speaker 1: you know, getting something that may or may not be
Speaker 1: good for you. This is not foraging advice. Yeah, just
Speaker 1: you know, Well, here's the quick thing. If anybody out
Speaker 1: there listens to the show and they do forge for mushrooms,
Speaker 1: I would love to hear from you what it is
Speaker 1: that you're looking for. Maybe you live and I don't
Speaker 1: know where you have to live to find like the
Speaker 1: really good stuff. I actually see some picks of your
Speaker 1: shrooms too, Like, yeah, you know, that'd be awesome. I
Speaker 1: bet there's like some beautiful mushrooms out there that taste delicious,
Speaker 1: and I bet I could even be converted intellecting them.
Speaker 1: All right, Well, Matt, let's keep moving on. Let's mention
Speaker 1: the beer that we're having on the show. This one's
Speaker 1: called Pineapple Upside Down Shake by New Grass Brewing Company.
Speaker 1: You were just up in North Carolina, you picked up
Speaker 1: this beer for us, So thank thank you, my friend,
Speaker 1: and looking forward to having this one on the show today. Absolutely.
Speaker 1: All right, Well, Matt, let's get into the subject at hand. Today.
Speaker 1: We're discussing having an arbitrage mindset and how that changes everything.
Speaker 1: And it made me think about this Olympic high jumper
Speaker 1: from back in the nineteen sixties. His name was Dick Fosbury,
Speaker 1: and he basically changed the sport of high jumping forever
Speaker 1: the first time he jumped backwards over the bar. Until then,
Speaker 1: every competitor ever before had launched themselves into the air
Speaker 1: going forward belly over the bar. And uh, yeah, I'm
Speaker 1: not the last time anybody watched a high jumping event,
Speaker 1: maybe recently right with the Olympics called but but yeah,
Speaker 1: now every high jumper uses Dick's technique. So yeah, Dick
Speaker 1: Fosbury essentially exploited a flaw in the high jumping world
Speaker 1: that no one else was paying attention to. And yeah,
Speaker 1: to me, that's that's the basics of what arbitrage is.
Speaker 1: It's exploiting an opportunity. And once you start seeing arbitrage opportunities,
Speaker 1: you'll actually start to notice that they exist essentially everywhere, right,
Speaker 1: you can't unsee them. So like Dick and then every
Speaker 1: high jumper after him, you can't really go back to,
Speaker 1: you know, living like you used to. You can't go
Speaker 1: back to doing the high jump Billy first. It's like
Speaker 1: the game has changed now and I am now an
Speaker 1: arbitrage enthusiast. Yeah, that's right. It takes looking at different
Speaker 1: things that were presented within life with a different lens. Right.
Speaker 1: And when it comes to our money, obviously, life isn't cheap.
Speaker 1: You know, it doesn't have to cost a ton of money,
Speaker 1: but it costs some money, right, and none of us
Speaker 1: have a limitless supply of that money exactly. Well, that's
Speaker 1: kind of like the ultimate problem with life is that
Speaker 1: we can't just like summon money like the fed. The
Speaker 1: ultimate problem is what's the meaning of it all? And
Speaker 1: we're not gonna get into that, that is true, but
Speaker 1: we're just talking about money here. Uh. And you know,
Speaker 1: oftentimes we go through life just making the same default,
Speaker 1: standard issue decisions just because we've taken the path of
Speaker 1: least resistance, right, we haven't thought creatively about the different
Speaker 1: problems that we're faced with. And this is often the
Speaker 1: case when it comes to making money. You know, the
Speaker 1: questions that typically come up are like, Okay, where are
Speaker 1: you going to go to college? And what are you
Speaker 1: gonna study? But in reality, how much time is actually
Speaker 1: given to whether or not college is even the best
Speaker 1: path for that person And can often apply to the
Speaker 1: different expenses in our lives as well, not just how
Speaker 1: we make money, but how we spend our money. Someone
Speaker 1: might be moving to Atlanta, Oh, what what neighborhood are
Speaker 1: you going to buy a house in? Or maybe it's oh,
Speaker 1: you're wanting to get healthy, Like what, Jim, are you
Speaker 1: going to join? Uh? And so I want to question
Speaker 1: the question. We don't want to just assume the default answer.
Speaker 1: And in many areas of our lives, it's almost as
Speaker 1: if there's this invisible template that we're following. But we're
Speaker 1: trying to challenge these assumptions, particularly because they impact your wealth.
Speaker 1: And so that's a huge reason we're focusing on building
Speaker 1: an arbitrage mindset. We want you to think creatively about
Speaker 1: the different money problems that you're going to encounter. Yeah,
Speaker 1: so let's give a little bit of a definition around arbitrage.
Speaker 1: Maybe we have like a basic concept based on what
Speaker 1: we discussed already, but Matt, when it comes down to it,
Speaker 1: arbitrage is basically the difference between the price that you
Speaker 1: can pay for something and then what you can get
Speaker 1: for that thing from somebody else, right, And so when
Speaker 1: we're talking about arbitrage, it's basically the idea of taking
Speaker 1: advantage of an inefficiency. The main way arbitrage has been
Speaker 1: used in the past is in currency trading, but currency
Speaker 1: trading is a risky thing that we're not really into,
Speaker 1: you know, it's not something that we would recommend. That's
Speaker 1: not what we're talking about today. Now, we're not gonna
Speaker 1: talk about that. There's other ways though, that you can
Speaker 1: use that concept, that idea to your advantage. We're gonna
Speaker 1: get practical today, but we'll also discuss your mindset the
Speaker 1: same time. We'll give concrete ideas for specific areas in
Speaker 1: your life that you can start pursuing arbitrage. And then
Speaker 1: also you know ways in which to kind of see
Speaker 1: arbitrage around you everywhere you look. So, yeah, we would
Speaker 1: say that developing that arbitrage mindset is something that anybody
Speaker 1: listening can begin doing immediately and they can start to
Speaker 1: see results. Right. Becoming more arbitrage minded essentially means that
Speaker 1: you're thinking more like a business with inputs and outputs
Speaker 1: and less like a purchasing consumer. That's also completely separate
Speaker 1: from the side of you that is an income generating employee,
Speaker 1: because they are one and the same, right exactly, And
Speaker 1: uh just makes me think of a recent purchase I
Speaker 1: was making. I'm heading to the beach with the kiddos
Speaker 1: and there's the spot it's perfect for kayaking, and I
Speaker 1: want to take them out, And so I'm looking for
Speaker 1: this inflatable two seater kayak and I'm scaring Craigslist and
Speaker 1: Facebook yard sale for a used one. And in my mind,
Speaker 1: all I'm thinking is can I get it cheap enough
Speaker 1: that when I'm done with it after this trip, I
Speaker 1: can actually flip it and make more money. So, like,
Speaker 1: if I can buy this inflatable kayak for eighty bucks,
Speaker 1: can I then sell it for a hundred when I
Speaker 1: get when I get back to town by taking better
Speaker 1: pictures or you know, just by making a better listing.
