The non-conformists’ guide to making money

Working Away From Work

I got my start as an entrepreneur completely by accident. You can read the whole story here, but the short version is that back in 1999, I needed to make some money. The bills were due, my third-shift job wasn’t going so well, and one day I took some photos of random stuff around my apartment and put it up on eBay. I made about $22 an hour right away, so I quit the night job and started building a wholesale business.

I’ve had a lot of different small businesses since those early days, including website design, publishing, and Google Adwords consulting. I’ve also had some crazy experiences along the way, and made a lot of mistakes.

Despite the mistakes and occasional uncertainly of not having a regular paycheck, my ten years of being out of the traditional workplace have made me a passionate believer in working for myself. I don’t have a large business — I work at home, and I don’t employ anyone directly. I have no plans to do that in the future either, because I’m comfortable with the super-small business model I call microbusiness.

Why Microbusiness?

I hear a lot of people say that they do not have the skill set to be entrepreneurs. They don’t like to manage people, they don’t want to borrow money, or they just don’t know how to start.

I completely understand those challenges — and that’s why I think anyone interested in entrepreneurship should start with a microbusiness.

A microbusiness is a very small business, one that you usually run on your own or with a few independent contractors. Some microbusiness owners have the goal of growing the company and employing people, but others of us are just happy to replace the income we could receive from a more traditional job.

What Kind of Business?

When most people set out to build a business, they usually end up building a job instead. With a job, you get paid to exchange your time for other people’s money. If you set up shop as a consultant, for example, you’re essentially doing the same thing. True, it may be better than working for someone else, because you’ll have more freedom — but there’s a flip side to self-employment and freedom. You’re still trading time for money, and with your own business, no one else is responsible if you fail.

While I do know some happy, thriving consultants, in general I think it’s better to create a business with automated products or services that can be sold without you directly trading time for money. Once you create your own products and set up a marketing plan, the products can then be sold 24/7 on your website or other online marketplaces.

Getting up in the morning to discover you have made money while sleeping is a great feeling.

If you have no idea what to sell, I recommend creating high-margin products, especially information products like e-books, multimedia publications, or other teaching materials. The value in these materials has to do with what you help people learn, not from any expensive production costs.

(The books E-Myth Revisited and No B.S. Sales Success are two great resources for thinking more about this.)

If you have a decent job, why should you worry about entrepreneurship and starting a microbusiness? Well, as the next section shows, relying solely on income from a job is the very slow route to wealth. It may work after forty years, but if you’re interested in speeding it up a little, the odds are that you’ll need some kind of business.

Get Rich Somewhere Between Quick and Slowly

I fully understand the motive between Get Rich Slowly as a counterbalance to active stock trading and get-rich-quick schemes, and I know there are millionaires next door who have slowly accumulated wealth through decades of progressive saving, index investing, and compounding interest. I also know that this route is far safer than active stock trading.

However, by working as an employee, only the very slow route will work, because there is really no other way most people can accumulate wealth with average incomes. I believe that anyone who is interested on achieving their own wealth needs to supplement their job income with external business income that they create for themselves.

This is the third way between the decades-long job savings approach as an employee and the risky stock trading approach. Maybe we should create a Get Rich at Faster-than-Average-Speed-but-not-too-Quickly site — but that’s not as catchy as Get Rich Slowly.

The Goal is Financial Independence

Instead of retirement, my ultimate financial goal is to achieve true independence in my finances, to the point where all of the work I do is done out of choice rather than necessity. There are a lot of good resources out there for figuring out what you need for your own financial independence journey—for example, the online forums and the book Work Less, Live More that J.D. has written about previously.

By choosing to focus on writing and world travel instead of building businesses, I expect that my financial independence goal will be set back at least a couple of years. Although I could certainly enjoy making more money, I’m comfortable with the tradeoff.

One important note about financial independence: Being financially independent doesn’t mean you will stop working.

I enjoy the work I do (most of the time), and I don’t think I could be happy if I sat on the beach all day long. You may also like the work you do, or you may have a desire to help other people by doing a different kind of work. What financial independence means is that you are able to choose what you do with your time. Regardless of any other philosophical differences, I expect that almost everyone would agree that this is truly a goal worth charting a course for.

Making Mistakes

I don’t think this essay would be complete without mentioning a few mistakes I’ve made along the way to creating a financial plan that works for me. If any of the above information sounds self-confident, I assure you that the selection of mistakes I include below is but a brief sample.

  • In my early business days when it was an enormous sum of money, I once lost $3,000 on eBay in a single weekend due to a minor listing error.
  • I forgot to renew at least two domain names that were later converted to passive, regular Adsense income…by the new owner.
  • I regularly gave up hundreds of dollars from 2000-2002 because I didn’t want to return any inbound sales calls.
  • Six years ago, I decided not to go to Cambodia when I was right on the Thai border. The visa would have cost $20, which I thought was a lot then. Now that I spend $500-1000 to go to most new countries, $20 is a true bargain.

I think I’m doing most things right now — at least right for me — but I am not immune to making stupid mistakes.

Putting It All Together

I haven’t been very traditional with anything, and personal finance is no exception. What I do won’t work for everyone, and I am the first to acknowledge that. But I also hope that some of these principles challenge your own beliefs and practices about money in a positive way.

I welcome feedback, questions, or disagreements in the comments below. Thanks to J.D. for letting me share, and thanks to everyone for reading.

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