Outsourcing Life: Unconventional Advice for When You’re Financially Secure
Published on - February 10th, 2010 (by J.D. Roth) This is a guest post from Erica Douglass. After selling her online business for a million dollars at age 26, Erica
“temporarily retired”. She now writes an online business blog at erica.biz. This is very much an article about advanced personal finance techniques, and doesn’t necessarily reflect my own philosophy.
You’ve pulled yourself out of debt, are saving a reasonable amount of income for your retirement, have built an emergency fund, and your daily needs are easily met with your income. Congratulations! Now what?
That’s exactly where I was in 2007. I sold my business and generated a huge windfall — over a million dollars. I paid off all my debt. And then I looked around and said, “Oh, crap.”
I had absolutely no idea what to do with my money. Previously, any extra money I’d earned was immediately stuffed back into my business, and I had been running deficits nearly everywhere. This was the first time in my adult life I’d ever had my head above water, financially speaking.
Over the next three months, I proceeded to blow over $50,000. Oh, don’t get me wrong — it was fun! I bought a new car (that I still drive), some really beautiful artwork from artists I loved (that looks great on my walls), and thousands of dollars in clothes, new furniture, and other indulgences, such as $4,000 custom hand-made stereo speakers (that I’m listening to right now.)
It was fun…for a couple months. Then it got boring.
My Spiral into Depression
Like many lottery winners, I spiraled into depression. The business I had spent six years of my life building was gone. I felt adrift — like I had no purpose. Despite having been “successful”, no one knew who I was. I had marginalized most of my personal relationships in favor of growing my business and working myself to death. And money wasn’t going to buy me out of the situation.
Slowly, I pulled myself out of my depression. I realized I had the opportunity to make myself into anyone I wanted to be. I could do anything I wanted. I had complete freedom. The thought was both exhilarating and terrifying.
I bought a shelf full of self-help books and read them all, relentlessly seeking to answer the many questions I had. Some of them were philosophical, like “What made me successful when so many others have failed?” Some were practical, like “How do I invest my money?” But all of them led back to one deeper question: “What should I do to be happy?” I soon realized the latter question was incorrect. The better question was, “Who should I be to be happy?”
In December 2007, I started blogging. I exposed a significant amount of my business life and thoughts. I wrote about my successes and my mistakes and failures. I enjoyed writing, doing videos, and interacting with my readers. Helping others figure out their purpose, their businesses, and their websites and blogs was a fantastic experience.
Spending with a Purpose
I made a point of trying to achieve greater states of happiness on a daily basis. Instead of being merely content — or even apathetic — with my current state of being, I realized I could be happier daily. And suddenly it hit me: I understood what I wanted to do with my money. I wanted to outsource pretty much everything I hated doing.
In order to live a simpler, calmer, but more effective life, I had to drop the shackles of wanting to do everything myself. To allow time to meditate, think, write, and create, I had to get rid of the drudgery of daily tasks. I realized my money could serve a fantastic dual purpose: To allow others, whose passion is cooking, cleaning, or assisting in various ways to help me — while I supported them by giving them income to do what they loved.
My life fundamentally changed that day. I started hiring people to do everything I didn’t want to do. The first step was to hire a cleaning service. Then I hired a personal assistant to work out of my house, filing papers, doing laundry, and organizing. I hired virtual assistants to do all the menial tasks I hated doing: bookkeeping; video editing; audio editing; even setting up my Facebook fan page. (Lisa, my VA who set up the Facebook page for me, said happily: “I can’t believe I get paid to do this!” And I realized…we’re both lucky.)
My Daily Routine
I wake up in the morning and my VAs have sent me their updates. I am building a business where I create how-to videos for small business owners and bloggers who want to drive more traffic to their sites and get more customers.
I learned meditation, and currently spend about 40 minutes a day relaxing. I also spend a few hours a day doing the parts of my business I love, from creating videos to writing to programming. When I walk down to the kitchen, it’s clean; Elia, my housekeeper, comes in every week to make sure it’s spotless. She spends 2 hours cleaning our kitchen; total cost to me: $30.
My VA in the Philippines edits my videos and does a fantastic job for $3.33/hour.
Whenever I do an interview with another entrepreneur, I send it to another VA in the Philippines, who, for $9/hour, edits it perfectly, getting rid of all the strange pauses and “um”s. I send the edited interview off to a transcriptionist. For less than $30, I get back an excellent transcription, often 12-16 pages long.
Lisa, my VA here in the U.S., has set up an entire website and integrated it with a shopping cart for my customers to order products and access them once they have ordered. She charges $30/hour (my most expensive staff member) and she’s worth every penny.
