My year-long quest to create a guide to mastering money

“How would you like to write an Unconventional Guide?” my friend Chris Guillebeau asked me last spring. As long-time readers know, I’ve joined Chris to travel across the U.S. by train, travel across Norway by train, and produce the first three editions of the World Domination Summit conference here in Portland. When he’s not traveling or dominating the world, Chris publishes a series of guides on subjects ranging from art to law, from entrepreneurship to publishing.

“What kind of guide would I write?” I asked.

“A guide about money,” Chris said — as if there could be no other possible answer.

“What would we call it?” I asked.

“How about Get Rich Slowly?” Chris said.

“No way. I don’t think the folks who own the blog would like that,” I said. “I doubt they could stop us since you can’t copyright a name, but I’d rather not make them angry.”

“Well then, how about Master Your Money?” Chris said.

I thought for a moment. I was reluctant. I’d retired from Get Rich Slowly (the blog) a few months before and was enjoying all of the free time. But something about having a specific goal appealed to me. How hard could it be to produce a guide about money?

“I like it. I’ll do it,” I said, “but I can’t start until I return from Ecuador at the end of September.”

“No problem,” Chris said. “You should be finished by Christmas.”

A writer’s life
I didn’t meet that Christmas goal. Not even close. You see, I had too much to say but couldn’t find a way to say it.

When I came back from South America, I spent two weeks performing a braindump. I sat at my computer and brainstormed everything I wanted to share with readers. There was a lot — enough for three books. I tried to mold this mountain of words into some sort of recognizable shape, but it was no use.

After three weeks of work, I’d written maybe 20,000 words but felt like I’d gotten nowhere.

The writing process
Early in the writing process. Isn’t it ugly?

In mid-October, I flew to St. Louis to attend Fincon. Mixing with a couple of hundred other financial writers sent my brain spiraling in new directions. Talking with my colleagues made me reconsider what I was trying to do with Master Your Money. I went back to the drawing board.

When I returned to Portland, I spent a crazy week cooped inside my office. I wrote without ceasing. When Kim came home from work every night, I’d greet her with non-stop talk. She laughed. “This is funny,” she said. “You should see the difference between how you are now and how you were two weeks ago.” The difference was I felt energized. I was no longer suffering from writer’s block. My writing had purpose and direction.

Unfortunately, it was the wrong direction.

At the end of October, I met with Chris and showed him what I’d written. Over Thai food, he leafed through the pages. “Hmmm,” he said, and I knew that wasn’t good. “This is interesting stuff, but it’s not what I had in mind. This is about fear and freedom. It’s about happiness. I thought you were going to write about money. Besides, these sections are too short. The guide reads like a blog.”

I’d written 50,000 words of great material, but they were the wrong 50,000 words.

Note: Die-hard readers know that I didn’t just abandon the stuff about fear, happiness, and freedom. Instead, I’m using it as source material this year at More Than Money. Every Monday, I’m publishing one piece of this abandoned version of the guide. Last month, I finished the section on overcoming fear. Now we’ve begun exploring what it means to be happy.

So, I went back for a third stab at Master Your Money. I still thought maybe I could finish by Christmas. But I didn’t. Again, I lost my way. I couldn’t find anything to latch onto, no central theme. What did that mean, master your money? It seemed so vague.

On the day after Thanksgiving, I met Chris in a coffee shop. “It’s not going well,” I confessed. I showed him my outline. He nodded.

“What’s this bit?” he asked, pointing to a section where I described how I’d decided to manage my personal finances as if I were running a business. “I like it. Why don’t you focus on writing about how to be the chief financial officer of your own life?”

That simple suggestion was all I needed. For a fourth time, I started to write Master Your Money. This time, no problem. The words didn’t flow out of me unimpeded, but I had a clear idea of what I wanted to say and how to say it. I knew I’d found the angle that had been missing for months.

More than words
Master Your MoneyAfter a few weeks of writing on this fourth iteration of Master Your Money, it became clear that I wouldn’t be finished until spring. “No problem,” Chris said. “We’ll shift things around. But maybe you should start working on the other parts of the course too.”

“Course?” I asked.

“Yes,” he said. “Master Your Money should be an entire course, not just a single guide. We can call the guide How to Become CFO of Your Own Life or something similar. But with a name like Master Your Money, we want to provide even more. For instance, you’ll probably want to record some interviews with top financial writers and experts.”

For the next two months, I interspersed writing with recording. Although I’d become accustomed to being interviewed, I hadn’t yet mastered the art of interviewing others. But I figured it out. Before long, I found that I enjoyed conducting interviews more than I liked writing!

I recorded interviews with some of my favorite finance folks, including:

  • Jean Chatzky, whose books helped me start digging out of debt
  • Gretchen Rubin, best-selling author of The Happiness Project
  • Liz Weston, one of the country’s most popular financial columnists
  • Ramit Sethi, the mastermind behind the book (and blog) I Will Teach You to Be Rich
  • Adam Baker, former Get Rich Slowly staff writer and a good friend
  • Mr. Money Mustache, whose polarizing ideas and personality have had a tremendous impact on my philosophical development

In the end, I’d accumulated 18 interviews totaling over eight hours of audio!

“Great,” Chris said. “Let’s do more. When people buy the course, let’s give them a weekly email to remind them of all the different things they can do to master their money.”

