- @Elle_CM Natalie's raid looked like it was filmed with a strobe light. Lame CGI in reply to Elle_CM #
- I want to get a toto portable bidet and a roomba. Combine them and I'll have outsourced some of the least tasteful parts of my day. #
- RT @freefrombroke: RT @moneybeagle: New Blog Post: Money Hacks Carnival #115 http://goo.gl/fb/AqhWf #
- TED.com: The neurons that shaped civilization. http://su.pr/2Qv4Ay #
- Last night, fell in the driveway: twisted ankle and skinned knee. Today, fell down the stairs: bruise makes sitting hurt. Bad morning. #
- RT @FrugalDad: And to moms, please be more selective about the creeps you let around your child. Takes a special guy to be a dad to another' #
- First Rule of Blogging: Don't let real life get in the way. Epic fail 2 Fridays in a row. But the garage sale is going well. #
$1,000,000 Business Idea
I’m sick of working my day job.
I’m sick of working my side hustles.
I’m sick of working.
To make up for all of that, I’m going to launch a new business. My business model is guaranteed to generate $1,000,000 in revenue the first month.
Seriously.
It’s going to be a father/son enterprise, and to prove that the business model scales, I’m going to help him generate another $1,000,000 in revenue the first month.
This plan is infinitely replicable and infinitely scalable. Steal my business plan and you can have a million dollar business, too.
Ready?
First, my son is going to sell his XBox for $100. Yes, he’s taking a loss, but that’s the cost of getting into the business. Oh, and he’s selling it to me.
$100 for him.
Second, I’m going to sell it back to him for $100.
$100 for me.
He sells it to me for $100.
$200 for him.
I sell it to him for $100.
$200 for me.
If we do this just 9,998 more times, we’ll have generated $1,000,000 in revenue. At 1 minute per transaction, I figure we can both be running million dollar business after just 2 weeks of full-time work.
That’s a two-week vacation every single month.
Phenomenal plan.
Some of the haters are going to explode with comments about “profit” and “expenses”, but I don’t care. Cash flow is king. They can sit at home and whine about their $50,000 jobs while I’m making millions. Sure, my profit (the money leftover after expenses are taken from the revenue) is on the low side, but I can make that up in volume.
Millions.
If I do this every month, I’ll be sitting on a $12,000,000 business. I bet I can sell that for 5 times my annual profits.
Any buyers out there?
Any entrepreneurs ready to copy my business model?
Anybody have a better grasp of the difference between cash flow and profit than I do?
Delayed Gratification, Take II
How much would you pay for a kiss from the world’s sexiest celebrity?
That was the focus of a recent study that I can’t find today. There is no celebrity waiting in the wings to deliver the drool, and the study doesn’t name which celebrity it is. That’s an exercise for the reader.
This was a study into how we value nice things.
The fascinating part of the study is that people would be willing to pay more to get the kiss in 3 days than they would to get the tongue slipped immediately.
Anticipation adds value.
Instant gratification actually causes us to devalue the object of our desire.
This goes well beyond “Will you respect me in the morning?”
The last time I talked about delayed gratification, it was in the context of my kids. That still holds true. Kids don’t value the things that are handed to them.
The surprising–and disturbing–bit is that adults don’t, either. If I run out to the store to buy an iPad the first day I see one, I won’t care about it nearly as much as if I spend a week or two agonizing over the decision.
The delay alone adds to the perceived value. The agony turns the perceived value into gold.
If I spend a month searching for the perfect car, the thrill of the successful hunt adds less value than the time it took to do the hunting.
Here’s my frugal tip for today: Delay your purchases. While it may not actually save you any money, you will feel like you got a much better deal if you wait a few days for something you really want.
Optimized to Go, Part 1
Last weekend, we held a garage sale at my mother-in-law’s house. It was technically an estate sale, but we treated it exactly as a garage sale.
A week before we started, a friend’s mother came to buy all of the blankets and most of the dishes, pots, and non-sharp utensils so she could donate them all to a shelter she works with. She took at least 3 dozen comforters and blankets away.
Even after that truckload, we started with two double rows of tables through the living room and dining room. The tops of the tables were as absolutely full as we could get them, and the floor under the tables was also used for displaying merchandise.
Have you ever had to display 75 brand-new pairs of shoes in a minimal about of space? They claimed about 16 feet of under-table space all by themselves. Thankfully, the blankets weren’t there anymore.
We also had half of the driveway full of furniture, toys, and tools.
We had a lot of stuff.
Now, most people hold a sale to make some money. Not us. We held a sale to let other people pay us for the privilege of hauling away our crap. As such, it was all priced to move. The most expensive thing we sold was about $20, but I can’t remember what that was. Most things went for somewhere between 25 cents and $1.