I treat my staff members well, and they love the fact that they can work from home and get paid great wages ($3/hour in in the Philippines is equal to about a $65,000/year wage here in the U.S.) They are happy — I can see it in their emails and text chat messages.
My partner Richard and I fight less. There’s no scrapping over who will do a certain task. If no one wants to do it, we work together to figure out how to hire someone.
A Disease Opens My Eyes
I was recently diagnosed with Celiac disease. The management of the disease may sound simple, but it’s not: eliminate wheat, oats, barley and rye from your diet. Most restaurants have very
few gluten-free items; I’m lucky if I can order one non-salad item from a typical menu. Some restaurants are impossible to eat at; soy sauce, for instance, has wheat in it. I’ve gotten sick from things as odd as bacon, cake frosting, and ranch dressing.
After a few weeks of eating mostly hot dogs and tuna fish, I grew tired of my limited options. I thought about learning to cook, but it wasn’t something that excited me. So we hired a personal chef to cook our meals — one who understands the challenge of cooking gluten-free. We pay her $10/hour, including travel time to deliver the food to us, and she gets a fun side job.
In a randomly-chosen week before I hired a personal chef, I ate out four times and went to the grocery store twice. I spent a total of $179.91 on restaurants and groceries. Last week, I spent $215.49, including groceries, for eating out and paying my personal chef. My “eating out” expenses dropped from $86.14 to just $32.28 — over 60% less! My total spent was $35.58 more, but to me, that’s a small price to pay for gourmet food of my choice delivered to my door. Another remarkable and unexpected side effect was that I no longer have an urge to go out and spend money at fancy restaurants — I simply ask my chef to make what I want and deliver it to me.
It has been more than two years since I sold my business, and I am happier than I have ever been. I made different choices than most: We rent a house instead of owning (a savings of nearly $4,000/month in our neighborhood — more than our monthly rent payment!); we only have basic cable; we don’t have a landline, credit card debt, car payments, or student loans.
I chose, instead of buying more Stuff, to live a more fulfilled life. For me, even more important than holding onto my money tightly was to learn to let it go — to give it to others in exchange for work well done, and to trust that they could do tasks well. It’s one of the best decisions I’ve ever made.
Previously at Get Rich Slowly, Erica shared Finding Time to Pursue Your Dreams: How to Free Up 750 Hours a Year with One Simple Change and The Ten-Minute Budget. Download her free Blog Success Manifesto, which offers 30 tactical tips to grow your blog faster than
you ever have before.
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@ mmeetoilenoir: There’s a big difference between not being able to handle something and not wanting to. For example, Erica could have learned to cook, but she wasn’t interested in doing so. Since I don’t have the money to pay someone to cook for me, I spend time preparing food rather than in leisurely pursuits.
I don’t mean that to sound self-righteous or like I’m having a pity party — that’s just the reality of her situation versus mine. (I like to cook, actually) When you’ve got money, you’ve got more choice. Like Erica, I don’t care about stuff. I care about being able to choose.
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I’m surprised no one has mentioned this yet: a million bucks ain’t what it used to be. There is NO WAY that $1 million (minus taxes and whatever she spent) can sustain this lifestyle indefinitely. [If she's paying these expenses out of income from her online business, then I'm not sure what the million dollars has to do with it.]
I also find interesting the rationalization of her choices (e.g., I have celiac so I need a personal chef). My sister has celiac, and does just fine cooking for herself. In fact, she eats better than anyone else I know.
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Wow, a lot of mixed feelings on this article.
Many of you aren’t comfortable paying $3.00 an hour to a VA overseas, but guess what, that’s above average in the Philippines, so most are more than happy to accept jobs for such a wage.
If you look on websites like odesk.com, where you can hire developers or VAs for various tasks, many of them offer their services for $1.11 USD an hour. Yes, $1.11 an hour. This is what THEY put as what they think their services are worth.
To us, that’s almost nothing, but to them, that’s a decent wage (convert it to pesos and compare, and you’ll see). That’s food on the table and shelter for a family who may need that extra $3 an hour. Should we deny them the ability to make money from us hiring them just because they are overseas?
It’s not just people in the U.S. who are struggling.
Follow up thoughts? I wish there was a way to reply to individual comments.
JD?
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As you may have guessed from my preamble to this guest post, I have mixed feelings about the article, but I ran it anyway because I thought it was interesting, and I thought it would generate discussion.
