Make Money in the Third World Part 6: The Crime Syndicate Taxi

This is the sixth part in a series on real-life businesses that operate in third world nations. You can read the whole series here. So far each of our businesses that we've highlighted has been relatively harmless. Yes, there was the flaming roadblock, and the snake charmers, but in general even these are relatively benign for a tourist to witness. However, travel to the third world is not all fun and games and wacky businesses. There is a darker side to travelling in these countries.

Today we highlight the crime syndicate taxi in La Paz, Bolivia

Western Bolivia is a major tourist destination in South America. The city of La Paz sits in a valley surrounded by 20,000 foot mountains that are snow capped year round. It is the primary hub from which tourists visit Lake Titicaca, and is relatively close to the world's largest salt flat (sounds boring, but is awesome).

For this reason, there are gazillions of tourists running around at all times, and foreign money is one of the primary sources of revenue for the city, which is surrounded by inhospitable mountains and the arid Altiplano, on which nothing can grow. There are lots of legitimate tourist services in La Paz, but there are at least as many swindlers and thugs.

La Paz has a robust taxi system, and all legitimate taxis are registered with the city government. These taxis are always white with a green stripe, and always have a telephone number printed prominently on both sides of the side of the car. However, there are other illegitimate taxis all over the city. If you walk down a main street, you will probably see three or four of them drive past you. They are everywhere. A very common crime in La Paz is for one of these rogue taxis to wait around by the La Paz airport, or one of the major bus hubs, and pick up a tourist or two. The driver will be friendly and offer a good deal, but will promptly drive them to a spot where a gang of thugs are waiting. The thugs will drag the tourists out of the car, strip them naked, and take all of their stuff. Sometimes they murder their victims, sometimes they just beat them up. Its very common.

I was aware of this practice during my time in La Paz, and it probably saved me on at least one occasion. I had just returned from a bus trip to Titicaca, and a rogue taxi pulled up to pick me up. A passenger got out and grabbed my backpack and tried to load it into the taxi.  Both he and the driver were extremely pushy about getting me to get in the car, but I shoved the "helper," grabbed my backpack, and hailed another legit cab. A group of onlookers took up my defense and yelled at the rogue driver. I don't know. Maybe they were just being helpful, but I doubt it.

In any case, this kind of thing is pretty common in large third world cities. La Paz has a reputation for it, but if you do any travelling to poverty stricken nations, you should be aware of your travel arrangements and be careful what cars you get into.

Make Money in the Third World Part 5: Selling Junk

This is the fifth part in a series on real world businesses that Howtomakeadollar has witnessed operating in third world nations. You can read the whole series here.

I spent a few months living in the Maghreb several years ago, and every single morning I was awakened at around 5:30 AM by a guy riding an old bike through my neighborhood. Every two or three seconds he would shout "REEEEEEEEP," and he would pedal around extremely slowly, weaving around like a drunk. Attached to the front of his bike was a tray covered with all kinds of items. Sometimes he would have tin cans, or glass bottles. Other times it would be rusty nails, a shoe, and some old sunglasses.

Throughout the day I would encounter the guy all over the place, often several miles from my neighborhood. I have no idea what "REEEEEEEEEEP" means, or even what language it is. I suspect it is Berber, and I suspect it means something like "Buy my stuff."

I doubt he made much money off his stuff, but he seemed to have something different every day, so he must have had some amount of turnover. On a few occasions I saw people buying stuff from him. His business consisted of riding around, picking up any item he found on the street, and selling the stuff he found to anyone who happened to want or need it.

Like I said, there is no way he was making a lot of money off this, but he was definitely surviving. This kind of thing is very common in the third world, but I remember this guy because he woke me up every day, and I never figured out what "REEEEEEEP" means.

Make Money in the Third World Part 4: Snake Charming

Howtomakeadollar is running a series of blogs about real-life businesses that we've encountered in poverty stricken nations around the world. In these countries people are very innovative and find all kinds of unique ways to make money. To read the whole series, click here.