Back to the office I went. I created a list of 52 topics that I thought were crucial for anyone wanting to take control of their finances. I researched. I wrote. I edited. I scheduled these emails to go out every Monday for an entire year.

“Now it’s time to put the finishing touches on the course,” Chris said the next time we met. “You need to create some tools for people to use. We want to give them a sort of money toolbox.” More time in front of the computer! This time I researched data on saving and spending, best practices for negotiating salary increases, complex formulas for retirement and investing.

Ready for launch
After I’d finished with the spreadsheets and handouts, I met with Chris again. He looked them over. He looked at the list of email topics. He looked at the interviews. He paged through the guide, which we were now calling Be Your Own CFO.

“It all looks great,” he said. “But I don’t like the name. We shouldn’t call it Master Your Money. We should call the course Get Rich Slowly. That’s what it’s all about.”

I’d long ago surrendered to his ideas for this course. I’m a writer. I produce content. Chris has proven time and again that he’s a marketing genius. I trust him. So, I approached the company that owns Get Rich Slowly (the blog). I told them about the course that we’d created. I explained that we planned to launch it as Master Your Money, unless…How would they feel about us using the name Get Rich Slowly?

To my surprise, they agreed. In fact, they thought it was a good idea, a way to cross-promote.

Now, after nearly a year of work, my Get Rich Slowly course is ready to launch. Next Tuesday morning, it will be released as one of Chris Guillebeau’s Unconventional Guides. The course will contain a 120-page guide describing how to Be Your Own CFO, 18 audio interviews with transcripts, 52 weeks of action-packed emails, and a variety of tools in a sort of “money toolbox”.

Wow.

“I can’t believe I’m finished,” I told Kim the other day. “It’s so much! I never would have started if I’d known it would take this much work.”

“Well, you know what they say,” she replied. “If you want to eat an elephant, you’ve got to do it one bite at a time.”

And that’s how I created the Get Rich Slowly course — one bite at a time.

Be Your Own CFO
The finished product. Isn’t it pretty?

Comic book ad from 1956: How I made a small fortune in spare ime!

Blackhawk 105Last month, I mentioned that I got my entrepreneurial start as a kid by selling stuff door to door. This “stuff” generally comprised products advertised on the back of of comic books: seeds, greeting cards, and so on.

For more than thirty years, companies recruited armies of salesboys and salesgirls through comics. I was one of them. But it wasn’t just kids they recruited.

I was reading an October 1956 issue of Blackhawk — a fanciful war comic (the Blackhawks didn’t just fight commies; they also fought space aliens) — when I came across this gem of an ad that touts how much a man can make selling Mason Shoes.

Mason Shoe ad

That’s a little small to see on the blog, so you can click through to see the entire ad on Flickr. Here are some of the best bits:

Mason Shoe ad

Bill’s friend Jim introduces him to the world of Mason Shoe:

Mason Shoe ad

Look how that shoe gleams in the second panel! Naturally, Bill started selling to his friends, relatives, and co-workers. Everybody wants comfortable shoes:

Mason Shoe ad

And here’s the end-of-the-page sales pitch:

Mason Shoe ad

“Bill! A new toaster!”

It’s probably obvious why I love this.

For one thing, it’s an ad in comic form from inside a comic book. For another, it’s promoting one of my favorite aspects of personal finance, personal entrepreneurship. True, it veers toward the “get rich quick” side of things (but then all sales schemes like this do), but that’s okay — in order to succeed, the Mason Shoe man will have to pour his soul into his work. Finally, I’ve done plenty of door-to-door sales in my day, so I have a soft spot for this sort of thing. (It’s never this easy!)

By the way, Mason Shoe still exists, though I can’t tell from their website if they still manufacture their own shoes. It may be that they just sell other brands.

A Story About Mason Shoes

A fellow named Drew Cook dropped me a line to tell me about his experience with Mason Shoes. Here’s what he had to say:

Back in the early 1970s, I lived on St. Thomas in the U.S. Virgin Islands, and worked various construction sites for about five years, first as a laborer, then as an ironworker (connector). One day at lunch on the first job site I worked on, a guy came onto the site and showed us a small Mason Shoe Co. catalog, telling us he was a sales representative of the Mason Shoe Co., and we could order work boots from him that he would later deliver to us on the job. One of the veteran construction workers on the site told the rest of us how good the “Mason Shoes” were, and that the mail-order through the sales rep deal was legitimate.

We looked through the catalog, and several of us, including me, filled out a simple little form indicating what type of boots and what size we wanted. I ordered a pair of heavy, ankle-high, oiled brown leather steel-toed boots with hard rubber soles that laced to the toe, which I’ve since learned are traditionally called “roofer’s boots.” I seem to remember that they cost around $35 or so — a lot at the time. The sales rep took a few dollars from each man as a partial payment on their order, and told us he’d be back in a couple of weeks with our boots. He was as good as his word, and showed up on the site two weeks later with our boots. They fit perfectly, and we all paid the sales rep the balance on our orders.

I wore those boots on that job and several others for a couple of years until they were near-to-wearing-out from use, then ordered another pair of the same type from the Mason Shoes rep (can’t remember if it was the same guy or another fellow). I wore the second pair as an ironworker for another few years, and they served me quite well.

