At some point, the 10X rule stops working if you are a Solopreneur.
Say you are an artist, writer, blogger, YouTuber, musician, designer, tutor, baker, and so on. (Someone without the long leverage of new technology or capital. Which would be most of us.)
Say you just published your first blog or released your first song. Or you printed your first t-shirt design. Or wrote the first chapter of your book. Or, recorded the first podcast. Or, sold the first bracelet through Etsy.
Say you get some interests. You get some sales. You see some tractions. A glimmer of hope. A tribe of like-minded humans. A possibility of a business of your own. Someday.
The 10X Growth Rule
The 10X growth rule would mean: 1 x 10 = 10 blogs/songs.
(i.e. 10 times more profit or paying customers or fans)
You do the second round of 10X rule. You work hard, you get professional. You invest your own money into your venture. You take a shot on yourself.
10 x 10 = 100 blogs/songs
(i.e. you are definitely having some sales and some notoriety)
You do a third iteration of the 10X rule.
100 x 10 = 1000 blogs or vlogs or songs or designs or books (chapters/stories)?
As you can see, it’s getting harder now. You are definitely playing in the middle of the bell curve. You have found a product-market fit. You have data. You have insights from the mistakes you have made.
You know what’s working and what will not work. But you are at your full capacity.
Still a Solopreneur
The truth is you are still a Solopreneur. You are still hustling. On your own. You are doing okay but you don’t know if you will make it through the end of this “hustle tunnel”.
You have high hopes but you also have doubts. You need capital. You need miracles. You need grace.
Because the 10X rule will not work for you anymore. Not unless you take on VC money or a bank loan and hire a bunch of people. (Because you need a bigger pool of customers. You need more demand from your existing customers. And, all this takes money. Something you don’t have, yet.)
And though all of that is possible, and you know you can do it, the questions remain, will you make it BIG after the next 10X?
What does it look like after the fourth iteration of 10X growth?
Let’s apply it to your business or blog or fanbase. Let’s calculate:
1000 x 10 = 10,000 blogs/customers/podcasts/products/so on
Though the 10K mark looks impressive, it may not be enough. So you need to make a critical decision now. Should you grow and take outside money and build a team.
Or, should you keep it running your business/project as a hobby? (After all, 1000 true fans is all you need, according to Kevin Kelly.)
A Mediocre Success is Worse
If you stay at the 1000 mark, you are playing in the long tail of everything. You won’t have the financial freedom this way. You will NEVER be able to quit your day job. You will never be financially and emotionally independent. You will never own your own calendar. You will never realize your dreams!
But, if you take a leap of faith and go for the next phase of growth, you will be tested by everything and everyone. The market will test you. Your family will test you. Your customers will test you. Your faith in your idea will test you.
You’ll have to work incredibly hard. You’ll have to cut all distractions. You will have to get dead-serious. You’ll need all the faith and hope that you can muster. You need all the allies and friends and partners that you can make. You’ll need an incredible amount of patience and inner calm or your ship will burn midway.
Say, you are able to cross the chasm. Say you make it through. Now, you have won the trust of your investors, partners, family, your customers, and fans, and above all, your own self.
Now you feel bolder. Maybe even a little aggressive. You are thinking the unthinkable. You are thinking of the 5th phase of 10X growth.
10,000 x 10 = 100,000
At this point, it makes sense to go all in. After all, if you can command a size this significant in any market or niche, you will always have positive cash flow.
You are no longer a Soloprenuer. You have a business. Your team size may be very small, but you definitely have made it. You may quit your day job now. You may decide to do this for the rest of your life.
You have grown as a person. You have grown a business that brings in net profit. You have survived which 9 out of 10 entrepreneurs won’t. And above all, you are just getting started.
Actually, (and paradoxically), it gets easier from here. You can take on more investments. You can grow your team by a factor of 10. And you can actually go shoot for a 6th and maybe even 7th phase of 10X rule.
In phase 6, you are at a million mark. In phase 7, you are at 10 million mark.
However, the question remains, will you or your business/platform/paying customers/etc. get to the 4th growth phase?
Can you transition from 1,000 to 10,000? If you are a Solopreneur? Can you pull in $100,000 in profits (or even in revenues)?
If the market is showing the signs, then you should go all in. Because this is the hardest jump you’ll ever make on your journey to being a successful entrepreneur.
But first, you must find your 1000 true fans. Take as much time it takes to get to this point. It will be worth it in the end.
If you are a millennial (like me), you would agree that the last 10 years were interesting and full of ups and downs. We started this decade at the tail end of one of the worst recessions (2008-2010).
The economy then gradually started to recover in 2011 and since then has broken many records.
A Decade In Review
We saw governments around the world pour trillions of dollars into the economy to keep the financial engines humming. The actual impact of this excessive money printing is yet to be realized. I guess we’ll find out in the next 10 years.
We saw Bitcoin have its 15 minutes of fame in late 2017 and the Crypto market almost hit a Trillion dollars market cap.
We saw Brexit happen. We saw a narcissist idiot become the President of the United States. At the same time, we also witnessed Finland elect a group of young women (early to mid-thirties) to the country’s highest position.
We saw some significant growth in the specialized AI revolution. Google’s DeepMind defeated all of the world’s top Go champions. Machine Learning today sounds almost like a casual thing as data mining and analytics were in the previous decades.
We saw Elon Musk save Tesla and SpaceX. Telsa stock did reach $420 USD which is funny. We won’t go into that tangent but if you were following the news, you will get a giggle.
Game of Thrones premiered in 2011 and finished in 2019. Millions of people watched it around the globe. Perhaps, as one of the most successful TV shows of this decade, GOT truly was a cultural phenomenon.
Despite HBO stealing the crown for producing the best TV series, #Netflix was the best performing stock this decade. Well, Netflix and Chill even became a “thing”.
This decade also saw the Arab Spring, a series of anti-government protests, uprisings, and rebellions that spread across much of the Islamic world. Caused by authoritarianism and corruption, the world witnessed Egypt, Libya, Syria, Tunisia, and Yemen revolt against their own governments.
Similar equally powerful political shifts also happened in South Asian countries of Nepal, Pakistan, and India. In the Americas, Venezuela and Cuba joined the club with the citizen protesters. There are plenty of simmering unhappy forces of common citizens, sitting dormant; waiting for outbursts across the Latin world and Asia.
Overall, Nationalism and nationalistic sentiments were on the rise and the common people (always-connected by the Internet) wanted a better economy, equal rights, and hopes for a better future. This trend is likely to continue.
There were more than 50 wars (small to large) that were fought around the globe. Religion is still as powerful and influential as it was at the beginning of the 21st century. Mankind’s dependence on God to save itself reflects how governments around the world have failed its own citizens.
On the flip side, some folks and organizations around the world decided to look beyond the pale blue dot and mapped out their plans for colonizing Mars, Outer Space, and the Moon.
As many as a dozen countries and private companies around the world are thinking beyond the earth. However, despite the progress made up until 2019, Space Colonization is still a concept. We don’t know what we don’t know!
Speaking of Technological Progress
Technology, in general, saw impressive growth but nothing that was forecasted in the 1960s Sci-fi novels. We still didn’t get flying cars, global prosperity (end of poverty), time travel or space travel for that matter.
Cancer and cardiovascular diseases still kill millions each year. The human race is just one super-bug away from being decimated. The healthcare services on average suck around the world. We are still far too behind any meaningful goal post when it comes to our health and death.
The global ocean level rose more than by an inch in the past 10 years while the politicians are still debating if climate change is real or a hoax.
In the coming decade, we still have a lot to work on and worry about. From the ongoing refugee crisis to economic slowdowns to unpredictable climate changes to massive inequality around the globe, there is a lot of work for each one of us.
I would end this short post with a note that, yes, in 2019, we also saw one democratic candidate in the United States run on the platform for Universal Basic Income (UBI) for all. This is neither too early, nor too late.
In the hindsight, perhaps we will look at this decade and wonder if this was the right timeline to start thinking about bigger and bolder shifts in how humanity evolves in the 21st century.
We may have had a slow start with the promises of the 21st century but remember, we still have 80% of it left.
Oftentimes we talk about being our own boss and dream of being a self-employed entrepreneur or a lifestyle business owner.
