Former Banker

How Safe Is Your Income?

February 10, 2012 | Author: Will

What body part(s) do you NEED to be in “working condition” in order to keep earning a living? As a self-employed individual who works from home and whose work is location-independent, I used to think that I was in pretty good shape and didn’t have to worry about this, until I met a disability insurance agent at a business networking event, who asked me if my income was protected in case something happened to me and I couldn’t work.

“Couldn’t work”? Now that gave me pause. Much like a pianist or surgeon, my income potential is largely determined by whether or not I’m able to use my hands (not that I’d be fine with losing a leg, or my eyesight, but you know what I mean). So I set up an appointment to find out more about income protection and I can say I’m definitely going to apply for it.

Before I dive into what I learned, one quick marketing (side) note: “You need to apply for disability insurance” was NEVER going to get my business! “Would you like to protect your income?” sounds SO MUCH BETTER! Semantics, I know, but in this case, it made all the difference!

How does one actually protect their income?

You protect your income by purchasing a disability insurance policy. Said policy provides supplementary income in case of sickness or injury resulting in a disability that prevents you from doing what you normally do for a living. If approved, you get paid (they refer to the payments as benefits) on a monthly basis so that you can maintain your standard of living and continue to pay your regular expenses. Most people with disability insurance get it from their employer, but someone like me would need an individual policy.

What’s the approval process for disability insurance?

One of the first things that was made very clear in my meeting is that not everyone can get disability insurance, since the approval process is very strict. On the other hand, once you do have it, it can’t be taken away from you (unless you stop paying, of course)

The approval process itself is based on two types of documentation: health and income. Health information is derived from forms that you have to fill and exams that you have to take. Income information is based on your tax returns. You can’t walk in and say you want to “replace” $100,000 worth of yearly income unless you have the documentation to support that income claim in the first place.

The whole thing takes anywhere between 3 and 5 weeks.

When is the best time to get disability insurance?

Like all insurance products, the best time to get it is when you don’t need it: when you’re young and healthy. When you try and get it when you’re older and your health is deteriorating, all the detected health issues will become what is referred to as “pre-existing conditions” and will excluded from the policy, meaning that you will not eligible to collect benefits if said issues are responsible for you becoming disabled.

Customizing my policy

Disability insurance policies are highly customizable. Here’s how I would want mine, and those criteria were the basis for an on-site simulation (or illustration as they called it) of how much my hypothetical policy. I’d like to:

Protect my net income
Protect my 401k contributions
Allow for adjustments as my income increases
Allow for cost of living adjustments
Receive tax-free benefits
Get a policy that pays benefits if I’m unable to keep doing what I’m doing now, regardless of whether I can make a living doing something else
Get an affordable policy

So how did I fare?

Income protection: that’s the starting point and my tax returns will constitute proof of income
401k contribution protection: once again, my tax return will show that. Additional rider; increases premium
Known as a future increase option. Additional rider; increases premium
Cost of living adjustment. Additional rider; increases premium
Tax free benefits. As long as I pay my premium with after-tax dollars, my benefits will be tax-free. In case you’re wondering, if you’re self-employed and your company pays your premiums, or your employer pays your premiums, your benefits will be taxable.
Known as a true own occupation rider. If I can’t do the specific job I had at the time I became sick or disabled, I can still do other jobs and collect my benefits, as long as it’s not the job I was disabled from. I could become a marketing consultant or get a job as a salesperson, and generate income from those activities while still collecting my benefits. With an “any occupation” policy, your benefits stop as soon as you start working, no matter the field. Additional rider; increases premium
This is where I played around with the elimination period. The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits (a concept that is comparable to a deductible period for your policy): the shorter the elimination period, the higher your premium. To keep my premiums at an affordable level, I opted for a 180 day elimination period, as opposed to the standard 90 days.

In my simulation, I would get 60% of my current income and 100% of my 401k contributions, future increase options, cost of living adjustment options, and true own occupation, all for less than $2,000/year.

Slightly Humorous Footnote

“There is no disability insurance store with predetermined policies for such and such profiles”. That was in response to me saying who I was in a few sentences and asking what type of policy is best suited for me.

