Author: Willard Michlin

Article:
Why is it that the older and richer people become, the more
conservative they are with their money? Have you ever done or
know someone who has made an investment that promised a 10%
interest or profit per month? Everyone wants to make above
average profits. It is amazing how many people will send their
very hard earned money across the world to Nigeria or to Boca
Rattan, Florida on the promise of a telephone acquaintance to
make them much richer. People give their money to complete
strangers in hopes of making more money.

All good investment advisers will tell their clients "If a deal
is too good to be true, it probably is." Professionals only make
very high returns in areas they personally know very well. This,
for them, is a business investment, not a passive investment
like stocks, bonds or mutual funds. Real estate and business
investments are considered active investments. People who are
employed by others do not usually make active investments,
because they just do not have the time to watch a business
investment, where big profits are always possible (as well as
big losses.)

People with small amounts of money come to me all the time and
ask: "What can I do with $1,000 that will give me a big return?"
Here is the answer. When I was a 21-year-old lad working for my
father, I had money in the bank, I owed securities (stocks) and
my income was a fixed salary. I saw many opportunities to make
money all around me, in the business. My father, like so many
employers, wasn't interested. Besides I was trying to figure out
how I could make money for me.

At the time, 1971, we had high inflation and prices were going
up on many things. My father used metal rings to seal
containers, nuts and bolts, paint, and other industrial
supplies. I watched prices starting to go up and it appeared
that they might even double on finished products that were made
from steel. Since the company used these products all the time,
buying bigger orders meant buying much more then you needed and
having to store it so it didn't get stolen. I used to buy 2
years supply of bolts at a time. Knowing the price was going up,
I bought a 4-year supply. Rings took a lot of space so we would
buy 3 months at a time. The problem with new rings, being bought
and laying around, in storage, was that the workers, taking the
easy way out, would take new rings out of the warehouse, instead
of cleaning the old rings, which saved the company a lot of
money.

My father didn't want to have a years worth of rings around,
even though we both knew the price was going to continue going
up. We came up with an idea. I would buy, with my own money, the
extra inventory, the amount above the companies normal order
size. My investment inventory would be stored in a separate
locked area in the warehouse. When the company needed more rings
or bolts, it would buy them from me at the then current market
price. I made $1,500 on my $5,000 investment in just six months.
That was a 30%, no risk profit in just half a year. Now I was
hot.

When I got married, and I used more toilet paper and toothpaste
than I did before, I decided that I should repeat the process
that I learned as a boy. When I was a boy toilet paper was 10
cents a role. If you do not know what it is now, take a look. I
bought 5 cases of toilet paper and put it in the garage. I knew
that paper prices were going up. I not only got the increase in
price, I got close out quantity discounts by the case. Do you
know that dog and cat food by the case is 10% off? Then if you
wait for when Friskies has a sale or close out, then buy large
cases; you cannot believe what you will save. If you can get a
distributor or wholesaler to sell direct to you, another 20-33%
is possible. You might check the price at Costco. It may be
cheaper than what the wholesaler will sell it to you for.

You only buy items that you know you will use yourself,
personally. You are not buying for resale. You are buying a
two-year supply of things you know you will use, for sure.
Toilet paper is one of them. (Make sure you try the brand out,
to see that you will like it.) Smart and Final has many things
in bulk. Compare prices at Costco, Smart and Final, the 99-cent
store, and if you can find the distributor that the 99-cent
store buys from in Downtown LA, you will really be buying cheap.

First step. Make a list of everything you buy on a regular
bases. List non-food items, bathroom items and dry or canned
food items. Do not buy food the rats can get into. Grains must
be in steel drum with bags. You will be shocked at how much 20
lbs of rice will cost you compared to a one pound bag, about a
quarter of the cost or less. Do not buy clothing, because of
change of styles and weight. You can buy men's socks and
underclothing when you see a real close out at 80% off. Men wear
the same style all their lives and their weight tends to be
constant. Do not do this for children or woman. Things change
too fast.

Second step. Price shop so you will know what are the good
prices and bad prices. Do not buy yet, just price shop.

Third Step. Decide how much inventory you want to have, how much
money do you have to spend and how long it will take you to use
it all up. Where are you going to put it so that it will be safe
and dry? Not a public storage place, please. The rent will eat
up your volume buying profits, real fast.

Fourth Step. Look for close outs so you can buy cheaper than the
best price you planned on and then have fun buying.

Hidden Bonus: There are also non-profit advantages to this
program that you should be aware of. In case of an economic
depression you have food. That means if you loose your job, you
still eat. Your unemployment check can then go towards the rent,
gas in the car, car payments, and fresh food. You will already
have most of the toilet items and other things you will need,
until you get a job.

In case of a natural disaster or a teamster strike you will have
your well-stocked private supermarket with those needed items.
The IRS closed down Howard Ruff, a newsletter writer in the
1970's. They attached all of his bank accounts, and locked the
front door of his store. Howard had 12 children, no income and
no money in his pocket. He did have big food storage, which fed
his family while he took a month to decide what his next move
was going to be. He was able to think his problem out without
panicking because his family was fed, and he could postpone his
mortgage, utilities and other bills for a few months, before he
had big troubles.

So be smart. Invest in a food storage program. Only buy what you
will use, and do use. Buy in quantities that you will use up in
2 years. Do not buy a 5-year supply of anything. Shop for the
best price, and then wait for a better deal than that. Then you
have made a safe and profitable investment, while at the same
protecting your family from emergencies.

About the author:
Willard Michlin is a real estate and financial distress
consultant. He can be contacted at his Ventura, California
office by calling 805-529-9854 or by e-mail at
kismetrei@earthlink.net. See other article by Willard at
http://www.kismetgroup.com

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