Tag: money

Multiple income streams

Right now, I’m splitting my time between being employed (four days per week with Moodle), my consultancy and the co-op which I co-founded (one day per week combined). In other words, I have more than one income stream, as this article suggests:

Having multiple income streams can come in handy if one income stream dries up. After two years in business, I’ve learned that you’ll always have peaks and valleys. Sometimes everyone is paying you, and sometimes your lead pipeline can look barren. I started a marketing and PR agency and spent that first year working my startup muscles: planning, strategizing, defining markets. If I hit a slow month, I kept working those same exercises. While it helped grow my business, I sometimes needed an intellectual rest day.

People who have only ever been employed (which was me until three years ago!) wonder about the insecurity of consulting. But the truth is that every occupation these days is precarious — it’s just hidden if you’re employed.

This is a short article, but it’s useful as both a call-to-action and to reinforce existing practices:

Developing a secondary income stream is easier than you may think. Think about how you like to spend your off hours and research potential markets. Maybe you’re really good at explaining something that is a difficult concept for other people–create a course on an on-demand training site like Udemy or Skillshare.

In general, we think more people are paying attention to us than they actually are. Your first endeavour doesn’t have to set the world on fire, be a smash hit, or a bestseller. The important thing is to get out there and provide something that people want.

Through volunteering, putting myself out there, and developing my network, I haven’t had to apply for a job since 2010. Also, with my consultancy, it’s all inbound stuff. Some call it luck but, as Thomas Edison is quoted as saying:

Opportunity is missed by most people because it is dressed in overalls and looks like work.

I’d add that knowledge work doesn’t look like work. But that’s a whole other post.

Source: Inc.

No cash, no freedom?

The ‘cashless’ society, eh?

Every time someone talks about getting rid of cash, they are talking about getting rid of your freedom. Every time they actually limit cash, they are limiting your freedom. It does not matter if the people doing it are wonderful Scandinavians or Hindu supremacist Indians, they are people who want to know and control what you do to an unprecedentedly fine-grained scale.

Yep, just because someone cool is doing it doesn’t mean it won’t have bad consequences. In the rush to add technology to things, we create future dystopias.

Cash isn’t completely anonymous. There’s a reason why old fashioned crooks with huge cash flows had to money-launder: Governments are actually pretty good at saying, “Where’d you get that from?” and getting an explanation. Still, it offers freedom, and the poorer you are, the more freedom it offers. It also is very hard to track specifically, i.e., who made what purchase.

Blockchains won’t be untaxable. The ones which truly are unbreakable will be made illegal; the ones that remain, well, it’s a ledger with every transaction on it, for goodness sakes.

It’s this bit that concerns me:

We are creating a society where even much of what you say, will be knowable and indeed, may eventually be tracked and stored permanently.

If you do not understand why this is not just bad, but terrible, I cannot explain it to you. You have some sort of mental impairment of imagination and ethics.

Source: Ian Welsh

You get paid what other people think you’re worth

Great post by Seth Godin:

Yes, we frequently sell ourselves too short. We don’t ask for compensation commensurate with the value we create. It’s a form of hiding. But the most common form of this hiding is not merely lowering the price. No, the mistake we make is in not telling stories that create more value, in not doing the hard work of building something unique and worth seeking out.

Create stuff that people value and that is in scarce supply. Focus on leaving the world a better place than you found it.

Source: Seth’s blog

How to get people to pay you what you’re worth

Good advice in this article for people who (like me) are asked regularly whether someone can ‘pick your brain’.

If you decide you do want to give advice, do it on your terms. If they ask to meet for coffee and you don’t have time, send an email instead. If they ask a question that requires a novel-length answer, address one part of it, or send them some helpful links. Don’t fear being explicit that you didn’t have time to answer in full by saying something like: “Thank you for reaching out. Your question requires an answer that I unfortunately do not have time to fully address due to my work. However, you might find the following books/links/thinkers/YouTube videos helpful.”

Given I live in the back of beyond, most of my initial meetings are online, which makes life easier. I give people 30 minutes for free, and then that sometimes leads to them asking me to put together a proposal for them.