I agree with Erica that money does indeed allow a person to outsource tasks that she’d rather not do. I don’t know if I’ve mentioned it before, but Kris and I have paid for a housekeeper for years, even when I was struggling with debt. We currently pay $90 every two weeks, but it’s worth every penny to us. Why? Because it’s like salve for our relationship. I’m a slob, and our housekeeper de-slobbifies some of my slobbiness, leaving me to work more on my writing.
But remember my article about the guilt of wealth? For me, hiring a housekeeper very much == the guilt of wealth. I know that millions of Americans do it, and I know that these folks come from all sorts of financial backgrounds and hire housekeepers for all sorts of reasons. But having grown up poor, there’s a part of me that looks at having done this for the past few years (decade?) as…I don’t know…elitist, I guess.
And it doesn’t stop there. For the past five months now, I’ve been buried in my book. It’s been my top focus, and I’ve neglected a lot of other things around our home, including the yardwork. I’ve been sorely tempted to use some of the book’s advance money to pay somebody to come in one weekend and do all the yardwork.
But I haven’t done it. I can’t bring myself to do it. It feels like a slippery slope to, well, I don’t know where. Plus, I’m with those who find this post a bit condescending.
So…please don’t think I necessarily endorse Erica’s views (or those of any other guest poster). I just like to feature a variety of viewpoints at GRS, especially if I think they’ll help generate discussion…
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I really enjoyed this article. I do not believe that all of Erica’s choices would be well-suited for my sensibilities, yet the article is well written and reminds us that a content and fulfilling life is the end game not a specific monetary sum. Money is simply a tool that can facilitate our efforts. I genuinely believe that GRS is a thriving community because it brings something unique to the PF blogosphere, the topics are diverse and it has a philosophical component. Our everyday lives are not just about the numbers. JD – I applaud you for supporting diverse content!
Every post and author will not appeal to everyone, plain and simple, nor should it be. We are all at different stages of our fiscal journey.
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I love this post… thank you for showing a non-conventional, and very interesting way to manage the things we all have on our to-do list each day. I’ve started looking at VA’s for some simple tasks surrounding my start-up business, and this post has helped me see that I need to do it. Today.
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She has $1 million plus whatever this video business is bringing in.
I appreciated the article simply since I do see money as a tool. My husband and I choose to have biweekly maid service and biweekly lawn service and live frugally elsewhere. We aren’t rich, we make about $78,000 annually before taxes, and our net worth grows about $2000-$3000 a month. We live inexpensively and splurge on what’s important to us…not doing all the chores or weeding my flower bed is important to me. Expensive cars or houses are not important to me. It’s all about balance and priorities.
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Uh, I’m happy that Erica doesn’t have to scrub her own toilet any more. But I am utterly stunned that after getting a huge financial windfall, it apparently didn’t even occur to her to give one penny of it away to help those less fortunate than herself. Amazing…
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Oh, and my maid appreciates the work. She is having a hard time making ends meet since the economy crashed and people started letting her go to save money. I’ve given her a 15% raise and leave her care packages when she comes by…I don’t think it’s demeaning. She calls to express thanks that seems very sincere.
It’s only demeaning work if people treat you like a slave or talk down to you…otherwise, it’s cleaning for money. Seems like a solid job to me.
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I think if I were really rich I would definitely pay more for services than for stuff.
However, while I can easily see hiring a cook (or I would if my husband wasn’t a great cook already), I don’t think I’d feel comfortable imposing my sloppiness over other people, and making the clean up after me. It doesn’t feel quite right.
So to some extent, yes, but I still think you should make sure not to overdo it.
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Wow, I think you guys are being very harsh on a young woman who’s following a conscious spending plan.
She decided to outsource menial personal tasks to US-based workers, and hired workers abroad to help with business tasks. This makes sense as a business decision because they can work cost- and time-effectively. (Keep in mind: daytime in the Philippines is night time here, so even while Erica is sleeping, her business is not losing productive time).
I would like to see more articles about people who have made other choices once they got past the basics of personal finance. Where do people give their time and money? What will JD do once he gets beyond his Stuff accumulation phase? etc. There’s a lot here.
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These comments are making me shake my head. Wow. People will find all sorts of reasons to keep themselves broke and self-righteous.
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@54 A little one-off thing like long-neglected yard work doesn’t have to become a slippery slope unless you let it. If it’s causing you stress, figure out if it’s worth the time/money/aggravation and do it yourself or hire someone to do it for you. Plenty of landscapers will do a one-off spring cleaning or you can hire someone to work along side you.
I’m not crazy about slippery slope arguments. Either something is worth the money or it isn’t. Just because putting a dent in the neglected yard work might be worth it, doesn’t mean you’ll be willing to pay someone to mow the lawn every week (unless it actually is worth having someone mow the lawn every week). They are different things.
