Various Observations

I've been a bit delinquent with updates, so a bit of everything today.

With the Dow Jones average near its high, I've made a partial mutual fund redemption to help pay for our recent vacation, which my wife and I agreed to do before the trip. But this strategy can only be used sparingly, which is why we're trying so hard to generate more revenue.

My wife's career service business continues to do well lately, although she is striving to delegate more work to others so she can focus on business development. Seems like this is the challenge of any small business - to get past the point where everything is being done by one person.

Get Rich Slowly has an interesting post this week on whether it's a waste to have multiple magazine subscriptions. I've also wondered about this, but still find it useful to peruse publications like Money, Kiplinger's and Smart Money while commuting to and from work. Usually I try to save articles electronically as I've found that most articles I clip rarely are found again. At least on my computer I can use my desktop search program (I use Copernic) to locate past articles. I also continue to read the Wall Street Journal daily.

Our recent switch to Geico for auto insurance includes emergency road service so we'll probably drop AAA which, fortunately, we've rarely had to use.

With gas prices continuing to slide lately, I'm glad I didn't take the plunge into commodity based mutual funds. Who ever imagined that prices would go any direction but up?

Not only is it challenging to think of things to write regularly but I've found an incredible number of other blogs focusing on revenue generation, some which I've featured on the right column. Many others are featured on the Carnival of Personal Finance. Guess making more money is a universal obsession.

Interesting excerpt from October's Kiplinger's (these magazines really are worthwhile somtimes): "The biggest barrier to becoming rich is living like you're rich before you are." The point is that too much discretionary spending makes it impossible to do the saving that will eventually result in accumulating wealth. I don't see an easy way to link to article but it is called 'The Invisible Rich." Who is best at implementing this strategy? Recent immigrants who live cheaply and work long hours yet manage to put away a chunk of every paycheck.

Finding the money to give to charity is always important, no matter what your income is. October's Money includes an article on how to find the charities that spend money responsively, recommending sites like the Better Business Bureau Wise Giving Alliance, Charity Navigator and Guidestar.

Almost every financial magazine I've read lately has at least one article on the sorry state of the housing market. Money includes one story about someone who sold their home with the help of a blog. Guess it helps to be creative these days. Yet it seems if you are planning to buy another home when you sell a house, it may not matter as much what the market is like. But when you need to pay two mortgages for an extended period (as some people I know are doing), this may not be much of a comfort.

Today is my wife's birthday so we'll definitely be spending some money tonight celebrating with a play and dinner out. Sometimes you just have to not be so careful (although I did get discounted theatre tickets through the Theatre Development Fund, a great way to finance entertainment if you meet their membership qualifications).

Back From Vacation, Back to Generating Revenue

After a week of clearly spending more than earning while on vacation, it's now time to get back on track towards revenue generation. My wife and I did find some sellable items for eBay at a road side sale - although we almost lost them to security at the airport so had to end up checking part of our baggage. We had a few high end meals, but otherwise our dining out expenses weren't horrendous. Although I always save receipts at least until I enter the information into Quicken, it's difficult to keep track of how much we're spending. (And doing so would take away some of the pleasure of being on vacation.)

Both of the areas where we visited have recently experienced declines in real estate, but they're also two areas that previously had significant appreciation: Pheonix, Arizona & San Diego, California. An old boss of mine who I met up with is still trying to sell his previous residence despite having moved several months ago.

We stayed at really nice hotels at discounted rates, very different from the bed and breakfasts / motels we usually seek out. One hotel actually put us in a full apartment, which seemed a bit of a waste since we were out most of the time.

It was the first vacation involving air travel that my wife and I have taken in about four years, so it was nice to get away for a while. But now it's back to work generating income - initially from eBay and hopefully through tax lien certificates.

Increasing Revenue, Not Just Decreasing Costs

I've always considered myself an excellent shopper, sometimes to the extreme of being a bit too cautious (see previous post). I'm always looking for ways to save money and to find pleasures that don't involve large expenses. Fortunately, I've been able to find many things that I enjoy that are as simple as enjoying a sunset or enjoying a waterside area.

But saving money isn't enough. If you take this too far, it starts to feel like deprivation, as my wife has warned me. There also has to be a focus on increasing income. It's not one or the other - it's a combination of both. It's only recently that I've started to focus more on the revenue side, such as starting to sell on eBay and pursuing tax lien certificates. This has been a difficult leap for me. It's easy to keep doing what you're good at (saving money); it's harder to develop new skills (finding ways to generate more income). But I'm determined to keep moving forward in both areas.