The snake chamer - In the U.S. we have very few open markets. Occasionally a farmers market may open in a town, but this is usually only for a few weekends per year, and it is limited to locally grown foods. In the third world there are enormous markets full of individual stands selling pretty much anything you can imagine, not just food. India and many Arab countries are particularly famous for their open markets where you can test your bartering skills and hunt for good deals on stuff.
One cool thing that you can find in most open markets in India, the Middle East, and North Africa are snake charmers. Real-life snake charming is a high risk job. Its a guy with a little flute instrument who will sit down in front of a basket with a cobra or two in it. As he plays, the cobra will slowly come out and stare at him playing, and will eventually start to sway with the music... If he's lucky.
In reality, the cobras will sometimes just slither out of the bag and try to get away. Occasionally they attack the charmer, or onlookers. Its not exactly a safe job. But if you have good snake handling skills and a net with a long pole you can usually scoop your cobra back up before it gets away or eats a little kid. Charmers who try to do more than one cobra at a time are really cool to watch, but you should stay back a good distance, because cobras can spit their poison pretty far, and they aim for your eyes, which will blind you, or at least cause major damage to your eyes. This is why most snake charmers have such weird looking eyes, or keep them closed. Many of them are blind in at least one eye.

Usually these snake charmers will just sit down in the middle of the market, and once people see what is going on, they clear out of the way, leaving a nice open area around the snake and the charmer. The snake charmer always has an assistant or two who stand around scanning the crowd of onlookers. They will approach anyone who looks at the snake charmer and charge them money for watching. If you are walking past and even glance at the spectacle, you can bet that someone is going to run after you and demand money. They are extremely pushy, and will grab you by the arm and yell at you to pay up. You should pay them about 1/4 of what they ask, but you should pay them, because thats how they make a living. Also, they have cobras that may or may not attack you if they play a certain note. In any case, its really cool to watch, and once you've paid they will leave you alone.

If you take a picture they will charge you more money, or they will grab your camera and delete it. (really). I don't know what they would do if you have a film camera, but you should pay them and not worry about it.

Make Money in the Third World Part 3: The Toll Road

This is the third part in a series on ways to make money in the Third World. All anecdotes in this series are true. You can read the entire series here.


The "toll" road - In lots of third world countries there are only a few main "roads" that connect one region to another. This makes these roads extremely important, and since these nations are poor, the roads are often in terrible condition. If a mudslide or storm washes out the road (common in the tropics), it can create a major problem for the cities along that road. I've seen potato prices go up by a factor of 10 in just a few weeks when a storm washed out the only road in the region. Truckers loaded with potatoes and sugar cane were stopped for over six weeks waiting for a road to open. During that time the only food they had was their cargo. So the truck drivers stranded in the mudslide ate good while the city starved. Such is life in the third world.

Well, in these kinds of societies there are lots of opportunistic people. On more than one occasion I've seen roadblocks set up at key junctions leading into major cities. These aren't just ordinary North American roadblocks either, with a few red cones. Cones don't stop truckers. No. These people would cut down several enormous trees and lay them across the road and set them on fire. I'm talking about a bonfire with 20 foot high flames. They would throw tires on top. One time they dug up the road and used it to create a mound of blacktop, rubble, and dirt. They dug all the way across the road, about a 10-15 foot deep trench, the entire width of the road, and about as wide as it was deep. With all the rubble they collected, they erected a large mound. On top of the mound were flaming tires. This particular roadblock was set up so that a narrow passage around the road was just barely possible to drive through. The roadblock served to slow traffic down to about 1 mph. As the vehicles slowed down, people would jump in front of them and demand money. If you didn't pay you got flaming tires rolled in front of you and you had to back out. If you did pay, you went on through. They only charged about the equivalent of .50 cents per car, but traffic was backed up in both directions for over a mile, and I'm sure they made a lot of money. After about a week they put the fires out, dragged the trees off the road, and shoveled the rubble back into their trench and went away. I guess they had made enough money. This kind of thing is pretty common, and is not regarded as criminal. Its considered to be a legitimate way of doing things. Usually police will come and stand around in case violence breaks out, but they don't stop the actual blockage.