Speaker 1: That to me is like just a small example of
Speaker 1: like how I think about arbitrage in my life, even
Speaker 1: if something as mundane as the purchase of a used
Speaker 1: good online, that's excellent, dude, I love how you are
Speaker 1: thinking about that um on a personal level, right. But
Speaker 1: you know, at a very high level, arbitrage is just
Speaker 1: one of the basic building blocks of markets. And so
Speaker 1: by really zooming out, you can see how arbitrage is
Speaker 1: really just at the core of most businesses. You know,
Speaker 1: that is taking on raw goods, creating something either better
Speaker 1: or something simpler. It's something a little more unique in
Speaker 1: order to sell it at a markup in order for
Speaker 1: that bi us to make a profit. And so by
Speaker 1: this definition, you know, something as simple as the smoothie
Speaker 1: that you may have purchased while running some errands, like
Speaker 1: smoothie like I P A or um what is it? Yeah,
Speaker 1: pineapple upside down to Jake, I P A. Even something
Speaker 1: as simple as that is a form of arbitrage. So
Speaker 1: maybe you can't make a beer at home, but like
Speaker 1: with a smoothie, you know, maybe at home, could you
Speaker 1: have taken some strawberries of some spinach, some milk ice.
Speaker 1: Could you have mixed that in your own blender and
Speaker 1: made something delicious and healthy, like, yeah, you definitely could.
Speaker 1: But the company selling you a smoothie, you know, they're
Speaker 1: betting on the fact that they can make either a
Speaker 1: better one or they can make a smoothie that's more convenient.
Speaker 1: It's like, don't get all your kitchen stuff dirty. Come
Speaker 1: by a smoothie her exactly while you're out running errands.
Speaker 1: It's super easy, and they're betting on the fact that
Speaker 1: it's going to be worth the trade off for you
Speaker 1: to pay them for that SMOOTHI instead of you making
Speaker 1: one yourself. All right. So that's a good example, Matt.
Speaker 1: Let's talk about other maybe businesses that in particular specialized
Speaker 1: in arbitrage, like Ali's Bargain Outlet. Big Lots is another story.
Speaker 1: T J max And is another story that they're just
Speaker 1: like Council, countless examples of different stores that specialize in arbitrage.
Speaker 1: So Ali's, for instance, Ali's Bargaining Outlet. I'm not sure
Speaker 1: if people have them where they live. I I've been
Speaker 1: into a one a couple of times with my father
Speaker 1: in law. I never have. He likes Ali's Bargaining Outlet. Um,
Speaker 1: it's a mixture, Matt, I would say, I don't think
Speaker 1: it would be your style. Uh, and it's not even
Speaker 1: necessarily my style. But what they do, you know, it's
Speaker 1: it's arbitrage at its finest, and it appeals to some folks.
Speaker 1: So Ali's, for instance, sells all sorts of goods that
Speaker 1: were unwanted other retailers. And and I looked up what
Speaker 1: Alie says on its website. I wanted to figure out,
Speaker 1: you know, how they build themselves. What's your mission statement? Right? Exactly?
Speaker 1: They say if a manufacturer makes too much of an
Speaker 1: item or changes their packaging, Ali's will buy overstocked or
Speaker 1: old packaged items. So basically, at its core, Ali's is
Speaker 1: exploiting arbitrage opportunities. And um, yeah, I don't even mean
Speaker 1: to use the term exploit in a negative way because
Speaker 1: I think it's actually a good thing. It's a healthy
Speaker 1: thing for the market, making use of right exactly exactly
Speaker 1: like your mushrooms that are going bad giving them to
Speaker 1: your neighbor. Um, that's he's exploiting you not liking mushrooms
Speaker 1: or may not like mushrooms. You've got your head and
Speaker 1: the whole forging for mutionoms things. Yeah, I know. So yeah,
Speaker 1: it really much of what alise cells might have otherwise
Speaker 1: been thrown away or basically been completely useless, but they're
Speaker 1: reusing it in a way um. And all these customers
Speaker 1: they know what to expect. They love the cheap prices.
Speaker 1: And really it's the same with stores like TJ Max
Speaker 1: and big Lots too, right those stores are scooping up
Speaker 1: last season's items for pennies on the dollar um, And
Speaker 1: they've established a successful business model doing it. So when
Speaker 1: you think about it like that, there are thriving businesses
Speaker 1: that have made arbitrage the very center of their business. Absolutely. Yeah,
Speaker 1: But you know, arbitrage it's not just about big companies
Speaker 1: and massive store phone operations. We think that by thinking
Speaker 1: of your own personal finances through the lens of an
Speaker 1: entrepreneur or as a business owner, we think that you'll
Speaker 1: be able to take advantage of the benefits of arbitrage
Speaker 1: to boost your net worth, to make you more profitable
Speaker 1: as a person, sort of like a business would. And
Speaker 1: so we'll get into some of the specifics how you
Speaker 1: can implement arbitrage, how you can adopt more of an
Speaker 1: arbitrage mindset, and we'll get to all of that right
Speaker 1: after this break, all right before the break, you said,
Speaker 1: we want to make people more profitable, like human beings,
Speaker 1: more profitable people. I thought that was kind of a
Speaker 1: cool way to each individual to be more successful. We
Speaker 1: want your your your stock valuation go up. I want
Speaker 1: I want Joel LLC to be worth more tomorrow than
Speaker 1: it is today. Okay, I like that. I like that goal.
Speaker 1: So yeah, let's talk about like a specific ways people
Speaker 1: can first, before we get into some of the specifics
Speaker 1: on mindset, let's talk about some real, physical, tangible ways
Speaker 1: that people could use arbitrage without being a big business
Speaker 1: in order to make money. Right. That's right. So before
Speaker 1: before the break, we talked about how arbitrage is this
Speaker 1: core principle of a lot of businesses, but on a
Speaker 1: smaller level, you know, it's it's something that basically anybody
Speaker 1: can participate in as an individual. You know. There was
Speaker 1: this interesting post on this website dollar Sprout Mat a
Speaker 1: couple of months ago, and this guy named Ben he
Speaker 1: bought a hundred thousand dollars worth of Pokemon cards during
Speaker 1: the pandemic. I'm not sure if he was just bored
Speaker 1: or this is like, uh, it sounds like he's his
Speaker 1: new favorite thing now because he is making money doing it.
Speaker 1: He started flipping them on eBay um and as he
Speaker 1: learned about the pricing dynamics of specific Pokemon cards, he
Speaker 1: was able to make a really good profit. He even
Speaker 1: began to buy single cards on eBay that were listed
Speaker 1: poorly and then he sold them himself, making real money
Speaker 1: in the process. So he not only was he like
Speaker 1: doing the most basic form of arbitrage by like dividing
Speaker 1: something up and then reselling it, he said, you know what,
Speaker 1: I see another way in which I can make money.