Do you have questions? Comments? A disability insurance success (or horror) story? Sound off in the comments section!

Control Your Spending Without Making A Budget

January 13, 2012 | Author: Will

Are you a budget hater? Does the thought of tracking your spending give you nightmares or make your palms sweat? The good news is, you’re not alone. A July 2011 survey by Bankrate showed that 40% of American households don’t use any type of budget to keep up with their finances. The bad news, though, is that people who don’t track their money are likely to struggle with out of control spending. Shouldn’t there be some kind of middle ground?

I started using a budget a little over a year ago. I use that term loosely, though, since what I do doesn’t really fit the definition of “budget.” I don’t sit down every day and enter all my purchases into a spreadsheet – I did that for a while, and it was horrible. I don’t give myself ridiculous limits that I have to stick to or else. I also don’t deprive myself of the things that are important to me, whether or not financial gurus like Dave Ramsey or David Bach would approve.

Instead, I took some time to figure out exactly where my money was going versus where I’d like it to go, and I determined what purchases could be delayed or eliminated to help me reach that goal. Now, any “budgeting” I do just involves being mindful of my spending and making an effort to stop throwing money down the toilet.

Here are some steps you can take to keep your spending at a manageable level without resorting to actually making a budget:

Know where your money goes. Do you know how much you make in a month? I’m sure you do. What about your total monthly expenses, like mortgages, car payments, utilities, and groceries? Many people don’t know the total amount they spend each month on those expenses. Look back over your bank statements and figure out a rough estimate of how much you have left over after bills.
Figure out your goals. Why do you need to control your spending? Are you trying to start saving more? Do you want to make a major purchase in the next few years? Are you just tired of being broke? Until you know why your spending needs to change, you aren’t very likely to change it.
Identify your weaknesses. Do you buy hot chocolate from Starbucks every chance you get? Get new games on release day? What about eating out? Everyone spends money on different things. That isn’t necessarily bad – you just need to be aware of your habits. If there’s a certain area where you feel like you’re spending too much money, that may be an area to focus on.
Be mindful of triggers. If you know that a Saturday night out usually results in an expensive dinner, or that you can’t walk out of Best Buy empty-handed, you might want to avoid those places or activities for awhile. Everyone is triggered in different ways – you don’t have to give up what you love, but you can minimize it if other things are more important.
Set limits. When I go out to eat, I decide how much I can spend ahead of time and stick to it. I only go to the mall when I have to shop, and even then I also set a limit. Also, since I tend to be an impulsive buyer, the harder part for me is resisting that first urge; once I successfully fend it off, then I can plan my purchase comfortably. That’s what I did for my MacBook Pro, my TV, my PS3 and that’s probably what I’ll do for the iPad 3 when it comes out. These self-imposed limits keep me from wasting money.
Allow yourself to have fun. I’m not a fan of rewards for controlling spending – “Ooh, I was really good this week, so I’ll go binge-shopping!” That doesn’t help anything. But I am a fan of letting myself have some of the things I like most instead of restricting them. For example, as long as it won’t overdraw my bank account, I will buy feed my Kindle anytime I see a book I want. I love to read and I’m not going to deprive myself of that to save $100 a year.
Embrace technology. My bank has built-in software to keep up with what I spend in different categories each month. If your bank doesn’t offer that, consider a free service like Mint.com that will track your spending so you don’t have to. Once or twice a month, you can log in and see where your money is going. You don’t have to do it yourself, and you get the benefit of seeing spending patterns that might prevent you from reaching your goals.

Don’t Be Fooled

All the tasks I listed above are part of budgeting. However, you can do those things without ever creating, updating, or using an actual budget. As long as you’re happy with your financial picture, Excel can remain that desktop icon you never click, and you can spend your free time doing something else.

If you don’t budget, how do you control your spending? Do any of these tasks sound like the methods you use? If you do budget, what helped you get over the inherent hatred of the B-word?

5 Things Smokers Don’t Want to Hear

January 11, 2012 | Author: Will

To this day, I have no idea how I didn’t end up being a smoker. I can honestly say it’s not for lack of trying. In my teen years, growing up in Haiti, smoking was THE cool thing to do. So I tried it… and tried it… and tried some more. To no avail! It was as if I liked smoking but it didn’t like me back. And in the end I gave up.