Getting Stuck On the Old Rules

A teacher once told me that he wasn't able to enjoy a meal that cost more than $10. Although this was many years ago, I've always remembered this when choosing a restaurant. As a result, I often find myself selecting a place to eat based on price. Unless the food is really awful, I seem to enjoy low priced meals. In a high priced restaurant, even if the meal is very good, my pleasure is diminished by how much I've had to pay. Is this a way to live? While eating out can consume a large chunk of discretionary expenses, it seems like I've taken this a bit too far.

Similarly, I learned somewhere that hotels / motels shouldn't cost more than $100 / night, much less if possible. After all, you're only going there to sleep, right? The current hotel where my wife and I have stayed for the first part of our trip has cost $115 / night, which is a 'special' rate since she is attending a conference. Supposedly the 'regular' rate is about $300! Yes, it is a nice facility with a large pool (I am a year round swimmer), but it still seems 'expensive' to me.

In dealing with elderly relatives, I've noticed that many people get 'stuck' on prices that have long become obsolete. Unless you shop regularly and see what things cost now, it's easy to think that the old rules still apply. So for some the solution is to stay out of stores unless absolutely necessary and complain that things 'cost too much.' Then, when forced to replace an item that has broken or worn out, it's shocking to discover the new reality.

Dining out and accommodations can consume a huge part of a travel budget. But while it's nice to save money where you can, getting fixated on the 'right' cost should be can be tiring and, in the end, take much of the pleasure out of a vacation.

Taking a Break During Vacation

Now that I've become accustomed to doing something every day to bring in more revenue, it's a bit difficult to be on vacation for a week. Thanks to wireless access throughout the hotel (:<), it's easy to stay connected but not as easy to monitor eBay auctions. To keep making progress, I'll also need to start getting active with tax lien / deed auctions, even if it's only to learn what it's like to attend.

I asked my wife how we should handle finance matters while we're away, whether to be as frugal as we've been at home or to be more relaxed. She says we should be 'somewhere in the middle.' Nevertheless, after paying for airfare, hotel and car rental, we've already spent a lot before even considering food and maybe a few souvenirs. Being able to write off much of it for my wife's business is helpful, but hardly a license to spend freely.

Shortly before leaving, I purchased The World is Flat (getting 30% off list price of course). Having focused so much on books about money and finance lately, I thought it would be beneficial to read about something else for a change, especially facing a cross country airplane round trip. What I find especially interesting about Thomas Friedman's book is that a year after it was released, already a huge best seller, he took the time to update it and come out with a 'version 2.0' edition.

I've only made it through the first hundred pages or so, but it's clearly a fascinating read. It reviews major trends affecting society, especially the pervasive influence of computers and the Internet. Now it's easy to work with anyone anywhere in the world - geographical barriers don't seem to matter much anymore. Although many people have been concerned about the effects of outsourcing, it's clear that this is a trend that will only increase in coming years.

Will people ever get accustomed to reading on screens instead of books, making printed materials obsolete? Certainly while flying across the US in one of the few environments that is not connected either by cell phones or Internet access, having the book certainly came in handy.

Vacation, Flea Market, Auto Insurance

Today is September 11th. How life can be affected by the events of one day in our lifetime.

Vacation
My wife and I will leave for a week's vacation this week. We've estimated that the trip will cost up to $3,000. It is a combination business (she is speaking at a conference) and pleasure (we will visit some friends afterwards) trip. After working so hard to save and earn more money, it's a bit tough to switch gears. Some of the expenses will be deductible through my wife's business, but it's still a large outlay. Often when we travel we stay with friends or family instead of hotels, which even at discounted rates will still cost us about $100 / night during this trip. But vacations are important; it's also nice to live a bit differently sometimes.

Flea Market
For the first time, we spent time at a flea market this weekend and specifically looked for items that we might be able to resell on eBay. My wife found an old slide viewer in its original box. We bought it for $3; from completed sales on eBay, it looks like we may be able to sell it for as much as $100. I also bought some very old books, but I'm not as sure that they will command a high price. I haven't put many items up for auction yet, but I am accumulating items at home. It seems that we will need to put up a large volume regularly while we learn which items are 'sellable' and which items are not.

