Patience when Flipping


One of the main parts of flipping for profit is to have patience. When I buy items I don’t normally have a planned date when something has to sell by, or I want to start trying to discount it. The reason for this is because I know once I have bought I don’t have much control over when something sells. The vast majority of items breakdown very simply between the supply and demand curve. This thought process takes patience. I don’t know when someone is going to make a decision to buy, but as long as I’ve purchased an item that is in demand and did not pay too much I will be able to make more purchases and sells over time with an inventory that is growing and make a good return on a small amount of money.

Patience

I’ll probably get the exact saying wrong, but people tend to over estimate what can be done in a year and vastly underestimate what can be accomplished in ten years. If you keep this in mind and have patience you can grow a very small amount of money into a significant stake over an extended period of time. If I think about the amount I started with in my change jar and what the possibility could be in a ten year time frame from possible ranges it is a very wide range. From a most simple version I will build a framework about how patience would be your friend over time in a situation like this. If I were to get a 30% return on my initial amount it would be almost $500 at that time. As well, I could then make $150 a year off of the inventory moving forward. That would be five times the amount I had when I started every year. I think a $150 a year extra would be a nice thing to have from change that had built up over the years. This amount does not assume using future change to increase the value.

YearAmount30% returnNew balance
1$36$10.80$46.80
2$46.80$14.04$60.84
3$60.84$18.25$79.09
4$79.09$23.73$102.82
5$102.82$30.85$133.67
6$133.67$40.10$173.77
7$173.77$52.13$225.90
8$225.90$67.77$293.67
9$293.67$88.10$381.77
10$381.77$114.53$496.30
Growth at 30% a year for ten years

Another possibility is I am able to get 75% return on my initial amount in the change jar every year for 10 years. This is possible when flipping. This would put me at an inventory of $9698 in inventory which I could make $7200 a year off of before taxes. $600 a month is not life changing, but gives a lot of options for what could be done with it. This amount could pay all of a family’s utilites and still have money left over each month.

YearAmount75% returnNew Balance
1$36.00$27.00$63.00
2$63.00$47.25$110.25
3$110.25$82.69$192.94
4$192.94$144.71$337.65
5$337.65$253.24$590.89
6$590.89$443.17$1034.06
7$1034.06$775.55$1809.61
8$1809.61$1357.21$3166.82
9$3166.82$2375.12$5541.94
10$5541.94$4156.46$9698.40
75% a year return after 10 years

At the end of the day remaining patient will allow the power of compounding to work its magic and turn into something which could be a reasonable amount of money which throws off a good amount a month and in a year. Building an additional monthly and yearly flow not tied to a job is a pillar of creating value for yourself outside of your job to allow you to do other things in life financially. I am excited to see what will become of the amount over the years from the start of just over $36.

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