This won’t be a long post but I just realized we’re about one third through the month and I haven’t posted once!
Perhaps part of the reason for that is that nothing has really happened financially, so I haven’t had anything interesting to say since my last post. I’ve had an oddly packed schedule and have sort of been watching all my portfolios do terribly. Before diving into investing in general, I figured I might be nervous wreck seeing my portfolio take $100+ dives each day, but I think I’ve read enough sort of assuage my fears. Now I view these downtimes as opportunities. Whether or not I can take advantage of the opportunities is another matter.
Hmm, wow. That reminds me. I haven’t done a net worth update this month! Nor have I done an update on my goal progress. Based on my average posts per day this month, I’m guessing I will be falling short of glory. But that’s okay. I’ll post something along those lines soon.
This just shows how easy it is to fall out of the swing of things if you aren’t involved on a daily basis. Admittedly, I’ve been spending more time on the side business than watching my stocks. On that front, I’ve finally chosen a name, so hooray for decisiveness!
Another thing I’ve been doing is allowing myself to get lost in fiction. It happens a few times a year, but getting absorbed in stories, particularly horror stories is something I love. Plus, I’ve been on quite the bender lately with horror movies on Netflix. I think I’ve all but used up their queue. Right now, I’m half way through The Exorcist. I hadn’t seen it in a few years, so I felt like now is a good time.
All that is just to say — I’m still here, just temporarily sidetracked. As soon as I make some additional purchases, stock or otherwise, I’ll be sure to let you know.
And, as I mentioned, stay tuned for my net worth update!
I’m taking a break from cleaning my house to post an update on my recent activities, partially as a reward but also to help me get some of my thoughts down.
How business makes me feel.
This past week, I’ve been trying to choose a product to start my side business with. As I mentioned recently in my post on making money on the side, I am in the process of getting things rolling with Amazon FBA and, subsequently, an e-commerce business. Featured prominently in that post was Kermit as I was trying to make it clear that I am very green to the process from the business side, although I have spent years working with various e-commerce shops from the engineering side.
So the first step in any commerce-based business, as far as I can tell from what I’ve been studying, is to choose a product. Well, for some that may be easy, but for me picking products has been nearly impossible. There are so many things to choose from and I definitely don’t want to recreate the wheel here. I have a list of products I plan to start with and later I will narrow that down by setting up a score for each — essentially going with the product that I think will sell best while maintaining a decent profit margin, all while being something that I can pivot off of for similar products.
All the things on my list are of high quality, which is extremely important to me. As I mentioned previously, I wouldn’t want to sell anything to other people that I wouldn’t sell (okay, give) to my mother. That qualifier has sort of narrowed my list of possibilities way down, which is nice, but there are still hundreds to choose from. It could take forever.
This is exactly why I’ve given myself a deadline. I have to have chosen five products by this Monday. And that’s after choosing many and narrowing down the list based on a series of factors both of my own and sort of plucked from various posts and videos I’ve been watching. I don’t want to take forever on this. The next goal is to find a supplier for said products, foreign or domestic. Either way, it has to be done and soon!
Another interesting thing has been watching my individual stocks and comparing them to my index funds. Obviously there hasn’t been enough time to compare them in a meaningful way, but still — the index fund has been killing the individual stock selection. Luckily, I’m a buy and hold kind of fellow and won’t be selling my stocks any time soon.
Despite the downward trend my stock selections have already entered, I have transferred another $1,000 to Scottrade for some buys on Monday. That money is to take advantage of my free trades which, inconveniently, have an expiration date. For me, I see that as free money.
At this point, I don’t think I will invest more into the companies I already have. Once I have a decent selection, perhaps 10 or 15, I think I will do that but while I have 5, my plan is to diversify my selection a bit more. I don’t have a hard and fast rule here, it just feels like what I should do. Maybe some of you fine people can weigh in on this with your valued opinions.
For now, I should get back to work. This place needs to be clean before I go (I hate returning to a dirty house). For this next week, I will be out of town on a much-needed vacation so I’m not sure how often I’ll be posting, but rest assured I will be back to keep you posted on where I take my portfolio and my side business.
You know what’s not easy? Making money on the side.
At least for me it isn’t. For the past few days I’ve been looking into a whole bunch of different business ideas, and I think I’ve stumbled on something that works.
Of course, I’ve tried things in the past and they worked okay I guess. Mostly, I dabbled in Internet Marketing a few years back and that … didn’t end well. Yes, I made money. That was the upside. But the downside was stress. Lots of stress. I was spending thousands of dollars just to churn out a couple hundred dollars or profit margin on the other side. In fact, that margin was always a moving target and knowing when to stop, say, a pay per click campaign became an art. It’s what I imagine day trading to be like, except on fast forward. On top of that, there was a nagging feeling that I was doing something wrong and so I stopped. Some of the things I was selling seemed to promise the moon without much substance.