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Outsourcing to the Philippines (or India or wherever) is IMO the computer version of hiring illegal immigrants to clean your house. No thank you. Even if I had been interested in using Erica’s services, I am very much not inclined to do so now.
I’ve been unemployed for close to 2 years now because my previous help desk job was outsourced to Manila. Happens that I was damn good at my job too, but you know, the company wanted to save money (and likely so the CEO can buy another useless sports team since his first one isn’t doing so hot.) I can’t go find a different help desk job in this area because all the other PC support jobs also got sent overseas. And let me tell you, the customers I’ve talked to since I left HATE said outsourcing with a passion. “Customer service” is truly non existent for companies like my previous employer and others who have outsourced overseas.
Since there are no more jobs in the area doing what I was trained for (and I can’t relocate due to hubby’s job) I’m going to have to go back to school again for job (re)training.. at the age of 47. I just hope there’s some jobs available whenever I finish school this time.. and hopefully we can survive until then. Somehow. It hasn’t been easy the last couple of years. I’ve considered starting my own business, but in this economy, I think getting career training would be a better option right now.
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@63 (Nicole)
Thanks for the rational view of my slippery slope.
There’s no way I can see hiring a regular gardener. Plus, I like mowing the lawn; it’s meditative. But yeah, this spring, I think getting somebody in here is worth the cost.
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How thrilling that Erica pays her Filipino VAs more in real dollars than her American VA — $72k American equivalent for the $3.33 Filipino and $195k for the other versus $60k for the American (at $30 an hour).
I don’t think I’d be going around bragging about outsourcing to those nice people who will work for pennies on the dollar. No wonder she has an American VA for the Facebook page — the American is working for less, in real dollars, than the Filipinos.
And protip: No one is deeply fulfilled by cleaning or editing your videos.
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@KW
What makes you more deserving of the job than someone in the Philippines? If customers are truly unhappy, they could stop using the company’s services and force the company to hire in the USA again…but they won’t because their fees would go up.
I’m against slave labor and sweat shops, but I have nothing against international competition. If they can do the job cheaper, I’d hire them too. It would be a bad business decision not to.
As a customer (definitely not a boss), I have left companies due to bad customer service (Comcast most recently). I explained why I left so they have it on file…it’s up to the company to choose what resources it uses.
If my job gets outsourced, I’d be sad and angry since I’d be unemployed, but that’s the way of the business world. I live in Houston, so there are other jobs. If I couldn’t find one in 2 years, I’d move.
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Either she’s drawing on her $1M to pay these VAs or she’s paying them from what she earns in her new business.
If she’s paying them from her nest egg, then that is a very bad lesson to be covering at GRS. If she’s making enough and paying them as employees to do work that is worth more than they are paid, then it has nothing to do with the fact that she is *rich* and is a lesson on paying people what they are worth.
To those saying there is something wrong with paying someone $3/hr overseas, you are presuming that it’s a one for one if she didn’t hire that person. That is to say that she would hire someone here at whatever the going rate. Even if she paid someone $10/hr, perhaps the work isn’t worth that. So she would be editing her own videos and NO ONE would have a job. Babysitting is worth $4-6/hr to me. If someone wants to charge me $7/hr, I’ll just stay home. Wages are about the most you are willing to pay compared to the least someone else is willing to charge.
I’m not sure if Erica’s advice is good or bad for getting rich slowly, I’d have to know more specifics (like what kind of money her new business is bringing in). I like the discussion about if it is worth it to hire someone to do a task, in terms of money, time, and comfort. What is Erica’s professional time worth? What is her personal time worth?
Personally I would worry more about not having enough to do to keep me busy. I wouldn’t think of hiring people as a slippery slope, but I would think freeing up time would be. Busy people get more done, and the less people have to occupy them the more they seem dissatisfied. How many people retire and fight depression? It is about losing their professional identity, but also about having too much time to just sit. My mom retired and she has been very satisfied to get out of the rat race, but she fights depression because there is nothing useful she is doing with her time. She’s *happy* to sit and read, but in the long term she needs more than the hedonistic stuff to keep herself satisfied with life.
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I think it’s great to hear stories from all ends of the wealth spectrum and even though I’m not rich, I could relate to aspects of Erica’s story like feeling depressed after a great accomplishment. Outsourcing tasks seems like a little (when you have the money) thing that makes a big difference in her quality of life and it does give other people the opportunity to earn more money.
