Imagination is Key to Active Investing
In the advanced levels of the game of money, imagination becomes critical. If you want to be an entrepreneur, or even an investor who isn’t starting out with much capital, you’re going to have to sharpen your skill of imagination. It’s the key to finding the deals and seeing the opportunities that no one else sees. If you’re an investor who doesn’t really have any money to start, then you’re going to need imagination. It takes imagination to make something out of nothing.
Here’s an example from my personal investment past. One time, I made a quick $5,000 with no money down. How did I do it? Well, during that time I was really into contemporary art. I was following all the big artists and looking at what their works were going for at auction. I remember finding Damien Hirst the previous year and really liking his work. I bought a signed edition print of his. I had a trip planned to go to London that year, so I thought it would be cool to go to Other Criteria, his publishing company, and White Cube, the gallery that first displayed his work back in the 90’s. So, I made appointments at both so I could see some of his original works on paper. I first went to White Cube and met with a gallerist named Polly. She was a smart, petite young woman who walked me through several unique works on paper they had for sale. All of them were over 25,000 pounds (~$35,000), which provided no real value or opportunity.
I loved the experience but there wasn’t any way I was buying a unique Damien Hirst from White Cube. The next day I went to Other Criteria. They had several unique works, but all were over 10,000 pounds (~$15,000). But, then I saw something that no one else did. They had these signed books of Damien Hirst that were retailing for 1,400 pounds (~$2,000) and the book had a unique work on paper inside the book. I thought about it and saw an opportunity. You could definitely cut the unique work out and sell it as a unique work on paper. It looked great and the subject was something Hirst was famous for — skulls. Later that night, I went back to my hotel and looked up prices of relevant on the Mutual Art website. I found a past work that was very similar to the one I saw that went for $10,000. There was an opportunity here.
Instead of using my own $2,000, I went to a friend, Carrie, and made a business proposition. I said I’ve found a Hirst work of art for $2,000 that I think could be sold at auction for $10,000. I made her an offer — if she put up the money, she could double her money in a few months, once we sold at auction. I outlined the risks that were involved. Maybe the auctioneer wouldn’t have space in their next auction for a work like this, or maybe it would only fetch $5,000 at auction.
It didn’t take long for her to see the opportunity for herself and she agreed to the deal. I bought the work and brought it back to the US. We called up Phillips and they agreed to sell the work at their next auction. The auction went very well for us. We ended up selling 170% over estimate for $10,500 for the artwork, my friend doubled her money in the matter of a couple months and I made $5,000 from nothing. You can see the listing, here.
This is the type imagination it takes to become a savvy investor and entrepreneur. You need to be able to see opportunity where no one else is seeing it. Imagination is a skill and like any other skill you need to practice it. Practice looking for any opportunity for a deal. You can start by making some deals with your friends. Do a bunch of research and look for an opportunity on Ebay or Etsy. Look to do a seller-financed real estate transaction. Look at commodities or precious metal opportunities or estate sales. Look to do service-based work, like consulting, in your current domain of expertise. Just start getting your imagination working. They say being coachable is being willing to look for the opportunity for yourself so start looking!
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Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Please do your own homework.
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