Debt reduction seems to be the hottest topic in personal finance. That is because it is one of the most difficult thing to do and debt is the easiest thing to accumulate. The credit card is the prime tool for the submergence in debt for millions of Americans. Ever since, I've gotten my credit card, I have racked up a large balance from just the occasional spending on small purchases. Recently, it has caught my attention and has become a concern to my financial stability. Thus, I'm seeking to remove this debt soon.

From reading many other great personal finance blogs, I've looked into the many ways that people have successfully rid themselves of their credit card balances. I don't want to transfer the balance to a new card nor would I want to cut up the card. So the most reasonable debt reduction method would be to pay more than just the minimum in multiple payments per billing cycle.

My credit card balance is currently around $900, which mostly went to my little side gig for making money. I just made payment for $300. In a few days, after Amazon.com transfers my money to my bank account, I'll make another payment of $300.

Hopefully, I'll have the balance close to nothing by the end of the summer because that's when the promotional 0% APR offer would end. If I can prove to myself that I can stick to a plan for reducing my debt, I'd develop a good habit for paying back my college loans in the future.

Anyone running a business seeks to run it with as much efficiency as possible, while still being able to maximize profits and to satisfy customers. My college course classes for the Business Management minor has taught me many ways to streamline a business and to make it more profitable.

In my situation, the one thing I can do to make a drastic change in the way I spend money to make money. Reducing expenses is a common business practice but it is very efficient way of making a larger profit.

HOW I'M DOING IT

The PSP mod kits that I sell consist of a battery and a memory stick. The cost of the battery is already very cheap ($25) and I cannot find a better alternative. As for the memory stick, I've been purchasing 512mb memory sticks for $7.99 each. After some thorough research, I've found that 256mb memory sticks could be used and they were available in a store for only $4.99 each.

Next, I've given a detailed look at the listing fees on Amazon.com. Apparently, I've been selling in the wrong category, which charges 15% commission while the mroe appropriate category charges only 8% commission. That is almost HALF and that's a BIG difference!

Finally, I'll be reducing the cost of shipping. Firstly, I'm using USPS Priority Mail with delivery confirmation. The shipping boxes, I order online so they're free. I typically make the effort to trek to the post office and pay for postage there. After looking around USPS.com, online postage is cheaper and tracking is free. So now, I'll be paying for and printing postage labels at home. It saves money and I can just drop off the packages without waiting on line, thus also saving me time.

THE RESULTS

The total cost of goods, including taxes and shipping fees, was originally $40.55 for a profit of $13.15 per unit. A reduction in expenses would yield a cost of goods of $36.60 for a profit of $17.10. Decreasing expenses by about 10% will increase profits by 30%. A few dollars and cents may not seem like much but as multiple units are sold, there is a big difference in profits.

Following up on my vent post regarding my discontent with the policies on eBay, I've resorted to another method of selling PSP mod kits. Thanks to the glorious creation of Amazon.com, I've been able to sell my inventory of kits in just 3 days.

No wonder Amazon was able to grow to its currently dominant Internet status. Although the fees for selling on Amazon.com are higher compared to eBay, transactions are completed much quicker. Everything is laid out for potential buyers, like in a store. I don't have to wait for buyers to bid/pay nor do I have to go through Paypal to collect my money. They see what they want and pay. Then I ship the next day. The feedback on Amazon.com is of no major concern to me since I provide the best service possible.

Now I'll be ordering starting materials in larger quantities. In a future post, I'd be describing what steps I am taking to make this side gig more profitable!

Here are some links back to some carnivals in which Realm of Prosperity was cited.

• Carnival of Personal Finance #157: Third Anniversary Edition at Consumerism Commentary
• The Carnival of Twenty Something Finances at Poorer Than You
• Carnival of Money Stories #64 - Time to Listen to Others Edition at Money Ning

Check out the other great articles from other blogs!!

Everyone has their own hobbies and interests where they will begin to gain knowledge and expertise in whatever that activity may be. Some love playing sports, some collect stamps, and some prefer to grow their own plants and vegetables. Often, hobbies and interests are areas where many people's careers revolve around. Sports players go pro, video gamers become programmers, and collectors open their own stores. Hobbies can be an opportunity to make money.

My Hobby
I was an avid collector of exclusive sneakers, namely Nike Air Jordan. Exclusive sneakers have created a culture among many of the youths that are out to make a fashion statement. I could look at someone's shoes and tell the price range of the shoes.

What is unique about these sneakers is the amazingly large demand for a rapidly growing consumer base, which makes these sneakers appreciate in value since they are released in certain styles and colors for limited times in limited amounts. People get on lines in front of sneakers stores many hours before release time for a chance to own a pair of these exclusive shoes. A brand new pair of Nike Air Jordan III White/Cement (as shown in the picture) retailed for $100 in 2003 would now sell for more than $350. THAT IS A 250% INCREASE IN VALUE!! There is no mutual fund out there that can match that type of growth.

How I Make Money From My Hobby
I've spent hundreds of dollars on these sneakers and I've stopped buying them as I grow older. But luckily, many of the pairs that I still have are brand new. Since I'm home from school, I have put them up for sale and business is going great. One pair that I bought last year for about $145 was sold for $170. Sure, it may seem like a bad idea to tie up cash on a pair of sneakers for a whole year but I've come to see it as buying a share of stock with a 17% increase in stock price. If I had bought many pairs (as in buying many shares), it seems to be a much better option compared to the many low cost index funds available, which lately carries no stable guarantee.

Ever since the fall of 2007 (the beginning of the downfall of the economy), the Federal Reserve has cut interest rates many times to prevent a recession. Many banks with high-yield online savings accounts offered a rate of about 5.00% and it was recently around 3.00%.

Now banks are raising the rates!!! Wooooohooo!!

I just received an e-mail notifying me of HSBC Direct raising its rates to 3.50%. A large increase from 3.05%. It is pleasant news to see this and hopefully it is the beginning of more raises to come.