At those prices, we sold at least 2000 items. That isn’t a typo. We ended the day with $1325. After taking out the initial seed cash, lunches we bought for the people helping us, and dinner we bought one night, we had a profit of $975.
At 25 cents per item.
We optimized to sell instead of optimizing for profit. At the end of a long summer of cleaning out a hoarding house, it all needed to go.
In the next part, I’ll explain exactly how we made it work.
Mortgage Race, Part 2
As I mentioned last month, Crystal and I are in a race to pay off our mortgages. The loser(henceforth known as “Crystal”) has to visit the winner. Now, since–judging by the temperature–Crystal lives in Hell, I think it would be good for her to visit in the winter. There something about the idea of going ice fishing, staring at a hole in the ice while sitting on a 5 gallon bucket, cursing the day I was born.
Today, she threw down the gauntlet again. She has apparently decided that, since her prerequisites are met, she’s going to win. Sure, she’s closed on her house and built her savings back up to $20000, but it doesn’t matter. I’ve sent a small army of arson-ninjas to keep her from getting ahead. They are so small, they can only carry tiny matches and single drops of gasoline, so the damage they can do is tiny, but it will add up. Just a word of advice: if you hire an army of arson-ninjas, go for the upsell and get ninjas that are at least 2 feet tall. Anything less is just inefficient.
When I announced the race last month, my mortgage balance was $26,266.40. Today, it is $25,382.53. In three days, there will be another $880 applied to the principal.
In February, our renters will move in and we’ll conservatively have another $650 to pay. When that starts, our balance should be around $23,000. Adding a portion of the rent payment should mean we pay off the house in May 2014. However, when I bring in our side hustle money, that will bring us back to September 2013.
Crystal’s projected payoff is July 2013, so I’ll have to hustle.
Power
At 8PM Friday night, our power went out.
We had 70 MPH straight-line winds and horizontal rain. Trees came down all over the neighborhood. Two houses down, 3 tree played dominoes, creaming the house, the fence, and two cars.
How did we do?
The skeleton I keep hanging in my tree lost its right shin-bone and we lost power. So did 610,000 other people in the area.
It’s interesting to watch what happens when the power goes out.
I’m assuming every generator in the area sold out. I don’t know, because I already had one. I do know that most of the gas stations near me ran out of gas on Saturday. Most places were out of ice, too. Batteries were hard to scrounge.
The restaurants that either didn’t lose power or had backup generators were raking in money all weekend. Sunday morning, McDonald’s had a line of cars backed up an entire block.
Our power came back on Monday night. 74 hours of living in the dark ages. We had to read books on paper and cook all of our food on the grill.
We did okay. A few years ago, when the power went out for a day, I bought a generator. Saturday morning, I finally had a reason to take it out of the box.
The generator cost me $450. Over the weekend, we put about $40 worth of gas into it. That kept our refrigerator and freezer running, saving at least $5-600 worth of food. Two neighbors filled up our available freezer space, so that’s another $200 worth of food that didn’t die.
That’s a $500 investment to save nearly $800 worth of food.
Pure win.
The generator also allowed us to keep a couple of fans running, which is great when the power goes out when it’s 90 degrees outside. We also fired up the TV and DVD player at night to help the kids settle down for bed. This is one time I was glad to have an older TV, because cheap generators don’t push out a clean electricity that you can safely use to run nice electronics.
We have a couple of backup batteries for our cell phones, so we got to stay in touch with the world. We borrowed an outlet at our rental property to charge the batteries when they died.
We had about 5 gallons of gas on hand, which was convenient, but not enough. I’m going to grow that. A little fuel stabilizer and a couple of 5 gallon gas cans and we can be set for the next time gas runs out.
We cooked everything on the propane grill. I keep two spare propane tanks on hand, but we didn’t use them. Sunday night, my wife made spaghetti on the grill. The hard part was keeping the noodle from falling through. Nah, we threw the cast iron on the grill and cooked away. Had pancakes and bacon made the same way on Sunday.
We had to buy more lanterns. We had two nice big ones, but at one point, we had 9 people in our house. That’s a lot of games, books, and bathroom breaks to coordinate with only two main lights. This weekend did teach our daughters that the emergency flashlights are not toys. Two of them had dead batteries that needed to be replaced.
Going out to dinner Monday evening was a treat. We sat in a building with air-conditioning!
All said, we spent about $250 that we wouldn’t have if the power would have stayed on. That’s $40 for gas, $80 for dinner(you try feeding a family of 5 for less than that at a restaurant that doesn’t have a drive-through) and $130 on new lanterns. The lantern bill caught me by surprise, by a lot, but now we are set for next time.
How would you do without power for three days?