I never ran across another Mason Shoe Co. sales rep, because I stopped working construction when I moved back to the States in 1975, but as I said, those “Mason Shoes” were very high-quality, and lasted through a lot of rough usage. As you mentioned, the Mason Shoe Co. still exists, but they don’t sell any boots like the ones I ordered and wore back in the early 70s, and I doubt they have independent field sales reps any more. The closest match I’ve seen to the Mason Shoe Co. boots I wore years ago is the “Roofer’s Boots” currently offered by the Duluth Trading Co. (Item #86053) — at an astounding $174.50!

I love Drew’s story. It’s always fun to find a real-life connection to something that seems so abstract and distant — like an ad in a 1956 comic book.

One More Mason Shoe Ad!

I found another Mason Shoe ad. This one’s from the August 1961 issue of Amazing Adventures. Click on the image to view it full size at Flickr.

Amazing Adventures #3 Mason Shoes ad

Turning garage sale junk into eBay gold

On Saturday night, I attended a party with some of my former high-school classmates. Many of the other guests were artists. I don’t know many artists, so it was fascinating to listen to their stories, especially about the economics of selling art during a recession. I learned a lot.

Later in the evening, I spent some time chatting with my friend Jonathan. He asked me about the blog. “What are you going to write about tomorrow?” he said.

“Well, I’d like to write about earning extra money,” I said. “That’s the topic for the podcast I’m doing Monday afternoon, and I think it would be fun to also post an article related to the subject. I’ve been picking the brains of these artists, hoping to find a story, but I haven’t found one yet.”

“I’ve got one,” Jonathan said. “Let me tell you how my mother earns extra money.”

Garage Sale Gold

“My mother makes money on eBay,” Jonathan said. “She likes to travel, but it’s not something she could normally afford to do. So, she’s found a way to generate extra cash that she saves just so she can off to Europe — to France or to Italy. Wherever she wants to go.”

“How does she do it?” I asked.

“She shops at garage sales,” Jonathan said. “She goes with my aunt. They each have certain things they know a lot about, and so they go from garage sale to garage sale, searching for hidden treasures. They buy them, take them home, and auction them on eBay. It’s simple, but it works.

“Here’s an example,” he said. “Recently, my mom bought a monkey perfume bottle for ten bucks. She sold it on eBay for $150.”

“A monkey perfume bottle?” I asked, completely baffled. Jonathan laughed.

“Yeah,” he said. “I know it sounds crazy, but it’s true. That’s the thing. People don’t know what they have, so if you’re educated about what certain things go for, you can get some great deals. Sometimes you have to play dumb, you know. If you find a great value, you don’t want to appear over-eager.”

“That reminds me of something that happened a few years ago,” I said. “A friend called to tell me about a nearby garage sale. This guy had a couple of boxes of comic books. Usually garage sale comic books are junk, but this guy had a bunch of great stuff from the late 1960s. He wanted $5 a piece for them, which was more than fair. I thought about making an offer of $100 or $200 for the entire lot. I was going to lie to him and say they were for my non-existent kid. I wanted to play dumb. But I didn’t have the guts. I left without buying anything. I should have at least made an offer. There were a couple of thousand dollars worth of comics there!”

“That happens all of the time,” Jonathan said. “My aunt once found a nice set of luggage marked at $100. She knew it was worth more, but she couldn’t bring herself to buy it. Her son told her to do it, but she didn’t. Later she saw the same set on eBay. One of her competitors had bought it. It sold for two grand!”

Competitive Business

“Your mother and your aunt have competitors?” I asked.

“Sure,” said Jonathan. “A lot of people do this. There’s a group of them that go around from sale to sale. You get so you see the same people. Some of them are competitors. Other people have specialized niches. They know one thing really well, and they hunt at garage sales until they find it.”

“Interesting,” I said. “I remember once we were having a garage sale. I came home from work, and Kris pointed out a guy rummaging through my compact discs. I had hundreds of CDs for sale. Kris told me he’d been at it for about an hour. Eventually, he came up and tried to talk me down on prices, but I wouldn’t do it. I was shocked at the CDs he’d selected. It wasn’t the common stuff. He somehow knew every single hard-to-find or expensive disc that I’d accumulated over the past decade. Even the classical music. It hurt to sell that stuff.”

“Yeah,” Jonathan said. “There are a lot of people like that. Some are just collectors, but others are like my mom, who will just turn around and sell the stuff for a profit on eBay.”

He paused for a moment and then added, “My mom has no shame. She’s one of those who’s knocking on doors at 7am. She’ll read about a sale in the paper, and she’ll be there early, trying to get the best deals.”

“Don’t people get mad?” I asked. “When Kris and I hold sales, it drives us crazy when people show up early.”

“Sure, they get mad, but she doesn’t care. A lot of people turn her away, but many don’t. They may be mad, but they’re happy to take her money.”

Love It or Leave It

“The thing is, my mom loves this,” Jonathan said. “She’d do the garage sales even if it wasn’t a way to earn extra money. There’s a lot of time my mom buys stuff and gets nothing. But she doesn’t care because she had a blast garage-saling for three days.

“A friend of mine is always trying to convince others to start side businesses. He says that you can’t do it for the money, though. You have to do something you enjoy. You have to take other stuff into consideration. If you do it just for the money, there’s a good chance you won’t stick with it because you’ll discover you don’t like it.”

