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BARTERING
We haven’t come to the point – yet – where the dollar is so weak
and worthless that people will not accept them. That day is coming, but, bartering is about to take off in this country. It has been widely in use in foreign countries, but has been somewhat suspect here. Many barter companies have come and gone.
The recession is now reviving barter because many folks and companies don’t have cash for necessary goods and services.
Barter is trading goods and services without money. It was the original method of getting your neighbor to do work back in the cave man days. Trade a dinosaur haunch for a buffalo skin shirt or a flint spear head.
You name it and you can barter for it – food, rent, repairs to home and car, real estate, legal fees, prescriptions, doctors,, etc., etc.
Barter can be next door or with a company in another country. Business to business is very common although we don’t hear much about it. About 40% of major companies bartered last year for more than $60 billion dollars.
There are many barter companies. An Internet search will find a local company. One of the best known is Craigslist where swap and trade and sell for just about anything. Their barter service had over one million page views between last January and February says their founder, John Moore. The year before for the same period they did 360,000.
When you trade in your car that is a form of bartering, but usually additional cash is required. Some barter companies issue barter money, credits or certificates that can be used at a later date. Most people prefer a straight trade.
There are 3-way trades. The owner of a landscape business trades with an auto repair shop who then trades credits with a real estate company that ends up having the landscaper take care of houses. These are somewhat complicated transactions, but there are many of them.
Large corporations trade with each other to take in unfinished goods which they process to give back to the supplier for their retail trade.
Some retailers will trade for services such as painting, cleaning, truck repair, electrical work, and almost anything. Ask the manager what he needs to see if he will barter for what you have. No money need change hands.
Just because money is not involved does not mean there is no tax. The IRS considers the trade the same as cash and should be reported on your 1099 as income at the fairly traded item’s worth.
There are hundreds of small barter organizations all over the country.
More are forming every day. It is a specialized operation requiring sales and accounting background. Franchisors that will help individuals get into business for a fee. Be sure to do due diligence before parting with any down payment or training. It is best to talk to several who have recently started in the last few months.
Personal and business bartering are growing and here to stay.
Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy It!” has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know. Copyright 2009 Williamsburg Investment Co. All rights reserved.
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