What I particularly like about this article is that it encourages readers to find ways to give back to their sector / profession:

Once you’ve created boundaries around when and where you’ll provide help on demand, you can begin looking for other, more expansive avenues for giving back. This can include devoting your time speaking on panels, at schools/universities, on podcasts, or at workshops for free if it’s a cause or audience that would benefit from your knowledge. Though beware of the requests that can often follow on from such engagements, and refer to the third step when answering them.

One thing that’s not mentioned in this article that I’ve found can work is if you offer a ‘critical friend’ service. This is basically billing them for a day’s work at your regular rate, from which they can draw down time for advice when they need it.

Source: Quartz at Work

The immorality of retaining wealth

The image I’ve chosen for this post came via social.coop rather than the article cited, but it does indicate where non-inherited wealth comes from. This wealth is then often used for investment or speculation that then becomes unearned income.

I like the way that the author frames things in terms of how much people retain, rather than how much they earn:

Note that this is a slightly different point than the usual ones made about rich people. For example, it is sometimes claimed that CEOs get paid too much, or that the super-wealthy do not pay enough in taxes. My claim has nothing to do with either of these debates. You can hold my position and simultaneously believe that CEOs should get paid however much a company decides to pay them, and that taxes are a tyrannical form of legalized theft. What I am arguing about is not the question of how much people should be given, but the morality of their retaining it after it is given to them.

Also, I like the idea of a ‘maximum moral income’:

We can define something like a “maximum moral income” beyond which it’s obviously inexcusable not to give away all of your money. It might be 5o thousand. Call it 100, though. Per person. With an additional 50 allowed per child. This means two parents with a child can still earn $250,000! That’s so much money. And you can keep it. But everyone who earns anything beyond it is obligated to give the excess away in its entirety. The refusal to do so means intentionally allowing others to suffer, a statement which is true regardless of whether you “earned” or “deserved” the income you were originally given. (Personally, I think the maximum moral income is probably much lower, but let’s just set it here so that everyone can agree on it. I do tend to think that moral requirements should be attainable in practice, and a $30k threshold would actually require people experience some deprivation whereas a $100k threshold indisputably still leaves you with an incredibly comfortable lifestyle better than almost any other had by anyone in history.)

Source: Current Affairs

How to be a consultant

I stumbled across this via Hacker News. This guy basically explains how consulting works, with some great advice. Here’s three parts that stood out for me:

This is, far and away, the most important lesson to learn as a consultant. People who are unsavvy about business, like me in 2009 or like most freelancers today, treat themselves like commodity providers of a well-understood service that is available in quantity and differentiated purely based on price. This is stunningly not the case for programming, due to how competitive the market for talent is right now, and it is even more acutely untrue for folks who can program but instead choose to offer the much-more-lucrative service “I solve business problems — occasionally a computer is involved.”

I don’t actually think this just a programming thing, and although I’m no longer in a position to be able to hire myself out on a weekly basis, the following approach sounds sensible:

If you quote hourly rates rather than weekly rates, that encourages clients to see you as expensive and encourages them to take a whack at your hourly just to see if it sticks. Think of anything priced per hour. $100 an hour is more than that costs, right? So $100 per hour, even though it is not a market rate for e.g. intermediate Ruby on Rails programmers, suddenly sounds expensive. Your decisionmaker at the client probably does not make $100 an hour, and they know that. So they might say “Well, the economy is not great right now, we really can’t do more than $90.” That isn’t objectively true, the negotiator just wants to get a $10 win… and yet it costs you 10% of your income.

I always mean to ask for case studies, but never get around to it. He explains why it works:

I always ask to follow a successful consulting engagement with a case study. My pitch is “This is a mutual win: you get a bit more exposure and I get a feather in my cap, for landing the next client.” Case studies of successful projects with some of my higher profile consulting clients (like e.g. Fog Creek) helped me to get other desirable consulting clients. Very few clients turn down free publicity, particularly if you offer to do all the work in arranging it.

Source: Patrick McKenzie