Listen Money Matters - Free your inner financial badass. This is not your father's boring personal finance show.

If someone told you they were starting a franchise, what would be the first thing that came to mind – Mc Donalds, Chick-Fil-A, 7 Eleven? When you start to look into the world of franchises, you’ll be surprised at what you’ll find. These days they come in all different shapes, sizes and niches. Today the guys chat with Laura Novak, owner of Little Nest Portraits Franchise, about starting a franchise. She talks to us about how her franchisees work, why she decided to go franchise and what systems she has put in place to make them successful. Why Franchise Laura started out as a photographer when she was only 23 years old and grew her passion into a successful small business of her own. As the years went on, she wanted to spend more time with her family and was ready to build a business that was bigger than her. For most entrepreneurs, it’s hard to let go control of their business. After being approached by someone about opening another Little Nest location, Laura started to think about starting a franchise. Doing this would allow her to still be in the business, but its success wouldn’t be tied to her hours. There is a significant difference between working in the business and working in the business. It was well said by Michael E. Gerber from the book The E-Myth Revisited about The Franchise Model. “It is a proprietary way of doing business that successfully and preferentially differentiates every extraordinary business from every one of its competitors. In this light, every great business in the world is a franchise.” Laura began to see fasting growing franchises in the women’s services sector such as workout studios and blow out salons. These companies were giving women the chance to have successful careers while being in control of their schedules and lives. She wanted to help people do what they love while balancing their families and home. With Little Nest Portraits she wanted to empower others and offer them a chance to be a successful and profitable entrepreneur. She has opened three locations, and there are a few more in works. How It Works With a franchise, you are for the most part trusting your brand in other people’s hands, so it’s super important to find the right people. The Little Nest vetting process is pretty extensive. It starts with 3- hour long webinars to get to know a little more about the candidates and give them the opportunity to learn about the company. Next, Laura will spend a day together with the candidate in person to learn even more about each other’s values. During these meetings, she looks for qualifiers such as level of management experience. There is already a lot to learn about the business itself, so she needs someone who already knows how to manage people successfully. They also need a decent amount of business experience and understand the basics. Most importantly, personal values need to match. All these things help Laura determine if an individual can capitalize the business. She has found the best owners do not have much experience with photography but instead have excellent sales skills, and of course, a passion for running their own business. Laura and her team provide weekly reports to all branches to show how everyone is performing. Franchises are all about partnership. The location owners success is also her success. Laura and her team provide owners with proven systems to support the growth of the business from marketing to customer service to decor. They want to give franchisees all they need to run a Little Nest successfully. Costs Some franchises require you to have a certain amount of assets as well as liquid funds to purchase a branch. For Laura and her team, all they are concerned with is if the franchise can get the appropriate fu...

Should you start an emergency fund or save for retirement? Pay off debt or start investing? Everyone will give you different advice, and it can get confusing. It’s hard to know how to prioritize your financial goals. Personal finance is personal, so there isn’t one answer for everyone. Today the guys are going to break down how to prioritize your financial goals and help you figure out what to focus on first. Know What You Want You can’t do anything meaningful until you decide on some goals for the short term (this month), medium term (next 3-6 months) and long-term (1-2 years). What stage are you at in life and where do you want to be? Your financial goals can be buying a new home, saving for college, starting a family or creating an emergency fund. When you take this step, it’s important to think about both your short-term and long-term goals. Perhaps you want to plan a family vacation to Europe within the next five years. Or, you may wish to have enough of a buffer in your finances so that you and your significant other can afford to go out for a nice dinner every couple weeks. No matter your vision, be sure to create SMART goals. This stands for specific, measurable, achievable, relevant and timely. To develop SMART goals, you will need to get specific. For example, how much should you have budgeted before you begin planning your trip? Or, how much money would you like to spend each time you go out to dinner? To that end, it is critical to tie real numbers to your goals. You should also have a feasible timeline for when you would like to accomplish each goal. It’s OK to be ambitious, but you should also avoid