We talk about making lots of money, about quitting our boring day jobs, and early retirement?
We aspire about starting a lifestyle business and later perhaps someday even turning it into a billion-dollar empire!
Not all career ladders go up, some are just flat 😉
Employee vs. Entrepreneur
But, have you ever wondered what would be a better course of action for you? Being a salaried employee or being a small business owner? Perhaps, the best answer depends on our particular situations and where we are in our life.
Let’s say, you are a small business owner. Whether you have an online store or you are hustling as a Solopreneur.
Small Business Owner
Say you work as a contractor (or are self-employed, for example as an uber driver).
Say, you make $40/hour and work 40 hours/week. That’s ~ $84,000 USD per year. Sounds like a lot of money, right?
But, do you realize:
You’ll be taxed 22% off that money by the Federal government
You’ll be taxed 5% off the remaining by your State government
5% will be gone into your health insurance
5% extra will be taken to match your share of Social Security and Medicare Taxes
10% of the money will go on gas, car insurance & maintenance, & other business expenses
10% will be spent on comfort good or eating out because of stress
20% of that money will be gone in unexpected emergencies and/or later years health care costs as you get older
25% will be gone in rent and utilities if you choose to live *modestly*
The Long Term Outcome
This leaves you with 0% money for investments, education (self-improvement), travel, and other life events (weddings, etc.) or life emergencies.
Now, knowing this and giving this some more thoughts, would you still do it? Would you still drive for Uber or start a small business?
If so, what would you change and how would you split your expenses and which investments and savings decisions you would make?
You don’t have to be a slave or a drone
Now let’s say you are a 9-to-5 slave to your stable biweekly paycheck. Let’s see what happens in this case.
A Salaried Drone
Say, you make $84,000 a year. Say, you get 2 weeks of paid vacation, paid okay healthcare coverage, and a 3% match on 401K contribution.
Let’s say you live in the city as the above example and your transportation, utilities and rent expenses are the same.
This means, you are spending the same money as in the above situation BUT, you are getting:
Ten days of paid vacations + 10 paid national holidays each year (Read: this is your opportunity for having a paid vacation)
You are saving 5% of your income on healthcare because it’s provided by your employer
You are getting 3% extra income-bonus through your employer’s 401k match, and also you are forced into saving at least 6% – 10% of your income each paycheck
You are not contributing double taxes in Social Security and Medicare taxes because your employer is paying it for you
Because of life and income stability, you are less worried and therefore you can afford to make a plan about bringing lunch from home, not eating out, and even putting some money towards an emergency savings account.
What would you do? Which path will you take? Would you rather be an unhappy 9-to-5er or will you try to strike your own destiny?
Are you an employee or an entrepreneur? Why/why-not?
Anyone who is currently active in the workforce (any type of work) must have individually faced the growing impact of two related yet distinct global phenomena: Outsourcing and Immigration.
Outsourcing is: Capital —-> Cheap Labor
Immigration is: Capital <—- Cheap Labor
When capital (money) moves to a country with a surplus and cheap labor, it’s Outsourcing. It’s not new and it is not just related to Information Technology. In older days, merchants will often set up a second base or partnerships in a foreign city or country which produced the raw materials or imported products for their primary business.
When surplus and cheap labor moves to the money (bigger job market), it’s Immigration. A bigger and better job market could also mean more resources and hope for better living standards.
Immigration is also not new. The history of human evolution has been of constant migration from land to land, and island to island.
The labor force is a type of investment made by the businesses & entrepreneurs. Like commodities and resources, labor (and labor-cost) is part of the “expense” and therefore is a dividing factor to calculate productivity.
Since every business has competitors, it is “critical” that businesses have to keep their productivity higher at the lowest possible cost.
Supply and Demand
Most people will not complain, question, or even overthink when they buy a dozen of bananas for less than a dollar that came from South-Central America. Since bananas are cheaper in the south, it makes sense to move them to the north to balance the global supply-demand equation.
Same is true for honey, solar panels, lithium, gold, and tuna. And everything else, by the way, including human labor.
Human Labor as a Commodity
But if you take this logic to the next level, “generic labor” is no different from bananas or iPhones or cotton t-shirts. In other words, manual labor, for the most part, is yet another commodity.
Most people don’t see it that way because they have lived their whole life in an employee mindset with either large multi-national corporations or government agencies where the employees are often protected by either laws or regulations.
It could also be that anyone not seeing this paradigm shift is not young enough to face the ever-increasing global competition in the job market.
In most Western countries, we live in government-controlled, mostly stable democracies that support some labor rights and unions that we consider our labor to be a different offering, often overvaluing ourselves.
But if you are the one running the business, to you ‘labor’ is no different from moving bananas or cotton from a low-cost place to a high-cost place. This is how any industry becomes more efficient, better, and cheaper for everyone anywhere in the entire world.
The global movement of money and labor (whether physically or over the internet) is what is constantly flattening the globe and smoothening the political-geographical divide between various nations.
Future of Money & Work
For most people who are just “employees” (read: labor), the best way to ensure your earning potential or even increasing it depends on improving your skills, or starting a business of your own (irrespective of size), or even relocating (read: immigration) to a lower cost (but relatively equally developed) destinations where your skills are far more valued than the local labor pool.
Unless the world goes completely backward where every country closes its borders (which won’t happen due to the rise of powerful technology and the internet), “outsourcing and immigration” will never stop (irrespective of local politics). This is the future of work.
From Immigration to Mars
More outsourcing of work, global bandwidth penetration, satellite internet, everyday use of VR/AR for communication, a workplace full of A.Is, automated machinery, and smart robots, global digital currencies — it’s all coming. And, for anyone reading this, it’s coming within our lifetime.
This is a rising trend which is not going to stop anytime soon. Instead, it’s going to take humans from one planet to the infinite vastness of space. To explore space and expand beyond earth, we humans, must first get flattened here on earth as one united species. We have to eventually learn to act as one.
The current trend of outsourcing of work, automation of repetitive, boring, dangerous, and laborious manual work, and immigration is good for all of us. That said, it is also important to note that like any other system, nothing is perfect and there is a lot of damage that is done by tax sheltering, poor immigration policies, and illogical outsourcing.
With that said, it is equally important to note that, this collective trend is bigger than any one of us. So, it’s going to happen, no matter what we personally feel about it. The best thing to do here is to embrace the good and work toward moving forward.
With quality immigration, applying Artifical Intelligence to complex fields such as medicine and law, and by automating repetitive and dangerous manual tasks, we are creating a free space for all humans where creativity and innovation can be applied.
Losing a job or the prospect of losing your future employment is also the push for today’s entrepreneurial boom. And this is going to continue in coming decades.
I’ll be the first to admit that this paradigm shift is easier said than done and there is still a long way in front of us. It is easy to intellectualize this than to feel the heat.
There will be challenges to overcome both at the collective level and at an individual level.
There is going to be a lot of pain before anyone of us can realize any gain from it.
My thesis here is that technology often helps creates accelerating and exponential trends and with the Internet, VR/AR/MR, and in the rise of algorithmic automation and Artificial Intelligence powered workforce, where you live will matter less and less.
With that same logic, where you stash your cash will also matter less so with the rise of digital cryptocurrencies such as Bitcoin, Bitcoin Cash, Monero, and ZCash.
Let me know what do you think about where we will be in next 20 years? In the last 10 years, have you personally been affected by either outsourcing or immigration? If so, how? Please share your thoughts in the comments below.
The future belongs to a new class of workers and investors.
What does that mean? Well, this is going to be a short but deep post, so please hang tight.
A month ago, Amazon added $62B to their market cap (or valuation) in a SINGLE DAY. In fact just within the 7 and half hours of the trading day. How did they do that?
To understand this large number (sixty-two billion), you have to know that the entire FedEx company is worth $61B. Airbnb is $30B and Pinterest just $10B. My point here is how come Amazon is managing to produce so much reach, revenue, and growth year after year?
The short answer is smart machinery. Yes, smart, intelligent robot workers. An army of self-managing doers (just that in Amazon’s case, a lot of these workers are just robots).
The reason, Amazon was able to lock in this boost is because of its ever-expanding reach, influence, and control. For Amazon, the customer is not just the king but everything.
