Way back at the beginning of the year I hopped into a friendly little wager among personal finance people to see who would have the highest value portfolio at the end of the year. Now that we’re passed two months, it’s time to see how my investments are doing.
First, let’s recap a little. Unlike most of the challenge participants, I am not relying on stock for the bulk of my wealth building in this challenge. I split my $1,000 initial investment into peer-to-peer lending (25%), stock investing (25%) and my own little side business (50%). I’m going to go in order of returns.
Share Builder
I managed to transfer $250 into the account aaaaand nothing. I haven’t touched it at all. I don’t even remember the password. There is some serious work to be done in this area. Here’s the problem, I have never been able to invest in stock outside of my 401(k) because I traditionally worked for investment banks. I hated jumping through hoops to get permission to invest, so I never bothered. Now that I can do it, I am so not used to the freedom that it’s a bit daunting. This is a mental hurdle to get over. But, I did earn 7 cents in interest. Hey, it’s something.
Nothing to it but to do it, right? The way I see it, I haven’t missed too much. The market has had more ups and downs than a seesaw. Next month will be different…I promise.
Lending Club
I chose Lending Club as my P2P lending provider with a fresh portfolio. Instead of using their automatic investing option where they place your money into portfolios based on your risk tolerance, I decided to choose the individual loans to invest in.
This can be slow, time consuming process when the loan that you choose to invest in gets cancelled. That happened a few times, but I finally have my $250 now invested in 10 different loans. So far, my porfolio’s value is $251.44. My net annualized return is 10.44%. So far, I have received interest payments totaling $1.51.
This was meant to be my “aggressive” portfolio, but I found myself playing it safe. Must put my money where my mouth is. Heck, this is still my money that I’m playing with. I’m having a hard time being as aggressive as I should be, especially if I want to beat the pants off the other suckers participants. What I will do is reinvest the profits into new loans that are more risky but offer greater potential rewards.
I’m A Hustler Baby
This, my friends, is where I will shine. Half of my money went into a side business. I’m selling cell phone cases that I design on Amazon. Since January, I made a net profit of $1,078.10 from what I sold on Amazon. So, my investment more than doubled. What? Doubled. You want to know how, don’t you? Alright, read on.
Although I design the cases, I don’t make them myself. I subcontract that out to my brother who owns all of the equipment. He also gives me generous net 30 day terms meaning that I don’t have to pay for anything up front and he also drop ships for me, meaning that I don’t have to store inventory. Basically, I run a business as lean as humanly possible.
Amazon literally pays me before I have to pay him for the items so I could have invested nothing more than the cost of the professional seller account and a stack of UPC numbers (required for selling on Amazon) and still made out like a bandit. If I wasn’t making my own stuff and just reselling things that other people manufactured, I wouldn’t have even needed to purchase UPC numbers. Lots of sellers on Amazon resell old books. That’s a great place to start if you have a stack of them or if you pick up a bunch at yard sales for pennies.
Do you think that I’m bullshitting or that I didn’t sell that much on Amazon in that time? Go ahead and look at the report that I downloaded from Amazon (PDF). What you don’t see here is the cost of goods sold, the cost of reshipments for orders that were incorrectly shipped (crap happens) or for shipments that were lost in the mail.
How Am I Doing?
Just peachy. My portfolio, if you can call it that, is up a total of $1,079.68. The biggest difference here was of course my own side business. I didn’t include anything like website sales or any other selling platform. I specifically chose to sell just on Amazon because everyone can do exactly what I did and have your Amazon business up and running in a short time.
To be fair, I am in the unique position of being close to a drop shipper with a product that I trust. My brother provides the same service for a number of different people, so I don’t have any exclusivity here. If you can find a trusted company with products that you like and others want to buy; who are aware of Amazon’s rules; who are willing to work with you and who drop ship, you have struck gold my friend. I’ve always said that a small side business is essential in today’s economy. Now, you get to see what I’m doing and how I’m doing as well.
But, I’m not the only one taking this challenge. You can check out the people who will lose challengers and see how they’re doing. Just remember, I’m making it rain over here.
Disclaimer
Don’t listen to a thing I say or take whatever I do here as investment advice. My portfolio’s performance doesn’t guarantee you a dang thing. Consult your own investment professional for advice before taking on some risky crap like betting against a bunch of personal finance people in a public spectacle of wits and stuff. I warned you.