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Fastest way to double $500, $1000, $2500, $5000, $10000? [Archive] - Page 11 - SOWPub Small Business Forums

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Michael Ross
August 10, 2002, 10:21 AM
I wrote: what do YOU consider to be Safe.

You responded with: That's dependent on the person of course -- I'm sure we all have a comfort zone somewhere between placing a bet on a horse race and putting the money in US Treasury Notes.

Paul, your original question asked "what would you think..."

What I think is safe or not would be different to what you would think is safe or not. That is why I redirected the question back at You.

I wrote: Also, are you thinking along the lines of the return on Your Cash Investment, or on the investment overall?

You responded with: No, you're complicating things. I have $500 in my pocket. I want $1000 in my pocket. What's the fastest way to get there? I don't care if I invest $50 to get the additional $500, or the whole $500 I have -- the object is to get $1000.

NO, I am NOT complicating things. You asked for a way to Invest this money. You did not ask for the quickest way to turn $500 into $1,000 any old way.

You could take that $500 and use it as a deposit on some real estate or to buy options. Either case you become leverage (in debt).

With real estate you may have been able to get a bargain property with a large amount of equity. And thus your $500 deposit enabled you to borrow money which was then used to puchase something with an immediate gain of thousands of dollars in equity.

With stock options, my understanding is you can buy ten times your investment. So your $500 buys $5000 worth. If those options rise in price to $6000, the overall return is quite different to the return on Your Cash investment.

You said Invest and did not say it had to be simple.

Besides, Simple and Complex are also relative to the experiences of the person doing the investing.

I wrote: Because if it's Your Cash you are mainly interested in, then there are ways to get returns of infinity... in real estate... using borrowed money and none of your own.

You responded with: Yeah, but I don't care about "ROI", what I DO care about is "how much money do I have". If someone gives me a bag of aluminum cans and I sell them to the local recycling plant for $15.00, then my ROI is infinite, but I'm still $485 short of turning my $500 into $1000.

ROI is important when it comes to Investing - which is what you asked about. Your ROI determines the SPEED at which you will reach your goal.

I believe the formula is, divide 72 by the rate of return to get the number of years it takes to double your money.

So $10,000 invested at 12% will take 6 years to double (72/12 = 6)

You need to know your ROI even in simple buy/sell transactions. This will thus help determine the number of transactions you need. And thus how fast you can get to where you want to go.

I wrote: No matter which way you cut it though, the fastest and safest return will be to buy something and then sell it.

Your responded with: Ah, now we're getting to the ANSWER to my question! Looks like it's another vote for chatteling! :o)

Hold On! I said to buy "something" and sell it based on your initial use of the word invest. And I never mentioned Chattel. "Something" can be anything which can be bought and sold - options, notes, stocks, goods, licenses, etc.

I wrote: The amount of return you want will determine whether you buy before you sell, buy after you have made the sale or sell without actually buying.

You responded with: Again, I only care about how quickly I can turn that $500 into $1000.

If you only care about using your money then you are limiting your available options. As I said, the amount of return you want determines your strategy.

I can buy stock and then sell it - money leaves my hands and I get it back, plus a profit, after I sell.

I could know of a source. Make the sale then go buy it to complete the transaction. I know I have a sure sale, and may have even taken a deposit for the thing, and so my return will likely be higher.

Or I could make a bunch of sales, collect the money and forward some onto the seller with intructions to deliver it to my customer.

Now the thing about your question is, you wanted to know the fastest way from an investing point of view - as I understand it because you used the word invest.

Remove the "invest" term and open the question up to making money fast and the alternatives are many. With $500 there are a plethora of businesses you could start.

Hugh Gaugler's Gutter Cleaning thing is a classic example. For about $500 he started a business which landed him 90 customers right off the bat. At $100 a service he grossed $9,000.

It might have taken him two months to service those 90 people... but hey... it's still a good return right? $500 to $9,000 in two months. Is that fast enough for you?

I think some people would have a bit of trouble taking $500 and turning it into $9,000 in two months by buying and selling chattel.

Michael Ross

This contains lots of ways to take $500 and use it to start a business that makes you money (http://www.sowpub.com/cgi-bin/to.cgi?l=sfgreatideas)

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