This philosophy has made Amazon into a ruthless, productivity-slave-king. Like Uber, the customers love it, but, the workers pay for it by working HARD. Or, worse, losing their job to a new shiny machine.
So, what can we mortal humans do? How do we continue to grow our small companies against the giants with an army of robots? Or, as an employee, how do we protect our job and income?
Again, the short answer is by having a lean business model and as a human worker, become more valuable. Welcome to the world of “self-managing doers”.
Self Managing Doers
The future belongs to those who can produce and ship goods at a cheaper cost and faster pace than their competitors. An army of bots, super-computers, global, decentralized teams, and automation jobs will be utilized in an ever-increasing proportion to bring the fixed cost down.
More and more people will lose their jobs or will work harder and longer for a pay cut (not directly, but through inflation and loss of benefits). Take a moment and think about it.
Middle management will become obsolete as they are neither good with the company’s vision nor good at “doing the actual work”. In the future, most employees will report to a Vice President or a Director, or Team Leads.
The team leads will be workers and not managers. Just like a sports team, they will serve in a dual role for the same pay. What will be their reward for additional 2 hours of managing team members and writing reports? Social status.
Non-performing employees (technical or not) will be seen as a burden and fired fast. Eventually, the workforce will look more and more like productive human-like bots who will self-manage their duties and report on tasks completion. These will be the new working class of near-future. Fueled by technology, they will be self-managing doers.
Companies, small or large, will be wi-fi connected distributed teams of “self-managing doers” who’ll ship code to toys to groceries using drones, self-driving cars, and the satellite powered Internet.
For the curious: Besides sharing my life stories and writing poetry, currently, I along with my wife, we are also trying to make this world a little more brave, free, kind, and compassionate by designing wanderlust & adventure themed t-shirts and handmade accessories. Please check them out here: www.artoftravel.store
Many of you may have already read “Zero to One: Notes on Startups, or How to Build the Future” by Peter Thiel. Some of you may not have got the chance to read it yet. I recommend adding it to your reading list.
(It’s a great read and also a prism to look inside Thiel’s mind, one of the smartest Silicon Valley entrepreneur).
This is not a book review or a summary. These quotes are my own thoughts which is the direct result of pondering over the core message of the book. In this post, I am going to basically share what I learned from this book and what thoughts best summarizes the essence of ‘Zero to One’.
Zero to One by Peter Thiel
Because of the forward moving, linear nature of time, every moment happens only once.
Create something new. When you create something new, you have a monopoly on it until you are defeated by your copy-cats.
One superpower of technology is “ability to scale exponentially”.
What is ‘your’ truth?
Understating the difference between exponential (0 to 1, x^n) and linear (x to n) is key to business success. Ability to execute/build/invent a process that scales exponentially is the ‘key’ job of the founding team.
Linear progress is horizontal. Exponential progress is orthogonal or vertical.
It gets harder and harder to innovate as your organization gets bigger and bigger.
The best advertisement spend is paying directly to your clients. Giving away a free product or service or even hard cash for joining/subscribing.
A bad plan that is in execution is better than a good plan with no execution. Having a (bad) plan is better than having no plan at all.
Selling the product/service is just as important as creating the product/service.
If your market is competitive, your focus should be on market share acquisition and not on profit. Profit margin and competitive market don’t go together. Competition by definition destroys every competitors’ profits.
Standing for yourself and thinking for yourself doesn’t mean ‘opposing’ the crowd. Opposing is an act. All acts cost attention, time, and energy.
Your market is your core offering. The key functionality of your core product or service. Your competition is likely the whole market (and not necessarily the niche you serve.) For example, an Indian restaurant in New York is not only in competition to other Indian restaurants in New York but all restaurants in New York. The primary offering of a restaurant is feeding people who don’t want to cook at home.
In business, sales are the most important thing. If you have a novel product, you also need an effective sales strategy. Product and Sales are both equally important. A successful business “must” have both.
Sales, in essence, is all about finding a distribution channel that works. For a business to survive, all it needs is one successful product distribution channel. By this definition, the most profitable company in any market has the biggest distribution channels. (Note: It’s not the product but sales we are talking about.)
It is better to be in the business in a very large market than to be a monopoly in a very small niche. By growing your market share in a very large market you can make more money but in a very small market where you are already a monopoly, you can’t grow without increasing the prices and therefore inviting new competition and destroying your monopoly.
In a capitalist system, every business (no matter how large or small) fights for survival each day. Any day could be the beginning of their end.
A creative business keeps their clients by keep creating and offering new categories of products.
A business fails when it fails to escape competition. It’s capitalistic evolution. The survival of the fittest.
All successful private companies in the world are successful because they each solve a unique problem and own a large chunk (monopoly) of their market.
If you can’t beat your rival, merge with your rival or merge with other smaller rivals to become the biggest.
Growth can be measured in a short timeline. Endurance (durability) can only be measured in the long term.
Before starting a business or investing in one, always ask, “Will this business be still around in a decade from now? In 30 years from now? In 100 years from now?”
If you have existing competition, a good rule of thumb is, it will take you to be 10X better than the current market leader (in the core offering) to be able to lead to a successful and enduring monopoly of your own.
There are four ways to get 10X lead over your prime competitor: inventing something new, or creating a new market, or creating a 10X better product, or offering a 10X better UX. Ideally, you should have at least 2 of the four.
To gain 10X lead over your most fierce competitor, you have to focus on one key product (one opportunity) and get 10X better there first. Dominate a small (key) market first then expand from there. (50% of $10M market > 1% of 1B market)
A successful founding team is one where a core group of people is able to provide value to millions of other people. One to very many.
To find the ideal business opportunity, look for ‘adjacent possible’ in the technology landscape. Adjacent possible is usually the intersection between two brand new technological developments.
Nothing great is achieved without a great team. It’s a myth that you can go far alone.
The challenge of creating network effect is making your product useful to its very first users (when the network is still so tiny that it doesn’t derive any value from its size or connectivity).
Part-time employees are essentially consultants. Consultants are essentially part-time employees.
Think how every employee can have the skin in the game? Perhaps, to start, offer to pay part salary, part equity or part bonus based on annual revenue. Those who prefer equity over cash, demonstrate long-term commitment. Those who prefer bonus or percentage of revenue from direct sales over cash show they have trust in their skill and are committed to hard work.
The most productive companies define specific roles for each team member. Defining roles reduces future conflict and miscommunication.
When you have identified a problem or market need that no one is working on, have a head start and innovate faster than anyone else that may come after you by essentially copying you.
The 21st century has made it super easier to start a new business and incredibly difficult to succeed in one.
It’s better to be the employee #17 at a unicorn startup than to be the CEO of “Hey, I Am Open For The Business Too”.
Nothing lasts. Monopolies don’t last forever. Empires don’t last. Countries don’t last.
Now, let’s go and build something meaningful.
PS: If you liked this article and my take on Zero to One by Peter Thiel, then please let me know if you would like me to cover other books. If so, any recommendations? Thank you.
PPS: Spot any error/typo? Please let me know in the comments and thanks for catching.
Jeff Bezos In 1999. Doing the work himself. Buying and selling one book at a time. A long journey from “only books” to “everything” in such a short time.
What a journey! In just 18 years, Amazon turned from being an unknown tiny online store to world’s largest online retailer.
What 18 Years Can Do
This is what 18 years can do in your life. Be it a spiritual path, entrepreneurship, or a life of wanderlust. To some, this may seem like a long time, to others, it may seem like a short time. But the key lesson here is how much growth can be realized in just two short decades.
Eighteen years is nothing when compared to even the average human lifespan.
This is what consistency can do in your life. This is what 18 years of working on your dream can do in your life. (Even when no one else believes in your dreams).
Below is the Amazon’s stock volatility (from 1997 to 2017) from early difficult years to a half-Trillion dollar market cap.
Jeff Bezos is now the richest person alive. Amazon today is 680 Billon dollar company. It has been one of the largest job creators in the past 10 years.
But do you know how Jeff Bezos started and what was his life like 18 years ago? Below are a couple of photos that showcase his long journey.
From this guy…
To this guy…
To becoming this guy…
Do you think you can work on your dreams for 18 years? Do you believe it’s worth it to work hard for 18 years so you can enjoy the rest of your life and be in a position to help others achieve their dreams, just as you did!