I count myself lucky, and I am guilty of what this article’s author describes as an increasingly hostile attitude towards smokers. But I also realize that this attitude just makes them retreat further into their habit, much like the overweight kid who gets picked on at school and seeks comfort in food.

So I reached out to a smoker with the question: “What is the most useless advice you have received over the years, and what kind of support would actually help you quit smoking?”. Quite an eye-opener.

Smokers don't want to be judged

I’ve been a smoker for about 15 years. I never intended to take on that label; in fact, I hated the smell of smoke when I was a kid. But somewhere between childhood and becoming a teenager, I thought it would be a good idea to take up the cigarette habit.

What started as a social thing turned into a pack-a-day addiction that I still haven’t managed to kick. I’ve tried nicotine patches, gum, going cold turkey, slowly reducing how much I smoke, electronic cigarettes, hypnotherapy, and even Chantix. While each method had its merits, especially on a short-term basis, none were enough to help me quit for good.

I remember being able to smoke in the mall and inside restaurants when I was younger, but society is becoming increasingly hostile to those of us who choose to pollute our lungs with tobacco. These days, even standing outside with a cigarette draws hateful looks (and the occasional rude comment). While I fully agree that non-smokers should not be forced to breathe secondhand smoke, I also think people could stand to ease up on the hate just a little.

Everyone has opinions about my smoking habit, and they aren’t afraid to share them. (I can only imagine what would happen if I walked up to someone and made “helpful” suggestions about how to lose weight.) Here, in no particular order, are 5 pieces of advice about smoking that I could do without:

“You know, that’s bad for you!” REALLY? You mean smoking isn’t healthy? Wow. I never would have figured that out on my own. I had no idea that smoking can cause lung cancer, COPD, emphysema, and countless other health problems. It’s not like the packs have warning labels or anything. Thank you, kind citizen, for educating me.
“My [relative] used to smoke, and s/he quit using [method].” Believe it or not, I am aware that lots of people quit smoking every year. I am also aware of the various methods of quitting, many of which I’ve tried. I never know what I’m supposed to say to those remarks. “Wow, how wonderful for your cousin! Tell him congratulations!”
“You know, if you quit smoking, food will taste better.” Yes, because that’s exactly what I need. Food tastes pretty damn good already, so I might as well park a chair in front of the fridge if it’s going to taste even better. Cigarettes act as an appetite suppressant, and while that’s not a good reason to smoke, it’s a bad argument for quitting. So I’m supposed to give up a habit that I enjoy, AND I might get fat? Oh gee, sign me up!
“I don’t know how you stand that smoke smell.” So now you’re saying I stink? This just keeps getting better! Here’s a pro tip: Most smokers are not those disgusting people whose skin is saturated with nicotine smell. I don’t smoke in my house, and I only smoke in my car on long trips. My clothes don’t smell like smoke unless I go to a bar. While I admit my senses are probably dulled compared to a nonsmoker, I know that stench all too well. And I hate it too.
“Smoking is expensive! You should quit!” Yeah, thanks. My habit costs me about $1300 a year, and it would be much more if I didn’t live in Kentucky (our prices stay low in support of tobacco farmers – can’t drive away business!). Since it comes out of my wallet, I’m well aware of the expense. But saying I should quit because it’s expensive is like me saying you should stop buying groceries because they’re expensive. You can’t just magically stop doing something that’s become almost as natural as breathing.

What to Say to a Smoker

If smoking really bothers you and you’d like to help, the first step is to keep judgmental comments like the above to yourself. We are physically addicted to nicotine, and nothing you say will change that overnight. Nagging just makes us want to escape and take a smoke break. You may find the habit disgusting, and I understand that. But you probably do disgusting things too, and I don’t tell you about it.

Just once, I’d like to hear someone say, “If you ever decide to quit and want some support, I’d be glad to help.” Just that and nothing else, ever. That would let me know the person cares but doesn’t feel compelled to lecture me. And if the day ever comes when I’m ready to quit smoking for good, those are the people I could be around without needing a cigarette as a crutch.

Comments? Reactions? Let me hear it!