I thought of a conversation I’d had earlier in the evening with one of the artists. He makes interesting clocks. He doesn’t actually make the mechanisms, but he creates artistic clockfaces. We talked about the economy, and he told me business has been rough lately. He doesn’t sell a lot even during the best of times, but the last few months have been even harder. But he keeps doing it because he loves it.

In the end, Jonathan summarized his mother’s strategy: “My mom doesn’t make a lot of money, but she has fun. And she’s able to earn enough to travel. She’s traveled to Turkey and Costa Rica and Switzerland.”

“And this is just off of garage sales?” I asked.

“Yup,” said Jonathan. “It’s garage-sale money.”

Photo credits: Garage sale by M. Gifford, Matchbox cars by Daniel Spils, Switzerland by MK Media Productions.

Practice, Passion, and Patience: The Secrets to Successful Blogs

In his new book, Blog Blazers, Stephane Grenier interviews 40 prominent bloggers about their secrets to creating successful — and profitable — blogs. Some of those who participated include:

I also took time to respond to Stephane’s questions. Here, with his permission, are a few of my tips on how to build a successful blog.

 

Stephane
What makes a blog successful according to you? Is it traffic, reach, revenue, etc.?

J.D.
I run several blogs. Each blog has a different measure of success. My personal blog is successful if it keeps my friends and family informed and entertained. I don’t need a lot of traffic there, but to maintain a connection to the people I know. Similarly, at my animal intelligence site, I measure success by how many stories I can find and share, not by traffic.

At Get Rich Slowly, however, things are different. My number one measure for success is feedback from readers: are people finding the content useful and relevant? But I’m much more interested in traffic numbers there. In particular, I try to build my subscription numbers. RSS readers are important to me. I’m less interested in pageviews and unique visitors.

Revenue is a secondary concern for me. Don’t get me wrong: the money is nice, but it’s not my top priority. I am grateful that I’m earning enough from blogging to allow me to quit my day job, but I’d still blog even if I didn’t.

Stephane
When did you decide you finally reached success with your blog?

J.D.
I don’t know. I’ve been writing various blogs for nearly seven years (and “on-line journals” for even longer). For most of that time, I’ve dwelled in relative anonymity. I guess it’s only recently that I’ve begun to think of myself as a successful blogger, and that’s only because doing this now can support me full-time.

Stephane
Which websites would you recommend for any new bloggers starting to blog?

J.D.
Steve Pavlina’s article on how to make money from your blog is excellent. I think it’s the best single piece of information on this subject. There are only two actual web sites, however, that I think most bloggers need to read: Problogger and Copyblogger. These sites consistently provide excellent information.

Stephane
Which book(s) would you recommend for new bloggers (these can range from marketing books, blogging books, etc.)?

J.D.
I strongly believe that the skill most bloggers — including myself — need to improve is writing. I don’t think bloggers need to read marketing books or blogging books. They need to read books about writing. I recommend the following:

Two non-writing books that I also believe are useful:

  • The War of Art by Steven Pressfield, which deals with procrastination and fear, etc.
  • The Incredible Secret Money Machine by Don Lancaster, which is a late-seventies manual for starting a small business. When I re-read this recently, I was amazed at how much of the advice applied to my situation as a “pro” blogger.

Stephane
What’s your best advice in regards to content and writing for bloggers?

J.D.
Content and writing are two different things. I address writing elsewhere in this interview. As for content: be interesting. Try to avoid the “echo chamber”. Every blog niche has one. Among personal finance blogs, one person will write on a subject (“how to save money on cheese!”), and then there’ll be a ripple effect as other people respond (“my top 5 ways to save money on cheese!”, “why processed cheese is better than the real stuff”, “top 5 blog posts about cheese”). Some of this is natural — there will always be articles you want to respond to — but too much of it is lame.

To use one example: John Chow has carved out a very successful niche for himself. He has a good blog and some devoted readers. But many of his readers create blogs that seem to be solely responses to John Chow. Don’t do that. Let John Chow write about John Chow. You write about yourself and what is important to you. If you don’t know a damn thing about making money on the internet, then don’t write about it. Write about your paper airplane collection instead. I’d rather read a good blog about paper airplanes (or saving money on cheese) than to read yet another person responding to John Chow.

Stephane
What are your quick and short five best tips for blogging?

J.D.

  1. Take a writing class at your local community college.
  2. Don’t start a blog because you want to make money. Start a blog because you’re passionate about the subject.
  3. Write daily, even if you don’t post daily. Get in the habit of writing.
  4. Learn to edit yourself! I spend more time editing my material than I do actually writing it.
  5. Don’t worry about SEO. Search engine optimization does not make a successful blog. Writing content that people want to read makes a successful blog.

Stephane
What is the most common pitfall new bloggers generally fall into?

J.D.
Wanting overnight success. Readers and traffic come with time. You can’t start a blog for fame and fortune. You have to start it for love. If the passion isn’t there, the other things will probably never come.

Stephane
Any other comments or thoughts you’d like to share?

J.D.
Blogging is a dream come true for me. Not the blogging itself, but the opportunity it gives me to write everyday. I’ve always wanted to be a writer. I just never pictured myself writing about personal finance for the web. (I thought I’d write fantasy or science fiction novels.) Now that I’m doing it, however, I understand that this is what I’m meant to do. My whole life has been leading to this. It’s awesome.