_However_, I think minimum wage and environmental laws become pointless if people/companies can skirt them by going to other countries. I also personally believe in supporting a local economy, so as glamorous (and altruistic?) that it may seem to have a $3/hr overseas assistant, that wouldn’t fit with my principles.
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@J.D. and everybody else that seems to have wealth guilt:
If I enjoyed lawn care, I wouldn’t hire a service either. Sadly, I don’t enjoy it. What is wrong in hiring people to do a job you don’t like? Obviously they either want or need the job or they wouldn’t advertise their services. I don’t just grab random people and make them clean my house or mow my lawn. I don’t understand why it’s wrong to hire someone else to do what you don’t want to. I get paid to do a job that my boss either can’t or won’t do…I don’t feel like less of a person because of it…
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If I had tons of free time, I wouldn’t be depressed. Come on, get some hobbies, make some friends, volunteer for some charities! I definitely don’t need work to be happy. I need free time with friends, more time to volunteer for the Houston SPCA and Meals on Wheels, and time with my husband to be happy.
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@Crystal
I agree. Change is hard, and it’s even harder when it’s your job on the chopping block. But I think rather than railing about companies that send jobs overseas we need to understand why they do and work against those realities. As an investor I expect companies to make decisions good for the bottom line. That can mean sending call service jobs overseas, or it can mean bringing them back and paying more because the service is better.
Ultimately the system is very dynamic. We need to take into account things in this country that make hiring workers expensive. It is a balancing act, we like to make companies do things, but we have to understand that it adds costs to the business. Some costs are worth it and some aren’t, but we have to acknowledge them. You can agree or disagree with ‘living’ wage laws, environmental protection laws, mandated health insurance laws, etc. But all of these add costs to doing business. There are also international trade/employment issues. I was reading recently about the VAT China uses that lets them undercut American companies, it is essentially a tariff that isn’t called a tariff w.r.t. free trade. That is wrong and we need to put pressure on our politicians to put pressure on trade partners. Not to necessarily “protect American jobs”, but to keep them honest.
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Not everyone finds volunteering or donating money to charitable causes fulfilling. I think it’s a bit narrow-minded and unfair to assume that since she’s financially comfortable that she *should* be doing those things, or would necessarily enjoy them.
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KW – “America first” is just being self centered and unambitious on a large scale. I did help desk work part time in college for minimum wage and I was good at it, but hey, guess what, there are better jobs out there if you’re willing to put some effort into educating yourself. After I graduated with a CS degree I found a much better job.
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Raghu@ 48 — seriously?
I think you are way off track. I really enjoy the variety of financial topics and situations on GRS. JD — PLEASE KEEP THEM COMING!!!
I think this was an amazing glimpse into a life MANY OF US are striving for here on GRS — and the struggles and decisions that come with that life stage.
LOVE this guest post.
PS: SHE IS NOT BRAGGINGGGGGGGGGGG — good lord — are you serious… Some of these posters really sound like they hate rich people — and they surely will never be one with this attitude… Unreal…
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I think many people struggle with what to do after retirement. My own father took early retirement intending to start a business, but he wasn’t disciplined enough to do that and spiraled into depression. My father-in-law also took early retirement and has basically sat at home drinking. And messing up his money. They’ve both done that.
But my grandfather-in-law retired at 52 and lived till 86 and really had a wonderful life with family and travel.
So, you know, retirement is different for different people, and for some it truly is a disaster. Work you love can really give your life joy and meaning. And that doesn’t mean I don’t love my family and pets, volunteer locally, and spend time with friends. Some people are better at meaningfully filling their time than others
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Interesting article…and even more interesting discussion here. As I think about starting my own side business again, the idea of outsourcing is one I’m going to have to come to grips with – I can’t do everything myself, and our creativity and prosperity increases when we do the things that we’re passionate about and good at. If someone else can take a few of the more tedious tasks off my desk in an affordable way, it’s definitely something I want to think about.
And, I’m a celiac food blogger, and it’s always nice to see little splashes of awareness thrown into posts on non-food topics.
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Like the article or not, I am definitely enjoying the discussion!
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Erica’s post reminds me that EVERYTHING is a choice. There are trade-offs that we all can make to help us achieve the life we’ve dreamed of, if we just took some time to think about it, instead of blindly living our same-old same-old lives.
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Funny, I first read this article at 7AM today and there were no comments. My own early morning gut- reaction to the article was not positive. Something like “excuse me while I go vomit my coffee.” It’s interesting to come back and now read so many diverse reactions.
The tone felt a bit self-absorbed to me; particularly coming from a 26 year-old. Really? Is there something wrong with learning how to cook in order to take care of yourself? or do your own laundry? Are you now SO important that you can no longer be bothered with the menial tasks of self-care?