I don’t ever want to be in a business that could possibly screw people over.
No! Relax, Kermit. Like I said, I’m not a monster.
So I’ve been focused on legitimate businesses, which are rightly more difficult to build and more prone to failure. That risk of failure is what scares me. Ideally, I’d like to build my own brand of something I wouldn’t mind selling to my mother. Er, well, I’d give it to my mother, but sell it to other people.
I’m not a monster.
For a long while, I’ve had a good name for a potential e-commerce business with not much more than a name to show for it. Mainly, that’s been because I wanted to either build products myself or find a supplier that made products I wouldn’t mind putting my name on. Well, building products myself has a steep learning curve, especially if I want to scale my business. It’s not out of the question, but I just don’t have the time.
After all, I haven’t become financially independent yet.
So, now it comes down to finding a supplier. Or two. You know, just to get things rolling. And that’s been the hardest part overall, because I just don’t know where to look. And from what I’ve read, wholesalers generally don’t want to get involved with those of us who are a little green behind the ears (only established businesses need apply). Jerks.
What I’ve been looking into this week is just the material I’ve been looking for to jump start that part of the business, so as you might imagine, I’ve been soaking it up like a sponge.
The next part is buying actual products that I can put either on an e-commerce site or even use Amazon FBA (Fulfillment by Amazon) for, or … both!
Decisions, decisions.
I’ve read about people who do okay with Amazon FBA using arbitrage, but I don’t have time at this point for such low numbers. I’m really after higher numbers, which means I’m going to need to put more money into purchasing and branding up front. I’m convinced that building your own brand of quality products (that people already use) is the way to go. That way there’s no competition for the same product, which means higher profit margins. Then I could laser-beam focus on marketing while Amazon takes care of all the other things.
Be cool, Kermit. You’re supposed to be my analogy for being new to something.
So, for now, I’m still trying to find products but at least I have a better idea of how to vet them. I feel closer now to the prize at the end of the rope because I’m not just going blindly about it anymore.
It’s sort of like having a mentor. Mentors, as it turns out, are super important. Having someone who knows the ropes and has gone through doing what you want to do will decrease the distance from start to success because they remove many of the unknowns, including the unknown unknowns! As much as I may know about programming, web application development, Internet marketing and the like, these are only pieces to a larger puzzle.
Generally, programmers aren’t exposed to the business side of the things they build. I know I’m not. So by the time I get to work on something involving, say, e-commerce, the real hard part has already been done so there is this illusion that it’s easy to get things going, when clearly … it is not.
I mean, programming isn’t super easy for everyone. I’m definitely not saying that. Actually, let’s throw an analogy at this thing. Those always work, right?
I’m not saying building cars is easy for everyone. I’m just saying that as well as an engineer or mechanic can put a car together, selling the car — especially in large quantities — is a different beast altogether. That’s why there are car commercials and pushy salesmen to deal with. You could have a lot of a million cars, but without someone selling the brand and the experience that is your car, they’re just going to sit there.
So branding and marketing are the missing pieces.
And brand-building is what I know virtually next to nothing about. That’s something I wasn’t aware of previously! First, that I needed to brand at all. I thought branding was optional — something you did once you were tired of eking out profit from selling other peoples’ already-popular product lines. Second, that branding was important. I was also of the mind that you could just sell things sort of haphazardly and just build your name up (which is sort of branding), and people would trust you, the salesman, no matter what you sold.
Hey, I never said I was bright. And this stuff hasn’t really been my serious focus until now, so forgive me being green. It certainly isn’t easy.
I must have spent a good six hours re-making an old site that was just sitting there gathering dust. Well, sort of. Yesterday, I was just casually checking my AdSense stats which have been at an average of about $0.02/day now (up from $0.01! Yay!), when I noticed a single $0.15 click. Upon further investigation, it turned out that it was a site I’d sort of set up and forgotten about. So of course I had to dig in a bit more and it turns out that it’s ranked well for a number of organic search terms.
Naturally, there was only one thing to do — give that puppy a make-over while preserving SEO. And that’s what I did. As soon as work was done, I got to work. Luckily, my wife took the kids out for the night so I’ve been in focus mode the entire time (early retirement light, I guess). She’ll soon return, which is why I feel a bit rushed in writing this but I wanted to get a post out tonight. I hate breaking that chain.
Boy have I digressed from the title.
So today, I read a post from my buddy Adam over at I Want to Retire Soon (IWTRS) where he went over his progress for the year so far. I feel like I’ve been doing a lot of that, but one thing I haven’t really done is set any kind of public goals for me to embarrass myself with (just kidding), so I wanted to take the opportunity to set a few in the same vein as IWTRS. So without further adieu…
Goal 1. Fill Emergency Fund to 100% (Status: Completed)
Okay, I’m kind of cheating on this one but to be fair, it was the only real goal I publicly stated (besides my FI date goal stated in my About page, that is). Also, I killed that goal, so I’m going to give myself that one.