Speaker 1: These people don't know what they're doing, and I'm going
Speaker 1: to capitalize on their poor listing. I'm gonna buy it.
Speaker 1: I'm gonna create a good listing, and then I'm going
Speaker 1: to make money. Right. So, yeah, he was able to
Speaker 1: exploit a few different inefficiencies, uh and make money from
Speaker 1: this imperfect market of the online sale of Pokemon cards.
Speaker 1: So I feel like, yeah, reading that it made you
Speaker 1: realize that arbitrage possibilities are kind of endless. They can
Speaker 1: be found in a whole host of places. Yeah, there's
Speaker 1: a lot of different advantages and angles that we can
Speaker 1: take when it comes to arbitrage. And you know, one
Speaker 1: of Ben's tips was to look for cards at non
Speaker 1: peak hours when there's less competition. But he's also mentioned
Speaker 1: some pitfalls like avoiding payment scams and the folks selling
Speaker 1: fake Pokemon cards. You don't want that. Yeah, and so
Speaker 1: over time, obviously you need to have some knowledge, uh
Speaker 1: that that's required in order to actually profit. But still,
Speaker 1: retail arbitrage is a common way to make extra money, Joel.
Speaker 1: You know, I we had a friend who used to
Speaker 1: go to thrift stores. He bought the best stuff there
Speaker 1: at the thrift stores and resold it on eBay, and
Speaker 1: he actually made a living by doing this and supported
Speaker 1: his family for years. Uh. And now he basically does
Speaker 1: the exact same thing, but with mid century furniture, and
Speaker 1: through that process he really knows his stuff. He's got
Speaker 1: really nice, high end stuff, stuff that you know, I
Speaker 1: follow on Instagram and I see stuff up there and
Speaker 1: I'm like, oh, I want that in my house, some
Speaker 1: mid century pianos. Recently, I'm like, oh, And it's stuff
Speaker 1: that he has found sometimes on the side of the road.
Speaker 1: Literally one time, there's just one show that you found
Speaker 1: on the side of the road. It's amazing. This is
Speaker 1: also what our friend Katie Woke Stanley does she buys
Speaker 1: stuff at goodwill or even she snacks stuff also on
Speaker 1: the side of the road for free and resells it
Speaker 1: on eBay as well, And so the possibility is to
Speaker 1: profit from arbitrage are virtually endless here. Granted, this is
Speaker 1: a form of arbitrage that starts to look more like
Speaker 1: a side hustle or even a part time or full
Speaker 1: time job. But I don't want to make it sound
Speaker 1: like that that's a bad thing. Being a collector and
Speaker 1: understanding the mid century furniture market is one that every
Speaker 1: Boddy's found incredibly fulfilling. He has gained a lot of
Speaker 1: knowledge through this process. He's now an expert on mid
Speaker 1: century furniture and it now allows him to work for himself. Yeah. Man,
Speaker 1: it can be so basic to arbitrage, right. Like I've
Speaker 1: mentioned on the show that we're doing some renovations to
Speaker 1: the house. When we were getting rid of some of
Speaker 1: our scrap metal, he was put it on the side
Speaker 1: of the road. Guess what, there are people that drive
Speaker 1: around town looking for this scrap metal because they can
Speaker 1: turn a off it from it. There's it's It's truly
Speaker 1: the principle of one person's trash the other person's treasure,
Speaker 1: And yeah, I feel like too talking about retail arbitrage,
Speaker 1: It's becomes so much easier for the average person to
Speaker 1: participate in that process of like buying something at a
Speaker 1: discount and then selling it for a profit. And it's
Speaker 1: a legitimate way for people to even purchase brand new
Speaker 1: items immediately to resell if they're discounted enough. Right, you
Speaker 1: don't even need a storefront in order to make it happen,
Speaker 1: because the Internet can make it easy to find the
Speaker 1: deals and then to read list those items quickly, and
Speaker 1: even before you buy it, you can check on the
Speaker 1: internet to see, oh, what is this item typically selling
Speaker 1: for their even specific apps you can download to make
Speaker 1: sure that the item that you're buying sells quickly and
Speaker 1: will sell for a profit based on the price that
Speaker 1: you're paying. But there are also a few important things
Speaker 1: that you're gonna want to pay attention to if you're
Speaker 1: opting to try retail arbitrage. Income potential, Like I just
Speaker 1: mentioned obviously one of those what about quantity, like how
Speaker 1: many of them can you buy? And then the size
Speaker 1: and the weight, because if you're selling one off items,
Speaker 1: you know it's gonna be a little more difficult. You
Speaker 1: have to create that listing for every single item that
Speaker 1: you buy. But if you can buy a hundred of something,
Speaker 1: then you can magnify your your profits. Right. Size and
Speaker 1: weight are also important so that your profit isn't consumed
Speaker 1: by the shipping costs. That is something that could bite
Speaker 1: you in the butt as you're attempting to pursue retail arbitrage.
Speaker 1: But yeah, if you keep all vintage bowling balls or
Speaker 1: something like that, man I chose the wrong market exactly exactly.
Speaker 1: And if it is yeah, if it is highly profitable
Speaker 1: but it also is a substantial size, well it might
Speaker 1: work out right because then you can hire someone to
Speaker 1: take it across the country for you. But you're right,
Speaker 1: vintage bowling balls would probably be the quintisential worst way
Speaker 1: you can go about retail arbitrage. Yeah, so we're talking
Speaker 1: yeah specifically, and we're talking about retail arbitrage, right, and
Speaker 1: so becoming arbitrage minded it does extend far beyond just
Speaker 1: the retail landscape. Here. The cost of housing is easily
Speaker 1: the most expensive line item on our budgets, and developing
Speaker 1: an arbitrage mindset can not only save you a ton
Speaker 1: of money, but it can also make you healthy sum
Speaker 1: every single month as well. So we're talking about house
Speaker 1: hacking here. Uh So, the default consumer mindset, they you know,
Speaker 1: they consider how much they can afford every month on
Speaker 1: rent or mortgage. Maybe they add like ten to that
Speaker 1: after they talked to like a realtor so, you know,
Speaker 1: and then they see what's out there, they're like, oh,
Speaker 1: maybe I can afford just a little bit more, and
Speaker 1: you know, then they're just stretched every single month to
Speaker 1: cover that cost to the point that they can't achieve
Speaker 1: any significant financial goals otherwise house poor exactly. And then
Speaker 1: they might try to find other ways to pay less,
Speaker 1: maybe by negotiating rent, or maybe they choose not to
Speaker 1: live in the neighborhood and you know that has the
Speaker 1: really nice pool and they're really expensive h o A fees.