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Hi Erica,
We all outsource like crazy when you think about it – it’s the fundamental basis of division of labor in our economy.
I certainly didn’t mine the metals or process the petrochemicals that went into my BlackBerry, or weave the fabrics that went into my clothing. Or, for that matter, drive myself to work this morning.
The choices we make about what to do “in house” and what to delegate are fundamental to how we want to spend our finite time on this planet.
-Jack
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What I find most intriguing about this post is that it illustrates how wealth reverses the equation set forth by “Your Money or Your Life.”
Instead of thinking about how many units of working time are spent by money decisions you make (spending money = loss of time), you start thinking about how many units of fulfillment time are spent by that same set of decisions (spending money = gain of time).
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Interesting comments. I don’t have any problems with the idea of outsourcing things, but I think what has rubbed several of us the wrong way is what sounds like a condescending attitude about providing “fulfilling” jobs for others. Fulfilling? Maybe. But not necessarily or even likely. That doesn’t mean the work isn’t appreciated or the money needed – but let’s not wax on like we’re offering nirvana by hiring someone to do menial tasks. I agree with SecondhandMoon (#29!)!
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Re-reading the comments, I find myself wondering, how much of the negative comments are because she’s 26, seems to be childless as far as I can tell, and had a major windfall? Would people be reacting the same way as they would if she was instead 40, raising a family, high-income (but not sitting on a large chunk of money), and doing it to have more time with her kids?
I think the point remains that outsourcing certain things is a worthwhile financial tradeoff. Others can make a viable business of tasks that we, individually, may not be as effective at or just plain don’t enjoy.
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Worst. Post. Ever.
Excuse me for not understanding how the average GRS reader can relate to a 26 year old millionaire that lives pays over $4,000 a month in rent (Manhattan?), outsources menial tasks to third world countries and has a personal chef.
Seriously; there are people on MTV cribs who probably live more modestly!
I get the “finding your purpose” angle, but do us a favor and find someone who the readers can see themselves as. There just aren’t many parallels here, and even I consider myself pretty well off.
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JD, for what it’s worth, I loved this article. It doesn’t necessarily match my own personal values (it’s not how I’d spend the money, I’m much more independent and frugal), but I love that you’re finally posting more articles about the final stage of wealth. I find too many PF blogs focus too much on poor people, and people deeply in debt. Sure, they need advice too (and it’s certainly a huge target audience), but this is, after all, Get Rich Slowly, not Get Out Of Debt Slowly. I would love to see even more articles illustrating how different people manage their fortunes, to give me a better-rounded perspective on how I might want to structure my own life when I eventually reach the same level.
Also, I think a lot of people are letting their envy show too much. I think situations like Erica’s should be celebrated and held up as examples of people winning at life and achieving their goals. It’s inspirational. Those of you who are piling on and tearing her down would be well-served to take a few moments and reflect on why it angers you so much that this woman has been able to succeed while you are so unhappy with your own life. Does the problem lie with Erica, or yourself? Her success does not impede your own ability to succeed. Your life is the result of your own choices, just as Erica’s is. Don’t begrudge her the results of her choices just because you’re unhappy with the outcome of your own decisions.
Regarding the suggestion that Erica didn’t give any of her windfall to those less fortunate than her: I disagree. I’m fairly certain she paid taxes on the money. Beyond that, no one deserves her money more than she does. She earned it. If others feel entitled to it, well, that’s a pretty sad commentary on the state the country has decayed to.
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@Comment #62: “People will find all sorts of reasons to keep themselves broke and self-righteous.”
Agreed, which makes me wonder why they’re reading a blog called “Get Rich Slowly.” If they resent rich people so much, a blog called “Get Rich Never” might be more appropriate reading for them. I, for one, liked this post because it helped me think about optimizing my own spending since I’m in the final stage of personal finance myself.
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Wow! I’m surprised and a little unsettled by the very strong emotions being shared on both sides.
I think that when we can see money as a tool, one of many, we can release the good/bad feelings it provokes. These feelings can be irrational – but they are valid. But if we cannot release those feelings, then money controls us more than we control it (if that makes sense).
Does a business person, deciding how to spend his/her budget feel guilt, shame, embarrassment, elation, delight, greed or any other strong emotion? I think the company shareholders would hope not (tho’ business people are human, so) Shareholders, the owners of the business, want the decisions made based on value provided to and realized by the corporation. And I think maybe that’s the mindset to aim for in managing personal finance, the mindset of using a tool to create as much value as possible – with value determined by the owner.