Auto Insurance
Finally yielding to Geico's unyielding commercials, we did an online auto insurance quote and found that we could save about $100 on our six month policy. We're down to one car now, having recently decided that our light usage didn't justify immediately purchasing a second vehicle after my wife's car died last month. We're unfortunately paying a surcharge due to one accident last year, but that would be the case with any company we used. Every little bit counts in trying to balance our budget.

et Al
One obstacle on the way to financial freedom: I couldn't figure out why eBay constantly asked for my password as I moved from screen to screen. Finally realized that my firewall product wasn't allowing cookies to be saved. How easy it would have been to use this as an excuse for not maintaining my efforts to develop this revenue stream!

First Success with eBay, Early Morning Schedule, Easy Steps Towards Financial Freedom

I've made my first sale on eBay. Interestingly, I put up several books which didn't get a nibble (even some at a starting bid of as low as .99), but the one video game based on the Law & Order series was snapped up at the bargain price of $4.99. I bought it for my wife, who's an avid fan of the TV show, but she never used it. So I went to Staples last night and bought many sizes of shipping envelopes so I can be prepared for the upcoming surge :>) of orders.

I've also now spent much of the past week getting up at 6 AM instead of my normal 7 AM time. Not being a morning person, this has been a stretch for me, but so far it's worked. The only problem has been making sure that I spend the extra time focused on revenue strategies and not on other tempting time wasters such as 'catching up with email.'

I did spend this morning, however, filling out a refinancing application which will hopefully help alleviate the pressure a bit. In addition to the wonderful articles in Get Rich Slowly, I recently stumbled upon these simple rules on how to become financially free:

1. Make Money
2. Save
3. Invest
4. Share
5. Spend

Notice how 'Save' comes immediately after 'Make Money' and 'Spend' comes last. Very sound advice and a good read.

Living With the Choices We've Made

Six years ago, after many years of working for mostly financial service companies, I decided to move to the nonprofit sector to find work that was hopefully a bit more meaningful. As a result my salary immediately dropped significantly. It took a few years and a couple of job changes to move back to my previous compensation. Then from 2003 to early 2005, a sudden loss of a supposedly secure position led me to try consulting. Although back in full time employment now and earning more than I ever have, it's still clear that my choices have resulted in less income than if I had stayed in the for-profit sector.

Five years ago, following a passion for helping others with their careers, my wife started her own business. It has been a long road towards profitability, as if often the case with starting a company. Having been so many job changes myself and realizing the importance of this type of work, I've fully supported her move. Having been subject to so many fluctuations working for others, it's certainly tempting to want to take responsibility for one's own career development.

These decisions have resulted in a situation where we struggle to meet our expenses. We've been fortunate to have savings to make up the difference but, as my wife has pointed out endlessly especially since we moved into our own house almost four years ago, it's important to earn enough to make ends meet. This is a main reason why I've sought new revenue opportunities, as documented in this blog. My overall philosophy about money was also influenced last year by attending a seminar based on Secrets of the Millionaire Mind - now I understand that making money is important. After my heavy reading campaign in recent months, I also know that it's better to not be dependent on any one job. Who knows when the next layoff, reorganization, restructuring etc. will occur? Since beginning my current job at the beginning of 2005, the organization has changed dramatically. My position still exists, but most of my department doesn't.

Do I regret the choices my wife and I made? Not really, but often I wonder why it's been so much of a struggle. Financial freedom is not easy to secure, but hopefully it will happen and be worth the pain to get there.

Secrets of Financial Success From Money Magazine

The September issue of Money Magazine featured an section which included interviews wealthy people from around the U.S., What It Takes to be Rich. (This is similar to Thomas Stanley's The Millionaire Next Door and The Millionaire Mind. Apparently, millionaires are able to make their own luck, as described in a 2003 article by Richard Wiseman called The Luck Factor. Wealthy people:

• listen to their intuition
• have positive expectations, creating self-fulfilling prophecies
• are resilient and are able to transform bad luck into good

More than half of the wealthy people interviewed had started their own business. My wife did this five years ago but it's been a challenging road to make it work. I tried working for myself a few years ago while in between full time employment but found that I preferred working full time. It does seem, however, that the financial rewards are potentially much greater when you are in control of your own destiny.

Unlike a key principle of Secrets of the Millionaire Mind, the Money Magazine feature claimed that you don't need a burning desire to get rich to be successful. As probably my wife would agree who is a resume writer and career coach, rich people first "chase their passion." Sadly, many people go through life not knowing what their passion is, or having the courage to go after it.