Speaker 1: But here is the problem. Their focus is still on consumption.
Speaker 1: They're not thinking of how they can instantly transform this,
Speaker 1: uh this expense into something that would potentially generate some income,
Speaker 1: turning that liability into an asset. Right that is slipping
Speaker 1: on his head. Yeah, that is one of the key
Speaker 1: elements when we're talking about arbitrage. So when you're thinking
Speaker 1: like an arbitrage r which I think is what they're called, right,
Speaker 1: that's at least the French term. I don't know, yeah,
Speaker 1: sort of arbitragery perfect I like it. Uh yeah. You
Speaker 1: basically you set out apartment hunting or house hunting with
Speaker 1: a completely different mindset. You're you're thinking less about the
Speaker 1: level of comfort and luxury that you can live in.
Speaker 1: You're thinking more about the long term. And so you've
Speaker 1: maybe already talked with three other friends who are totally
Speaker 1: interested in renting rooms of a house that you're going
Speaker 1: to put it down payment on, right, or maybe you
Speaker 1: don't have the those friends in mind just yet, and
Speaker 1: maybe you're not super social. We will have like three
Speaker 1: friends who are just dying to live with you, but
Speaker 1: still that's your plan. So you know, you're only looking
Speaker 1: at houses that have rooms with attached bathrooms or something
Speaker 1: like that that you could you know, and and then now,
Speaker 1: of course there's obviously just so many ways to rent
Speaker 1: that room out that are easy. Doesn't have to be
Speaker 1: a friend, but that is fairly easy criteria to stick with, right,
Speaker 1: and since you've already been smart with your money, you're
Speaker 1: easily able to put down so that the monthly payment
Speaker 1: is affordable and then lo and behold, you're actually making
Speaker 1: money somehow every single month because you've house hacked. So yeah,
Speaker 1: finding ways to house is a great way to flex
Speaker 1: those arbitrage muscles of it, turning that liability into an
Speaker 1: asset that is producing income that isn't just sucking you
Speaker 1: dry every single month. Exactly. I kind of wish we
Speaker 1: would have just started with this housing arbitrage, because we
Speaker 1: all have to live somewhere. But not everybody wants to
Speaker 1: flip Pokemon cards on you, right, but everybody has to
Speaker 1: have some place to live. And if you can get
Speaker 1: this one thing right, this can easily be a way
Speaker 1: that you see your finances go in an incredible direction.
Speaker 1: And you know, since we're talking about housing, us talk
Speaker 1: about other ways to determine where you choose to live.
Speaker 1: This is an arbitrage opportunity in and of itself. That's
Speaker 1: called geographic arbitrage. You can take this to an extreme, right,
Speaker 1: if you want to move to like, uh, Thailand, if
Speaker 1: you want to move to Southeast Asia, it's incredibly cheap
Speaker 1: to live there. Uh And like even now, there are
Speaker 1: a lot of early retirees moving to Portugal because it's
Speaker 1: a nice place to live, and it's a good bit
Speaker 1: cheaper than the cost of living in much of the
Speaker 1: United States. But combining a great, steady salary job that
Speaker 1: allows you to work from anywhere, that is the key
Speaker 1: to geographic arbitrage. You've got that steady income coming in,
Speaker 1: but you're finding ways to reduce in a major way
Speaker 1: the money that's going out, the money you're spending every
Speaker 1: single month. And obviously not everybody can do this right.
Speaker 1: Some people have jobs that are tied to a specific location.
Speaker 1: A lot of people have jobs that are tied to
Speaker 1: a specific location, but that is probably less the case
Speaker 1: today than ever before. More and more people have this
Speaker 1: sort of flexibility and could use something like geographic arbitrage
Speaker 1: their advantage. And let's say you don't want to leave
Speaker 1: your home country. You love the United States, Hey, me too,
Speaker 1: So maybe you don't want to be an next pat Yeah, exactly,
Speaker 1: and that's understandable. Maybe your Portuguese isn't so hot, and
Speaker 1: you you, you know, you're not ready to dedicate that
Speaker 1: much time to do a lingo and learning that language,
Speaker 1: So I understand you just want to pick up and
Speaker 1: move to a cheaper cost of living state. That's a
Speaker 1: worthwhile way to go to or even it could be
Speaker 1: as simple as moving to a less expensive county nearby
Speaker 1: where you live, same state, just a cheaper spot in
Speaker 1: that state, right, and you're in one of the really
Speaker 1: high cost of living areas, right like if you're in
Speaker 1: California or New York City. Um, checking out less expensive
Speaker 1: parts of the country can make a whole lot of sense.
Speaker 1: And this is of course more realistic as work from
Speaker 1: home opportunities are going to be even more prevalent now
Speaker 1: than they've ever been before. And the cool thing about
Speaker 1: geographic arbitrage too is maybe it doesn't even mean that
Speaker 1: you have to work. You can actually use cheap travel
Speaker 1: as a form of geographic arbitrage. We talked about this
Speaker 1: a little bit with Nomadic Matt back in episode three
Speaker 1: sixty one. But Matt I stumbles upon this site called
Speaker 1: the Earth a weights dot com and it is this
Speaker 1: awesome site where you can kind of find specifics on
Speaker 1: the cost of living for different cities that you're interested
Speaker 1: in living and so at the consumer reports, but on
Speaker 1: cost of living, yeah exactly, and so it's crrel like
Speaker 1: if you're if you're like, you can specifically pick the
Speaker 1: continent or the part of the world that you're you're
Speaker 1: interested in living in, and it gives you kind of
Speaker 1: a good estimate for you know, what it's gonna look
Speaker 1: like and how much money it's gonna take every single
Speaker 1: month to live there. I will say, if you're looking
Speaker 1: to move south of the US media and Columbia looks
Speaker 1: like one of the top spots. Nice, sounds like our
Speaker 1: dollar could go a lot further there. Maybe we can
Speaker 1: talk our wives into moving the entire How do money
Speaker 1: family down to Columbia. I got a feeling they're not
Speaker 1: going to be on board with that. Let's put our
Speaker 1: arbitrage money where I'm mouth is. Okay. Here's the thing, too,
Speaker 1: is that you can apply these same principles that allow
Speaker 1: arbitrage to work with housing or retail arbitrage, but you
Speaker 1: can apply them directly to your money as well. And
Speaker 1: so we're specifically talking about using leverage so that you
Speaker 1: have debt and you're investing at a rate of higher return. Right.
Speaker 1: This might sound a little sketchy, but that's actually exactly
Speaker 1: what you're doing. When you have a mortgage, say at
Speaker 1: three percent, and then instead of rushing to pay off
Speaker 1: that mortgage, you're putting that money into your retirement accounts.