Bezos’ story doesn’t end with Amazon. It begins with the Amazon and goes into the eternal vastness of the Outer Space. You can take a space ride in Blue Origin, a space tourism company that Jeff founded in the 2000s.
Today, I am going to reveal my 10 years plan. As many of you (those who are regular on the Naked Soul blog) know we started this community to connect like minded individuals around the concept of “naked soul” in summer of 2014. This blog was launched in Oct 2014.
I published the Naked Soul, book I (a collection of erotic love poems) in January 2015. We started the Naked Soul Podcast in November 2015 and here we are today. It’s already April 2016.
2015 was a great year for me. But 2016 came with disappointments. My dad was diagnosed with stage IV stomach cancer and I went to care for him full-time for almost 3 months. I stopped the podcast series, stopped blogging, stopped writing and did not get paid for almost 2 months.
I had to borrow huge amount of money from my relatives to pay for my father’s medical bills. It was brutal to say the least. Emotionally I was at my all-time low and the entire first three months of 2016 was just painful and exhausting.
After I returned back to my normal life (not sure if I am truly back to my normal state of being), I started to write and blog aggressively. I am re-starting the Naked Soul podcast and working on publishing my second book (a poetry book on a spiritual theme). Sign up for Naked Soul VIP letters to get notified when it comes out.
Okay, so coming back to main topic for today’s blog. I was assessing my standing, my expenses around running this blog, podcast among other things and my income statement today. I have to admit, things do not look over-the-top, but I do see a trend here and a viable options to create a million dollar a year company which adds probably over 100 folds in value in return to the naked soul community and society in general.
I started The Art of Travel project which we would be launching soon next month. We separated Health & Fitness and Travel from the Naked Soul and created separate YouTube channels, blogs, social media accounts, and so on. So, now, our vision and messaging is even more clear and focused.
Although, traveling to explore your inner self, staying healthy so you can be of service to others and living like a naked soul are all related. Yet, we decided it is better to separate the three so that we can serve each communities within our larger community better and effectively.
What I wanted to tell you though is you can do this too.
I am going to outline my plan and revenue streams. I have written about some of these income streams in my other blog posts so make sure to read them. I won’t be repeating anything in this blog post. Everything is new and fresh. We want to take a step forward.
To cross $100K in yearly income and to hit 7 figure income you first need to plan out your long term financial goals.
Following is my financial goal as a whole (which includes The Naked Soul, The Art of Travel, & Fit Couple Goals):
Year 1 2015 $500 (yes, I made only $500 in my first year)
Year 2 2016 $2500 (5X growth)
Year 3 2017 $20,000 (10X groth)
Year 4 2018 $60,000 (3X growth)
Year 5 2019 $120,000 (2X growth) (one person retires)
Year 6 2020 $250,000 (2X growth) (both person retires)
Year 7 2021 $450,000 (1.8X growth)
Year 8 2022 $675,000 (1.5X growth)
Year 9 2023 $875,000 (1.3X growth)
Year 10 2024 $1,052,000 (1.2X growth)
What is X factor here?
The X denotes the times or multiplier. So for example, 5X growth means five fold growth or growing 5 times. Similarly, 1.5X means growing 150% or one and half times compared to the previous year.
There are several ways you can bring in revenue. Some of these income sources bring in revenue for me today and some don’t. But as your community matures you can can be sure that all of these revenue sources will bring in some cash flow for the engine to keep running.
You need cash flow or else your engine will shut down. So, you have to plan this out from the early on.
(In no perticular order)
Online Courses, Webinars, & Trainings
There is a good chance that you are either a freelancer or a employee somewhere meaning you have a job (full time or part time). The first step is to bring in enough cash so you can safely exit and begin serving your community full time. To grow something into a self-sustainable business, you have to give your 100%.
My main objective is to replace my current private consulting income and begin engaging in full time entrepreneurship.
And, by year 10 (i.e. by year 2024), I want the enterprise to cross cross 7 figures in revenue. Well, revenue is not same as income, but that would be sufficient to grow these communities world-wide.
Next, I will suggest you to draw the vision board for the next 2 years, 3 years, 5 years and 10 years. I did that. This is a very important step. Don’t skip it. Spend a lot of time creating your vision board.
Next, like ours, your biggest challenge is going to be the first three years, 2016-2018.
But, having said that, after you have created and spent time absorbing your vision boards, just FOCUS on hitting the 2016 goal for now. Just focus on Year 1. That’s it.
Our 2016 goal is to bring in $2000. You can set a different number. It can be $100 of passive income. Or it can be $10,000 of side income in year 1. Again, it doesn’t matter. You decide and then plan it out according to the formula that I have just shown you above.
So where are we in 2016?
So far in 2016, we have made, $490 (Naked Soul YouTube) + $20 (Art of Travel YouTube) + $20 (Fit Couple Goals YouTube) + $380 (print book sales) + $200 (kindle) + $170 (Naked Soul Blog) = $1280
$ Made = $1290 (in 120 days)
Target by Dec 31, 2016 = $2500
$ to Hit Target = $1220 (246 days to go)
I am totally confident that we are going to hit our goal.
If you noticed, one trick is to set a realistic goal; a goal that you are likely to hit and one which is not easy either. This way you won’t feel disappointed if you fail because you won’t fail too far off (if you fail at all). The point is not to avoid failure but to really hit your target.
And, if you succeed, your small success will act as a motivation for you. This will make you more likely to work harder for your next year goal.
Let me know if you any questions? I would be happy to answer anything you may want to ask me.
Take care for now and stay tuned for The Art of Travel. It is a beautiful, beautiful website with a lot of great essays, entertaining videos, inspiring pictures from around the world, travel tips & hacks and more.
I have been living happily for too long and my happiness is about to come to an end. I am looking for a new job. A good, contracting job, 40 hours/week, Monday to Friday, 9 to 5.
But wait, why would I do that? Why do I need a job? Because my bills are getting bigger than my bank balance and I need to find a job to keep the cash flow positive. But wait, where are the jobs? I have been actively looking, searching, applying, emailing and calling but I don’t see “open jobs” or “now hiring” signs.
This must not be right! I thought so too.
Or, maybe I am not looking for anything less than $100,000/year. Well, I may even take $80,000 deal. But first of all, it must exist. And, I am not talking about manufacturing jobs. I am talking about engineering jobs and IT jobs.
Is Job Market Slow
Where are all the jobs? The news, media and government statistics tell me that the unemployment rate is at 5%. Bullshit. The market is good and banks are looking to increase interest rates? Another BS.
Seriously? Do you see people around you increasing their expenditure? Do you see people buying a bigger house or renting an expensive apartment? Do you people around you in your neighborhood leasing fancy cars? I don’t.
I think, most people are thankful that they have a job or some sort of income. Those who don’t have a stable monthly income, ask them? What are they going through? What do they feel?
Is it the election? Is it automation, outsourcing, or just that most jobs are becoming either cheap or highly technical?
If you can program DeepMind or for some A.I projects, maybe you will have a job! But, if you are just an engineer (even a computer engineer), perhaps, you should learn new skills. Jobs are not increasing. Salaries are not increasing. Rent is. Expenses are.
What will I do? Well, I want to find out what others do in my situation?
What about higher degrees and getting licenses and new certifications? More BS.
There is no proven correlation of getting a higher degree and receiving a $2000/month raise in salary, for example. Or, $1000. I am fine with $1000. But, the problem is it’s not even a guarantee that you will find a job, to begin with.
What if you already have a job? There is no guarantee that your new degree or certification will land you a promotion or a raise. What is guaranteed is that next year your rent or overall expenses will be higher!
So what can I do? What am I doing? What is my point that I am trying to make here?
I think we are moving towards a high unemployment and under-employment society in the US. And, this a problem. This is going to be a big problem in the coming decades (or maybe years).
As more and more jobs get absorbed by Artificial Intelligence programs and automation, more and more people will lose their jobs and their monthly, stable income. That is going to be a disaster.
Think about driverless cars for example. What would happen once, cars can drive itself. Think about the public bus drivers, train drivers, cab drivers, and so on? Think about the customer service jobs! What happens when more and more calls are programmed and routed to a computer? How many hundreds of thousands of people will become jobless? (If they haven’t already in banking, finance, government).
