New Look

I decided to change things up a bit. Let me know how you like the new look.

Profile of a Money Maker: Shanel Yang

I’m really excited today because we have our first profile of a money maker. Shanel Yang has an amazing story of coming to the United States from South Korea in 1971 and the obstacles she had to overcome. Her parents were in charge of earning money by taking whatever jobs they could find and she, in turn, was in charge of learning everything else this country had to offer.

Hit the jump to see our complete interview with this amazing person.

*Image courtesy of shanelyang.com

Profile of a Money Maker

One thing that I hope to accomplish with this site is to profile as many people as possible. No matter what phase a person might be in their financial goals, I believe that everyone has a story to tell and that we can all learn from those stories.

In the process of trying to get people to profile, I had an interesting response come back from one individual. The E-mail reads like this:

Hello! I love being profiled, but I’m a terrible financial example. My
website makes no money, my paycheck goes to bills, and I never seem to
be able to get out of debt. So…I really appreciate your kind
request, but I think I’m probably not what you’re looking for!

All the best,

I felt saddened by the response. This person has a great looking website and a nice little niche in the market. I really felt that they had something to offer the community. The sad part was, this person didn’t see it.

This site is not about debt elimination. There are plenty of other sites that already tackle that subject. We aren’t focusing on the stuff that makes us poor. Our only goal is to focus on our money makers, not our money takers.

No matter what stage you are at on the path of financial freedom, whether you are dead broke or uber rich, you have a story and we want to learn from you.

Starting next week, we have our first profile of a money maker, so make sure to come back and check it out.

Does the Robin Hood theory work?

There was an interesting article at msn.com yesterday that estimated the net worth of all the current millionaires (10.1 million millionaires) in the world to be around $41 trillion.

I began to ask myself if they could really support the whole world with their money or if there is a limited amount that even the richest of the rich can do for mankind.  Call it the Robin Hood theory.  Take from the rich and give to the poor.

Can $41 trillion really support all of mankind?  I took the $41 trillion and divided it by the worlds current population of 6.7 billion people.  The answer is a measly $6119.40 for each person. I can’t even survive two months on that amount.

Granted, my cost of living is a lot higher than someone in remote Africa.  I understand that.  $6119.40 might be more than they could ever make in an entire lifetime.  However, I think it’s fair to say that it would be impossible for the richest of the rich to take care and support the worlds population with money alone.  So the question then becomes, whom do they take care of first?

This question alone has made me realize why the richest just don’t give their money away for free.  They are taking care of themselves first, family second, community third, and so on until they get to the remote places of the world.  Though they might be over the top with taking care of themselves first (I still don’t see the point in a $20 million home), I believe that most of the wealthy are in fact helping a great number of people.  Can they help more?  Yes, but they can’t help everyone so someone has to be left out.  So who do you leave out?

Your Image, Your Money: Led Zeppelin

What is the worth of a song?  According to Portfolio.com, $572 million plus.  That’s right, Stairway to Heaven by Led Zeppelin is estimated to be worth $572 million and counting.

Led Zeppelin have found their money maker in a single song.  Sure they have a portfolio of great hits, but Stairway to Heaven is by far their biggest cash cow and they know it.  It is their image.

So how did they turn a single song into the money maker it is today?  First, its a great song.  It is one of the most requested songs of all time.  Every time the song gets played on the radio or otherwise, they make money.

Second, they didn’t whore it out.  They were very selective of when and where it was released.  It was never made a single because Zeppelin wanted to make people purchase the whole album.  By purchasing the whole album, Zeppelin made more in royalties.

Third, they use it to generate sales of their other songs.  Cadillac targeted baby boomers in a 2002 ad featuring “Rock and Roll”, another song of Zeppelin.  Cadillac knew that baby boomers would be drawn to an ad that had Zeppelin playing.  Zeppelin could have used Stairway to Heaven, but instead keeps it close to home for the perfect deal.  Now that companies know that Zeppelin is licensing their songs, the longer Zeppelin holds out on Stairway, the larger the price it will fetch to the lucky bidder.  In the meantime, companies are licensing Zeppelins other songs.

There are some important lessons you can learn from Zeppelin.  Once you have your money maker image, take care of it and you will reap the rewards over the long run.

Book Review: Microtrends

What are the small forces behind tomorrow’s big changes?  Microtrends by Mark Penn tries to answer this question.

The book highlights 75 “microtrends” that are the cause of a much larger societal movement.  Though the book doesn’t really connect the dots very well, it does outline some interesting smaller trends that do have some force in today’s society.  The amount of influence that these trends actually have in society is debatable.  However, understanding these microtrends can help you in finding a money maker.

While reading the book, I found that I was in fact part of several of these microtrends.  I am an older gamer, part of a religion that doesn’t allow women clergy, and a part time sun hater.  So what does it all mean?

Penn outlines that a microtrend is defined as 1% of the population.  1% of the US population is still 3 million people.  Imagine you had access to 3 million potential customers, could you make money?