Speaker 1: You're often saving money on taxes by doing this and
Speaker 1: earning a higher rate of return on the money that
Speaker 1: you're investing by prioritizing that over paying off your mortgage
Speaker 1: as quickly as you can. And so this is you know,
Speaker 1: this is why we feel that not all debt is
Speaker 1: ad And I mean, like, we don't go as far
Speaker 1: as to say that some debt is quote unquote good.
Speaker 1: Now we're not debt cheerleaders, no, yeah, yeah, but given
Speaker 1: the right situation, like uh, like a situation where you're
Speaker 1: investing boatloads instead of paying off your mortgage. Well, if
Speaker 1: that's your situation, then we feel that debt could make
Speaker 1: sense for you. Essentially you're taking advantage of a form
Speaker 1: of money or investing arbitrage by doing that. Yeah, And
Speaker 1: I think Matt, you know what we've talked about at
Speaker 1: the beginning of this episode, Having this arbitrage mindset is
Speaker 1: crucial to that, right, because you can't just take on
Speaker 1: more debt without an arbitrage mindset, because then you're in
Speaker 1: this consumeristic space and you're spending the dollars that you're borrowing.
Speaker 1: You're not using them wisely, and that is definitely not
Speaker 1: the place we want you to be. But if you're
Speaker 1: keeping that mortgage around on your home so that you
Speaker 1: can contribute more to your workplace for a one K, right,
Speaker 1: you're able to take full advantage of that match. Now, yeah,
Speaker 1: the percent return on your money exactly, that is a
Speaker 1: good use like arbitrage. Let's see versus three point you know,
Speaker 1: it's like, okay, one is clearly greater than the other,
Speaker 1: exactly that that's a big arbitrage win right there. But
Speaker 1: arbitrage also has some downsides. So yeah, we'll cover what
Speaker 1: some of the problems with arbitrage are after this break
Speaker 1: and then and then we're also going to discuss how
Speaker 1: to locate the arbitrage opportunities that are likely worth pouncing on.
Speaker 1: Where do you find the best ones? Will get to
Speaker 1: that right after this. All right, we are back in Joel.
Speaker 1: So far arbitrage sounds pretty great. Right. At the very least,
Speaker 1: you can save money by making choices that will use
Speaker 1: arbitrage to your advantage. But the ultimate goal is for
Speaker 1: you to be able to make money by exploiting this inefficiency.
Speaker 1: And again, which when when we say exploit, like exploit
Speaker 1: is a word that has such a negative connotation, but
Speaker 1: we want you to see it as benefit from Yes, yeah,
Speaker 1: as it's like the core of business, because that's what
Speaker 1: a successful business person does, right, They look for those
Speaker 1: opportunit needs. But all that being said, there are some
Speaker 1: downsides to arbitrage as well, and so let's get to those.
Speaker 1: One of the potential issues with discovering and inefficiency is
Speaker 1: that it's not likely going to remain an efficiency for
Speaker 1: much longer. It typically has a pretty limited shelf life.
Speaker 1: You might be able to take advantage and practice arbitrage
Speaker 1: and this maybe in this one area that you've discovered
Speaker 1: for a while, but then once others catch on and
Speaker 1: realize what you're doing, they're also likely to join in
Speaker 1: if there's a big enough benefit for them to to realize.
Speaker 1: So this means that the value that you're extracting may
Speaker 1: not be there for long. And so yeah, like going
Speaker 1: back to to the story that you mentioned of Dick
Speaker 1: the high jumper back earlier in the episode. After he
Speaker 1: started doing that, everybody changed how they jump. They adopted
Speaker 1: his more efficient method. Uh, you know, for a hot minute,
Speaker 1: Dick had an advantage, but it did not last. And
Speaker 1: so it's worth mentioning that just because you stumble on
Speaker 1: something that's really amazing right now, it may not necessarily
Speaker 1: mean that it's going to be amazing for much longer. Yeah,
Speaker 1: you don't necessarily have the arbitrage opportunity forever, right, Like
Speaker 1: there's a window that's closing, for instance. Yeah, going back
Speaker 1: to the example of Ben selling Pokemon cards, there's a
Speaker 1: good chance that more and more people are catching onto this.
Speaker 1: They're seeing some of the money that people are making,
Speaker 1: especially after you write a popular article on the internet
Speaker 1: about how you're doing it, and there's copycats coming out
Speaker 1: there to take advantage. Right, But that's okay, because we're
Speaker 1: not all unique snowflakes for very long. You know, it's
Speaker 1: not long before people start to copy you know, successful people, Right.
Speaker 1: But a helpful way to think about this is how
Speaker 1: can you help others maybe take advantage of the inefficiency
Speaker 1: that's happening. For example, lots of folks discovered there was
Speaker 1: an arbitrage opportunity to run out a room in their
Speaker 1: house on a daily or nightly basis, But it really
Speaker 1: took the founder of Airbnb to bring that to the
Speaker 1: masses and to make it easier Matt something else that
Speaker 1: we've discussed. We love some of those discount gift card
Speaker 1: websites right where you can say, guess what, I'm gonna
Speaker 1: make a five dollar purchase at Lows, but instead of
Speaker 1: just going in and paying with cash, I'm gonna go
Speaker 1: and buy a discount of gift card so that I
Speaker 1: can get an even lower price on that item that
Speaker 1: I'm buying. Well, think about the people that created those websites.
Speaker 1: They were arbitrage minded people. They realized that there were
Speaker 1: folks out there who had gift cards that they didn't want.
Speaker 1: Two stores like you know there, ain't give him a
Speaker 1: gift card to the Gap and they're like, I don't
Speaker 1: shop at the Gap. I only shop at Made Well,
Speaker 1: And so yeah, what am I going to do with
Speaker 1: this piece of crap gift card? Thanks Aunts for nothing?
Speaker 1: And so yeah, somebody had the idea that I know
Speaker 1: there are people like this out there who will sell
Speaker 1: me their gift card and lose a lot of money
Speaker 1: in the process because they would rather have sixty, yeah,
Speaker 1: a hundred dollar gift card to the Gap. And so
Speaker 1: someone started one of those, and then a bunch of
Speaker 1: other sites sprung up doing similar things. And then there
Speaker 1: was an aggregator site that sprung up, giving you a
Speaker 1: list of all the different sites where you could get
Speaker 1: a discount on one of those gift cards. So yeah,
Speaker 1: I guess it is important to note that just because
Speaker 1: there might be an opportunity for a little while in
Speaker 1: a specific area, it doesn't mean that it's always going
Speaker 1: to exist exactly. Yeah. One of the other problems with
Speaker 1: arbitraged too is the inherent risk of counting on something
Speaker 1: happening right before it's actually a done deal. The landscape
Speaker 1: and markets is always changing, and so are consumers tastes,
Speaker 1: and this can actually play out pretty badly when it
Speaker 1: comes to retail arbitrage specifically. And so in arbitrage, you
Speaker 1: were might come along, they might get in over their
Speaker 1: head and buy too much of an item that they
Speaker 1: see as an opportunity. I'm gonna buy all the tickle
Speaker 1: me almost over Christmas, and it's like, oh, not the height,
Speaker 1: not the hot toy atom anymore. I spent a hundred
Speaker 1: k on Pokemon cards one and drop like one million dollars.