What can you do?
You can do what I am doing. Become a freelancer. Start today. If you are reading this blog post on your laptop, start now. You have got a personal computer and internet. You are good to go.
Write down your skills and areas that interest you. Then look for opportunities on how you can market your skills or learn a new skill (for free, online).
If you are already working, think about a small side business or a second job. Think about Plan B. Even if your job is very stable and you see no sign of layoffs, think about raise? Are you guaranteed a raise by your employer? Maybe not? Do you think the cost of living is increasing every year? Do you think, it’s a good idea to at least earn more so that you can invest more and let the compound do the magic.
My solution for myself is: I want to earn more so that I can invest more. The more I invest, the more interest I am going to make on my capital and the more money I will have when I need it. The compounding will do the job for me. But, my job is to make my capital and monthly investment as large as I can.
Yes, I know, I am not desperate for a job right now. But I can be. Maybe tomorrow. Maybe next year. Why should I wait for next year? Why not plan today for the next year.
Why not save more today.
I am going to continue to apply for new jobs. Maybe I will find something that interests me. Maybe I will take this job and start working a new 9 to 5. I see no harm (because I do see, the coming gloom of unemployment and mass under-employment).
I love to study money. I love maths. And, it is no surprise that I love economics. I am a lifelong student of personal and social psychology. Recently, I have been hearing a lot of peer-to-peer lending and how it is better than traditional borrowing from a bank or a credit union. Well, I was curious and I wanted to find out.
How To Pay Debts Faster
Things changed in our country after the 2008 global financial crash. Borrowing became harder and unemployment rate everywhere, in every industry was getting higher and higher. I was no different. I lost my job and was without any stable income from 2008-2009. Almost a year.
I was living with one of my friends and selling stuff on craigslist and Amazon to pay my minimum credit card balances. Life was hard.
When in college, some of my Verizon mobile payments were missed and I literally did not have any money to pay to them. I was sent to collection and it really hurt me. That collection record for just $430 cost me thousands of dollars in the higher interest rate for the past 7 years.
I also was late on few of my credit union loans when I was without a job in 2008-2009. Overall, life was hard and it continued to be so because of high-interest credit cards and more interests adding to my already high debts. The only solution is to:
1. Make more money,
2. Save money (spend less than what you earn and buy what you need and not what you want),
3. Refinance your debts (and existing loans) with lower interest. This is what Upstart does for you. Eben if you are 640 or so, you can get a loan for as low as 7.2% (as I did) as long as you have a stable job with a decent salary and a good education.
BTW, if you are currently in a large debt, read my post on “How I eliminated my $50,000 debt” in just 2 years. Not everything will apply to you as every debt situation is different but you can use some of the tricks that I used and my story may inspire you to take actions.
I hope in future more and more peer-to-peer lending startups will change the general Wall St. culture of “suck all the money you can out of students, poor and those who are already in debt.”
This is not an exaggeration or an attack. This is a fact. A fact that people are greedy by nature. Being human means being selfish, and self-serving. Does that mean we are all evil? No. Not at all. Let’s look at this. (And please feel free to recall your own life and memories of your past behaviors and actions. You will see the light and truths for yourself.)
If left to rule of nature and biology, then yes, we humans are just like animals. We prey on those animals who are weaker than us, including other humans. But, human animals have evolved new-cortex, a new area of the brain which gives rise to thinking, cognition and even consciousness. Humans have the full awareness of the “I am”. And this is what makes us empathetic and compassionate and even altruistic.
So, if we feed our soul and mind, with stories and values about kindness, silence, self-reliance, and contentment, then yes, we are the creature made in the image of God. But, if you have no such practice such as meditation, reflection, journaling, volunteering and martial arts, and so on… then yes, you are in danger and you are more likely to act out selfishly.
Money is a powerful thing. Let’s agree on this and get it out of the way. Now, if we all agree that “MONEY IS POWERFUL” then what do we need to do? Well, if you know electricity is powerful and touching a live wire will shock to your core instantly, you become careful around it. You became aware of it. But, interestingly, money is more than electricity. With the money, you get to buy whatever you want. With money, you get to skip the line and pass on others before you. With money, you get a leg up and sometimes an unfair advantage over others. So, yes, that’s why money is not only a powerful force but also very seductive.
Let’s also make it clear and get it out of the way before one of you start bashing around the argument that money is not evil, it is the people who are good or evil. No. I disagree.
Yes, I agree, that money is not evil. It is the love of money that is evil, and this love can germinate in anyone’s heart if left unguarded. So, it is not that people are good or evil. No, no one is born evil or good. In fact, we are all a mixture of some good and some bad. Notice that I did not say good and evil because evil is different. It takes time to transform bad into evil. People have shortcomings, I do. You do. We all do. We are all bad in some ways. But, it takes constant dwelling on the bad to become an evil person.
So, if you give in to money, you will start liking it more and more. More than your health. More than your romance. More than your family, and more than other human beings, nature and life in general. And, this is what happens in a culture which is dominated by Wall St.
All day long you talk about money. You shuffle money. You dream about money. And you think you won’t be susceptible to its seduction? C’mon. And, if the people in power are all under the spell of “make more money”, what are we as citizens going to get?
We get the lesson of work harder, save money, and pay your debts on time. Or, else, we will charge you even higher interest rates because you do not have money. Think about that. What a joke. Honestly, have you ever wondered, why the Supreme Court has never looked into it? Go figure that out!
Coming back to my experience with Upstart. My thoughts here are not only to demonstrate that companies like Upstart is the dawn of a new era but also that as we move forward in our 21st century, it’s honestly time to revisit how we view our finances, economies, employment, education and more.
The loan application process was simple and efficient. The loan was easy to apply. Upstart is an institution that considered an individual’s potential earning power in the next few years and does not judge one by his current credit score, age, and past.
It is great for people finishing up professional training, recent graduates with a job offer and young adults making a decent salary. If you are older, it is still a better deal than taking a loan from a bank or credit union.
Today I want to share how I make money online. How I invest my time and where I invest my resources. I have made simple diagrams which will explain volumes. Let’s dig into it.
As you can see, I am spread all across the board. I am an independent consultant and I run my own business as a self-employed boss. I am also having few small-scale businesses where automation works for me.
The difference between Self-employed vs Business quadrant is primarily of automation and systems. For example, a small mom-and-pop shop is basically being self-employed. You have to ask yourself this question to identify a true business.
“If I do not work today, will my business make money?”
If the answer is NO!, then you are a Self-employed individual.
On the other hand, if you own a Chipotle franchise or a McDonald franchisee, you have a system and team of employees put in place to work on behalf of you. In this case, if you get sick, your business still runs and makes money for you.
How To Make Money Online
As you can see, I invest heavily in real-estate and that’s put me into the I (Investor) quadrant as well.
My goal is to completely ELIMINATE the “E” & “SE” quadrants and invest all my time, money, energy and brain into the “B” & “I” quadrants. In next 5 years? We’ll see.
But that’s my goal. My 5-year goal is to operate a > $5 Million USD business and grow my net-worth to > $1 Million USD. You can have your own goals and then work backward.
So, what am I doing about my financial and business goals? Well, the answer is continuing to do what I am already doing.
How can YOU do this too?
Yes, you or anyone can do it by putting in enough dedication and hard-work into the process I am about to describe. Just follow the steps as shown in the diagrams below.
The promotional tools are the tools where you “spend” time and/or money. These tools allow you to leverage the power of the Internet. When used properly and with creativity, they allow you to both build a brand name and do marketing for your products and services at a minimum cost of traditional marketing.
As I have said in my earlier posts on Blogging 4.0 that blogging alone or YouTubing alone or writing eBooks (or books) alone will not cut it anymore. There is simply too much competition out there. Plus, think about it and ask yourself: “What difference are you making in this world?”
You have to not only create true value for others but also differentiate yourself. One way to do so is to take advantage of Podcasting, YouTube, writing books and creating and offering products and services.
Then, you got to slowly-slowly remove yourself from the business process and automate everything. You want to be in a position where even if you can’t show up for work, you still generate cash flow.
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What do you say? If you have suggestions, feedback, and thoughts, please feel free to leave a comment and I will try to honor your requests. If you would like me to expand this post, please let me know what would you like me to describe in greater details? (The first 3 commenters are always my favorite.)
