My kids and I like the television show Storage Wars. So we decided to hit some local storage auctions.
For those of you who are out of the loop, storage facilities routinely auction off units whose owners are in arrears on the monthly payments. Buyers at the auctions have about 30 seconds to look in a unit -without going inside, touching anything or opening any boxes. Then an auctioneer opens the bidding.
If you win a unit, you have 24 to 48 hours to clear it out and clean it out. Everything in the unit is yours – though the auctioneer asks that the new owner return persona items like pictures and paperwork to the storage facility for return to the original owner.
Last week, we even bid on and won a unit. We are planning a family garage sale in July – with half of the proceeds going to charity – so we thought some extra stuff would help. We paid $75 for the unit + 10% commission + 6% sales tax. In it were a love seat, a nice cabinet, three windows, a table, a counter-top and lots of other stuff. I calculate we will do okay.
As I reviewed this process, I realized this is a real-world example of how our economic capitalist system works. President Obama and his team need to hit an auction or two so they will better understand it.
First, there is personal risk. I took money out of my ATM and invested it. I’m not sure that my investment will pay off, but I weighed the risk and took the chance. If it does, I will be able to pay myself back and then have more money to give to charity and re-invest. Or maybe I will spend it somewhere. Or maybe I will pay down my personal debt. Since it was my money – and my risk – I can choose what to do with the profit.
Second, there was hard work involved. My two sons (13 and 10) and I spent much of the day loading a truck, cleaning the unit, and then unloading the truck. It was hot. It was also a lesson well-learned by my kids. We have been to three auctions since and they are very much more discerning as to which units to bid on. They figured out quickly the cost-benefit side of the equation as it relates to labor!
Finally, it is entrepreneurial. I noted above what our motive is. However, at the auctions we have met people who have had thrift businesses and auctions for many years, some have just gotten in the game, and some were just there to see how it worked. But all the people we spoke with had a common theme – the interest in taking control of their own lives and their own financial destinies. They don’t want the government creating a job for them. They want to create their own.
I will be more than happy to have the president tag along next time so he can better understand how our economy works. Shoot – he always has a bunch of people with him. It’ll be less for the Parker boys and me to have to load up!You can follow Charles Parker on Twitter @cpbrevard and on BlogTalkRadio from 8:00 - 9;00 pm Sunday evenings - http://www.blogtalkradio.com/the-charles-parker-show/2012/04/30/the-charles-parker-show