When I read the words “Black Market” I immediately assume the author is referring to some sort of shady/illegal dealings. I think of the drug and weapons trade, as well as the money laundering that goes hand-in-hand with those two industries. Just the term itself sounds nefarious in some capacity (interestingly, “White Market” sounds bright, clean, and trustworthy – how has no cashed in on this yet?); however, while the black market certainly does contain these highly publicized areas of income, the majority of the “underground economy” as it sometimes known is actually common services that people simply perform for cash and then keep the tax man out of everyone’s pocket.
The Greeks Aren’t The Only Ones Playing the Tax Game
For a lot of small business owners (especially those in the construction, trades, and services industries) there is a lot of tax to be paid and collected at every level of a project or business deal. Any time the government can be kept out of the loop on some of the smaller scale projects, both parties gain a much better deal. At the same time, it could be argued that they are getting this deal at the expense of the average tax payer since they are cheating the system of tax revenue. I was surprised to see that the Statistics Canada estimate for our underground economy is $36 billion a year, and the USA’s was roughly our proportionate equal at close to $1 trillion according to the Wall Street Journal. Imagine if the USA could collect even half of that every year? Their debt paydown could be accelerated in a hurry! Of course this would be offset by the expansion of high-paying IRS jobs, so it might actually hurt the economy in the long run (not to mention the thorny issue of drug legalization).
My Dad – The Criminal Genius
I never realized that my family was breaking the law my entire life. My dad is the king of black market, legal activities (an important distinction to make I think). He was constantly trading his services and products (mostly firewood and machine-related activities) for those of others. Any time we needed electrical, plumbing, or specialized construction help (anything he couldn’t handle on his own) it would be traded. It never seemed like he was following in Al Capone’s footsteps at the time, but when you stop to think about it, he was actually avoiding taxes to a large extent.
A Profitable Method of Exchange
I’m a huge believer in this sort of strategy to save money. I think it’s an example of a practice that is much more realistic than becoming a millionaire by never ordering a coffee or eating out. Sadly, it’s an advantage that is definitely slanted towards trade people. There are very few people that need a high teacher to write an essay for them, or show them how to use powerpoint. I do have a couple of services that I’ve managed to leverage for something I needed in return. The first is my limited ability to do stuff online. Between JB and I we can create a serviceable website (nothing too fancy, but it gets the job done) and a lot of small business are very intimidated by trying to create their own little spot on the world wide web. For a couple hours work I’ve gotten a couple favours and a little side income that I can keep “off the books.” The only other card I can play in the black market game is a strong back. I’m a pretty big guy, so when a piano or a dresser needs to be moved, I’m your man. Just as long as it doesn’t require a lot of spatial intelligence or trades-related knowledge.
Stupid Tradespeople… Getting “Real Life Skills” and All
Few people realize the long-term savings available to a talented tradesperson if they market themselves in this regard. For example, everyone needs a plumber, electrician, or mechanic from time to time. Often, these people get pulled away off of company time to do small jobs for friends that don’t want to spring for the high per-hour wage that tradespeople can often command. If you offer cash for their time, tradespeople can often make a decent after-tax (since there is none) return, without charging a lot of money. If they can trade a couple hours of their time, for $300 worth of a mechanic’s labour, that’s a pretty substantial profit! I reckon that my dad probably saves $2000-$3000 a year, just by constantly trading services and getting below-market rates on odd jobs. Your ability to maximize your black market potential is definitely connected to your network of like-minded friends. This is another advantage tradespeople have – they tend to know each other and work together often. My hope is that after I have worked a few more years as a teacher, I’ll make a good enough impression on at least a few crazy students, and once they have their jobs in the trades (making more than their old teacher) they will come back and help me out in gratitude… A teacher can dream right?