Can you imagine how much money do these kids make with millions of views on their videos? A lot of them make over $10,000 each month. Some make over $30,000 a month.
The point is not to join the YouTube wagon but to create multiple funnels of income.
You may be a techie, or you may be creative.
You may have books in you. You may have CDs and music in you. You may have documentaries and films in you. These are all various funnels for income.
You have social media.
You can be a consultant.
You have a job.
You can become a teacher.
You can drive Uber part-time for a limited time to make some cash. You can do Airbnb and rent your rented house.
You can invest that cash (say $1000) in a Roth IRA or IRA and then start investing $200 or whichever amount you wish until retirement.
You can create your own investments with Vanguard IRA or start a simple savings account. You can invest in Stocks or Real Estate or both.
It always amazes me to find out how people complain about being poor when all they may need is Uber + Airbnb + few consulting gigs. You don’t even need an employer. You can be your own boss.
And, if you already have a decent paying job, what are you waiting for? You are in lucky 20%.
To make money, you got to first make money so that the money you make can later make money for you!
All you have to say is “I can do that, too.” Then do it.
Learn to use every talent you have to create income. That’s the right mindset. You can also create simple gigs on Fiverr and build revenue, create simple video webinars on Udemy and Skillshare.
If you have something to share that adds value, you have an opportunity. (As the popular saying goes, if you are good at something, you should probably charge for it.)
You just have to take one step each day.
365 days it is.
I want to see where I’ll be in 365 days from now! I am interested in measuring my own progress in 365 days from today.
Do you accept this challenge? If yes, tweet to me or comment with hashtag #365Days.
Involve your friends and make it a fun challenge.
Did you know about the free VIP pass offer to the Naked Soul Club? Subscribe your email address now and be part of this tight-knit community of lovers, readers, writers, adventures and other people just like yourself. I send great contents directly into your mailbox. Once a week. Sign up now and stay in the touch!
What are you doing to make $100,000 in next 365 days? What other creative ways one can use to make some extra cash? Share your pro-tips if something is working for you. It may help others. (The first 10 commenters are always my favorite.)
Today, I am going to tell you my story. Well, not everything but a small chapter of it.
When I was about 9 or 10 years old, I always thought I would ever find a job. As a kid watching my dad go to work and do office work was beyond my intellectual capacity and therefore I mistakenly believed that I can never do a job. I am just not qualified.
One night I wrote a letter to my Dad. I think I wrote something like “Papa, please never stop working. I don’t think I will ever get a job.”
My mom and brother asked me to show what I have written. I was so embarrassed by the fact that I admitted I am totally unqualified that I tore the page.
I had to struggle with them to do it. My brother and Mom wanted me to show it to them. It was kind of cute from their perspective that I wrote a letter to Dad. I ended up crying.
Well, this is when I was in Mihijam, a very small town in the eastern part of India. Years later I moved to the US to continue my education in Computer Engineering.
I took a small bank loan to fund my education. My family was middle class and I knew that I am accountable to every single dollar. The success or failure of my American Dream was in my own hands.
I learned and accepted early on that I am 100% responsible for my own future success or failure.
I started working part-time in College and building relationships with people in positions. I was a regular churchgoer during my college years. This saved me hundreds of dollars and hours by staying out of drinking and partying.
In hindsight, spirituality saved me both time and money and it helped build a rock-solid foundation for my future growth.
I used to read a lot. I was big-time into documentary films. But what really used to motivate me was writing and thinking about starting my own business someday. I used to come up with business ideas and discuss them with my friends.
I was a hungry young man ready for any challenge. One day, a young man in his mid-thirties came with a Business offer and I was in awe. It was like God sent.
It turned out to be the Amway MLM business. I joined and worked hard at it. At my peak, I was almost halfway to Platinumship, the first step of Amway’s success ladder.
Well as most MLM stories end, Amway did not work for me and I went back to focus on reading and writing.
A year later, I started an IT company with one of my college friends, and part-time I was also teaching new graduates healthcare and information technology.
Around the same time, I got a high paying full-time job offer with Dell as Senior Software Quality Advisor.
For three years I worked at Dell and in parallel ran my own side IT business. I made some money that allowed me to buy two real estate properties in Noida, India for $150K USD during the Indian real estate boom.
Since I carried no debt at this point in my life, I was also able to invest heavily in the Stock market.
I bought Apple shares when they were below $400 mark per share (before the stock split).
I bought tons of Medical Marijuana stocks at $0.02 and later sold at $0.30 a share.
Fast-forward to today, I am still working as an Independent IT Consultant, and I continue to write.
I have two more books coming out soon (they are currently being edited). I also offer one-on-one book marketing consultation.
I have no debt, my car is paid off and between my current stock portfolio, real estate investments, other investments, and savings, my net worth is approximately $1.03M USD (if I liquidate everything).
Having said it all, I also must add that I do not feel accomplished yet. Most of this money is tied to non-liquid assets such as Real Estate and Gold. Moreover, my goals are higher and I know this is just the beginning.
Hope my story provides hope and inspiration to some of you who may be thinking out loud that if they can make it.
Keep working hard where your heart is. The rest will come to you on its own.
Did you know about the free VIP pass offer to the Naked Soul Club? Subscribe your email address now and be part of this tight-knit community of lovers, readers, writers, adventures, and other people just like yourself. I send great content directly into your mailbox. Once a week. Sign up now and stay in the touch!
Do you want to become wealthy? Are you working on your goals or are you gonna give up? Tell me in the comments and I’ll try to answer your questions. The first 10 commenters are always my favorite and I like to personally communicate with them. So share your thoughts.
Every time I have lost money is when I have tried to make more money than what I was already making. ~ Salil Jha
I have been hit hard (twice now). I have got an IRS bill for $17,000. This needs to be paid in 30 days. Five months ago, I got a similar tax bill from IRS asking for $8000 in various taxes. I took a loan from my girlfriend and paid $8000 thinking it was a big fat check for an expensive business lesson. I thought to myself, I have already learned a lot in my various business venture. But, unfortunately, this was just the beginning.
This is a story of resilience, positivism and making lemonade out of life’s lemons. This is my story. A true story. A story of an immigrant boy trying to chase his American Dream and the mistakes made on his perilous journey.
I started an IT consulting business in Oct 2011. My primary goal to start Precog LLC (the name of the company) was to generate some side income and possibly grow the business to enough profit so that I eventually sponsor my H1B visa and Green Card through it while making good cash.
The goal was also to help recent college grads to find jobs and help them in whatever way possible. There were a lot of bad and abusive companies in the IT consulting realm and our goal was to purge the abuse of innocent and poor college students.
The company was started by Albert Pen, my good friend and me. The company was incorporated in his name, the same month he got his Green Card. I was the man running the engine. Albert was the legal structure beneath our company.
One thing that I did not mention yet is that Precog was not originally conceived as an IT consulting firm.
The groundwork of Precog started in early 2010 when two of my good friends and I thought of building an electronic stretching machine. Our ideas was to make stretching easier to learn for martial artists, yogis, gymnasts, and any fitness enthusiasts.
But, one of my friends had another idea, a rather big idea to build flying drones and sell the idea to state governments.
The Birth of an Entrepreneur
Look, back in 2010, a Canadian company was in fact building and selling drones (UAVs) to DC police. Their product was in $20,000 USD and we wanted to build something for half the price.
We started to work on the first prototype, leaving the electronic stretcher idea on the back burner. As we got more involved in our overly ambitious project, all of us started to realize that we need more capital than what we had initially planned for.
Together we spent $6500 into the project and as you can probably predict from the story line, we lost it all. One of my friend who has spent into a powerful computer took his computer and factoring that still lost about $1000. I lost about $3000 in this failed venture.
So this was the beginning of Precog. And this Precog was about to be transformed into a service-oriented company where you do not have to invest a lot of cash up front.
The Precog LLC Era
I worked very hard building Precog. I created a website for our company and began to advertise our services. Soon, I had several interested students calling me for IT training and assistance in job placements.
I started to teach classes, often charging $500 for each student per course. Initially, I was mainly working with recent college graduates.
