Sunday, February 9, 2014

Cash Flow

I've been floating by for nearly one year with no job. This has been made possible by several factors.

1) I haven't been paying rent. I started out staying at my parents' house, and now I'm migrating to the tiny house that I made.

2) I had a pile of bicycle parts to sell on eBay. Two swap meets worth; thousands of dollars in severely under-priced parts and ephemera.

3) I don't spend much. I have an inexpensive lifestyle.

I had two goals when leaving my job as a bicycle mechanic. The first and most important goal was to build a tiny house. The house needs finishing work, but the construction is done. I did it. Boom.

The second goal was to find a way to maintain a job-free existence. I want to set my own hours and make a comfortable income with room for savings and time for new projects and adventures.

I feel like I've made progress on the second goal, but I don't know if it's enough. I have the beginning framework for a sustainable situation selling on Amazon with their FBA program. I have the framework, and the methods and hardware are becoming familiar. The fundamental theory is simple - buy low; sell high. The challenge is in establishing an algorithm for exactly when to buy an item. If you spend too much on inventory, then it might not come back fast enough to cover your needs. Everything might sell, and the profits might be very good, but the speed at which the investments show a return needs to be fast enough to cover monthly expenses. That's cash flow.

If I had a reasonable amount of money in the first place, I wouldn't be as panicked about cash flow at such an early stage. As it is - I am. I look forward to honing my skills and algorithms. I look forward to understanding the math and economics which apply to this emerging market of niche interests, abundance, and the dirt cheap distribution which makes profit possible. But I've burned up some money trying to find my footing and get the equipment, software and hardware that I need in order to operate.

I've pulled a rabbit out of a hat many times over the last year. I've run low on cash and put building on hold while I photograph and list a new round of bicycle components. I've pulled myself out of a hole, and emerged victorious to begin building again. I've pinched pennies and stretched dollars far beyond where most people would assume a breaking point must exist.

Once again, the worry is setting in. Worry comes easy when I feel the threat of a traditional job breathing down my neck. I have some bicycle parts and other items to sell, but I've been getting closer and closer to the bottom of the barrel. The $100+ bicycle parts are long gone. The $40 bicycle parts are possibly all gone as well. I need to nickel and dime my way back to solvency.

I feel like I'm going to make it past this point. I don't know how it's going to happen, but I need it and I want it.