The reason why Microtrends is an important read for finding your money maker is rather simple.  By finding what microtrend you belong to, you have found your target market.  Also, since you are already part of said microtrend, you already have some sort of knowledge related to your target market.  By the invention of the internet, you now have access to your target market with greater ease and cheaper barrier to entry.

Microtrends is not an extremely groundbreaking book.  It does have spots that are rather boring to read.  Some of the microtrends that you don’t belong to can be rather lame to read through.  This is due to the fact that he uses statistics to back up his microtrend.  If you aren’t a fan of statistics, I recommend you only read the microtrends that you have interest in and skip the rest.

Overall, Microtrends is highly recommended as a read to help you to understand what potential money makers you have based on the microtrends that you may belong to.  It should be used to help you to start thinking about other microtrends that Penn leaves out of his book.  By finding your 1% target market, you just need a way to get your product out to those 3 million people.

Microtrends receives a 3/5 stars for lack of keeping you interested through the microtrends you don’t belong to.  However, it is still a must read to get you thinking about your money makers.

My Mentor: Harry Swensen

We all have mentors that have guided us in our lives.  You probably even have many mentors for different aspects of your lives.  The same can be said for your money makers.  Different money makers have different mentors.  In My Mentor, we will try to highlight all the many mentors that have influenced our lives.

Today’s mentor is Harry Swensen.  Harry happens to be my father-in-law and it just so happens that he is the most frugal person I have ever met.  Some might even call him cheap (not me of course:).  I’ve never seen him splurge on anything brand new, buy the latest and greatest, or even take his wife to a new release movie.  That’s not to say that he doesn’t have nice things or take his wife out on dates.  He does.  He just refuses to pay full price for anything.

My wife is always telling me stories of her dad and how he influenced her while she was growing up.  One of her favorite stories to tell is how her dad actually looked forward to getting “toilet papered”.  Toilet papering involves kids that throw rolls of toilet paper all over your yard and trees as a prank.  Harry actually liked to get toilet papered.  He would get out in the morning and gather all the toilet paper and put it into trash bags.  He would then bring the bags into the house and instruct his family that they were to use the toilet paper until it was all gone.  He liked the fact that he wouldn’t have to use his own money on toilet paper for a few weeks.

I know this is somewhat extreme, but he has had a good influence on my wife and I.  It’s nice having a wife that has the mindset of frugal living.  This was taught to her by her dad.  I don’t have to worry about my wife racking up unnecessary debt.  Nor do I need to please her with an extravagant lifestyle.  This in turn has helped me to focus on the things that will help our family be successful in the long run.  Because of this I have extra money to pursue side projects outside of my regular employment.

As for the art of frugal living, I am not as extreme as Harry.  However, learning from Harry I have been able to find areas in my own life that I can cut back on.  This in turn has kept me from consumer debt and has laid a solid foundation for regular savings.  My mentor, Harry Swensen.

Have your own mentors?  Share them with us in the comments section.

Health 101: Wii Fit

This is a follow up to Health 101: Yoga as a Money Maker.

My wife purchased Nintendo’s Wii Fit for me on Fathers Day.  I had been really excited to try it out because I wanted to see if Nintendo could really pull off the exercise video game.  What I found was something more than I would have expected.

Not only has Nintendo pulled off the video game portion of Wii Fit, they have also succeeded in the exercise portion as well.

My favorite part of Wii Fit is the Yoga Training.  I have a gym pass at Gold’s Gym and they have Yoga classes, but I have never taken one.  What I have found through doing the Yoga Training is that I am using muscles that I have neglected through normal strength training.  Not only that, but the whole focus on your breathing aspect is rather gratifying.  It truly is a focus driven exercise.  I even notice myself throughout the day focusing on my internal balance and breathing.

I’ve only been using Wii Fit for about a week, but the Yoga Trainer alone is worth the price.

Lessons on finding your money maker #1

Finding your money maker is one of the hardest things to do. Today we introduce a new segment called “Lessons on Finding Your Money Maker”. In this segment we will discuss practical ways for you to search out that elusive money maker.

Lesson one is all about tracking the things that you already have that are bringing money in the door. By understanding what you currently have that is making you money, you can put greater emphasis on your current money makers.

The way we are going to do this is by breaking down our current money makers into percentages. I’ve asked one of my co-workers if we can use him as an example. We tracked his money makers for one month. This is what we found:

65% of his money comes from his wage.

8% comes from his commissions and bonuses.

3% comes from the employer match to his 401K contribution.

24% comes from a side project. He has started buying cars and selling them under his uncles car dealership.

Lets break this down. First, his wage is his greatest money maker at this current stage in his life. The goal is for the wage to become a smaller and smaller percentage of your money maker. The reason, if you are like most Americans, your wage is likely paying for all your bills and not leaving much left afterwards.

Next, we have his commissions and bonuses. This is a great opportunity for him to focus on a money maker. If you are lucky enough to have commissions or bonuses at your job, you can ask yourself this question; what do I need to do to increase my commissions and bonuses? This will help you to stay focused on the important things at work and stay away from the time waisting tasks.

