ASk HN: How would you make $25,000 if you had $25,000?

https://news.ycombinator.com/item?id=1579503

by pmichaud • 16 years ago

39 52 16 years ago

news.ycombinator.com

Here's a brain teaser for all you smart people. You are given $25,000 free and clear, and your goal is to make $25,000 more, for a total of $50,000. You have 1 month to accomplish your goal. How do you do it?

Janteh• 16 years ago

Buy tickets for popular sport/music events, sell for double the money when the venue is sold out. Repeat.

Not that I agree with this kind of business from an ethics point of view, but it's easy money.

rjett• 16 years ago

If one could make $25000 in a month doing this, then I think there would be quite a few people considering career changes.

goatforce5• 16 years ago

A roommate of a good friend makes a very good living doing this. I'd guess he must be holding many tens of thousands of dollars of tickets at any one time, and significant effort goes in to acquiring the tickets in the first place.

jagbolanos• 16 years ago

there is quite a bunch of people that do it in soccer games all over the world, specially latin america

ismarc• 16 years ago

The same way I would turn $25000 into $25001, use $25000 to create something with a higher value. The easiest route would be carefully purchasing $1000 - $2000 cars, get them running/AC/etc, then slap a $200 paint job and sell for $2500 - $5000. You'd have to be careful and selective so that your time and the parts line up for the margins you're looking for, and then the resale process. This doesn't scale since if you continually buy up low priced cars, you'll drive thw prices per car up in the region, but it's nice for extra cash to do 1-3 cars at a time.

lsc7• 16 years ago

depends entirely on your skillset. As other posters suggest, the idea is to take your twenty five grand and create something with more value.

Me, uh, I'd probably just buy servers for my current business, then require pre-payment. I don't know that I could sell that many pre-paid VPSs, but it'd probably be my best chance. speaking of, why am I screwing off here? I should be putting up more servers.

Other options, considering my skill set, would be buying server parts, assembling, and selling them... though clearing that much inventory would be something of a challenge with my sales skills, and margins on servers (unless you are dell or hp) aren't that high, so I'd need to go through several buy parts -> assemble and sell servers -> buy parts -> assemble and sell servers cycles in that month, in a business where net-30 is the norm, so that'd be pretty difficult.

but yeah... I think the key is "what are you good at?" then "how can I do using what I'm good at, plus twenty five grand, to make something worth twice that much?"

tbrownaw• 16 years ago

Go to Vegas, you've got almost a 50% chance.

Find some other currency that's also called "dollars", that's worth half as much as the one you have.

techiferous3• 16 years ago

http://www.roulettehero.com/roulette/ashley-revell/

corin_3• 16 years ago

Was going to be my comment too. Never put that much on roulette, but have done four figure bets in GBP before. Adds a bit of excitement to life :)

electromagnetic• 16 years ago

Last time I went into a casino I put 5 dollars into a machine and walked out with 500. I would be scared if the same happened if I put in 25,000!

il2• 16 years ago

An easy way to do it: Buy undervalued and poorly monetized but well-established sites on flippa, optimize advertising and grow traffic, resell on Flippa in a few months.

If you've got $XXXXX to play with you can pick up some incredible bargains for a quick flip.

EDIT: I didn't see that you only had one month. This is still feasible, but would require some paid traffic/PPC skill to pull off.

tocomment• 16 years ago

Have you down this? Are there sites on flippa that make for steady monthly passive income with minimal seo work?

il2• 16 years ago

I haven't done this at a large scale(most of my bigger Flippa sales have been web services I built myself) but I routinely see sites on Flippa with decent traffic and authority that are very poorly monetized. If you can optimize the advertising to appeal to your target market, maybe line up some direct media buys or premium ad networks, you can do very well without worrying about SEO or increasing traffic.

rwhitman2• 16 years ago

I've always been curious as to how this is actually accomplished. I have never had success in selling small websites.

Love to learn more about this. If you can elaborate on the process, please do..

byoung2• 16 years ago

Generally on Flippa is that sites sell for more when they have at least one of the following (preferably more):

  over a year old
  high PageRank
  lots of inlinks
  steady profit
  lots of unique content

If you can buy a site with decent traffic and PR for say $300, take 3-6 months to put more content on it (50 x $2/article) , build backlinks ($50), and do a little PPC to increase traffic and Alexa rank ($100), revenue and profit should increase to the point where you can sell the site for about $1000+.

dangrossman• 16 years ago

I sold a website on Flippa for $90k. The site sold a single WordPress plugin I wrote and was selling for $97 per license.

jodrellblank• 16 years ago

Borrow it. $25K is unsecured personal loan money, so depending what I urgently need 50k for, I could probably get it then pay it back over a few years.