Goal 2. Reach $20,000 in investments for the year (Status: On track)
So far, I have about $12,000 invested (as you know from my many postings on the subject). This goal poses some threat as I have an upcoming dip in salary coming, albeit temporary (side hustles and side businesses — time to step it up).
Goal 3. Write at least 25 posts here per month (Status: Behind)
Last month, I wrote 24 posts. I feel like none of my posts are really super long, nor are they super short, so I feel like that should be a good momentum to maintain. However, I’m going to reach a little higher on this one and call it ‘Behind’ because I’d like to generate more quality content on a constant basis.
Goal 4. Comment on at least 20 posts per week on similar blogs (Status: On track)
I’m totally ripping Adam off here on this one, but I think this is vital to keeping involved and keeping the right mindset. If I’m constantly thinking about financial independence, early retirement, dividend growth investing, index funds, I will be much less likely to fail. I’m calling this one ‘on track’ because I comment on at least 5 blogs every day just because I enjoy it. And Adam, if you find a way to track that metric, please let me know.
Goal 5. Get my feet wet with Dividend Growth Investing (Status: Behind)
I’ve been bothering a lot of people in my attempts at researching this one, and I don’t think that will stop anytime soon. Still, I haven’t achieved it yet and I want to sort of pressure myself into it because I think it will pay off well in the long-run. Hopefully this one is set to “on track” by the beginning of Q4!
Well, that’s it for now. I’ve got stuff to do around the house since I’ve been staring at this stupid screen all day!
It’s times like these when you think, “Man, I sure could use a shovel.”
Isn’t life funny?
One moment, you’re stressing about things in a major way and the next moment, opportunity lands right on your face. Or desk. Opportunity lands somewhere. And if things have sorted themselves just so, it’s sort of like being stuck in a hole and having a shovel fall in with you — not the best situation, and it won’t be easy getting out, but at least you have a way out.
So yesterday, after getting my absolutely final offer from the company I’ll be taking a job from, I had resigned to the fact that I’d be making a lot less money over the next year — again, somewhere around 35% (but closer to 30% because of the way taxes work out).
In fact, this is why my posts have been sparse. I’ve been doing a lot of thinking. Thinking about how to reduce expenses, what that will do to my marriage, what that will do to my self-image. I know the amount of money I make shouldn’t be tied to my self worth and that’s quite often what I tell other people, but combined with a personal “crash” of sorts which has taken the FI Monkey “stock” down 35%, it’s much easier said than done. And that’s exactly what sort of hit me yesterday — my “portfolio” (income rate) is about to take a huge hit and because I am not diversified (having multiple income streams), I am feeling the full brunt of that impact.
And so I thought about that.
Now obviously I have promised myself (and my readers!) that I will start a side business (or side hustle, as they say these days) and I absolutely intend on doing just that. But as I said at the beginning of this post, opportunity landed. And that opportunity came in the form of a consulting agency that wants to farm part time work out to me at the rate I’ve been charging the company I work for.
And the more I think about it, the better it sounds:
I get paid the same rate I was being paid before
I can work at my own pace and on my own schedule
I can deny projects if I should so choose
I can even charge flat rates for projects
I don’t have to work directly with clients and act like a project manager
I don’t have to manage people
Since I was beating the stock analogy to death, here is a picture of a horse wearing roller-skates. You’re welcome.
The trade-off, of course, is that I have to charge accurately and competitively. These guys aren’t going to pay a slow horse to do a fast horse’s job. But I can swing that. The trick is staying within those guidelines while keeping my main income stream happy, but what makes me most happy about this possibility is just that — I will no longer have just one main income stream.
As of next week (I believe), I will have become diversified. Naturally, having just two income streams is not really diversified but it’s an excellent start. It just means that starting (or buying) a business will become yet a third income stream and lead to an even more balanced “portfolio.” I’ll have my stable income (bonds?) and my volatile income (stocks!) that will hopefully both grow at different rates.
The side benefit to this (not that I want to try to predict the future so early on) is that, should it somehow work out that I get close or even hit my financial independence number, I will be able to transition away from my main income stream and then slowly ramp down this side work over time in order to focus on my main business. Or who knows, maybe I’ll continue. I should probably figure out what my ideal “early retirement” looks like before waxing on about it, but you get the point.
What I have to be extremely careful about is making sure that my main job is not impacted by work from the others. But I also have to make sure I can get things done in a timely fashion with my second job. Luckily, I took the job that allows me to do all of this from the comfort of my home office. And I’m beginning to think I won’t have to keep beating myself up over the choice I made.
As luck would have it, things have a way of working out.
