What would you say to the following:
- A new $49.95 dress shirt for $9.95 (80% off)?
- A new $450 Calvin Klein suit for $25 (94% off)?
- A $595 Hugo Boss jacket for $26.25 (95% off)?
- A $1,395 Versace raincoat for $42.50 (97% off)?
- $21,600 income for 15 hours work ($1,440 per hour)?
These events happen every day. However, they happen only to those who accept them as possibilities.
You'll are probably aware of the cautious phrase, "If it sounds to good to be true, it probably is." That doesn't mean it isn't true. Only that it probably is. That leaves a slight probability that it is true. The cautious phrase is meant to protect you from situations where you might lose because you don't have the knowledge to evaluate the risk and reward. But it isn't meant to be applied to every situation nor to situations where you have the expertise to see if it's a great deal.
You also know these expressions: "there's no free lunch" and "you can't get something for nothing." They declare that everything has a price. These are true, because there is a price to everything, even if you aren't paying in cash, even if you aren't the one paying. The ultimate free lunch, air, doesn't cost you anything to breathe, although you do need to inhale. But with decades of pollution, even keeping the air breathable costs more, not only in reducing future pollution but in fixing the environmental consequences that have already occurred.
However, there are two drawbacks of relying on these expressions without thinking about them.
First, when interpreted literally and at all times, which many people do, you can conclude that certain things and events are not ever possible. You can deny yourself the benefit of the probability that the too-good-to-be-true situation actually is true in certain circumstances, that you can get a free lunch for no money if you invest your time learning where to get it, and that you can get something for no money, putting in something other than money.
Second, when interpreted only in terms of cash, which many people do, it's easy to agree with the expressions. There are only a few places to consistently get food without cash (homes of family and friends); the rest are usually included as a bonus (lunch during a seminar break, workplace meals as part of your employment). There are only a few places to consistently get stuff without cash that you actually can use: There is always a lot of junk that comes to you free: check your mailbox and e-mail messages to confirm this.
In short, you pay for your free lunch by increasing your knowledge and applying it, by maintaining quality relationships, or by negotiating the free lunch into the deal. These are the forms of payment, rather than by cash, check, or credit card.
The catch is that the cost is not in terms of money, but in time, in being there, in seeing the opportunity, and in having sufficient resources to seize the moment. Let's make sure we understand each of these.
- Time means the effort you put into discovering how goods and services can show up into the world (besides on the shelves of your favorite retailers), and knowing when (many things in life have cycles and seasons) and where to get them for no or very little cash (cash, check, or credit cards are only a few of the ways to pay for purchases).
- Being there means having some way to show up and to get accurate information about the situation (online at eBay, via telephone at that fancy Sotheby's auction, or you or your business partner on the courthouse steps bidding 30% of the foreclosed property's market value).
- Seeing the opportunity means having trained your mind to notice the opportunity in the situation and seeing how it meet your needs. (A restaurant, needing to increase sales, finally notices after years that the nearby symphony disgorges its hungry audiences at 10pm, and works with the performing arts community to promote special after-the-show menus.)
- Sufficient resources means whatever you need to make the opportunity a reality for you: knowing what you getting, negotiating the terms, paying for the stuff, and dragging it away to your castle.
As you can see, the more time you invest in knowing how things work, the greater the opportunities you'll have to lower the cash you spend. Which loops back in a positive feedback cycle. With more free cash, you can lower your debt, which frees more cash, which you can use to boost your savings and investments, creating more cash which you can use to build passive income to do what you want.
But it's not a free lunch. You need to train your mind to accept the possibility of other possibilities.