Scheming at university
At university I found myself exploring ways to make money from short term opportunities.
Failed investment
I did not know the first thing about valuing companies or investing in them when I was at university. When my friend (another Tim) and I were looking through the business pages one weekend and saw that Eidos shares had hit a 52 week high of £4.00 but were now trading at £1.80, we were convinced that a chunk of our student loan would be well spent on Eidos shares. The share price would go back up and we would double our money as Eidos had the popular game Tomb Raider starring Lara Croft.
This was my first investment lesson. A company’s past performance is no guide to its future. The share price actually drifted lower until we eventually cut our losses.
£50 per referral
I had to sign up to an online stock broker, Comdirect (now Selftrade), to buy my shares in Eidos. As it happened, they had a promotional offer on at the time: If you referred a friend to the service, and that friend signed up and placed a trade, then both you and your friends' accounts would be credited with £50.
If I could get my housemates, university friends and course mates to all sign up, I could make £50 a pop. I had to persuade my referrals that as long as they placed one trade and bought a penny share then the cost to them would be the £12.50 trading fee plus the 1p penny share. From their £50 sign up bonus they could make a guaranteed £36.49 and could then go on to male their own referrals. It was a win-win for everybody.
The guaranteed bet
One of my housemates was a social gambler: fruit machines in the pub, the odd footy match prediction at the weekend, and then he stumbled upon online gambling. It was great for him as he did not have to leave the house to make his occasional “cheeky bet”.
It turned out that all the major betting websites were offering similar deals in which they would match your deposit of up to £50 if you bet the entire deposit. To me this was another guaranteed money earner.
If I deposited £50 and bet half on one snooker player winning and the other half on his opponent winning then I would get back my original £50 from the sign up offer and also my winnings from whichever snooker player won. A guaranteed profit. I did this on every gambling website I could find and even set up a second credit card registered at my university address so I could do some of them a second time.
(Written January 1st 2009. Republished from Tim's personal blog on startups & small businesses)