For example, my co-worker would routinely answer phone calls from every client. He would then drop whatever he was in the middle of and try to help the client with whatever simple little thing they needed. This sort of distraction would take him away from clients that were ready to bring money in the door that day. The clients that were hot were then pushed to the next day. You can see the trend that would follow. By understanding this, he has decided to send all calls to voice mail. He then checks his voice mail and sorts through them and identifies the ones that are most important. So now the trend has reversed. Clients that are hot are dealt with today and clients that are cold are pushed back until tomorrow. By doing this simple little change, he has entered into his commissions earlier this month than ever before.

Next, we have his employer match for his 401k contributions. He just maxes out whatever the employer is willing to match. In this case 3%. No more, no less. The 3% is free money. He can’t really increase this because he is already maxed out.

Next, we have his side project. At the first of the year, my co-worker decided that his wage alone wasn’t going to be enough to get him to where he wants to be financially. He partnered with his uncle that runs a small car dealership. His uncle would allow him to use all of his resources. In exchange, he would pay a percentage of every sale back to his uncle. Currently, he is averaging one or two sales a month. However, you can see that already he has tapped into a money maker. Even with just a small amount of sales, he is bringing in nearly 1/4 of all his money. Clearly he has an opportunity to focus on this money maker.

This is just a simple example. We didn’t go into his investments, his interest on his savings accounts, or anything in great detail. We simply took a few of his obvious money makers and analyzed them. Even from this simple task, we have outlined two areas where he can put a greater emphasis onto his money makers, his commissions and bonuses and his side project selling cars.

Try this simple exercise yourself and try to single out money makers that you currently have. After you have found your current money makers, start putting more energy and emphasis into them. Remember, your goal should be to minimize the percentage that your wage is bringing in. By doing so, you will see an immediate increase to your net worth.

Book Review: The Automatic Millionaire

I went to the library tonight to search out some new books to read. I picked up The Automatic Millionaire: A Powerful One-Step to Live and Finish Rich by David Bach. Instead of just checking it out and bringing it home, I took a few minutes to read about 20 pages in the library. My initial thoughts were; this book is nothing more than a repackaging of common sense. I decided that it wasn’t worth my time to read through the whole book. So instead of me giving a review, here is someone on Amazon.com that gave a review. His thoughts are exactly what my thoughts are, the only difference being that he read the whole book while I just previewed the book. Here is an excerpt from his review:

“The subtitle of this book is “A Powerful One-Step Plan to Live and Finish Rich.” That’s a bold statement. Instead of a 9-step plan from Suzie Orman, here we have a one-step plan. So it goes, just do this one thing and you are golden. It turns out there is more than just one step, but the gist of the book is that you should pay yourself first, i.e. setting up automatic payroll deduction and electronic fund transfers for saving, investing, and debt reduction. I’m all for that, even though that idea is nothing new. All 401k plans work this way. There’s not much secret in personal finance. So don’t expect a magic wand that fixes everything without any sacrifice.

“The book says his plan requires “no budget, no discipline, less than ten dollars a day of investment.” If only it were that easy! It still requires commitment and re-prioritization. When you want to buy a plasma TV and you don’t have money, do you stop your automatic savings or do you forego that TV? Paying yourself first requires commitment. It means you won’t be able to have as many nice dinners as you want or do today. It means you won’t have leather seats in your car but settle for regular cloth seats. There’s no way around that. Automate however you want. At the end of the day, you have to cut your spending. If your spending doesn’t come down, you won’t be able to continue on your auto-pilot for too long.

“The book also gives the illusion that you don’t have to save much in order to retire rich. The “less than ten dollars a day” part is totally misleading. Investing $10 a day at 5% after inflation for 40 years gets you about $18,500 a year in retirement income before tax. Not bad, but I don’t think anybody can call it Finish Rich if you retire on $18,500 a year. If someone is not saving any money at all, saving $10 a day is better than nothing and we all have to start somewhere. If you really want to Finish Rich, $10/day is not going to cut it. Later in the book the author said you should save 10-15% of your income for retirement. That’s a lot better. Saving and investing $7,500 a year on a $50k income at 5% after inflation for 40 years will generate $38,000 a year in retirement income. But that’s 40 years. If you want to retire in 30 years, your investments can only generate $21,000 a year. Don’t expect that you will be like Jim and Sue McIntyres in the book, at age 52 having two homes paid off free and clear, two kids in college, and a $1 million investment portfolio. I’m sorry to burst the dream, but saving 15% on $50,000 income for 30 years is not going to get you there. It will get you somewhere, a lot farther than where you otherwise would be, but Finishing Rich will require more sacrifice than that.”

Though the ideas in the book are good and solid principles, it’s not the kind of book that will give you ideas on how to focus on your money makers. I would only recommend this kind of book to someone that is just starting out with personal finance.

I can’t give an official review because I didn’t read the entire book, but the guy from Amazon.com gave it a 2/5 stars.