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I outsource too. I go to the grocery store regularly and buy milk and eggs, so I don’t have to keep my own cow and chickens. I buy all my clothes pre-made. And I will freely admit that the little pizza place down the street from me makes way better pies than I can.
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I appreciate your success, and recognize the amount of time and work you must have put into building that business in the first place. You’ve done what most people haven’t been able to, and will never be able to, and you have every right to be proud.
That said, there’s more than a bit of disingenuity in this post. You “allow others, whose passion is cooking, cleaning, or assisting in various ways”. You’re not doing these people as big a favor as you think. Sure, you’re employing them, at least part-time, and I’m sure they’re grateful for that, but your cleaning lady isn’t excited to be following a “passion”, she’s cleaning your house because she can’t afford not to.
Ask yourself this — if these people you’re employing each had the same million-dollar windfall that you did, do you think they’d all quit tomorrow? They would, and then they’d hire their own personal assistants to do the jobs they no longer want to — the ones they’re doing now. Just because you’re an employer and therefore distributing money to those you employ doesn’t make you a philanthropist.
And I don’t think “I’m rich, so now I don’t have to do the things I don’t want to” is exactly a revolutionary idea in the first place. You’re not the first one to decide, “I’ve got more money now, I’ll just pay someone else to clean my house.” This seems to be a pretty well-established course of action among the well-off, the only difference I can see is that you’ve moralized it such that you think it makes you a better person for employing a staff of personal assistants, or at least that’s how the article comes off.
I don’t really care if you pay a Filipino lady $3/hr to be your secretary, we all do this when we buy shoes made by Chinese factory workers for $0.11/hr, and we’re not sitting here feeling guilty about that. At the same time, we’re not preaching about how much better off the factory workers are than their neighbors who are making even less as farmers. If you put me in the same position you’re in, and threw a million dollars at me, I might hire a cleaning lady, too, and I wouldn’t feel bad about it. But I wouldn’t delude myself into thinking I’m helping her to pursue her passions, either.
Nothing you’re doing is wrong, or bad, and hiring these people *is* economically beneficial. Still, it’s got the same economic effect as buying a new TV (then you’d be employing the people who build TVs). It’s not a moral victory for you, and you certainly wouldn’t be talking about the “passions” of TV factory workers if that’s what you’d purchased instead.
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@75 (Nate)
I really did not want to respond to your comment but could not resist myself from putting my view out there.
1) Being rich does not mean successful. If only being rich is successful then are all people who are poor not successful?
2) No body loves to cook or clean for anybody who is not your friend or relative. People do that because they have to. They need to put food on the table for their family.
Disclaimer: I do not hate rich people. I just love poor people more.
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I agree with Tyler–the unsettling part of this otherwise readable article was, for me, the assumption that her cleaning lady has a “passion” for cleaning. I think that’s incredibly unlikely. I’ll grant that she may find her job satisfying in the sense that she enjoys doing a task well, but I agree that if she had the chance, she’d probably quit. I really can’t add anything to Tyler’s post, but it does seem to me as if there’s something a bit morally slippery going on in this article.
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Tyler K– Very nicely put!
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LOVE this article! @ Nate pretty much summed up my exact thoughts. Keep up the variety of guest posts, J.D.
I was so excited to read this and send it off to my husband… We are in that spring yard work predicament and disagree on the idea of paying someone. While he thinks if we just did it together, it’d save us money and we’d have a sense of pride in doing it ourself. Whereas, I loath yard work, have no desire to do it myself, and feel that it is money well spend to pay someone to come in and take care of it for us. At least once to get it under control… I’d love to tell him that the author of Get Rich Slowly did the same
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Erica
Thanks for sharing some of your thought process with us. I think making choices consciously is one of the most important things that any of us can do if we want to live our “dream” life. Each of us will obviously make different choices, because each of us probably do want different things.
When I decided to get serious about building our net worth, one of the first things I did was I stopped using our cleaning person. We were paying her $100 a week to clean the house (about 4-5 hrs each week) and I decided that I would rather spend that ~$5000 elsewhere each year. My house isn’t as consistently spotless, but the difference still worth it to me.
I have found that I don’t mind cleaning now as much as I did when I had 3 children under the age of 4. And that I would actually be happy cleaning if someone was willing to pay me between $20-$25/hr for my services. So, I took that job back because it was worth it to me. Like JD with lawn mowing, I find cleaning to be meditative. And ideas and plans that I am working on always seem to have a breakthrough moment while I am doing something rather mundane.
