The Secret to Turning Anything into Gold

Growing up, I was a kid that wanted to believe in the miraculous. I fantasized about being able to lift things with my mind, fighting off armies of alien invaders, and, most of all, transforming anything I wanted into gold.

“Why, wouldn’t it be something if I could transform that stick over there into solid gold,” I thought myself. I mustn’t sell it all at once, of course. That would lead to suspicion. Rather, I would slice it into pieces and sell it only when I needed money to buy something… like video games.

I’m older and wiser now, right? No… not really.

I no longer fantasize about turning sticks into gold or buying vast quantities of videogames, but I do think about how to change the value of things. I look for ways to transform worthless, everyday opportunities into fortunes, as well as ways to make expensive things cheap. It’s not as miraculous, to be sure, but it’s just as powerful.

And you know what? I’ve learned how to do it.

The Laws of Supply and Demand

The secret to transforming anything into gold is not a complex chemical reaction or even anything that mysterious. We’ve known how to do it for centuries. In fact, if you’d been paying attention in high school Civics class, you would know what I’m about to tell you.

Generally speaking, you can change the value of anything by manipulating the Laws of Supply and Demand. The theory is intensely boring, so I’ll not get into the specifics of it, but the basics are rather intuitive when you get down to it:

  • If you want to increase the value of something, you can either decrease the supply or increase the demand
  • If you want to decrease the value of something, you can either increase the supply or decrease the demand

I may get flamed by economists for saying this, but it’s actually that simple. The Laws of Supply and Demand are not abstract principles that govern our economy, but tools that you can use to make yourself rich and others poor.

Let me give you a few examples to demonstrate.

Get Rich by Reducing the Supply

What if you have something that everyone wants and no one else has? It will become valuable, right? This is an example of low supply, high demand — an economic situation that makes people rich.

Consider the prohibition, for example. The United States outlawed the production, sale, and consumption of alcohol, making it much more difficult to buy. Of course, people didn’t stop wanting it. The demand for alcohol remained almost as high as ever. They just had a harder time buying it.

Putting in economic terms, there was a low supply of alcohol and a high demand. Not surprisingly, the price went through the roof, and any one courageous enough to continue selling it got rich. Drugs, prostitutes, and other illegal but desirable products and services follow the same model.

Getting Rich by Increasing the Demand

Sometimes, reducing the supply is tough. For example, I’d love to buy all of the oceanfront real estate in Panamá and then dole it out to developers for the next few decades at ridiculous prices, but I don’t have trillions of dollars lying around.

The alternative is to increase demand. Make more people want what you have. Assuming that the supply stays the same, the value should go up.

For example, one of the alternative energy sources currently under consideration to replace gasoline is ethanol. Countries like Brazil are already using simple sugar cane to create ethanol that costs less than our current price per gallon for gasoline.

What will happen if we make a nationwide move toward sugar-based ethanol?

You’ll see you lots of smiling, wealthy sugar farmers. The supply of sugar would initially stay the same, but the demand would skyrocket, probably above our current capacity. The price for sugar would then go up dramatically, making the farmers very, very rich.

Getting Rich from Decreasing Demand

Can you get rich from actually decreasing demand? At first, it sounds counterintuitive. How could you possibly make money by convincing people to NOT want something?

Easy… by lowering the value of something you want to buy. Let me explain.

One time, I heard motivational speaker Tony Robbins talking about buying his dream house. He didn’t have much money, so he was leasing it for awhile. To his horror though, a Middle Eastern prince came to see the property and was thinking about buying it.

What did Tony do?

He waited for them to walk down the stairs toward the basement and then shouted, “Hey, did you ever get rid of those rats down there?” Within seconds, the prince came back up the stairs, telling the owner how much he hated “rodents.”

Needless to say, the prince left and Tony bought the house for practically nothing down. How? He chased away the only other buyer, essentially lowering the demand and reducing the overall value. The owner was then more inclined to consider Tony’s terms and eventually gave him a great deal.

Over time, I’d guess the value of the house went back up, especially as Tony became more famous. I’m not sure if he ever sold it, but if he did, I’m sure he made a substantial amount of money. If you can buy something for cheap and then sell it for a lot later, you can make very, very good money.

Getting Rich from Increasing Supply

You can apply the same general idea to increasing supply. Assuming the overall demand stays the same, increasing the supply of something should decrease its value and put you in an excellent position to strike a bargain.

Basically, what we’re talking about is competition. Whenever a new competitor enters the market, what happens? The price of products or services goes down. The reason why it goes down is because the competitor is increasing the availability of the product to the same group customers. Companies are forced to lower prices in order to capture the same market share, usually leading to a price war.

It’s economics in action. Supply goes up, demand stays the same, and price goes down.

You might be thinking, “But isn’t that a bad thing? How can you make money from increasing competition?” You buy the product for cheap and take it to a new group of customers with a more favorable supply/demand ratio.

For example, a friend of mine is paying his way through medical school right now by selling laptops. He buys them off of eBay (where competition is high) and sells them to other students and nearby businesses (where competition is lower). He can mark up the price by 20%, still give them a good deal, and satisfy their need to buy from a human.

Putting It All Together: You Really Can Change Lead into Gold

How does all of this fit together?

Like this: getting rich is not so much a matter of exploiting some secret technique; it’s about understanding the science of how the market works.

Successful moneymakers don’t just apply a step-by-step formula to making money. They look at a situation and figure out why it’s happening. Then they manipulate the variables to suit them.

What looks like a “brilliant” move to the rest of the world is simply the result of understanding the science of how money works. That’s why I’m writing this series: to teach you the science.

With it, you really can make miracles happen, just like it really is possible to change lead into gold. It’s a process called nuclear transmutation. Soviet scientists first did it in 1972, and now it’s easily accomplished through the use of particle accelerators.

The difference? You don’t have to be a nuclear scientist. Start studying the market and you’ll see opportunities to change it in your favor.

And then you’ll know what it’s like to turn things into gold.