How Can You Invest and Grow Your Money from $5?

Tina Seelig, executive director of the Stanford Technology Ventures Program, is the author of the book ‘What I Wish I Knew When I Was 20.’ In the first chapter of her book, ‘Buy One, Get Two Free,’ she asks the question: what would you do to earn money if all you had was five dollars and two hours?

This was an experiment she gave to the students in one of her classes at Stanford University where each of the fourteen teams received an envelope that contained five dollars of ‘seed funding.’ They were permitted to spend as much time planning, but once they had opened the envelop they then had two hours to make as much money as possible.

So, what would you do if you had $5, but were limited to two hours to make as much money as possible?

Would you simply buy a lottery ticket? Or spend the money at a casino?

Whilst these are likely options people would think of first, they are high-risk ventures that present little return for your money.

How about setting up a car wash or lemonade stand?

These too, are unlikely to yield high profits in the two-hour time frame.

Thinking Outside the Box

Although many people may not take the question too seriously – after all, it’s only $5 – it does provide the perfect challenge to removing oneself away from typical responses, giving people the opportunity to think outside the box.

With so little money to begin with people can make a lot, once they know how to.

And as Seelig reveals in her book, those students who made the biggest profits didn’t even consider the five dollars. By doing so, the teams were no longer constrained to think about the money involved.

Instead, the teams that made the most changed the question to: how can we make money from nothing?

This, essentially, gave each team more thinking room, creativity to tap into their talents and the ability to identify problems to solve in their surroundings.

In her book, Seelig writes that the winning teams managed to bring in more than $600 while the average return on the five dollar investment was 4,000 percent. Not bad considering how little each team started with.

So, What Did They Do?

One team identified the problem that is common in many college towns: long lines at popular restaurants on a Saturday night.

During the two-hour time frame, the team paired off and booked reservations at different restaurants.

With the times for the reservations approaching, they then sold each reservation for up to twenty dollars to customers who didn’t want to wait in line.

They also found that the female students were better at selling the reservation spots instead of the male students, so they were tasked with booking reservations around town as the female students approached people to sell them.

A second team took a simpler approach and set up a stand near the student union offering to measure bicycle pressure for free. If the tired required filling, they charged one dollar.

According to Seelig, the team thought they were taking advantage of the students, but soon realized that their fellow students were grateful for a convenient service even though they could go somewhere to do it for free. So much so, that halfway through the experiment they stopped asking for a specific payment and requested donations instead.

As a result, their income increased.

What Can We Learn?

These two teams were able to make a significant profit during the two hours proving that if you put your mind to something in a relatively short time frame, you can make money.

What’s important to understand, though, is to avoid thinking about the money you have to begin with.

Think as though you have no money and grow from there. By thinking out of the box you open up the opportunities available to you, tapping into your creativity, and tapping into the potential profits you could make.

Featured image from Shutterstock.