You can read the entire interview — and 39 others like it — in Blog Blazers, the new book from Stephane Grenier. The author was kind enough to provide several copies of his book for me to give to GRS readers. I will send a free copy to four randomly-selected commenters on this post.

An Interview with Rich Rogers, Cheesemonger

I’m in Trader Joe’s with Rich Rogers. I’m looking for bread. He’s looking at cheese. Rich is in the process of opening an artisan cheese shop in Dallas, Texas, and he never misses a chance to check for cheese in other stores. The past year has been a crash course in retail marketing for him. It’s a harrowing process, but he loves it.

On our way to the cash registers, I stop to grab a jar of clam sauce. “I don’t even know why I’m buying this,” I say. “But it sounds good.”

Rich points to the jars of clam sauce, lined side-by-side. “That’s multiple-face merchandizing,” he says. “You noticed that sauce because the jars were arranged like that. Longer ago, there would have just been one jar in front, and all the other jars lined up behind. But because there was more shelf space devoted to the clam sauce, you noticed it. And now you’re buying it. That’s merchandizing in action.”

Rich hasn’t always been interested in retail merchandizing. For fifteen years, he produced film and video. As a producer, he hired people and put all the pieces together. In post-production, he learned supervision, and he learned to get at what the client wanted. This experience taught him to be organized, and trained him to become a good manager. But now he’s ready to parlay these skills this new venture: he’s going to risk his personal finances on a dream.

I sat down recently with Rich and his brother-in-law Wayne to talk about the risks and rewards of entrepreneurship.

J.D.: Why did you leave film production? What made you want to start a cheese shop?
Rich: We had kids. Shortly after we had kids, our roles changed. My wife’s career got more demanding, and mine wasn’t moving forward. I started cutting back my hours to spend time with my daughters. I began to re-evaluate who I was and what I was doing. I’ve always had a passion for food, and during the process of staying home, I fell in love with cheese. I never wanted to be a chef, but I always wanted to work with food. This was an opportunity to go into the food business.

J.D.: I recently made an entrepreneurial leap myself, and it scares me. Do you feel trepidation at starting your cheese shop?
Rich: Of course. The hard part is your friends and family are excited for you. It’s bold! You’re doing something that many people have wanted to do. But it’s a roller-coaster ride — one moment I’m excited about it, the next I’m nervous and depressed. This is the most exciting thing I’ve ever done in my life, but it’s the scariest thing I’ve done, too. I’m taking my savings and I’m taking loans from family. It’s the biggest gamble I’ve ever taken. And with where the economy is…But even with where the economy is now, I have to make the leap. This is my only chance.

J.D.: Why is this your only chance?
Rich: Americans in general, and Texans in specific, are scared of foreign things with strange names that smell funny. Tastes are changing, though, and they’re starting to get more interested. Plus there’s another group in Dallas that wants to open a cheese shop about the same time I do. I feel like if I don’t get in now, I’m going to miss this opportunity. Portland has three or four good cheese shops. Dallas doesn’t have any. It has a couple big grocery stores with a wall of cheese and nobody to help.

J.D.: When do you open?
Rich: We hope to open in June. We start paying rent in June. Realistically, it’ll be more like July.

J.D.: Do you have a partner?
Rich: It’s me and my wife. We have equal ownership. She can’t have an active role at the start, so for now I’m doing it by myself. It’s all on me. I need to find a way to make it work.

J.D.: That’s one of the things that scares me about quitting my day job. Before, the web site was just a hobby. Now it’s my only source of income. It’s all on me now, too. I’m nervous about making mistakes. Have you made any mistakes so far getting started?
Rich: Any time I go anywhere, I try to find out if they have a cheese shop, and then I go in and pick their brains. A lot of people have said finding a location is the toughest thing. I almost made a mistake with the location, but we’re really happy with the spot we chose.

 

 

It’s a cool location in a great old building, although it hasn’t has any renovation in 35 years. Our landlord really likes the idea, and can’t wait for us to open. There’s a butcher one block over, and a bakery two doors down. There’s a chocolate shop nearby. It’s a good location.

J.D.: I’ve never talked with anyone about leasing a building before. How does that work?
Rich: When we pay our lease, we’re paying the owner’s cost on the building. It’s just like renting a house. When you rent a house, you’re paying the owner’s mortgage. Same with a lease.
J.D.: Some of my readers have a problem with that. They don’t think it’s right that the tenant should pay the owner’s mortgage.
Rich: But that’s the way it is. And the thing that really gets you about renting a commercial space is you not only pay for the owner’s mortgage, you are also assessed charges throughout the year to cover their insurance, taxes, and management of the property. It seems like a racket, but it’s necessary. That’s the way it has to be. Otherwise why would anybody do it? They’d lose money.
Wayne: One thing people don’t realize when they start their own business is that their taxes are going to be higher. Their costs go up. Yeah, you may be selling $600 a day, but most of that goes to taxes.