Now, clearly I was willing to pay a true living wage for my cleaning lady. And I think a lot more people might be happy to clean if the wage was between $20-25/hr. But are those people willing to do what you need to in order to make that wage? Our cleaning lady was running a small business as the sole proprietor. It was largely built on word of mouth and she busted her bum to show people that not only was she a great cleaner, but reliable and trustworthy. When I stopped using her – she had a waitlist of people wanting to have her clean their house. She seemed to love the job because she had more flexibility with her hours than she could find in other areas, and she was getting paid well. But she also had all the risk. Those were the trade-offs she was willing to take. And be happy about.
I don’t know why so many people in this thread seem to think that manual labor is so demeaning. It doesn’t have to be. And there are lots of people who are making decent livings providing superior labor. If someone wants to be a chef, cooking isn’t demeaning or depressing. If someone owns their own cleaning business/cleans as an independent and enjoys making other people’s home pleasant to live in, that’s not demeaning either. Not everyone wants to do the same job. Lots of people love to work with their hands and have a special talent for making a home environment pleasant, clean and organized. And what might be a dream job to one person would be awful for another.
I am not trying to say that all manual laborers are fulfilled in their jobs. I think that there are lots of people who work jobs they hate to pay the bills (and some of them are highly skilled and highly compensated). But there are very few jobs that are purely repugnant. Cleaning, cooking and VA jobs are not deficient jobs. They just might not be jobs you might want to do.
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JD, please don’t post anymore articles like this.
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I’ve never heard Erica advocate JUST hiring people overseas to save some money. I’ve always heard Erica advocate hiring the best person for the job. And I guess I don’t think it’s too uncommon that if the best person for the job is cheaper than another best person for the job – you choose the cheaper person. I don’t think a political statement is trying to be made here. It’s business, in that regard.
And of course, if the cost thing was what it was all about for Erica, she wouldn’t have contacted me. She knows I compete based on quality of products and services, not on price.
And from a business standpoint, outsourcing is just a must. Can’t do it all yourself if you ever desire to move forward.
Outsourcing personal things I think is everyone’s choice. If laundry and cooking and whatever else are a real burden to you, and you are financially capable to outsource, do it. Life’s too short, I think. I too am gluten-free, but I’ve chosen to cook everything myself – because I love cooking.
I can’t speak for anyone else but myself – but Erica’s quote about me is totally true. I love what I do (and if I didn’t, I wouldn’t do it, period). I love helping people get stuff off their plate so they can move forward. And I regularly do the same by outsourcing various areas of my businesses.
@Amy – You’re assuming I work for a consistent $30/hour, for one client, and have one business that I own and operate. None of which is the case. I can’t speak for anyone overseas or anyone else, but I don’t feel slighted in the least. I make a nice living. I’m fairly certain that if I decided to increase my rates (actually, I don’t work hourly anymore, it’s not scalable), Erica would hang around. It goes back to not competing on price, but on quality.
Just my $.02. Really interesting discussion and ideas presented here.
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This article had nothing about personal responsibility once she got the $1 million windfall. In fact, it seems that all she’s done since getting the money is SPEND. I find this all pretty funny – basically, she’s bored and now has a video company that’s probably losing money; she admits she’s blown $50k on other stuff…
Heck, I’d say her time is less valuable than ever. So, maybe these little outsourcing dalliances and Facebook fan pages should be getting done by the girl herself.
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This post is a perfect example of someone who thinks they have more than they really do.
$1M windfall. After taxes that is likely about $600K.
Pay off debts and “blow” 50K and my guess is she was sitting on about $500K in cash. In 2007-2008 at the TOP of the market, so I doubt there were massive market gains.
I could be wrong, but my guess is she has half a million and while that is a large amount of money, especially in your mid to late 20′s.
But it really isn’t that much in the big picture, and that is what bothers me about this post. The assumption she is “rich” and hence outsources her life. IT certainly isn’t enough for me to justify the outsourcing.
This isn’t rich. $500K throws off $25K annually at 5%. That is peanuts. I know lots of people who have $500K, or $1M liquid who would never act this way.
This post is very condescending to those that actually have money…and to those that don’t.
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@Eric 50 “The article was ok, but take a look at yourself if you posted or agree with some of these comments saying ‘i can’t relate – i’m soooo poor, and you take advantage of poor people. hire only US workers. blah blah blah.’”
Eric, my point was I can’t relate to it that much. I am poorer than her. I don’t have a million dollars at 26 and find myself strangely depressed about it. I read GRS because I am ‘getting rich slowly,’ that is the information I would like to have. The only thing I gleaned from it was should you hire someone to do something when you have the $ and need the time. I don’t disagree with that. It’s your choice, your money.
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