What’s Wrong With Matching Your Content To Your Visitors’ Intent?

January 3, 2012 | Author: Will

If you’re running a business and you want to make money, one of the best ways to go about it is simply to give the people what they want.

I had a long post in mind for this one but I’ll probably be better served by throwing it out there and see what kind of response I get. Here are my questions:

Do you think it’s inherently wrong for a PF blogger to have posts on their sites that are written in order to make money from payday loans, multilevel marketing or options trading (via ads or affiliate links)?
Is it “reprehensible” to make money from selling products and/or services to other people trying to make money?

It’s important for me to point out that I’m referring to search engine traffic, (those posts would be, for example, excluded from the site feed). That being said, here’s my take on both questions.

There are topics that I will not touch (as I’m sure we all do, and for different reasons), but I’m more interested in the WHY behind that refusal. Theoretically, anyone should feel free to promote whatever they feel like, as long as they’re not deceiving people (promote Forex if you want to, but be very clear on your page that most people lose their money – do NOT hide it)
Provided that what you’re selling has legitimate value, I personally think there’s nothing wrong with “selling shovels to miners”. It’s up to the buyers to actually do the work to profit from the tools you provide them.

Basically, in my humble opinion, it all boils down to searcher intent. Want me to be a little more specific? Let’s say someone is looking for “instant payday loan new york 10017″ and you so happen to have a “Payday Loans Are Evil” post that is ranking #1 for this search term. Do you really think that person cares? They will go to result #2 and find the answer to their urgent problem! Now it’s different if someone is searching “should I get a payday loan”. In the latter case, you have the responsibility to educate them about the pitfalls of payday loans and urge them to find other solutions.

The same logic applies if someone is searching “buy a laptop with bad credit”. They don’t care about your (hypothetical) “Avoid Bad Credit Financing” post that explains to them how to raise their credit score over the next few months. They need that laptop now and they will scroll down to the result that allows them to get it. Conversely, if they’re searching for “how to raise my credit score”, then you have to tell them how they can do it for free and shouldn’t pay someone to do that.

Once again, the same logic applies to “make money online fast” vs. “honest ways to make money online”.

Look at the most powerful online company of them all: Google (sorry, Facebook). How do they make money? They serve results that match what you’re looking for. There’s no concern about whether it’s moral or immoral, ethical or unethical, realistic or unrealistic: you ask, you get answers, and Google makes its money from serving ads that are related to your search.

Why does Google (all search engines and other media outlets, actually) get away with it, while a blogger would get pilloried (by his/her peers) if they even tried to?

Your Job Sucks Because…

December 19, 2011 | Author: Will

Ever stopped to think about what your ideal job would be? I mean, not as in a specific way like “I wanna be [insert occupation here]“. That’s not what I’m referring to. I’m talking about what requirements a job would have to satisfy in order to be what you would call an ideal job. I came across what is probably the best definition of an ideal job while reading “Outliers: The Story Of Success” by Malcolm Gladwell:

“Those three things—autonomy, complexity, and a connection between effort and reward—are, most people agree, the three qualities that work has to have if it is to be satisfying. It is not how much money we make that ultimately makes us happy between nine and five. It’s whether our work fulfills us. If I offered you a choice between being an architect for $75,000 a year and working in a tollbooth every day for the rest of your life for $100,000 a year, which would you take? I’m guessing the former, because there is complexity, autonomy, and a relationship between effort and reward in doing creative work, and that’s worth more to most of us than money. Work that fulfills those three criteria is meaningful.”

Personally, it was like a revelation (cue bright lights and gregorian chants). Right there, I could see the exact reasons why I enjoy being a self-employed internet marketer.

Autonomy. I decide what I do and how I do it, what new markets to break into and which ones are best left alone.
Complexity. Internet marketing is not rocket science, but you do have to keep abreast of developments in search engine optimization, social media, and of course, marketing.
Incentive. There’s a strong connection between effort and reward, so the more I work, the better I get at what I’m doing and consequently, the more money I make. It’s a virtuous cycle.

In my previous career as a banker, the autonomy sure wasn’t there. Not only was I unable to decide what I was going to do, I couldn’t even decide how I did it. The complexity was there (thank God!). As for the connection between effort and reward let’s just say that it existed but the correlation was not as strong as it should be. I’m glad I was presented with the chance to move on.