J.D.: I really like the name and the logo. Where’d that come from?
Rich: It’s named after my grandfather, Pete Scardello. He was a big influence on my life. He taught me a lot about the importance of food. It was weird because in small-town West Texas it wasn’t okay for a guy to cook unless it was on a grill. He taught me that a meal isn’t just a time to feed yourself — it’s a time for friends and family. That’s one of the reasons I love cheese. It’s not just an indulgence — it’s something to share. It’s a way to extend the conversation. Cheese is the perfect food. It has everything except fiber. It has a perfect balance of fat, protein, and carbohydrate. You take a hunk of crusty bread and you’ve got a perfect meal.

J.D.: Yeah. I love that. It’s a great meal. But Kris and I buy most of our cheese at Safeway. Why would anyone go to a cheese shop? Why not just go to the grocery store?
Rich: A specialized shop can offer more than a grocery store. A lot of people who are very successful can take an idea and make it more appealing, even in a flooded market.
Wayne: And Rich knows a lot about cheese. He’s spent a lot of time learning about it. You can get more help from him than at the grocery store.
Rich: Not only did I have to learn about cheese, I had to learn about retail, about gourmet food, about marketing. There are so many factors involved with becoming successful — you have to pull on every scrap of knowledge you have. My father is in retail. We’re in different markets, and have different businesses, but I go to him for advice. Tons of it. He’s a great resource.

J.D.: Does entrepreneurship run in your family? My family, for example, is rife with it. My dad was always starting businesses. Both of my brothers have started businesses. Many of my cousins have, too. Is your family like that?
Rich: Yeah. My father started life with absolutely nothing. They lived in a one-room shack. They had a creek behind the house that acted as their refrigerator. But he went to school. He got an education. He started with a little fuel jobber that he owned a fraction of, but he worked hard and built that into an empire. Now he owns a string of gas stations. I remember when I was little, we’d be on family vacations and he’d stop at random gas stations because he’d see something different. He’d go in and buy some beef jerky just so he could scope the place out. He was always looking for new ideas. My dad’s gone from nothing to being wildly successful. He possesses qualities I someday hope to possess. He knows when to take a risk. He can talk to anybody. To me, he’s a genius. I want to get to that point.

J.D.: That ability to talk to anybody is so important. I can’t do that. Wayne can. I’m envious.
Wayne: It’s not that I’m good at it, either. But I just do it. I had to. In the car business, you have to be able to talk to anybody. Even when I didn’t know what I was doing, I had to fake it.
J.D.: “Fake it ’til you make it.”
Wayne: Yeah.
Rich: I’m not really good at faking it, but you just have to get over that. With this venture, I’ve just learned that I have to move outside my comfort zone. There’s nobody else to do it. I do have to fake it. But you know what? It works. Probably the best piece of advice I ever got from my dad is that happiness is a choice that you make each day. Every day, you get up, and you have the choice whether you’re going to be happy or not. I read a book recently called The Four Agreements, and it made a big impression on me. I’ve learned that you are what you think you are. You make all of these agreements with yourself. If I’d just tell myself I’m outgoing, I’d be outgoing. You are what you tell yourself you are. If you can see yourself as successful, you will be. Take what you’ve got and go with it.

Conclusion
There are two ways to build wealth: spend less or earn more. I write a lot about frugality and cutting costs, but the truth is I believe that the greatest gains come from boosting your income. Business ownership is one way to do this. But it’s not easy. Starting a business can be rewarding, but it carries a lot of risks, including the risk of losing money.

Nobody can know for sure whether Rich’s venture will prosper, but from what I’ve seen, he’s got a damn fine chance. He’s passionate about his product, he’s been methodical in his preparations, and he has a lot of charisma. With just a little bit of luck, I think he’ll become the Big Cheese in Dallas.

Thanks to Rich for letting me speak with him, and thanks to Wayne for a fine meal, fine wine, and fine cigars.

Excited and Scared: One Week as a Full-Time Blogger

I’ve had a week now to adjust to the idea that I’m a full-time blogger, that I’m completely in control of my financial success or failure. To be honest, I’m both excited and scared.

I had the same job for sixteen years. I’ve never made a career change. I’m sure that many of you have moved or started a new job and felt similar fears. I need to realize that my fears are normal, and that this change is not irrevocable. I don’t want to make this sound like I’m having second thoughts —I’m not.

I’m excited to be pursuing my dreams, and I’m committed to making Get Rich Slowly a fantastic place to find personal finance information. I just need to make some mental adjustments to my new reality.

No cost savings
Some books argue that you can save significantly by quitting your day job, but I’m not convinced this is true. It might be true for a two-income couple with young children, but it’s not true for me. Not only will I lose the income from my day-job, but Kris and I both suspect household expenses will increase.

After one week, I already know our utility bill will go up. It’s fine for us to leave the thermostat set at 54 degrees when nobody’s home, but when I’m trying to write, that’s too cold. I bundle up to keep warm, but all the same, I need to turn up the heat a little.

I never spent a lot to go out to eat with co-workers, so my food costs were pretty low while on the job. Now that I’m trying to eat healthfully, our grocery bill will probably rise. I don’t have kids, so there are no daycare expenses I can cut. I already shop for clothes at thrift stores, so the savings on my wardrobe will be minimal, as well.

The only real economy will come in automobile expenses. The box factory was exactly 20 miles from my house, so I’ll be saving about $14/day in transportation expenses (fuel and maintenance), or about $3500 per year. (My car costs about 36.1 cents per mile to run.)