Make Money in the Third World Part 2: Toilet Paper Partnership

This is the second part of a series that Howtomakeadollar is running for business ideas that we've witnessed in action in various third world nations. You can read the whole series here.

The toilet paper partnership - While travelling by bus on a 15 hour trek across the Andes, my bus stopped at a single little town in the middle of nowhere. The town consisted of a bunch of stray dogs and a house with a "bathroom" in it. There may have been a few other homes there too, but it was an extremely small town. The bathroom was free to all travelers, but a guy stood outside of it with toilet paper, which cost the equivalent of .10 cents per sheet. Thats per sheet. You know, the little 5 square inch sheets of toilet paper that are perforated. Well, to get a good wipe you need more than one sheet, and the whole bus was full of people who's last meal had been some kind of "roasted" "chicken" that the bus had stopped to pick up a few hours before. So pretty much everyone on the bus had to use this guy's jiffy, and he was making loads of cash. He paid the bus driver a considerable portion of it before the bus left. It was a partnership. 

Make Money in the Third World Part 1: Selling "Turkey" to Muslims

I've lived in a few poverty stricken nations in my day, and I've seen people scratching out a living using all kinds of ridiculous techniques. Howtomakeadollar is going to run a series over the next few days of true examples of Third World business models. To read the whole series, click here.

The "turkey" sandwich - I spent some time living in a Muslim theocracy several years ago. In these nations it is illegal to eat pork, or to have pigs, or anything related to pigs. There are lots of rules in these countries, and they are enforced strictly. They don't just give you a fine or something. They cut out your tongue (to punish you for tasting forbidden food) and cut off your right hand (just because) and then they put you in a prison for long time, and then they fine you. That type of thing. Not only are the laws strict, but there are so many of them that they are constantly creating Catch-22 situations in which it is impossible to obey all of them. Thats just the way it works over there.

Well one time I stumbled upon a little shack-restaurant that constantly had a long line of customers. Over a few weeks I noticed that this place was popular, and I asked people what it served. They all said essentially "this is the best turkey sandwich in the world." So I gave it a try. But it wasn't turkey. It was ham. It was obviously ham. It was dark pink, and tasted like ham. There was no turkey in the sandwich at all. Now remember. Everyone in this country is a Muslim. Ham is illegal. Nobody in this country has ever even tasted ham or seen a pig. So the guy running this shack was telling everyone that it was turkey so that he wouldn't get arrested for selling it, and all the customers were calling it turkey so that they wouldn't get arrested for eating it. In fact, I honestly believe that most of his customers actually thought it was turkey. Ham is completely foreign there. Its not that they've never eaten it. Its that they don't even know it exists. But I know it exists. After biting into it I winked at the owner. He glared at me. It was our secret.* I don't know where this guy was getting his ham. I have no idea. He was hundreds of miles away from the nearest country where pigs could be legally raised. But he was selling it like crazy, and nobody could turn him in for it.


If someone did try to turn him in, the cops would ask how the person knew it was ham. If the person said it looks or tastes like ham, the cops would ask them how they know what ham looks like, or tastes like. At this point any answer they give would land them in prison with their tongue cut off. Best to just call it turkey.


*He could have glared at me because a man winking at another man might be illegal there, or he may have glared at me because its illegal not to glare. Someone will have to ask an imam to sort this out. 

Make Money by Giving Stuff Away for Free

It seems like a bad business model to give stuff away for free right? Well, thats because in most situations it is a bad business model. But in some cases, you can actually do better by giving something away, so long as you do it right.