Are you lacking autonomy, complexity, or incentives? Or maybe all three? How does your current job rank on a 0 to 3 scale? There certainly are jobs out there that score a 3 out of 3. Don’t hesitate to share with us in the comments!

You Got Fired, Now What?

December 16, 2011 | Author: Will

One of my goals with Former Banker is for it to be a resource for people in all kinds of situations, not just current or would-be entrepreneurs. So instead of talking about something I have no first-hand experience of, I decided to pick someone’s brain! Funny enough, that person is now self-employed, and I wonder what they would think of that article they wrote three months ago, and what they would change (if anything) if they were to write it now…

Lost His Job

It’s every worker’s nightmare – you show up for work as usual, only to find out it’s your last day. Maybe you’re being laid off. Maybe you got fired for cause. No matter what the reason may be, all of us are terrified of somehow losing our jobs. Unemployment is a harsh reality for many Americans, increasingly so in the current economic climate. No job is immune. No position is secure. The ax could fall at any moment, and most of us are all too aware of that fact.

So what would you do if you had to drive home with your personal items stuffed in a cardboard box? Personally my first thought is “have a nervous breakdown,” but I’m thinking about more productive ways to cope. When such a large part of our identities are wrapped up in our careers, how would any of us even begin to pick up the pieces if the worst happened?

I feel very lucky to be employed right now. However, I don’t harbor the illusion that my job is guaranteed. With that in mind, I’ve created a plan for survival in the event that I find myself joining the ranks of the unemployed.

1. Get rid of unnecessary expenses. Immediately. Even if you have an adequate emergency fund in place, loss of a job should be considered a 911 emergency. Don’t try to maintain your previous lifestyle – now is the time to scale back as much as possible. If you have smartphones, go get some dumb phones (or get rid of them entirely if you still have a landline). Shut off the cable. Adjust the thermostat. Start clipping coupons. Do whatever is necessary to cut down expenses to the bare minimum needed to survive.

If you find another job quickly, that’s great! You can go get all your stuff back! But what if you don’t? It’s better to plan for the worst and hope for the best. I have a list in my desk drawer of all the expenses I could cut if I lost my job – that way I could do it quickly and without a lot of hemming and hawing. We’re all emotionally attached to conveniences, but that doesn’t mean we can’t live without them for awhile.

2. Dust off your resume and apply for EVERY job you see. But don’t get sloppy. If you’ve been in one position or company for a long time, your resume could be horribly outdated. Spend some time looking at examples online and update your information to compete with the hundreds of others landing on hiring managers’ desks. Even entry level job openings result in tons of applicants, and you want your resume to stand out – because it’s so professional and specific to the position, not because you used neon paper and Comic Sans font.

No matter how desperate you are to find work, take the time to write a great cover letter for each application and alter your resume to include skills related to the open position. Those little details go a long way in getting you noticed; if nothing else, hiring managers will realize you’re on top of your game.

3. Don’t be a lazy applicant. Hit the streets! As society becomes more computerized, it’s so tempting to rely on job websites and online vacancy lists to find a job. But guess what? When companies are making budget cuts, advertising is one of the first things to go. Many job openings are never listed in the newspaper or posted to Monster.com – the only way to learn about them is (1) word of mouth or (2) asking.

Visit some businesses. Ask if they’re hiring and what application process you need to follow. Bring some resumes and dress professionally, just in case. You never know who you’ll end up talking to! Cold call businesses that are further from home – sometimes they will invite you to send a cover letter and resume through the mail. I know it’s nerve-wracking to just show up at a place of business, but remember – the worst they can do is say no.

4. Apply for unemployment. This may seem like a no-brainer, but you wouldn’t believe how many people never apply for unemployment benefits. Some people assume they won’t be approved; others refuse to accept benefits out of some sense of pride. The bottom line: you definitely won’t be approved for unemployment if you don’t apply. And if you’re worried about how it looks to accept a handout, remember that you (and your employer) made mandatory contributions toward your right to unemployment benefits. You aren’t accepting charity – you’re cashing in a benefit that you paid for!