Potential problems
As you might expect, I’ve tried to be methodical about this move. Because I’m so eager for this to succeed, I’ve thought a lot about potential trouble spots, and I’ve tried to be sure that I have a plan for addressing them. Future concerns include:

  • Health insurance. For now, I’m covered on a plan through Kris’ job. What happens when she retires? What happens if she changes jobs? This isn’t something we have to figure out immediately, but it’s a concern for the future.
  • Personal savings. I’ve managed to rebuild my savings since encountering car trouble in early January, but I’m still short of the $10,000 I wanted to have set aside before quitting my job. I’m confident that I’ll have this by the middle of the year, but I’m still taking a risk by not having that money set aside first.
  • Income. The income from my web sites fluctuates. Some months it’s much higher than I need; sometimes it’s low enough to worry me. I’ve calculated how much I need to earn per day to replace my $42,000/year salary from the box factory, and so far I’m meeting that goal.
  • Expenses. My spending doesn’t worry me too much, but I’m continuing to track it closely. I spent the past two years reducing my lifestyle, cutting unnecessary expenses. This frugality will ease my mind as I begin to work from home.
  • Work schedule. For the past year, I’ve basically been working non-stop. Every spare moment has been spent on this site. I’m still working on it all the time. (Have I become a workaholic?) I need to develop a more realistic schedule that allows me to have time for family and friends.
  • Social life. Many people who work from home have warned me that it’s important to get out and be social. After just a week, I can see that they’re right. I need contact with people. How can I get this contact without spending money? Maybe I’ll take a class or two. Maybe I’ll do volunteer work.

I feel confident about our plan for each of these points. I’m particularly excited about our aggressive savings. In fact, I don’t have any specific worries about writing full time — only a generalized fear of the future.

Part of the problem may be that I no longer have a long-term goal. For three years, I was working to pay off debt. That goal kept me focused. When I became debt-free, my goal became to quit my day job. I’ve done that now, too. I don’t know what to do next. I have some short-term goals, but no longer have a single over-arching purpose. I need to find that purpose.

Words of wisdom
I spent part of Friday evening talking with Bruce, the father of a friend. We talked about exercise, we talked about investing and retirement, and we discussed my move to full-time writer.

“I’ve been writing on the web for over a decade,” I told him. “I’ve been writing daily about personal finance for nearly two years. You’d think this move would be a no-brainer. But the truth is I’m scared. It was one thing to have Get Rich Slowly as a hobby — it’s completely different to make it my full-time job. Making this leap is tough.”

Bruce nodded. “It’s always scary to try something new,” he said. “But I’ll tell you what. You’re doing the right thing. It’s scary now, but imagine how scared you would be to make this move in five years. Or ten. I think it’s great that you’re giving this a shot. What do you have to lose?”

He’s right. What do I have to lose? Nothing. Even if I fail, I succeed. I will have pursued my dream. If I come up short, I’ll have learned things for the future.

Where I’d really lose is by not pursuing my dream. When I’m on my deathbed, I’m not going to think, “Damn. I wish I hadn’t tried to write full-time — I should have stayed at the box factory.” But I very well might have thought, “Damn. I wonder what would have happened if I had tried to write full-time instead of staying at the box factory.”

To infinity, and beyond!
Ultimately, despite my fears, I’m doing the right thing. It’ll take a couple of weeks to work through my nervousness and trepidation. But I’m living the life I want, and that’s what is important.

Your first months, or even years, of being jobless will require adjustments of all kinds. You’ll be exposed to new people and you’ll be learning new skills. You’ll be drawing a new map, one that will take you places you’ve never been before. If you treat all of this as an adventure — which it certainly is — you…will be able to look back fondly when you tell the story of your early days of making a living without a job. — from Making a Living Without a Job by Barbara J. Winter

In the past month, I’ve done a lot of reading about nontraditional jobs (like writing a blog). Some of the books I’ve found useful include:

Each of these books was recommended by a different Get Rich Slowly reader. Thanks to everyone who has provided advice and suggestions. Your support makes all the difference!

An Entrepreneurial Leap of Faith

My friend Sparky called last night. “I’m thinking of starting my own business,” he said. “I need some advice.”

I wondered why he wanted my advice until I realized that:

  • I help run a million-dollar-plus family business;
  • For the past six years I’ve operated a small computer consulting firm on the side; and
  • I’ve often mentioned how I treat Get Rich Slowly as being similar to a business venture (in mindsest, not in application).

Sparky’s proposed bike-fitting business seems very much like my computer consulting business; they’re more similar than different. We spent an hour discussing best practices and the entrepreneurial leap of faith.

“What made you decide to do this?” I asked.

“It’s crazy,” Sparky said, “I was biking to work the other day and it hit me. I recognized I had a passion for something and I couldn’t deny it. I love bikes. I want to help people find the right bike. I’d be good at it. Then I got to thinking about that CD you made for your 31st birthday. Back then, you said it represented your entrance to adulthood. We’re 37 now, and I don’t feel like an adult.”

I agreed. “I still feel like I’m seventeen,” I said. I told him about my own Eureka! moment, the spark of inspiration for this blog. “I was soaking in the bath reading Loral Langemeier’s The Millionaire Maker when something in the book hit me like a ton of bricks. I realized I had a passion for personal finance and wanted to share it. I put the book down, got out of the tub, didn’t even towel off, and sat down naked at the computer to draw up plans for Get Rich Slowly.”