Think of Google. When Google's original search algorithm was created, the founders intended to sell it to Stanford University as an internal search engine that the university could use to improve its research capabilities. Well, what would have happened if they had sold their algorithm? They probably wouldn't have created the Google we know today would they? Nope. It would have been named something like "UniSearch," and the only people who used it would be nerdy grad students at Stanford. Instead, after they realized how good their engine was, they decided to run it for free on the Internet for all users. By opening up a superior product for free to everyone in the world, they ensured a massive base of users, and figured that they could find a way to make money off of this base. Google has been selling ads on its searches almost since the very beginning. These ads provide the revenue Google needs in order to continue operations. But in order to ensure it keeps its enormous consumer base, Google has to continually offer improved services for free. Thats why they now offer blogging software, Youtube, maps, and Google Earth (not to mention hundreds of other services). They give all of this away for free just to ensure that they keep their users happy.

Hewlett-Packard also follows a similar concept. They sell their printers at a loss - a significant loss. But they know that if consumers buy their low-priced printers, these consumers will have to come back to buy ink and toner from HP. By being willing to sell one product at a loss, they ensure that they will have a large customer base that buys their other products at a profit. This keeps HP profitable, and puts tremendous pressure on their competitors to sell low-priced printers. The customer doesn't mind either.

Make Money by Being a Wardrobe Consultant

Today I saw one of those public bulletin boards where people can advertise various things like lost pets, businesses, and whatnot, and I found a business card for a wardrobe consulting business. I have heard of wardrobe consultants, but I'm a little bit unclear about what exactly they do, and who pays them. Nonetheless, I am absolutely certain that this is a high paying and important job. Why? Because the word "Consultant" is a prominent part of the business name. I mean, what if the person was just a wardrobe? I would never even think of hiring them. But a consultant? Well, thats a totally different thing that I would never think to hire.

Like I said, I don't really know what exactly a wardrobe consultant does, nor do I have any desire to hire one. My wardrobe, such as it is, does not need any consultations. If I did hire a wardrobe consultant, probably the first thing they would say is "you need more socks and all your t-shirts are stupid." So like I said, I'm not really the kind of guy who is likely to hire a wardrobe consultant.

But that doesn't mean wardrobe consulting is a bad idea. On the contrary, I think its a great idea that you, or someone else, other than me, should do.  I imagine it is pretty easy. Just show up and ask to see your client's wardrobe. Most people, if they are like me, will say "Do you mean the closet?" If they say this, you should inform them that you are not a closet consultant, and walk away. Closet consulting is beneath you, and it is a rather ambiguous job title. Does it mean that you are a consultant, but only in secret, and you don't want anyone to know about it?

Somewhere in there you should get paid handsomely.

Market Research

Based on our extremely rigorous polling, Howtomakeadollar is pleased to report that its basic business model  (millions of one dollar ideas) is the best.

This poll was conducted for several days in January, 2010, and found that 60% of all people everywhere in the world, including Nauru, believe that a million one dollar ideas is the best way to make a million dollars. The poll also found that taking Christmas trees out is 20% likely to make you a millionaire. The margin of error on this poll is estimated at 20%.

A special thank you to all of our readers who participated!

Recirculation Specialist (aka Flipping): An Unappreciated Business Model

Flipping as a business model
A recirculation specialist is someone who buys something at a low price, then turns around and sells it at a higher price (Recirculation specialist also sounds really cool).  It can be anything. Sometimes you have to make minor adjustments to it in order to sell it. Other times you can literally just turn around and sell it for more than you originally paid. You usually hear about house flipping. House flipping is time consuming and can be very risky because you are dealing with hundreds of thousands of dollars, but it can also be highly profitable for the same reason.
However, you can recirculate/flip almost anything. Lots of people will sell used household items on Craigslist for a low price. Craigslist operates locally, so the pool of buyers is small. That means that demand will be low, and that means that the price will be low. If you see a good deal on a used item on Craigslist, chances are you will be able to sell it for more on Ebay, because Ebay has a much wider pool of potential buyers. In fact, Craigslist offers a whole category of "free" things. That means that if you can find someone who is willing to pay just one dollar for it, then you've made a profit. Flipping can have very high profit margins, but it involves constantly buying and selling things, and can be very time consuming. Additionally, you have to be very good at finding low prices and knowing how much an item is actually worth. However, this is a decent way to make a living, and I know (and have heard of) several people who make over one hundred thousand per year being a recirculation specialist using Ebay and Craigslist to sell things they find.