It’s definitely not easy to get unemployment. There is a ton of red tape designed to keep all but the most diligent applicants from getting through. But with all the extensions and the sheer volume of unemployed Americans, you’d be foolish not to at least make an attempt.

5. Keep the faith. When I finished grad school in 2006, there were jobs everywhere. My lack of experience made it difficult to find work, but it definitely wasn’t because there weren’t jobs available. Today’s employment climate is completely different. You won’t get a callback immediately after putting in an application. You may not even get one at all. The position you’re promised may be eliminated before you get a chance to start. Things may look bleak for awhile.

I firmly believe that no one stays unemployed forever. Look for work outside your comfort zone – mow lawns, deliver newspapers, or (the horror!) take on odd jobs. While none of these activities are fun or exciting, they could put food on the table until you find something better suited to your skills. Lean on friends and family for support. Take breaks from job-hunting to enjoy the extra time with your spouse or kids.

Do you have a plan for possible unemployment? Share it in the comments!

The NBA And The Hypocrisy Of “Honoring Your Contract”

December 12, 2011 | Author: Will

Image credit www.fairetail.be

Some things just don’t sit that well with me. One of them is the general perception that today’s NBA players refuse to “honor their contracts”. I say this idea is pure BS.

If we’re going to talk about “honoring a contract”, in my humble opinion it has to go both ways. I don’t understand the criticism leveled at a player (like Dwight Howard) demanding a trade. It’s in his right to do so. It’s not a “bad” thing! If he’s not “honoring his contract” by demanding a trade, then the Denver Nuggets last year did not “honor their contract” with Chauncey Billups when they traded him to the Knicks in the Carmelo Anthony trade, because Billups did not want to leave the team!

When the player requests to be traded, it’s wrong, but when a team decides to trade a player, it’s “business”? If a player gets traded against his will, he’s expected to ”be a professional about it”, but when a team receives a trade request from a player, it becomes a matter of honor?

Because the CBA (Collective Bargaining Agreement) that regulates player movement and salaries allows for trades, it can be argued that the main things that are set in stone in NBA contracts are 1) player salary (because the contracts are generally guaranteed) and 2) that the player show up and be ready to provide his services. Actually, when a player gets traded, he keeps earning his salary, and is expected to be a professional and perform for his new team. If he does that, he actually IS “honoring his contract”. How is that any different when a player says “I want to perform for another team” (i.e. a trade request)? As long as he shows up and performs for the other team, he still IS “honoring his contract”! One more thing: even when a player issues a trade demand, not only can the team still keep him, said team is under no obligation to send him where he wants to go! The player will have to “honor his contract” wherever he lands!

But when you think about it, who wouldn’t like to dictate under what terms they work? The only reason why most of us aren’t able to do this is leverage (or lack thereof). You’re lucky if you pick your cubicle! Now if you’re the best in the country (and arguably the world) at what you do, you should have that privilege.

I’m fully aware of the fact that NBA players are “employees” and that as such they should expect to be told what to do, but both you and I know they’re not typical employees. This is especially true of the stars, who also happen to be the ones with enough leverage to issue trade requests. Why are NBA players not typical employees? Well, how about you get back to me when your boss can legally go to his competitor and trade your contract? So enough with the apples & oranges comparisons.

Basically what I’m saying is “what’s good for the goose is good for the gander“. If teams can trade players as they see fit, then players can ask to be traded as they see fit. I don’t get the double standard. If one side is to be bound by “honor”, the other side should too. It shouldn’t be a one-way street.

P.S. If you disagree, by all means let me know in the comments. I welcome a healthy debate. Profanity and/or otherwise useless comments will be dealt with to the fullest extent of my powers as a moderator

Want To Blog Full-Time? Ignore “Warnings”, Listen To Advice!

December 7, 2011 | Author: Will

How would you feel if you ran a 5K every day and earned a living doing so, and then came home one day to see some guy on TV ranting about how someone can’t run a 5K, so you should just do a few laps as a hobby and find something better to do with your life? That’s exactly how I felt when I came across this so-called reality check for people who want to blog full-time. Thankfully, there are more positive takes on the subject.