setting yourself up for failure by giving yourself far too little time to reach your goal. No matter what they are, it’s time to get ideas out of your head and make a list. Setting tangible and realistic goals, following them, and tracking your progress is the key to success in achieving all of your financial goals. Writing down your goals is critical. However, you should also make a habit of revisiting your goals and making sure you are on the right track. If so, remain consistent and do not let yourself get complacent. If you’re not currently on track, remember why you set your goals in the first place and find ways to get to where you want to be. Don’t be too hard on yourself — change is hard, and many people fail several times before they find the right formula for success. If you get off track, the best thing you can do is make some adjustments right away. Prioritize Your Important List Once you have figured out your goals, give priority to each of your personal goals in order of importance, and then determine how long you have to save for each of them. Remember to put your oxygen mask on first. Debt destruction is probably more important than kids college fund. Putting your retirement on track is more important than buying a new car. Debt is most important. It’s costing you money and will move you figure away from your goals. If you have no idea where, to begin with, your debt. Although retirement may be many years away, so short-term goals like paying down debt should be taken care of first. Having an emergency fund is so important. Unfortunately almost half of Americans couldn’t come up with $400 if an emergency came up. A good rule of thumb is having 3-4 months of your salary in a savings account and then save up to 25k in an investment account like Betterment. Making more money can help you get to your goals faster. Not everyone has the time for side hustles so if you are looking to make some extra cash,

Becoming an entrepreneur is not for the faint of heart. Running and growing a business can be challenging – that’s why about 90 percent of all new businesses fail. Since the odds are stacked against you, it takes hard work and perseverance to achieve success. Whether you have a business or looking to start a one, it’s important to listen to your peers and mentors. Some lessons you will have to learn on your own but some small business tips you can learn from others. Collectively, Thomas and Andrew have ten years of experience under their belt running small businesses. Today they will share their most valuable lessons and small business tips. Don’t quit your day job. When you are just starting out, bringing in a consistent profit month after month can be challenging and stressful. You don’t want to be the position where you’ll do anything for a quick buck. You want to focus on building something that will make you $2000 passively everything month down the road and not worry about making $100 to survive the week. “A successful business is a marathon, not a sprint.” Keeping your day job until your business is financially stable will reduce pressure so you can focus on what matters. Remember – it’s not how you start the race, it’s how you finish it. For Andrew, constraint breeds creativity. Having limited hours to get work done forces him to do the things that matter and make the most out of his hours. Study the pros. You can read all the books on what you need to do to grow a successful business but what will push the needle is to study what the pros do. Find people inside and outside of your industry that you admire and dig into what they are doing with their businesses. For example, let us say you are super inspired by Pat Flynn and looking to run a successful online business. He has some great content online outlining what to do but go beyond that. Study what the pros do more than what they teach. Analyze their code, writing styles, videos, etc. Of course, don’t blatantly rip people off but take influence and make it your own. You will eventually develop your own style. First, get inspired. Improve 1% every month. Give yourself realistic growth goals. Growing 1% every month doesn’t sound like much, however, after a year you will have increased 12.68% and 26.97% in the second year. Just a little bit of growth consistently will start an exponential growth cycle. Just because you are improving 1% every month doesn’t me that every single thing you make will grow that one percent. That’s why you need to follow The Equal-Odds Rule. Thomas has an excellent video on it. Watch it. He believes if you want to make things that are amazing, things that become fruitful and well-known then you have to make a lot of things. The more you do, the more you will fail, and the more you succeed. Throw things at the wall. You never know. Don’t put yourself in the box. Many people limit themselves to what they think they can do or what people expect you to do. Don’t ever feel you need to fit into a box. Put your weirdness into your work” that weirdness sets you apart. There are not a limited amount of opportunities. There are an unlimited number, but if you chase every opportunity, you will never make meaningful progress on the ones that matter. Only pursue opportunities that help you achieve your key goals. Say no to everything else. Also, stop thinking all the good ideas are taken. It will just paralyze your creativity. Your idea most likely has already been done. There are very few “new” ideas out there but who cares!

