Your First Lesson In Lazy Money

Hey friend, Alex Pandrea here.

Welcome to the new LZY MNY CLB! Thank you for subscribing to this exciting new project. Let’s jump straight into Issue #001. Speak soon…

In today’s email, we're looking at the history behind one of the most notorious financial maneuvers of the 20th century. Also, why you should avoid buying a macaroni company + 3 straightforward business ideas that actually work.

The Story

Population collapse! The hopeless generation! I recently read an article titled ‘’Society is a Ponzi scheme.’’ Proper doom scrolling stuff but it got me thinking:

What is a Ponzi scheme really and how did it all come about?

Turns out, the real story is stranger than fiction.

In the early 1900s there actually was a Charles Ponzi, whose name became synonymous with financial scams everywhere. However, by all accounts, he started off as a decent guy and was quite the innovator.

Now, this will sound crazy to Gen Z readers, but before there were iPhones and even emails, long distance communication was a bit tricky. People would write letters by hand, attach a postal coupon and send them on boats across vast oceans, oftentimes taking months to reach the destination. Wild, I know.

Ponzi’s idea was straightforward and legitimate: buy postal coupons in countries where they were cheap and sell them at a higher price in more expensive markets.

That’s Arbitrage 101 and he made a killing in the beginning.

The catch, though, was the logistical nightmare this plan required. As investments flooded in, Ponzi's operation ballooned and at one point he was sending a Titanic-sized ship full of coupons, just to pay off one investor.

The underlying mechanism was unsustainable, a financial house of cards that was bound to collapse.

In classic scammer fashion, Ponzi glossed over his crumbling empire and decided on an insane tactic: Fake it till you make it!

He started paying old investors with money from new ones (I see you, Herbalife).

By now, Ponzi was ballin’ out of control, living it up in fancy NY hotel rooms, making a million dollars a day and buying a macaroni company in the hopes of – eventually - repaying his investors.

Alas, as is the fate of all pyramid schemes, his one also collapsed, dragging down with it thousands of investors and even several banks due to the vast amounts of money Ponzi's companies controlled.

The Profit

Ponzi may be long dead, but you can still use arbitrage in the 21st century, boats or postal coupons not required:

• Retail/online arbitrage – snag a bunch of cool gadgets, sneakers, various items at a discount and sell them to more targeted markets willing to pay top dollar. Find undervalued or vintage items, slap some cool branding on top and resell at a profit. Same applies for services – hire freelance web designers in SE Asia, start your own agency in US/Europe and sell their services at a premium.

• Domain arbitrage – aka the modern-day gold rush. It’s like buying a plot of land in the virtual world. Can be shockingly cheap! Find the ones that are overlooked but sound catchy, clever, or potentially lucrative and target specific individuals or companies that might be interested. Minimum outlay, maximum returns.

• Ticket arbitrage – ever notice how some events sell out in seconds, leaving thousands of fans desperate and willing to pay anything to get in? Here's where you come in. Buy tickets in bulk from smaller theatres or venues, especially if you've got a knack for marketing and can create a buzz. Then, sell them to those die-hard fans who missed out, at a price that reflects their desperation.

The Smartest Person You’ve Never Heard Of

From the mind of Alex Pandrea comes a story passed down through generations:

Meet Ace Victoria, our inspiration for LZY MNY CLB. In 1908, he founded the original Lazy Money Club, teaching ambitious Americans how to build wealth through wit rather than labor. Today, we're bringing his philosophy to the 21st century.

In each newsletter, you'll find "The Ace Segment" - his take on that week's topic. Today, he shares how transforming ordinary train carriages into luxury experiences created an empire. 

Recognizing the untapped potential in the emerging railroad industry, Ace bought entire carriages in bulk, which he transformed into opulent spaces that rivalled the finest first-class experiences of the time. 

He then sold tickets in those carriages at a significant premium, offering industrial barons and social elites the luxury they craved, all while leveraging the existing railroad infrastructure and operations.

His signature touch? A discrete brass plaque on each carriage door reading "Victoria's Select Passage"—a detail that made his carriages the most sought-after tickets in rail travel, often selling out weeks in advance.

In an early edition of his newsletter, he wrote to his readers the following formula:

Market gap + Your marketing skills + Someone else’s infrastructure = Easy money

Look for Ace's insights in every email. We have some exciting plans for this brand that would make the old hustler proud.

Stay tuned, 

Alex Pandrea,

Founder //LZY MNY CLB