Speaker 1: But then what if that's you and you're not able
Speaker 1: to unload what you've purchased, And so yeah, again, going
Speaker 1: back to that Pokemon guy, he talked about the downside
Speaker 1: to getting those nice cards that he was buying graded
Speaker 1: by a professional company. It seemed like that was a
Speaker 1: good idea, right, Yeah, what's you know, what he was
Speaker 1: saying was if I get it graded, then it's technically
Speaker 1: worth more. There's a third party that said, it's this legitimate,
Speaker 1: high end card exactly, And so you know, one hand,
Speaker 1: you can you see that as a great thing, but
Speaker 1: then on the other hand, it's actually took weeks for
Speaker 1: him to get that card back in his hand, and
Speaker 1: then by that time, the value could have completely changed
Speaker 1: depending on the popularity in the you know, opinion of
Speaker 1: the Pokemon market, like Pikachu no longer cool. Uh, it's
Speaker 1: a It's just important to keep in mind that the
Speaker 1: market reacts and shifts. You have to be aware of
Speaker 1: the risks that you are carrying. Essentially, it's like this
Speaker 1: carrying risk, especially when it comes to goods or services
Speaker 1: that might be influenced by popular culture. Yeah, for sure, Matt.
Speaker 1: And sometimes when we're talking about arbitrage opportunities, it happens
Speaker 1: where the rules change on us all of a sudden,
Speaker 1: and that arbitrage opportunity maybe doesn't look as good as
Speaker 1: it used to. For instance, you know people who maybe
Speaker 1: would rent out a room on Airbnb and then there's
Speaker 1: a citywide cracktown on Airbnb. Rules just changed exactly for you.
Speaker 1: Dang it. The bet I just made is no longer
Speaker 1: paying off for me, and in the way that I
Speaker 1: thought it was going to. Also, earlier in the pandemic,
Speaker 1: we saw folks who worked in tech moving out of
Speaker 1: the Bay Area or other high cost of living spots
Speaker 1: to take advantage of being able to live anywhere they
Speaker 1: wanted while still earning that super high tech salary. And
Speaker 1: for a minute, it looked like the savvaest thing in
Speaker 1: the world. You're earning the Bay Area salary but you're
Speaker 1: living in Indiana and realizing just incredibly low housing costs.
Speaker 1: But yeah, that window closed pretty quickly as many employers
Speaker 1: responded with different payrades based on where you live now. So, yeah,
Speaker 1: this was a geographic arbitrage opportunity, but the rules change.
Speaker 1: Employers are like no, no, no no, no, We're not paying
Speaker 1: you that much money if you're gonna live in Indiana. Uh,
Speaker 1: And so yeah, it's just important to note that when
Speaker 1: you're trying to take advantage of arbitrage. That is one
Speaker 1: of those potential pitfalls. Exactly. Yeah. So not only do
Speaker 1: tastes change out there in the market, but sometimes the
Speaker 1: rules change as how you can implement the arbitrage as well.
Speaker 1: Don't count on it necessarily being locked into stone forever.
Speaker 1: Maybe eBay could start charging sellers more, uh in a heartbeat,
Speaker 1: and you're like, all of a sudden, that's a cost
Speaker 1: that you weren't realizing before. That changes the game exactly Yeah.
Speaker 1: And so you may not be down though with flipping um,
Speaker 1: you know, underpriced items on the internet or maybe adding
Speaker 1: a bunch of roommates do you're you're living situation, But
Speaker 1: we want you to keep an eye out for arbort
Speaker 1: trash opportunities. When you start actively looking for them, uh,
Speaker 1: you are, You're you're gonna be bound to see some
Speaker 1: good ones on a regular basis. They're not going to
Speaker 1: be as far and few between as you think they
Speaker 1: might be, and it takes having the right information, right.
Speaker 1: So this is one of the keys to implementing arbitrage
Speaker 1: into your life. And on one hand that might seem like, uh,
Speaker 1: just a pretty I don't know, steep mountain to climb right,
Speaker 1: like a hurdle just to overcome. But the good news
Speaker 1: is that most of the knowledge that you might require
Speaker 1: is just sitting there in your pocket. We're talking about
Speaker 1: just the Internet and your ability to look things up.
Speaker 1: But part of using arbitrage to your advantage is actually
Speaker 1: the practice of putting that knowledge to work. And so
Speaker 1: just because it's there doesn't necessarily mean that you're going
Speaker 1: to succeed at implementing that knowledge. So, for instance, though,
Speaker 1: if you know, say you are shopping and you see
Speaker 1: an item that looks like a like a good deal,
Speaker 1: you can just open the eBay apps you what similar
Speaker 1: items have sold for in recent months, and that will
Speaker 1: give you that crucial knowledge to know whether or not
Speaker 1: that item actually is an arbitrage opportunity or not. Uh So, yeah,
Speaker 1: maybe it is the margins are wide enough and you pounce,
Speaker 1: But maybe it's not. But it's still a good deal.
Speaker 1: So maybe you buy it for yourself if that's something
Speaker 1: that you are already interested in. But either way, we
Speaker 1: want you to make sure that you're making informed decisions. Yeah,
Speaker 1: and Matt, it does take a lot of knowledge to
Speaker 1: be able to use arbitrage to your advantage, right, you
Speaker 1: have to have some sort of knowledge of the marketplace
Speaker 1: and the goods that you're considering buying your selling. Sometimes
Speaker 1: the best way to get started is to look towards
Speaker 1: a passion or a specific interest, right that you can
Speaker 1: turn into an arbitrage opportunity. You've got to eventually go
Speaker 1: beyond that, I think, and to be able to turn
Speaker 1: it into a working system. It can't just be a
Speaker 1: lover of hashion. Has to you have to be able
Speaker 1: to scale it to a certain degree. But taking something
Speaker 1: that you have some knowledge and interest in already and
Speaker 1: then noodling on how you can maybe make some money
Speaker 1: on the side is a good way to begin. It
Speaker 1: makes me think, Matt, how back in the day you
Speaker 1: and I used to go to this urban outfitters auction
Speaker 1: that was that that that took place back It was
Speaker 1: it was in augusta, right, we drove a couple of
Speaker 1: has on the outskirts of a gust that's like in
Speaker 1: South Carolina, but it was an urban outfitter is an
Speaker 1: anthropology auction like that was the That was the clutch
Speaker 1: part because that an throw stuff sold for top dollars.
