Have you ever noticed that the older and richer people are, they become more cautious with their money?  You or someone you know may have invested in something that promised a large profit per month.  We all want to make huge returns on our investments.  Amazingly people will send their hard earned cash half way around the world on the whim of someone they hardly know in a bid to make big bucks.  Indeed some people hand over their money to complete strangers in anticipation of making lots of money.

It is a good idea to remember the old saying, “If a deal is too good to be true then it probably is.”  It is only in areas where they are personally known that professionals get high returns on their investments.  These are business investments rather than things like mutual funds, stocks or bonds, which are classed as passive investments.  Active investments, where big profits and losses are possible, are not usually made by people who are employed by others, as they don’t have time to watch over the investments. 

Many people want to make a huge return on small amounts of money and they are always asking, “How can I do it?”  In 1971 there was a young man who worked for his father, he had some money in the bank, he had a fixed wage and he owned some stocks and shares.  There were many opportunities in his fathers business where they could have made money, but as was the case with many business owners, his father just wasn’t interested.  This young man wanted to make investments himself and make money.    At this time prices were rising and inflation was high.  His father’s business used products made from steel, and as the young man observed, the prices of such items started rising.  As his father’s business continually used these products it was necessary to buy in bulk sometimes buying enough stock for two years at a time. 

The young man realised that the prices were rising and decided to buy 4 years worth of stock instead of the usual two.    This in itself has draw backs as you have to store all the stock so that it cannot be stolen, and with all that spare stock lying around, workers were more inclined just to use new parts instead of cleaning and reusing old ones which as we all know would save the company money.  Although he and his father were aware that these prices would carry on increasing, his father wasn’t keen to have all that stock just lying around, so they came up with an idea.  The young man would buy more stock than the company’s usual quota, with his own money and that stock would be stored, in a separate warehouse on his fathers premises.  When his father’s business needed more stock, they would buy it from him at the current market value.  In just the first 6 months the young man made a 30% profit, and the best thing about it was, there was no risk. 

The young man had obviously been bitten by the money making bug, because after he was married he realised that there were commodities we use in everyday life that he could buy in bulk, as he did with his father’s business, and in turn save money.  Things like toilet paper, cat and dog food etc.  If you by these items by the case you will usually get discount, this can be around 10%.  It is possible to save another 20-30% if can get the wholesaler or distributor to sell to you direct. 

Remember you are not intending to sell the goods on, so only buy items that you know you and your family will use.  Only buy things you are sure you will use, as you will be buying a two-year supply.  You should compare prices at different wholesalers. 

How do you go about it?  Well, firstly, you should compile a list of all items you use on a regular basis.  Make sure you include bathroom items, non-food items and tinned foods.  You should not buy anything perishable.  You will be amazed by how much money you can save.  Due to changes in seasonal styles and weight gain/loss you should not buy clothes.  There is an exception to that rule which is men’s socks and underwear, as men will wear the same style all their lives and their weights usually remain constant.  The same cannot be said for women and children. 

Secondly, you should go out and price the items you intend to buy.  Don’t buy them yet, just shop around for the best prices.

Thirdly you have to work out how much money you will be able to use for this venture, how long it will take you to use up all the items you purchase, how much ‘stock’ will you want to buy and where you will store it.  It is not advisable to rent storage space as this will eat into your savings, thus making it a worthless venture.

The fourth thing you should do is watch out for any special sales, perhaps a company is having a closing down sale, or a clearance sale etc.

There are other advantages to this kind of investment, if for instance you loose your job, you will still have food and the necessary items you need.  The state benefits you receive would then be available to pay for your utilities, rent, council tax and fresh food etc.  You will already have a stock of most toiletries and non-food items that you will require until you get a new job. 

It is good to remember that you will have a private supermarket stocking all the necessary items for you to survive, should there be anything such as strikes or perhaps a natural disaster, which would cause shortages for everyone.  Having these resources at hand will at least give you time to think what your next step would be if some disaster were to befall you, without you panicking about how you are going to feed your family.

So be clever.  Get a food supply programme underway.  Only buy items you use.  You should only buy enough ‘stock’ to last two years.  Shop around for the best price and be on the look out for any specials.  Doing this will insure that whilst ensuring your family have all the necessities through normal times and emergencies, you have made a profit that has no risk involved.