The first 6 months were tough. Not for the business but tough on me. I was working a full-time job and I was running Precog part-time. I used to wake up early at 6 AM, do a training session, then get ready for the job.
During my lunch hours, I used to call and screen my students and answer to new inquiries. In the evening, after returning from my job, I used to take another class, sometimes two classes in a row.
I was working with various vendors. I was working with my students over the phone to prepare them for job interviews. I was talking to clients and other marketers. It was an all-consuming job. I believe I used to work ~16 hours a day, maybe longer on some days.
In the first 10 months, I invested almost $10,000 USD without much return. This was the turning point for Precog. It was “do or die”.
One of my friend, Matt Joy, who was trying to find a job came onboard during this time. Matt took charge for saving Precog. He was Godsent. Precog not only survived but actually thrived after Matt joined the team. Soon, we hired a marketer from India. His name was Daniel. And now we were a strong team of three, making some real cash.
The $750,000 Venture
We placed more than a dozen consultants between 2012-2014. We trained a lot of students. We were making some noise. This was late 2012. Things were looking sunny. We did over $500,000 in revenues in 2013 alone. In total, we did almost $750K in business in two and a half years of Precog’s life.
The business was doing great but my mind and body wanted to give up. I was single and occasionally dating. I thought to myself, business and money can come anytime but this is the time to find my life’s partner. My focus shifted from business and money to relationships.
2013 was hard on me personally. None of my relationships were lasting more than 3months. Matt was getting frustrated with me because he was all pumped up and wanted to take Precog forward. I, on the other hand, was distracted between dating and running a company.
I did not have the energy or interest in doing so. By this time I also began to realize the tax and accounting complications that Precog was facing. We had consultants working in 8 different US States.
All the tax paperwork in itself was 20 hours of work per week. The stakes were high, money was rolling in, and the business was getting complex.
This past week, I have been thinking of ways to repay my $50K debt. The breakdown of my current debts are like this:
$18000 IRS/Business Dissolving Cost
$14000 – Girlfriend’s loan
$18000 – Credit cards debt
$50,000 Total debt
This past week, I canceled some small monthly payments (to stop the slow bleeding). Subscriptions such as Spoitfy premium, TU Credit Monitoring and Audible membership were the first three to go.
These small monthly savings will not amount in big numbers but it is for the motivational purposes. These steps gave the mental confidence that “I CAN DO IT.” And I have 2 years to clean this mess up without significantly downgrading my lifestyle.
I am not giving up on music, reading or financial know-how. Instead, I am switching to Pandora’s free account, switching to Kindle eBooks (much cheaper) and Credit Karma’s free credit monitoring. I do not have any upcoming big purchases or loan request so I really do not need any credit monitoring at this time.
Next, I gave ultimatums to all other people I have employed on eLance for blog writing, manuscript editing, etc. This is going to save me $140 per month starting May 1st.
However, I have decided to keep one editor to edit my two upcoming books and one Virtual Assistant to help me grow my public platforms. In total, this is $200 per month expense. It is important to note that these costs are not new addition but the continuation of on-going expenses so I won’t feel a blow but will have to suffer the heat, well at least for now, until I find a better solution for my requirements.
I took advantage of Citi double points credit card offer. This will let me use $1700 credit for next 18 months without any interest.
I applied in my girlfriend’s name and got another $6700 for 21 months at no interest. These two credit cards will give me enough credit to use for the next one and half years.
In the coming months, I will be paying off all my existing credit cards where I also pay interests on purchases and existing balance. This way I’ll be saving $30-$40 in interest each month.
My girlfriend and I also applied to TD Bank’s checking, debit and credit offer which is offering $200 cash back and 5x points per dollar spent for the next 6 months. Together, we both will be able to get $600-$1000 back from TD bank’s offer in next 6 months. In the coming months, we will be looking for similar bank offers where we can earn or save a few hundred bucks.
The $10,000 credit union loan that I applied, I am still waiting to hear back from them. In the meantime, I applied for a $10,000 loan from my local Credit Union in my girlfriend’s name as well. If she will get a better rate from the Quincy Credit Union, we will take the loan in her name with Direct deposit payments. I’ll be transferring the monthly amount to her.
The other things I have decided to do are:
1. Call Xfinity and cancel the service in my name and get the service in my girlfriend’s name. Being a new customer, she will be getting better rates than what I am paying right now. If she gets the same rate, then I will cut the TV in our package and only keep the high-speed internet. This will bring in additional $20 monthly saving.
2. Once the free APR Citi credit card arrives, buy a new router and model through our new credit card and ask Xfinity to take off their rented Modem and Router. ($10/month savings)
3. Ask my employer to take off my health insurance ($397/month). Expected savings $280 per month.
Total monthly savings: ~$350 – $500 (per month)
In part 3, I’ll be focusing on selling old iPhones and other electronic devices that we are not using. Also, how meal planning and bringing lunch from home is saving me additional $200 in foods by not eating out.Â My goal for part 3 write up (next week) is to save another $350 – $500 each month.
Now, I am at a phase where action means more than planning. I have prepared a very detailed plan and now it is all about execution. The key here is quick action.
The first thing I did was email my website hosting company that I will be shutting down Precog’s website (i.e. $375 per year saving). I also listed both the domain and website for sale and auction on both GoDaddy and Flippa. I hope to at least sell the domain name and recover whatever I can from the sale.
I also listed my other domain names for sale which I am not using or plan on using in the next 2 years. In total, I have put five domain names on sale.
Next, I emailed MyLLC (the registrar for Precog LLC) that I would like to dissolve the business. There are some paperwork and a $99 fee. I am working on it and hope to close the business by April end. I found out that I have not paid my 2014 fee for NV and there were several other interests and penalties. In total, I paid $500 due on Precog since Oct 2014. Another $500 bill added to the debt bucket.
My girlfriend and I went to Quincy Credit Union and signed our loans. I borrowed $12,500.00 at 12.65% interest rate on 24 months repayment term and my girlfriend borrowed $7000 at 11.65% interest rate on 12 months repayment term.
I hope to repay this amount back in 24 months and 12 months respectively. I am setting aside $1200 to pay back these two loans. Starting month 13, I will continue paying $1200/month to QCU towards my $12500 loan to cut the time short and save on interest.
The next day I transferred $14000 to Albert and asked him to deposit the amount in Precog’s account. We have $3000 plus change in Precog’s business account and this will take care of the check that we will write to IRS.
I opened all my Credit Cards account and organized my balances and interest rates. I found an interesting thing. I had Credit Cards ranging in 11.15% – 23% interest. Since my big loans are in 11.65% – 12.65% range, I decided to pay off all Credit Cards which is charging me > 12.65%.
Luckily, my girlfriend does not carry any debt on her credit cards and therefore we do not have to factor in any cash there. After looking at all our credits, this is the summary.
Pay Citi, US Bank, and Chase in full and stick with Capital One (11.15%) and Discover (15%). Since the bulk of my credit card debts are consolidated in my Discover card (~11000), I have no other choice but to keep the debt there for now.
This past weekend, I started to find out all the electronic junk and books that I do not need and gathered a pile of items to be sold. I listed both our old iPhone 4S, two old digital cameras, and 2 books.
I have about 20 more books to put. At the time of writing this, I have already sold both iPhones (within 12 hours of listing on Amazon for $95 + shipping) and one book (The Art of War by Robert Greene) for $8 + shipping. I’ll continue to do this until I am rid of all the things that I do not need, use or have touched in a year or so.
Also, anything that I am not using and does not need and that cannot be sold, I will simply donate or throw away.
Keeping your home and mind clean and organized helps you in better managing your debts. I mean, it is not scientific but it works for me and few others.
I called home and explained the situation to my parents and discussed my options with my elder brother. They were stressed by the news but after talking for about half-hour, everyone got calm understanding that the situation is under control.
We continued the meal prep on Sunday and this is our third week on meal planning. I believe, meal-planning itself is saving us ~ $300-$400 each month by not eating out our lunch and dinners.
Meal planning is not only effective to save lunch dollars but also dinners. And when you do eat out, for most of the nights, you can eat at Panera and Chipotle. Note, you have to avoid restaurants because you pay for the meal and then you pay tips and end up getting drinks. So sticking to Chipotle/Panera type food joints works best.
