858-488-2545 dana@danarobinson.com
Want to own a $45,000 car for $14,000?

Want to own a $45,000 car for $14,000?

Cashless Currencies: Shifting, Swapping and Trading Things of Unequal Value

I’d like to introduce you to one of the most important concepts for bootstrappers.  I’ll the concept “non-monetary currency.”  I want to teach you to look for currency in places other than your wallet.   I’ve given these ideas titles that I’ve invented, but of course, I’m not the only one actually doing these things.

Trading Things of Unequal Value

I was having a beer with a very smart friend of mine, many years ago.  He was an Ivy League engineer and attorney.  He’s incredibly smart.  One of the smartest guys I know.  What I love about him is that he’s not just your typical rich Ivy League guy.  He’s resourceful…one of the personal traits I admire the most.

At the time, I lived in a gorgeous home overlooking the Pacific Ocean in La Jolla, California.  We were sitting in the den, where I had antique animal trophies mounted, and a large humidor full of cigars.

“That’s a lot of cigars” he said.

“Yeah,” I replied.

“Seems like a waste of money, dude.”

“Ah!” I said. “No, I actually get them from a client for free.”

“Seriously? How much is a typical cigar?” He replied.

“I actually don’t know, but I think these are 15 bucks, some of them are $20 or more”

“You must have a thousand dollars in cigars.”

“I suppose so,” I said, sipping on my Speedway Stout.

“How about that expensive humidor?” he asked.

“Same” I said and waved my beer in the direction of the humidor.

“Okay, I’m curious, dude, what else, in this house or wherever?”

“What other trades have I done?” I said.

“Yeah,” he replied.

“Hmmmm.” I leaned back and sipped my the black velvety beer.  “I once got a log house for my niece.  Well, not a full sized log house, but you know, a playhouse out of foam logs.” I said as I continued to think.

“Okay, what else.  Hmmm,” I continued, “storage shelving, vodka, clothing, shoes, a watch, a MacBook Pro, software, spa robes…I can keep going if you want,” I said.

“Haha,” he laughed.  “I’m picturing you in your free spa robe with a free cigar and a free glass of vodka working on your free computer!”

I thought a bit more.  “The chair you are sitting on was from a trade.  As was my bedroom furniture, my daughter’s bedroom furniture, and this Persian rug under our feet.”

He laughed.


“I like your model.” he said.

“I call it trading things of equal value,” I replied.

“That’s funny because I’ve done similar things and I call it ‘trading things of UNequal value,'” he continued, “it’s not an equal trade.  You aren’t really trading an hour of your time at your real rate because you are using time that is otherwise not spoken for.  You are trading less valuable time, but for a full priced trade.  That makes the trade cheaper from your perspective, while also giving the full value to the guy on the other side because if he hired you he would pay your full rate.”

“I like it,” I said.  “It’s a trade of two un-equal values where both parties benefit.”

My friend when on, “exactly! The other guy is also trading something of unequal value.  To him, he may not be able to sell all of the equity he needs in order to pay you.  So, the cost to him is not the full value he is getting from your services.  He’s getting a good deal as well, by trading something of less value in his hands for a service he would have to pay more for if he paid cash.”

“You are totally right on,” I said.  “As long as I’m trading hours I would not otherwise sell, then its a deal for me.  As long as the other party is trading at a lower value in their hands, then they get a deal too.  Its the ultimate win-win.I’m changing my name to trading things of unequal value.”

We finished our beers and moved onto discussion of real estate depreciation (which I’ll save for another blog entry).

What is important to understand here is that everyone in America has something of “unequal value” they can trade.  Do you cut hair?  Trade that for advice from an attorney, or your CPA for filing your taxes.  Do you sell retail goods?  Trade at full retail, which means you are actually trading something that cost you half of what you are getting in the trade.  Whether you have a good or service to offer, you can find ways to create currency from that and get other things you may want or need without having to come “out of the wallet” for everything.

Let me move on, and get to the next cashless currency concept.


Shifting is my label for taking money that would go to one place (such as the IRS) and using it for another purpose.  My favorite example is also one of my favorite cars of all time.  I once owned a Mercedes ML320 (like the photo above).  That’s the SUV model.  For those car snobs who want to know why I didn’t get an ML500, it is because a V8 is a waste of money, and requires more maintenance and is totally unnecessary on the short roads in and around my little seaside village.  So, stuff it if you don’t like the ML320.  Anyhow, a friend was selling his ML320 with 30K miles.

I bought the ML320 for $21,000.  I could have paid cash, but the friend was doing well and basically said, “pay $7K down and pay the rest off over the next year or two.”  I agreed, and that same day I was the proud owner of a beautiful Mercedes SUV.  Let me remind you that a new ML320 at the time would have been over $45K.  So, for starters, I’m buying a car that is only 3 years old that is less than half of the cost.  That’s an important financial lesson in itself.  Buy used.  That car lost $24,000 over the course of 3 years.

But, that’s not the main lesson.  The thing that was great about this car was that it was over 6,000 pounds in weight.  What that means is that the SUV is actually categorized as a “truck” or what we might call a “work truck” or “farm truck” (haha, right?) for IRS purposes.  I bought the car for business purposes, and in fact used it for almost 10 years as a work truck for my property management business.  I’m not a CPA, and I don’t know the current IRS rules, but at the time, there was a rule that let a business owner accelerate the depreciation on work vehicles over 6,000 pounds.  That meant I could write the entire $21,000 off that year as a business expense.  This saved me $7,000 in taxes that year.  Thus, the effective price to me was $14,000.  And, I didn’t even have to pay the car off up front. I put down $7K, and then saved $7K in taxes.  That meant I was into the car for zero dollars. I had shifted what I would have paid the IRS.  I still paid $7K, but instead of to the IRS, it was to my buddy Ron.  And, the net cost of owning a $45,000 Mercedes was $14,000 ($21K purchase minus $7K in saved taxes).  And, I paid for it over 24 months.

Rich people are masters of “shifting.”  They are particularly good at “shifting” when it comes to taxes.  They use shifting to take money they would owe in taxes and use it for investments, real estate, vehicles, and even private jets.  They use captive insurance companies and a variety of other shifting devices to expand their wealth, while paying a little less (or a lot less) in taxes.

For those of us “little guys” the shifting is more difficult.  My story of the Mercedes is a small victory.  Another one is actually real estate.  I’ve got an article on maximizing your passive loss on real estate here.

Look for creative ways to shift what you would pay to something you don’t want or need and re-focus that money into something you do want or need.


In many ways “trading things of unequal value” at the outset of this article is a type of “swap.”  But, swapping can simply be finding “things” you don’t want or need and trading them for things you do.  Your garage full of neglected possessions might be a trove of things you can swap for things you do need.  Before you go spending real money on more “stuff” consider taking some of your idle stuff and putting it to work.  There are swap and trade sites all over the Internet.  Craigslist is full of swap opportunities.

Swap your airline miles for something you need, or vice versa.

Swap the use of your house for someone else’s house for your next vacation.

Swap the use of a room in your house for something of value (I talk about renting a room through AirBnB in a separate article).

I’ve swapped some old landscape equipment for labor, had a guy do a lot of landscape work I would have paid for, and instead paid with my old equipment.

Of course, a trade of unequal value is always better than a swap, but don’t forget that your stuff is a currency.  Your time is a currency.  Your skill, talent, or even your artistic ability is a currency.  Learn to use the non-monetary currencies at your disposal, both as a tool to gain financial freedom, and for entrepreneurs, as a means of bootstrapping your business without using precious cash.