Why the 1 month time limit?

tjpick2• 16 years ago

pay some teenage kids minimum wage to run sausage sizzles all over town.

lsc7• 16 years ago

you could start up a delivery food biz with that kind of capital? (Honest question, I don't know) - I think there's a market for good delivery or take out food that's open late here in silicon valley... The place is crawling with overpaid Engineers who can't cook and aren't expected to stumble in to work until noon, and yet nearly everything closes at 9pm.

Now, I haven't jumped on the idea just 'cause I know jack shit about cooking or restaurant management, but if you could seriously start up for twenty five grand, I'd be looking around for such a business to invest in.

tjpick2• 16 years ago

Not sure. I think there's a good payoff from sausage sizzles, it's the kind of thing kids soccer teams and charities do to raise funds. That's just toy stuff, but I'd consider coordinating a dozen of those a day before I put 25k on red @ vegas.

Everyone who I know of in the cooking or catering business works pretty hard, and aren't millionaires, so I wouldn't think you would get into it unless you were in it for the long haul.

dzlobin2• 16 years ago

I'm actually working on this.

It's not in the valley but hopefully we'll be there soonish. More on this soon

istari• 16 years ago

I need 18 months. I would go to courthouse foreclosure auctions, partner with other investors, and buy the property for 70% of market, fix it up, and sell for market price.

30%/70% = 42%. Take away agent fees, closing costs, and repairs, I could have 25% if I'm careful. Turnaround is 6 months each time.

1.25 ^ 3 = 1.95.

1 month time horizon is silly. I assume you're looking for serious, practical, reproducible ideas. You won't get any that reliably returns 409600% annually.

If I were really held to 1 month, I'd go to Vegas and put it on red.

lsc7• 16 years ago

I can see buying at 70% off market, in this market... but you are going to have a difficult time turning around and selling for 30% more than what you paid, considering that 'market,' if trends continue, will be less 6 months from now than it is now.

If I had lots of credit and I was willing to risk it all, I would consider such a gambit, though my plan would be to buy, fix up, and hold (perhaps renting to cover costs) until the market started recovering.

For bonus points, if I knew anything about wrangling bureaucracy, I'd work on turning business real-estate into dual-use lofts. I'd really, really like to have a dual-use space here in silicon valley, but the nearest place they are plentiful is oakland, and I don't need dual-use space /that/ badly.

But then, I don't have lots of credit, and I personally suspect there might still be even more downside in the market than people seem to be predicting. Still, if I was going to do it, I'd do it here in silicon valley or elsewhere in the SF bay area. the fundamentals of this place are strong, and while I think it will get worse before it gets better, I'm certain it will get better.

techiferous3• 16 years ago

Put the existing 25K in the bank. Bid on a fixed-bid web project for 25K and get it done in a month.

BrianHV• 16 years ago

Where do you find fixed-bid web projects you can bid on for 25K? Do you have a go-to website, or connections with people who will solicit your bids?

techiferous3• 16 years ago

I actually don't prefer fixed-bid projects and I wouldn't attempt to do such a large one in such a short amount of time. But I live in Boston which has a nice startup scene and people approach me to build web applications for their startups.

I've been meaning to build a go-to website for about half a year now, but I've been too busy with client work--they find me without the website, often through the Boston Ruby Group.

noodle• 16 years ago

alternatively, bid on a fixed-bid project for 50k, and spend the 25k on help to ensure that it gets done.

corin_3• 16 years ago

For a safer gambling idea, split it into a number of bets on different sports matches that are all really shit odds (like 1-3 odds), you've got a decent change that they'll all win, and if they don't you'll almost certainly still have some left (if not more than you started) because you split it. Repeat until you hit the magic number.

Retric• 16 years ago

There is zero advantage to making several bets at the same time. So really what your suggesting is to make a series of bet's until you reach your desired goal. Unfortunately with most bet's the expected value is less than 1 so the more bets you make the higher your expected losses.

ghnyujryjh• 16 years ago

Someone should inform the bookies! Then they'll be able to change their odds so that however people bet, they'll end up winning over time.

lsc7• 16 years ago

As suggested by all the posters suggesting straight up gambling, I think that doing this reliably; doubling your money in one month, is going to be pretty difficult.

As I was saying before, if you have some special skill to add to the mix, that helps a lot (remember, a top end SysAdmin around here can earn $14K/month contracting, before taxes and stuff, so you wouldn't be doubling the money in a month in that case, you'd be adding 50% value, still damn good, and paying yourself a good wage.)