Let’s get one thing out of the way: I’m a full-time Internet marketer. I pay my bills from the money that my sites make. I don’t have a part-time job nor do I moonlight. THIS IS IT: if my sites make no money, I make no money! So when I see someone talking about it not being possible, it really gets to me. That being said, becoming a full-time blogger is no walk in the park. I’ll go out on a limb and say that you will probably have to make twice as much money as you think you do.

Pick A Profitable Topic

I could go on and on about this, but I’ll make it short. The topic you choose has to have ancillary products/services. Period. Otherwise you won’t make (much) money. I’m building this site around the following topics: money, technology, books/movies/video games, and entrepreneurship. Lots of possibilities. If you’re building your site around, say, how to help people get free stuff, you already have to get a little creative in order to make money.

Evaluate The Money Making Potential

There are two schools of thought when it comes to this. One says “aim for the stars”, and the other one says “go for the low-hanging fruit”. As in many areas, the right answer is probably some combination of the two. I personally started off with the first one, failed miserably, tried the second one, didn’t make enough money, and now I’m comfortably in the middle. I go for areas with some competition, and every now and then I try my hand at something really hard (the more money there is to be made, the more intense the competition). I usually get a feel for a topic by doing a search for it. If I don’t see plenty of ads, I move on.

Make Money On The Front End…

This is mostly done with search engine traffic: you present your visitor with a solution to their problem/question and send them on their way. You don’t try and hold on to them. This is just a numbers game: a percentage of them will click an ad or buy something. How do you make the money? Adsense, affiliate marketing, direct advertising, selling your own products. This is an excellent (short term) way to get your feet wet and make some money to at least cover your costs. You can scale that and make lots and lots of money but your business will be vulnerable to the whims of the search engines.

… Or On The Back End

This is where you diversify. You should try and brand your blog and build an audience and of course now we’re talking long term. You can then market different products and services to them (including your own). You could write a book, start a podcast, do joint ventures, find services you’re good at and leverage the blog to make money from them, and so on. For example, I could decide to also be a copywriter and market my services using various Former Banker articles as samples of my writing style. Or I could decide to become a coach for aspiring entrepreneurs and use the site to spearhead my marketing strategy. The back end is where the big money is. It’s also where you no longer depend on any single source of income.

Structure Your Business

This is crucial. I opted for an LLC because it was the best choice for me, both for legal and tax purposes. I use a payroll service to pay myself a salary. This is the best way to handle filing quarterly taxes and keeping track of withholdings. You will be able to figure out your net pay, and will avoid a huge tax bill at the end of the year.

Contribute To Your Retirement Accounts

I opened a 401K and opted to contribute 10% of my salary, with a 3% company match. My personal opinion: if you’re going to blog full-time, then your blog should make enough money for you to fund your retirement!

How Much Will You Take Home?

This is the most sobering part. On a month that I pay myself $3,000 (gross), the cash requirement on my business account is roughly $3,600. And from that gross salary, my net pay is about $2,100. Want a monthly take-home pay of $3,000? Your business needs to make a PROFIT of over $5,000 for that to happen.

So, You Want To Be A Full-Time Blogger?

I said it at the beginning, this is no walk in the park. Then again, I have yet to find an “easy” business venture. Becoming a full-time blogger is no different than becoming a successful real estate investor or building a successful brick-and-mortar business. It takes time, money, dedication, and most people who try will fail. What I’ve tried here is give you an honest account of what it takes to live off of blogging. You’d be stupid to think it’s easy, but you’d be an idiot to think it’s impossible.

I Don’t Regret My Mistakes!

December 5, 2011 | Author: Will

One T short of disaster! Epic Mistake!

How do you write a post with that kind of title without coming across as a pompous jerk? Pretty tricky but I’ll give it my best shot.

What do I mean by “I don’t regret my mistakes?”

Well, I have made a considerable amount of mistakes in my life. Being of a curious nature, and being a little overconfident in my abilities, I have tended to “make my own mistakes” instead of learning from the mistakes of others, because I thought I was smarter, could be more creative, and would succeed where they had failed. I learned my lessons the hard (and stupid) way.

Those were expensive mistakes. They cost me money (which can be recovered) and time (which can’t). Some of those mistakes I’m still recovering from, and they will be the subject of future posts.