Your paycheck gets deposited, groceries purchased, bills paid, and then you’re broke again until the next payday. That is the story for almost half of American households, and the vicious cycle is hard to break. It won’t be easy, but you can stop living paycheck to paycheck. An NYU study found that about 70 million Americans live in “wealthy hand-to-mouth” households. These are families that own assets like homes, retirement accounts, college funds and cars but yet still live paycheck to paycheck. They spend almost every dollar of their annual income to keep up their lifestyle and pay all the bills. Why is it happening? If you want to stop living paycheck to paycheck, you need to find the root of the problem. It is probably very simple – you are spending more than you earn. You may not throw your money away on extravagant things, but you are still living above your means. It’s time to consider making some lifestyle changes. Start by making a list of necessary and optional expenses see where you can save. If your spending is already very low, ask yourself what you need to survive and reframe your lifestyle choices. That can mean moving to a cheaper apartment, stop eating out,  taking the bus to work, making lunch at home, getting rid of the gym membership or get your bills lowered. There are many people who people survive on very little – look at Mr. Money Mustache. Take a hard look at the choices you have been making and create a budget that will give you the flexibility to save, even if it’s just $50 a month. You can build wealth one dollar at a time. Prosperity Mindset The mind is a powerful thing. To make real changes in our lives, we need to create a positive shift in our thinking. I’m not talking about The Secret “think it and it shall happen” bullshit. Well, maybe a little. Having a bigger vision for what you believe is possible for yourself is the first step to getting there. There is truth in the law of attraction. If you feel that you will never be financially stable or you’ll never get out of debt you most likely won’t. That negativity is reinforcing your limitations. Take full responsibility for your financial circumstances. Your willingness to change it is a key factor in your ability to make better financial decisions. Remember, prosperity is not about having a big house or ton of money. It is about being happy and living comfortably, and the way to get there is with a positive attitude and motivation. Breaking the Cycle Think for a moment on what you’ll gain from breaking the cycle. How will it feel to have extra money at the end of the month? Once you start having money left at the end of every pay cycle, you’ll begin to feel a little freer. Having financial breathing room will significantly reduce your stress.  Give yourself a pay cut. Living slightly below your means will help you stashing away some savings every month to grown an emergency fund. Try to pretend you earn less than you do. Start a crash savings program and do it in a short period like one to two months. Try saving 5-10% of your paycheck. Set up an automatic transfer to your account so it is easier to stick with it. Roughing it for a short period is all you need to get out of the cycle. Once you see that it is doable, it will be much easier to stay on course. If cutting expenses aren’t enough, then you need to build more income. Having an additional stream will make a huge difference even if it’s only $100 extra a month.  It doesn’t necessarily have to be another job. If you have a few extra hours a week,

This episode was inspired by a tweet we received from one of our listeners Alexa who asked, How many side hustles are too many? She has been working on a few things that she loves and was questioning if she should just focus on one and ditch the rest for now. Both Andrew and Thomas have struggled with focusing on one project from time to time. When trying to build a business you have a lot on your plate. Staying focused can be tough with a constant stream tasks and new ideas demanding your attention. In this episode, the guys talk about why focus is so important. They share how they get focused and deal with working on too many projects at once. To answer Alexas’ question, it really depends on what the goals are for these side hustles. If they are just fun activities that make you happy and keep you busy, then you can have as many as you want. However, if you are trying to grow something that you would like to eventually turn into a money generating business you need to focus on one thing. That is only you’ll be able to get the momentum you need for it to grow. Determine which ones are hobbies and which ones are actual business ventures. Once you figure out “the one”, run with it. WWAD (What Would Andrew Do) If you have a few ideas for side businesses and not quite sure which one you want to pursue further, experiment with a few things until you get some results.Use the skills you have to narrow down possible fields and match your interests to something you are good at. After a couple of months if your lemonade stand is flopping but your computer