Speaker 1: And this is this is early on in our both
Speaker 1: of our marriages, and so you and Emily were both
Speaker 1: looking for like some more furniture for your for your place.
Speaker 1: We had done something similar as well, and yeah, we
Speaker 1: saw this as a way for us to buy things
Speaker 1: at a massive discount. At the same time we were
Speaker 1: able to use it to actually make some money, make
Speaker 1: it worth our time. Yeah. Man, I started off going
Speaker 1: there wanting just to buy a couple of pieces for
Speaker 1: the house, and then it turned out I was like, Okay,
Speaker 1: some of these things are just priced way too cheaply.
Speaker 1: You can get you know, some of these rugs or
Speaker 1: some of these couches for just so much less than
Speaker 1: what they should be worth. And so I would start
Speaker 1: to stockpile some of them and and then start to
Speaker 1: list them on Craigslist, And on a couple of those pieces,
Speaker 1: I made hundreds of dollars. And so it's just one
Speaker 1: of those things like they want to get rid of
Speaker 1: all of this stuff at one time. But for me,
Speaker 1: I'm like, all right, cool, if I get four or
Speaker 1: five or six of these pieces that are gonna be
Speaker 1: able to make me two or three hundred dollars each,
Speaker 1: then this is a worthwhile arbitrash opportunity. And it really
Speaker 1: just started from something I was like needing and or
Speaker 1: interested in already. Man, it makes me think of the
Speaker 1: item that we scored the biggest return on, which was
Speaker 1: this anthropology tufted sofa. It was during kind of I
Speaker 1: don't know, it's like a lull during the auction, and
Speaker 1: a lot of folks just weren't paying attention, and so
Speaker 1: you know, this tufted couch came out and we bid
Speaker 1: seventy five bucks on it, but it was paying attention
Speaker 1: and the dude was just tired of it, so he
Speaker 1: he just sold and he sold it to us for
Speaker 1: seventy five bucks. This was a over two thousand dollar
Speaker 1: brand new sofa that we got for seventy five. It
Speaker 1: has some small defects. It had been returned, but we
Speaker 1: put that thing on top of the station wagon we
Speaker 1: had the Vida passalt wagon back in the day, drove
Speaker 1: it back to Atlanta covered in a tarp, and sold
Speaker 1: it here in Atlanta for like, I don't know, like
Speaker 1: twelve or six or something like that. A solid profit,
Speaker 1: but even still, it was at least a thousand dollars
Speaker 1: less expensive than what that person would have been able
Speaker 1: to get that couch for like new or brain new
Speaker 1: in the store. They were more than happy to purchase
Speaker 1: that sofa at a discount, and obviously we were more
Speaker 1: than happy to go through the hassle of figuring out
Speaker 1: how to get that thing back to Atlanta. But that
Speaker 1: just a very small example of arbitrage. Yeah, and you
Speaker 1: just start to see it, like, as you develop this mindset,
Speaker 1: you begin to see it more and more, and there's
Speaker 1: just opportunities. The opportunities abound in small ways and in
Speaker 1: big ways. Right, it doesn't have to be huge. And
Speaker 1: then I think, Yeah, one of the other things that
Speaker 1: it takes to kind of develop that arbitrage mindset that
Speaker 1: really does change a whole lot in the way that
Speaker 1: we live is maintaining a flexible mind. You've got to
Speaker 1: be open and willing to consider an opportunity before just
Speaker 1: saying no. I think sometimes people shut down an opportunity
Speaker 1: before they even begin to let it ruminate and give
Speaker 1: it some like time to consider. Yeah, it's not just
Speaker 1: about the knowledge, right, And so we talked about how
Speaker 1: that's something that you need to have on hand, but
Speaker 1: that's available to anyone. So that's really not, you know,
Speaker 1: a stumbling block anymore. It's more about what are you
Speaker 1: willing to actually take on? Yeah. Yeah, and I feel
Speaker 1: like the older I get, at least in people in general,
Speaker 1: we become more stuck in our ways and we're not
Speaker 1: as willing the step outside of our comfort zones. We
Speaker 1: go really deep into our professions and it keeps us
Speaker 1: maybe from exploring other areas, um that are alternatives to
Speaker 1: what we do for a living right like um, for instance,
Speaker 1: a doctor may not think about how to unclog a drain,
Speaker 1: even though it might be a simple plumbing fix. It's
Speaker 1: not because they're not really smart, it's just because they
Speaker 1: have maybe more of Uh, I'm just gonna leave that
Speaker 1: to the prose sort of mentality, that's right. Yeah, Exploring
Speaker 1: arbitrage opportunities will require a mindset shift, being a little
Speaker 1: more open to different opportunities that come along. Also, it's
Speaker 1: important to have cash on hand in order to be
Speaker 1: able to take advantage of a deal or an opportunity. Uh.
Speaker 1: If it's something small, right, so, like like maybe a
Speaker 1: purchase under a hundred bucks, it's probably not gonna be
Speaker 1: much of a problem for for most folks. Uh, most
Speaker 1: individuals out there are going to be able to handle that.
Speaker 1: But if you want to be able to pounce on
Speaker 1: a great real estate deal that will allow you to
Speaker 1: have two roommates, right going back to housing arbitrage, or
Speaker 1: if you want to invest more in the market because
Speaker 1: you're not planning to pay off your mortgage aggressively, or
Speaker 1: even you know, if there are some upfront costs associated,
Speaker 1: say with taking advantage of geographic arbitrage, before you're able
Speaker 1: to start realizing the benefits. Well, in all those cases,
Speaker 1: you're going to need to have that cash ready to go,
Speaker 1: whether it's saved up as a down payment or whether
Speaker 1: it's just having some cash in the bank that's fluid
Speaker 1: that gives you some flexibility. This is just another reason
Speaker 1: why we do not think that it is underrated. Do
Speaker 1: have a solid emergency fund uh sitting there in your
Speaker 1: savings account. You want to have that cushion not only
Speaker 1: to be able to weather any storms, but to be
Speaker 1: able to take advantage of any opportunities that might come along. Yeah,
Speaker 1: having some of that cash in the bank, having some
Speaker 1: liquid reserves gives you some flexible money in addition to
Speaker 1: the flexible mindset that you're gonna need to bring to
Speaker 1: the table if you're hoping to take advantage of arbitrage
Speaker 1: opportunities that abound around you and Matt when it comes
Speaker 1: down to it, wrapping this up, like, arbitrage can make
Speaker 1: you money with something as simple as buying a pack
Speaker 1: cards and reselling them individually not just Pokemon cards but
Speaker 1: sports cards to right. Or it can save you money
Speaker 1: by moving halfway across the globe to reduce living costs
Speaker 1: while you know, maintaining your solid job wherever you currently live.