Last week, I also called my employer and canceled my Health Insurance ($397/month pre-tax dollars). I have been on health insurance from January – March.
If I go out of it (I understand it is a risk but it is a calculated risk that I am willing to take). By going out of health insurance, I will incur MA state tax penalty in 2016 for 9 months.
This fine will be half of the premium amount of the cheapest health insurance. By paying a fine 12 months from now and by paying it far less than what I am spending on health insurance is a better choice for me.
After taxes, this might increase my paycheck by $300 per month. I will also try to take advantage of 3 months no-penalty gap period between health insurance enrollment periods. This way I will buy cheap health on my own in 2016 and not have 3 months of coverage.
I have always had health insurance and therefore I am up-to-date with my physical, dental, vision, and everything. I feel, going out of health insurance for say 12 months is risky but worth the bet given my miserable financial situation.
I called and email all my friends to whom I have loaned money. I explained my situation and they started to pay back. I got $330 from Norm Matthews and $140 from Sean Attitude.
Tim Robert said he will try to pay me back $1410 as soon as possible and Bill Tequila said he would like to pay me back $800 loan from last year. Â In total, this will bring me $2680 in cash. I’ll use this extra cash to pay off the high-interest credit card debts or my income tax liabilities once I do my taxes for 2014 this coming week.
I have ~ $250 in my OptionHouse stock brokerage account. I have to make a decision whether I liquidate my remaining position and get out or leave the money there. $250 is not a big amount. A hard thinking line for me but I hope to come to a decision very soon.
I started this week with some excitement and joy of paying off three of my low balance (but highest interest rate) credit cards. In total, I paid off close to $3000 in outstanding debts. Doing this is going to save me $50 in monthly interest. I also canceled my PostPlanner subscription from May. This will save me $29 each month. Phew right there, just in one day I have saved myself another $80 each month.
I put aside these three credit cards (Citi Diamond Preferred, Amazon Chase Visa, and US Bank Visa) on my card box (and out of my wallet). I deleted these cards from all recurring payments and moved all automatic monthly payments to my Discover Visa and Capital One Master Cards.
As of today, all of my credit card debt now reside in three cards: One Citi Double Cash (0% interest, a new card that I applied and got), a Discover card (holding the biggest portion of my debt, almost $12000 at 15% interest) and one CapitalOne card (11.15% interest, the cheapest card in my wallet).
I mailed $10,000 check to IRS by a 2-day priority mail so that it can reach on Monday, 04/13. I wrote a letter, signed it and sent it along with all the forms and supporting documents proving my unintentional mistake.
In my letter, I basically requested IRS to forgive my penalty (~ $2500) and to add back my educational credit of $1415. I’ll call IRS in 10 days and check on its progress. If I receive some financial breakdown, it will help.
If I do not receive any financial breakdown, Albert will take on the missed education credit payoff and I’ll pay off the rest of the balance within 5 business days once we hear back the final word from IRS.
Lastly, it is worthy to note that for the past few weeks, I have been tracking all of my expenses in an excel sheet across 50 different areas. This sheet as I continue to fill in and track my daily expenses has been mind-blowing.
For example, even after doing meal-planning, I have spent almost $500 on eating out while my grocery expenditures have been only $125 so far.
This is 4:1 ratio. This clearly shows that there is a lot of room for cost cutting and improvement. I hope to update on this after 8 weeks of tracking. I am sure, I’ll discover surprising findings.
Money you can earn and spend but time – time is a finite resource. You can’t borrow it, you can’t store it. It moves only in one direction and there is only a finite amount that you have got. To be successful, while in debt, you have to work extra hard to make up for not having money. You have to solve each problem creatively. ~ Salil Jha
IRS cashed my $10K Precog tax check on 04/15, that’s good news. Who would call loss of $10K a good news? Well, when you have messed up and there is no way out, any little progress (similar to drinking bitter medicine to cure illness).
Now, this IRS bill is not something that I should have paid because, overall, it was indeed a net loss. What went wrong is that during the tax filing, we did not show enough expenses thinking we have already saved on taxes (once our tax due became $0).
We stopped and did not add any further expenses. And now, after IRS did an audit and a match on our revenue, they came up with additional $40,000 in our 2013 income and since we were $9000 in the loss, after doing the simple math, made a decision that our net profit in 2013 was $31000.
This $31K was then taxed at a higher rate (sort of understatement tax penalty) and assessed a Self-Employment tax of 15% (which is ridiculously high).
Anyways, let’s move forward with our story. I called Discover Personal Loan to check if I can take a loan to pay off my remaining Credit Cards and lower my interest payments.
I qualified for $15K loan at 11.99% and paid off my remaining Credit Cards. After a while, I will seek to refinance this loan again at a lower interest rate, say between 8-9%. How?
Since consolidating your credit card debt into one personal loan often helps in credit score within a few months. This is one reason that I did not try to move my one credit card balance to another credit card with 0% APR.
The goal for me here is to not only eliminate debt (by changing my spending habits) but also to improve my credit score which in turn will open up future opportunity to further lower my interest payments and therefore the overall debt burden.
At the time of writing this:
My total credit card debt = 0 (Zero dollars)
My IRS debt = 0 (Zero dollars)
Loan from my girlfriend = $14000
My other loans: $34500
Quincy Credit Union (in my name) = 12,500 ($595 per month x 24 months)
Quincy Credit Union (in my girlfriendâ€™s name) = $7000 ($620 per month x 12 months)
Discover Personal Loan (in my name) = $15000 ($690 per month x 24 months)
So, as you can see from week 2 (above: my total debt amount roughly remains the same. $48500 instead of $50,000 but now at least I have put up a plan to pay it off in 24 months without changing my employment or sacrificing too much on my lifestyles.
However, my game plan has just begun.
I continue to sell my electronic gadgets and equipment that I do not use. Books sell as well but they bring on a very little amount of change (when we are talking about $50K).
I sold our two old iPhones (4S) for $200. Tim paid back $500 to me (actually just today). Tim still needs to return me $1115.
I have deposited $7500 in Precog’s business bank account just to wrap up Precog and pay off the remaining bill to IRS.
Both I and my girlfriend received our TD Bank cards this last week which is giving us $200 cash back for spending $500 in first 90 days. We have switched all of our expenses (and subscriptions and/or automatic payments) to TD card to meet $500 threshold.
On the flip side, last week, we also did our personal taxes and ended up paying $5000 and $900 to IRS and $52 and $200 in State Tax to Massachusetts (my girlfriend and I, respectively).
She had to pay a lot of federal tax because of how her I9 and W4 was set up with her ex-employer. She has had already anticipated and planned for high tax amount and therefore these taxes did not affect us financially.
Nevertheless, this was a lot of money going out of our bank accounts. At the end of the day, after paying over $6100 in taxes, we felt broke looking at our checking account balance.
This past three weeks I have been selling my older books and other non-necessity items on Amazon and as a Garage sale in my building. I sold a few electronics toys to my friends and colleagues at work.
I am currently enjoying $0 in Credit Cards debt. As I mentioned above as of today my credit score has jumped from 670 to 720. Having a loan is actually a good thing for the Credit report and not having a Credit card debt is also one of the best things you can do regarding your personal finance.
At this rate, I hope within 6 months, I’ll be able to take loan offers at a much lower rate than what Discover is currently giving me (11.99%).
Conclusion & Next Steps
I’ll end the first part of this story here. I’ll have a second blog post on it with more details in 6 months. We’ll revisit my total financial debt and what new measure I am employing to get rid to the single penny.
Hope this post has been inspirational, motivational and educational in some regards.
Remember, to be successful, to get out of your debt, you have to work extra hard to make up for not having money. You have to solve each problem creatively. This is a blessing in disguise. You will get to exercise all the creative brain cells if there is such a thing inside the human skull.
You have to make sure that you are not losing time by missing out on good opportunities. Remember there is a thing called “opportunity cost”. You have to keep moving forward with time and not wait until you are out of debt.
I hope to shed some light on this topic in my next blog post as well. See you in six months.
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If you have tried any of above-mentioned methods and/or tactics to successfully get rid of debt (whether a small sum or large), please share your success story. Also if my post has made you laugh or helped you by motivating you or giving you a direction, I would love to hear from you. Any other comments, please feel free to share your rich thoughts with us.