Exploring Tax Lien Certificates

I first heard about tax lien certificates about a year ago. Sometimes described as the secret of the wealthy, TLCs allow you to purchase the right to collect taxes and penalties on properties that owners have not paid their real estate taxes. After you buy the TLC, there is a redemption period during which the property can be redeemed by paying the outstanding taxes and penalties. If the owner still doesn't pay, the TLC owner can end up owning the property for only the cost of the tax lien.

The strategy is fully described in Profit by Investing in Real Estate Tax Liens. Each state in the US does this a bit differently; some states offer tax deeds, which actually give you immediate ownership in the property. Apparently you have to get information from the real estate office in each county on when the auctions are offered, how registration is done etc. Supposedly this is a very safe investment since you have a lien on the property. I will start with my own state and neighboring states so I can investigate properties prior to the auction. I've also received much useful information from Professor Profits.

What about eBay. I put up my first book for sale yesterday (instead of the five I hoped for). It's a bit tricky figuring out all the angles in pricing, but I'm sure it will get easier when I've done it for a while. My wife and I have identified at least 25 books so far that we can try to sell.

Getting Started with eBay

Trying to get out of the habit of doing too much reading, so I bought just one book on eBay strategies so I can get started. How to Buy, Sell & Profit on EBay was an easy read and gave some useful tips such as:

• pick the one item that you think can't possibly sell, and place it on eBay. When this sells (to your amazement), it will demonstrate how effective eBay can be.
• go through your own house first. When you run out of things to sell, go to garage / sidewalk sales to look for other items.
• Unlike most other businesses, you can start listing on eBay for 30 cents. Better to start listing items and make mistakes rather than wait to post the perfect listing.

I'm going to start with books since my wife and I love to read and we have more reading material than we can ever get through. We're also trying to split up the responsibilities so that I do the technical stuff and my wife handles the creative end.

So why not give it a try? I'll have at least five items listed by midnight tonight.

P.S. I also read through some reference materials on tax liens / deeds yesterday and this morning and am ready to take next steps. More details in next posting.

Doing Some Things Differently

It's said that if you keep doing things the same way but they're not working, you need to try something different. So I have resolved to:

1. Figure out whether I really am motivated to go after more money. As a project manager focused on nonprofit organizations for the past six years, I've chosen principles over maximum financial return. If I do want to have more wealth in my life, then why hasn't it happened? My wife suspects that I am getting stuck in the 'research' phase, and can't move into the 'action' mode.
2. Seek out 'multiple streams of income' as professed by Robert Allen. Having had many jobs in the past suddenly end without warning, it is obviously better to have many ways to earn rather than depending on a single source. The eventual hope is to not have to depend on a full time position at all, and only work when and where I choose to.
3. Early to Rise recommends getting up one hour earlier as a secret of successful people. As much as I dislike getting up earlier, I'm going to give it a try. By taking this time to focus on developing these additional income streams, maybe I can make some better progress.
4. I will also block out time on each weekend, at least 1/2 day, to focus on building wealth.
5. Unfortunately, I will need to curb some of my volunteer activities until I can afford to continue them. Now treasurer for Congregation M'vakshe Derekh, I may need to step back from my webmaster role until I can afford to continue these activities.
6. I will work with my wife to pick out 5 items that we can put up on eBay this weekend. Many others seem to do well with this strategy. Seems like there's little to lose and much to gain by giving it a try.
7. My wife and I will setup a weekly meeting to review finances and revenue generation strategies. We've often slipped when we've tried to do this a past, but we need to make this a priority to keep each other informed and motivated.

As I often do as a project manager, breaking up tasks into smaller phases may be the key to get back on track for earning more income.

Getting Serious About Generating Additional Sources of Revenue

Last December my wife and I attended the Millionaire Mind weekend, which gave us much inspiration about the role that money plays in our lives and how we can learn ways to increase our revenue. A particular point was the importance of earning passive income - as opposed to the type of active income we receive from working at full time employment.

It's now nine months later and although I've done a lot of reading and research, I haven't been able to take the next steps towards taking action. These are the main areas we've been considering:

1. real estate - particularly investment properties
2. tax lien certificates
3. eBay - selling our junk and everyone else's

After a firm reminder from my wife this week that we haven't achieved the results we hoped for, I've launched this new blog to document our efforts going forward. Hopefully we will be able to encourage others to follow this path towards financial freedom.