The thing is, doubling your money in a month is a what, 1200% annual return? no, it's more, if it compounds monthly, quite a lot more. You can bet that any investment with even a small chance of that kind of return gets all kinds of money thrown at it, to the point where those niches where this sort of thing is possible are filled right quick.

But yeah. Maybe you can pull that off for one month (hell, if you really hustled, and billed out at top end rates without a recruiter, you can make twenty five grand consulting as a SysAdmin. I mean, I couldn't... I've gotten that kind of hourly rate for short gigs, but I lack the sales skills to do that for a whole month.) but doubling that fifty grand the next month? doing it again? yeah, your odds start looking more and more like a day at the races.

andrewljohnson• 16 years ago

Poker would be one option. I'm pretty good at poker!

vahakota• 16 years ago

1. I just got 25k$ free and clear. Time to stop worrying for arbitrary goals for at least a month and enjoy life!

2. I'll find an another brain teaser that gives me 25k$ free and clear!

3. I'd do it exactly the same way I'd make $25,000 without being given 25k$ free and clear.

4. If I really would have to do it using the money, I'd donate the money to a random charity and use the fame and good will to organize nationwide boyscout door to door fundraiser in order to match my donation. Nobody said I'd have to make that 25k$ for myself.

5. Ok so I should make it for myself? I'd just add that 25k$ to my millions and millions of dollars, stash them all to a short period savings account and collect 25k$ in monthly interest. Nobody said you couldn't use your existing assets to "help a bit".. Why should skills be any different from capital in this respect?

6. Ok so I have to make the money for myself, I have to use the 25k$ doing it and I can't use any other assets? Oh boy.. I'm really not smart enough to pull that off :(

bloomingrose• 16 years ago

loved your comment - tried to up it but no arrow beside your name. :(

ww520• 16 years ago

Doubling in one month means 1200% annual return. That requires some insanely risky deals to achieve. Looks at the high risk, high return ventures.

- Gambling.

- Lotto

- Stock options

- Forex

- Future trading

- Illicit activities tend to have high return but highly risky. And also highly questionable.

cjlars• 16 years ago

409600% if compounded!

omrisiri• 16 years ago

IMHO gambling is probably the WORST way to go, and well given the 1 month time limit - you will probably have 29 days left to try and make 50,000$ after losing all of it the first day.

The time limit pretty much limits what you can possibly invest in for such a big return in such a short time.

This does remind me of a different HN article i read a while back - If you had 5 dollars and 2 hours how would you make as much money as possible : http://news.ycombinator.com/item?id=912105 .

I Personally would do some research on current stock options and try to build a strategy to double the money in the time frame i have left.

frobozz• 16 years ago

Buy 4 lottery tickets.

If one of them wins a sum >=$25004, then I've succeeded. If none of them wins, declare that I've failed, and pocket the $24996 leftovers.

foxtrot• 16 years ago

Roulette Table, Black.

ck2• 16 years ago

Buy 25,000 bags of flour @ $1 and sell them for $2.

(Didn't we do this in economics 101? Where you learn about overhead and loss, etc.)

GrandMasterBirt• 16 years ago

I'd buy some weapons, kill a few pimps, steal their hoes, and pimp em out. Price tag is probably like 2000 for the weapons/grenades, the money is for a while!

On the other hand if you want non-insane, I would buy an appartment building, flip it, and try to make long term money on that. With partners of course.

Honestly for 25 grand I'd live off the money for a few months and find a job.

dnsworks2• 16 years ago

It frightens me how many of these responses are people describing the scams they'd pull off if they had the cajones to do so.

messel• 16 years ago

With only a month, I'd bet it on black. It'd probably be the highest probability of doubling up in that short a time period with no personal effort.

With some personal effort, there a few ways of making 25k in a month. App building projects are very hot right now, you could outsource app building projects and manage their completion. Could you make 25k more in a month, maybe not in the first month. But after you had solid relationships and skilled developers as well as a smooth input project buffer you could conceivably generate 25k profit a month.

jeffepp• 16 years ago

I would stick with Stock options. You need to find compelling investment scenarios (Biotech FDA approvals, Quarterly Earnings, etc.)

This is very risky, obviously. There are not too many ways to double your money with a lower risk profile without actually working..

To me, this is much less risky than straight gambling. My last time I answered this with a Stock recommendation (ARNA) it has already been up 3x. So it can be done (see my previous comments)

ASk HN: How would you make $25,000 if you had $25,000?

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