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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@Russ – I find it interesting how I’m labelled altruistic. As well, the presumption that I said you were immoral. Not only that, but that I claim that your interests are in direct conflict with yours. Russ, I clarified again in my last response that what I’m trying to get to is my opinion on the “unconventional advice” given by the article. Now if you feel that I touched a chord in you and you want to feel better in how you think compared to what I think, then we can pursue that. But I’m trying to be as clear as possible. I’m reflecting on Erica’s response to her financial independence. Not on the details to which she has to do. Your response was clearly explained. The way you write, gives me the impression you are trying to prove you are right and/or I am wrong. I’ll be the first to say that I am not trying to do that. As I said before, I’m just trying to share and learn. If it seems like I’m judging in any way, I’m sorry. So if the very basic ethics of writing cannot be respected, then I do not want to engage in conversation with you anymore… so respectfully, you could probably say a lot of things better, with encouragement for change, rather than try to take a cheap stab through text. Example: what are you trying to convey when you say “If you cannot do that I would find the idea of sympathy towards you utterly repulsive.”? Russ, I’m sure you can see my perspective on this. I would be happy to continue to share ideas and learn more if we keep the environment for that respect.
@Honey – I agree with your statement -> “I want to live in a society that’s motivated to take legislative action to maximize the productivity and happines of all its citizens.”. So what do you think is stopping us from having that now?
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@Honey, I’m not so sure we’re on the same page.
@Arturo, I apologize, my use of the word “you” in the text you pointed out was not directed at you individually. I suppose that was a poor choice of words given the context. You have had an underlying theme of altruism throughout your posts based on an assumption that is a moral stance. I was challenging that assumption, that’s all. Perhaps a beer, or better yet, a scotch and a cigar would have made for a better venue. Take care.
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@Arturo – I think there are several things stopping us:
1) People falsely believe that if we give other people more, then it necessarily follows that they themselves will have less. Not only is having more employable/productive/tax-paying citizens better for everyone economically, there are numerous other advantages that can’t be quantified in terms of dollars per capita that are more important. This is why the talking heads drive me so crazy on TV – they say “If we did that, we’d have to raise taxes,” as if that’s always a bad thing. What if something’s intrinsic worth is greater than the dollar amount it costs to pay for it? Why is raising taxes a bad thing?
2) Because the world is an uncertain place, people will cash in on smaller gains immediately rather than invest in long-term solutions that will have much bigger payoffs later. I.e., “I will vote against increasing the sales tax because it is more expensive for me,” even though by voting against it I am depriving my city of educational improvements/new hospitals/whatever that will have a more significant positive impact on my quality of life down the road than saving .01 per dollar would (as a made-up example). The penny in my pocket today is real; my future children and the possibility that I may get cancer one day and need a specialist are not.
3) One of the great failings of democracy is that it indulges the human desire to put off acknowledging that we must save/plan today for things that are inevitable and expensive. Just like the average American doesn’t have a 6-month emergency fund (though the average GRS reader might!), as a society we ignore the fact that health care costs are skyrocketing, that the planet is overpopulated, that we are destroying our planet, and that all 3 of these things are inextricably intertwined in ways that we will not even be able to imagine until 2-3 billion people die of famine and pandemic – and even then our response will be as reactive and minimal as possible rather than as proactive and comprehensive as possible.
4) Secretly, we are all afraid that we are the expendable ones. It seems that one of the purposes in arranging humankind into a society is acknowledging the fact that if it’s human nature for us to protect our own individual interests (when really our understanding of the world is so imperfect that we can’t even reliably gauge what our own individual interests truly are or should be), then we need to create an external body (government) that is charged explicity with discovering what is best for the whole and ruthlessly implementing those discoveries regardless of the short-term impact on some individuals. It’s all good in theory, but we’re all terrified that we’d be the short-term casualty.
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@Russ, I am not sure what appreciating your stance and reasoning has to do with whether I agree with you or not.
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@Russ – Scotch and cigar sounds good. Thank you!
@Honey – Excellent reply. I agree. In the end, all things will take some sort of risk for any kind of gain.
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Not being an American, reading this discussion is quite interesting.
Australia has such a strong minimum wage, that hiring domestic help is quite expensive and hard to find. It is also very culturally awkward. We have such an egalitarian culture, that being served, even when paying for it is incredibly awkward.
I’ll “confess” that I hire a cleaner and a gardener. I do this with a clear conscience because I know how much they need the money and it releases my time to do more work as a Youth Pastor. Having said this, I don’t tell many people about it, I too am in my twenties without kids, so most people would see my choice as indulgent. Maybe it is, but it’s what I do.
As for hiring help from Asia, I’ve got to say I have no problem being a citizen of the world and paying smart people to do good work, wherever they live.
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Hi Erica, I read and posted comment(s) from your other articles that’s why I was able to follow you here. We admire you because you shared your blessings to those who needed it badly by hiring and paying them to help you on your household chores and to assist you with your online business. Your experiences inspired a lot to your readers.
Phil
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I live in Morocco where most middle-class people have maids. Even lower-middle-class people have maids. The reason people have maids is that no one wants to be bothered with work if they can get someone else to do it for them. What is valued is LEISURE time. By hiring out household work, what you are buying is TIME for yourself.
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This is probably the second post when people would start reacting a little overly about people outsourcing in the Philippines. I understand just how disappointing it is that sometimes jobs get outsourced in less developed countries like India, Philippines and others but may this serve as a wake up call to continue innovating and embrace the change with a challenge not just judging those people who feel some fulfillment in what they do. I salute Erica for doing what she thinks would make her happy, even though it required giving up some things because in order for us to have something we really and badly want oftentimes requires emptying our hands with what we currently have, so we could have more space and capacity to receive more. And yes, giving it out to those who need counts!
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