Sparky laughed. “Too much information,” he said. “But yeah, this was was like that. I had a flash and knew that I could do it. That I should do it.” His voice was edgy. He was nervous. He was bursting with enthusiasm, with excitement, and with trepidation. That’s awesome. It’s a great combination for a new entrepreneur to have — you want to be eager, but you also want to be a little scared.

“So what advice can you offer me?” he asked.

“Well, first of all, you need to know that I’m no business expert. All I can do is give you anecdotes based on my experience. Some of what I tell you might be wrong. You’re going to need to consult an accountant.

“To my mind, the most important thing you can do at the start is to keep your business accounts and personal accounts separate. Open a checking account specifically for the business. Deposit $100 or $500 or $1000, whatever you think you’ll need. Document everything that enters and leaves that account. Keep files. Don’t intermingle business and personal funds.”

“Why is this important?” asked Sparky.

“It accomplishes a number of things. It helps you know the status of your business, and it covers your ass in case something goes wrong. It also helps your tax preparer. Most of all, it makes the IRS happy. They don’t want to see you mixing funds. They want to know if your business is making money or losing it. Your business needs to make money in three out of five years to even be considered a business and not a hobby.

“On a related note, as much as possible, don’t incur debt. Some businesses have to. If you were opening a bookstore, you’d probably have to go into debt to stock your inventory. But for your bike-fitting business, you shouldn’t have many up-front expenses. You already have excellent personal finance skills, and those should stand you in good stead here. My box company, which has hundreds of thousands in inventory, is completely debt free, though it wasn’t at the start.”

“What about training?” asked Sparky.

“Training is an exception,” I said. “Be willing to spend for training. Buy the books and manuals you need. Take classes. If you can avoid debt, do it, but be willing to view training as a necessary business expense, much like paying for college in the Real World.”

“I hope to borrow some of the books I need,” said Sparky. “I want to keep my expenses down.”

“That’s a great attitude,” I said. “This is the kind of business you can start on the side and slowly grow into. You’re not planning to quit your current job, are you?”

“Not at all,” he said.

“Excellent. Don’t quit your day job. For a business like yours, or like my computer consulting gig, it’s best to begin by working evenings and weekends. This allows you to get a feel for it, to discover if you truly want to pursue it full time. In my case, I discovered that although the money was five times what I make at the box factory, I really didn’t want to work with computers the rest of my life.”

“Right,” Sparky said. “But at the same time, I’m prepared to quit if my business is successful. If I can make $X a month at bike-fitting, that’s a sign I can make it on my own, and I’ll do it.”

“Perfect.”

“Your advice is great so far,” said Sparky. “Looking back, what are three things you’d do differently if you started over today?”

“Three things, huh? Well, first, I’d be confident. People come to me for computer help because they don’t know the answers. And they’ll come to you for bike fittings because they don’t know how to figure this out themselves. They’re lost. They want us to guide them. They don’t want to think that we’re lost, too. Even if you don’t know where you are, act like you do. When you start out, there will be times that you feel overwhelmed. You’ll feel like you’re drowning. Don’t let your clients see this. Remain calm. They don’t know you’re scared. If you’re really in over your head, break off the meeting and set up a time to get back together. Research that which was giving you trouble. You’ll get it.”

Sparky interrupted. “That reminds me. How should I price my services at the start?”

“Well, that’s another thing I’d do differently,” I said. “When I started my computer consulting business, I made myself available dirt cheap. I charged $25 an hour. I hated it. I absolutely loathed it. I wasn’t making enough to keep me happy, and the customers who didn’t know me suspected they were getting somebody who didn’t know what he was doing. Charge the going rate, or something close to it. If a bike fitting normally costs $150, don’t do one for $75. Charge $125 at a minimum. You may feel like you’re taking advantage of people, but they won’t. They expect to be charged that much. And you can deal with any pricing complaints on a case-by-case basis.”

“Right,” said Sparky. “That’s what I’d already decided with one of my mentors.”

“Mentors?”

“Yeah. I know a couple of guys who do bike-fittings in other cities, and I bought one of them lunch the other day. He let me pick his brain.”

“Great move,” I said. “That’s a the third thing I’d do differently. Use your contacts. Networking is an important tool.”

Sparky laughed. “Networking is often treated as a joke,” he said.

“It’s not a joke,” I said.

“I know,” he said. “I see that now.”

I told him that I have a good friend who is an accountant. One of my oldest friends is a lawyer. Professionals like these are good friends to have. Moreover, my network of family and friends was my best source for new computer jobs when I was starting out. “Networking isn’t about superficiality,” I said. “It’s about cultivating friendships and acquaintanceships. It’s like in The Godfather: you do something for me, I do something for you. Most people like to help.”

“I’ve started doing this a little,” said Sparky. “I know a guy who owns a bike shop, and he’s going to let me rent space in it for cheap. And I called you didn’t I?”

We laughed.

“I’m so emotionally charged by this,” Sparky told me. “But at the same time I’m scared.”

Exactly,” I said. “That’s how you know you’re on the right path. You’re stupid if you’re not scared. You’re even stupider if you’re not excited. That’s the entrepreneurial mentality.”