Speaker 1: But arbitrage isn't without risks, Like we definitely covered that too,
Speaker 1: because trying to exploit arbitrage opportunities can leave you in
Speaker 1: the lurch if you don't know what you're doing and
Speaker 1: if you're not smart about it. So it's probably best
Speaker 1: to dip your toes in before going hog wild and
Speaker 1: purchasing a thousand tickling Elmo's uh and in order to
Speaker 1: try to you know, make money this Christmas. There's some
Speaker 1: definite downsides if you go too hard, too fast. Yeah,
Speaker 1: and you also want to make it, Like, aside from
Speaker 1: the financial risks, you also want to look at your
Speaker 1: lifestyle like is this something that I want to spend
Speaker 1: my time doing? Right, Because even though you can make
Speaker 1: a bug doing something doesn't mean you necessarily should or
Speaker 1: want to, right, Yeah, but I think once you start
Speaker 1: seeing arbitrage opportunities, you're likely not going to be able
Speaker 1: to stop seeing them. You'll kind of realize that they
Speaker 1: are all around you as you move through life. So yeah,
Speaker 1: hopefully our listeners are can be able to find some
Speaker 1: ways to make extra money and save more of it
Speaker 1: too by kind of developing more of that arbitrage mindset.
Speaker 1: It's amazing to me to see how big that arbitraged
Speaker 1: mindset can get you into building like a massive fortune,
Speaker 1: but it can also be used and exploited on just
Speaker 1: a personal level, either in really small ways or can
Speaker 1: you know, scale up to being something that makes you
Speaker 1: a full time income. It's just kind of a cool
Speaker 1: concept that we felt like was worth talking about on
Speaker 1: the show. Yeah, man, this is a fun episode. I
Speaker 1: feel like what you said earlier to about treating your
Speaker 1: life's sort of like a business owner would treat their
Speaker 1: business right, because it sort of like we're joking, how
Speaker 1: like like we are the CEO of our own lives
Speaker 1: and so and only we know what we're spending our
Speaker 1: money on and what we're purchasing, and when you know
Speaker 1: the ins and outs. Well, then you can find ways
Speaker 1: to kind of hot wire it. You know, it's like,
Speaker 1: oh wait a minute. Instead of uh, separating this expense
Speaker 1: from this from this source of income, you can link
Speaker 1: all these things together and find opportunities that might exist
Speaker 1: in your life that don't exist and someone else's life.
Speaker 1: This is why it's important to understand this as a
Speaker 1: principle so that you can apply it to your own life,
Speaker 1: because there's no one out there who's gonna do this
Speaker 1: for you. Just like we talked on Monday with Clark
Speaker 1: Howard about being your own advocate, this totally fits within
Speaker 1: that wheelhouse, that similar way of thinking. If you don't
Speaker 1: step up, nobody else is gonna do this for you,
Speaker 1: no doubt. Man. All Right, Well, let's get back to
Speaker 1: the beer that we had on this episode, Matt. This
Speaker 1: one was called Pineapple Upside Down Shake. This is a
Speaker 1: fruited sour i p A by New Grass Brewing Company. Um,
Speaker 1: thanks for picking this one up on while you were
Speaker 1: in North Carolina. But what were your thoughts on this beer? Man? Yeah,
Speaker 1: I'll go ahead and say that it's also brewed with pineapple, lactose, vanilla,
Speaker 1: and Graham cracker Uh, and so, dude, this was such
Speaker 1: a good beer. I'm really curious, honestly to hear your
Speaker 1: thoughts because I really liked it. I feel like this
Speaker 1: is it's slightly on the sweeter side of things, but
Speaker 1: it's dry hot, and so it's an I p A.
Speaker 1: And it kind of has some of those bitter notes
Speaker 1: going on. So it kind of has that sharpness that
Speaker 1: you would get with uh, like a sharp cheese. Right,
Speaker 1: It's not just like the super creamy sweet I don't know,
Speaker 1: what's the sweet cheese like have already. Yeah, that's I
Speaker 1: guess I'm not a big cheese. This is like a
Speaker 1: sharp Wisconsin cheddars or you know. It kind of has
Speaker 1: those flavors going on with the addition of the fruit.
Speaker 1: But for me, man, this this beer hit on all
Speaker 1: the cylinders. I'm not always looking for fruit in my
Speaker 1: I P A and so I don't. It's it's like
Speaker 1: it's a cylinder that I didn't even know existed. But
Speaker 1: all I know is that when I drink this beer,
Speaker 1: it tastes good, and that's all that matters. I drink
Speaker 1: the beer. It tastes good. Uh. Yeah, No, I like
Speaker 1: your very blue collar assessment of his beer matt Um.
Speaker 1: I would say this beer has has some awesome smoothie qualities,
Speaker 1: and yeah, the pineapple really really does shine through. It
Speaker 1: was pretty sweet. I wasn't tasting as much of any
Speaker 1: of the I p A tones. I was mostly tasting
Speaker 1: the fruit and the vanilla and the lactose. But still
Speaker 1: I thought this was really really delicious and it's just
Speaker 1: kind of a fun, unique beer to have. At the
Speaker 1: same time, I don't eat pineapple a whole lot, but
Speaker 1: I don't like pineapple. I like it. I just don't
Speaker 1: need a whole lot, but pineapple and beer I think
Speaker 1: pineapple exactly. I think it's why I don't even Yeah,
Speaker 1: but I think pineapple and beer is is really delicious
Speaker 1: and I like, um, most beers that put pineapple at them,
Speaker 1: I'm into it. So maybe I need to like go
Speaker 1: to all the inn get a pineapple soon. I just
Speaker 1: want to drink more pineapple drinks in general, because I
Speaker 1: feel like that typically means I'm at the beach stepping
Speaker 1: on a tropical cocktail or something like that, right, And
Speaker 1: this is this beer is also fun too, because the
Speaker 1: artwork on it could definitely had like a I don't know,
Speaker 1: like an under the Sea kind of SpongeBob SquarePants kind
Speaker 1: of looking on it's kind of illustrated and all over
Speaker 1: the place. But but yeah, this was brewed and can
Speaker 1: buy New Grass Brewing, and so if you're able to
Speaker 1: get your hands on any of their adventurous beers, I
Speaker 1: would highly recommend it. All right, man, Well, that's gonna
Speaker 1: do it for this episode. For folks that want show
Speaker 1: notes links to some of the websites that we mentioned,
Speaker 1: we'll have those up on our website at how to
Speaker 1: money dot com. That's right. If you've been listening for
Speaker 1: a while and you have not yet left us a review,
Speaker 1: would be eternally grateful if you were to do that
Speaker 1: over at Apple Podcasts or wherever you listen to podcasts.
Speaker 1: And a big thank you in advance for that, Joel.
Speaker 1: That's gonna be a buddy. Until next time. Best Friends Out,
Speaker 1: Best Friends Out.