Rent-Based Businesses

Rent-Based Business Model

Advertising/Renting: You might think that advertising and renting are totally different concepts, but I think they are quite similar. I am a landlord. I spent a ton of money up front and bought an apartment building. As long as I make more in rental income than my monthly mortgage, I can make a profit. Lots of businesses work this way. Buy a building, then rent it out to others. As long as the renters pay more than the regular costs of ownership, you make money. The risk is that you can't find renters.

Advertising is similar. Lets say you buy a billboard on the highway. All you have to do is find a "renter" who is willing to pay money to post their ad on your sign. You are essentially renting it to others. Or TV. If you own a TV station you can show whatever programs you want. If you can find people who will pay money to use some of your television time for an ad, then you can make money. If you can't find enough advertisers, you lose. Thats why I think advertising and renting are the same thing. The only difference is what your people do with the space they rent from you.

The Internet can also be rented. Think about Google. All Google is is a massive search engine that rents space to advertisers. Advertisers pick a word that they want to rent, and everytime someone searches for that word, their ad appears. Its not a building, its not a billboard, and its not a television station, but its the same principle. As long as enough tenants are willing to pay for a spot, you make money. The key is to keep your space well maintained. If my building falls apart, no one will rent it. If Google gets outdated, no one will advertise on it.

If you own something, chances are it can be rented. Many people rent out advertising space on their cars. Its called "Car Wrapping." Lots of agencies will pay you decent money to drive around for a month with a big corporate logo on your car. You can't make a living this way, but you may be able to make $200/month.

A very popular way to make money on the internet is advertising. All you have to do is create a website that people visit often. If enough people visit your site and click on an ad, you can make money. A second way to do this is called "Affiliate marketing." In affiliate marketing, you create the ad yourself. If you have a blog that gets (lets say) 1000 visitors per day, you can offer to write up a blog post that  endorses a certain product or company. If you do this very often, you will probably lose your regular internet traffic, but if you do it once a month you should be able to keep your regular readers while also making decent money.

Service Oriented Businesses

This blog post will be part of a series of posts which describe various common business models.

Service Businesses: This is a huge category so I'm going to generalize a lot. Basically, you provide a service and someone pays you for it. One year when I was in college I paid my December rent at the beginning of the month and had only $22 left in the bank. That meant I had no means of buying Christmas presents for anyone, and no means of even driving home for Christmas because my car was out of gas. $22 meant I would barely have enough to eat for the month. But one thing I did have was a lot of snow. I found a snow shovel for 9.99, and walked all over town looking for driveways that were still snowed in. On that very day I made over $100.00. That was good money, but it still left me pretty cheap on Christmas gifts, so I prayed for more snow. Yeah, I actually did pray about it.
I got two more storms in the next two weeks, skipped a few classes, and made a lot more. My first day of shoveling I had to walk all over the place looking for driveways that were not shoveled. I was friendly with my customers and asked if I could come back next time it snowed. I did a thorough shoveling job, and they told me to come back. This saved me several hours of hunting for clients the second time it snowed. Thats how service businesses work. You get paid for providing a service. Do a good job and be a friendly person, and you will get easy repeat business. I still have that shovel. A ten dollar investment earned me several hundred.

I knew a 19 year old who started a lawn-mowing business when he was 14. By the time he was 16 he had bought three brand new riding mowers and had a list of over 100 clients. He hired out his friends and made over $40,000 for himself each summer from when he was 17 through 19. Last I heard he was out of high school and was planning to into a year-round business of mowing, leaf raking, snow shoveling, and whatever else he can get into. If you work hard you can get a long list of clients quickly. You don't need a sophisticated plan and a business degree.

The service model is a pretty inexpensive way to start a business. All you need is your own skills and maybe a few basic tools. Its a good way to make some money that you can use to either reinvest in your business, or use to start a different one that requires more up front capital.