Yet the (flawed) person that I am today owes A LOT to those mistakes that I made. Saying that I regret them would imply that I regret who I am today, and that’s a pretty crazy thing to say considering that I have absolutely no idea who I would be if I hadn’t made them. We are prone to idealizing the things that relate to us, but there’s no guarantee things would have turned out “better” had I made different choices back then. I’ll take the person I am now over the person I think I would have been if I hadn’t done this or that.

The only mistakes worth regretting are the ones that kill you right then and there, stuff like drunk driving. And when you think about it, if a mistake kills you shortly after you make it, then there’s nothing for you to regret because you’re no longer around! Other than that, I believe all mistakes need to be embraced as life lessons.

“But Will, I [insert mistake here]. I regret not [insert anything that would have prevented mistake]”

Well that’s a very good point. The question is, what are you going to do now that the mistake is already made and can’t be undone? Are you going to let it eat at you while you’re not doing anything about it, or are you going to use it to be a better person? If you choose not to do anything, then what’s worth regretting is not your mistake, but your reaction to your mistake.

I would love some feedback to elaborate on instead of rambling on and on. What’s your take on the subject? Do you have a mistake you would like to share? Do you think I’m full of it? Let me know in the comments!

P.S. That is NOT my car, lol

I Want To Invest In Real Estate. Am I Crazy?

December 2, 2011 | Author: Will

I like money that I don’t have to physically work for. I am in love with the concept of working once and reaping the rewards over and over again. I don’t care how you call it, passive, residual, or portfolio income, if I don’t have to babysit it, I’m interested. So it’s not surprising that real estate is (from a conceptual standpoint) one of my favorite ways to make money. You want to bring up clogged toilets in the middle of the night? I believe that’s what property management companies are for.

Not too long ago, I read a Wall Street Journal article asking the question “Are you ready to be a landlord?“. Even though the subtitle said “Buying Investment Properties Can Be Risky. Here’s How to Do It Smartly“, I thought it was an overwhelmingly negative outlook on real estate investing. Actually, it got me wondering about the editorial process at WSJ, because obviously the author wrote the can be risky part, but the how to do it smartly part was forgotten. Even the so-called advice was framed negatively.

There is no investment opportunity that doesn’t carry risk. Heck, even not investing your money is risky: if you stash your money under a mattress or put it in a bank, you expose yourself to the risk of inflation eating away its value. And everyone knows about the risk-return tradeoff. I don’t know, maybe my love of entrepreneurship is clouding my judgment but the way I see it, now is the best time to invest in real estate if (BIG IF) you have the money and/or can get access to financing.

It’s telling that while everyone is panicking about how the market is going down, Warren Buffett, the most successful investor of our time, is busy buying left and right. We’re pepper-spraying others for Black Friday sales, but we’re bitching about the biggest investment sale since the Great Depression.

Caveat: education precedes action (or it should). So I’m not saying that people should just rush out and invest in real estate without knowing what they’re doing. There’s actually a reason why I personally haven’t taken the plunge yet: I have to learn more. Even the little education I’ve gotten so far has already pointed out some things that I want to know a lot more about, especially how to build a team to help me navigate the deals so I can know what to pick and what to walk away from. And even then, I know for a fact I will make mistakes.

But I digress. Instead of scaring people into not investing, publications like WSJ should instead embark on a mission to at least point people in the right direction for them to find the information that will help them make better financial decisions. Can you imagine the uproar if they had published a similar article about moving up the corporate ladder and just pointing out all the negatives?

I can’t remember where I read or heard this (this is what happens when you don’t take notes) but it’s one of my favorite quotes: “Fear will keep you from taking action when you should, and greed will cause you to take action when you shouldn’t”. The only way you can avoid those pitfalls is to educate yourself and take action to gain experience, whether you’re contemplating starting a business, investing in the stock market, investing in real estate, or anything similar.

So I don’t think I’m crazy. Warren Buffet says the same thing as the aforementioned quote but in other words: “Be fearful when others are greedy and greedy when others are fearful”. John Paulson completed the greatest trade ever by being fearful when others were greedy. Now others are fearful. Time to be greedy.