repair business is profiting then you know where to focus your attention. Giving it the time it needs will help you reach your goal of growing it into a full-time job. Andrew as dabbled in my projects, side hustles, and business ideas sometimes many at once. What he has learned through his successes and failures is not to spread yourself too thin. Giving your time and attention to many things will either result in failure, burnout or a much longer path to your ultimate goal. Getting focused on one thing and sticking with it has been the main factor in the success of LMM. Get Focused So no that you’ve figured out what you want to do, how will you stay focused on whats important? We all battle distraction and it can overwhelm us sometimes but there are plenty of ways to fight it. Whatever you are doing throughout the day should have clear value towards building your craft. Build a system to help you achieve things every day. Choose a few tasks to complete each day and write them down. Before moving on to anything else, these must be done. Create a schedule and plan time for each task and make sure you give yourself enough time. If you schedule 60 minutes for something and it takes you longer the time crunch will stress you out. If you haven’t created a system for getting things done, you’re likely losing a lot of productive time to inefficiency. There are many tools out there to help you out. Thomas is all about building habits so he uses Habitica, a free habit building and productivity app that treats your real life like a game. OmniFocus and Evernote are also great for organizing tasks and making lists of actionable items. You can also a try a “Not-To-Do List. The idea is to list all the things you are not going to go through the day to support your productivity. Avoid putting effort into things that will have little or no impact on the task at hand. Spend time on work that will show results. Self Reflect Diving headfirst into a new project can completely consume you. It is so easy to get lost in all the work, and our thoughts. Keep a journal to reflect on what you accomplished and how it measured up to your goals. This way you can see what is working for you and what ...

We love to answer questions from our listeners, and sometimes we make a whole episode around it. Today we answer five questions about drinking on the job, Lending Club, borrowing from family, green mutual funds, having fun, buying a first home, Bonus Question: I have noticed that you tend to be drinking beer on each of the podcasts, let me just first say, fuck I’m jealous.I would like to know what kind of job I can get that will let me drink beer in the morning (without the whole judgey this guy is probably an alcoholic vibe). If you do respond to this email, please don’t use my name as my current job frowns on asking questions like these. This question is great. You have to work for yourself or work for some hipster-ass startup that has beer on tap all the time. But even then they’ll probably give you the stink eye if you’re drinking it at 8 a.m. Question One: Do you feel Lending Club is still a prudent investment given the recent scandal issues they’ve run into? Will it have long-term impacts on the business and the quality of loans? I’m considering a 50/50 split of my available investment funds between Betterment and Lending Club (in addition to my 401k where I’m already contributing 12%). – Matt So, a little background in case you didn’t hear. LendingClub CEO Renaud Laplanche resigned after it was found that the company had altered application dates on some large loans. It was also found that Laplanche “failed to fully disclose to the company’s risk committee a personal interest he held in a third party fund while the company was considering an investment in the same fund, which purchased LendingClub loans.”  Tisk-tisk That said, after a full internal analysis of company reporting, it was found that 99.9 percent of loans were above board. Since the companies stock has plummeted but their loans were not effected. Many people were fired, so the few bad eggs are gone. Although Andrew lost money with his stock, he still has some money invested in loans. Thomas thinks he will wait this one out and see if and when the company gets back on its feet. Question Two: Need advice on relative claiming we owe them money. Last year my wife & I became debt free and were on our way to saving a down payment for an investment property. Now my mother-in-law is demanding a large sum of money from my wife.  She kept every receipt from when my wife was 18 onward (she’s 36) and now wants to be paid back. The list includes things like brakes on my wife’s first car and new basketball shoes from her senior year. My wife never signed anything but apparently verbally agreed at the time to pay back some of this money. I realize that from a legal standpoint we probably owe nothing, but I feel as though morally we are responsible for whatever my wife agreed upon. Just where should the line be drawn? We can probably all agree that this is a pretty terrible parent. At first glance, the situation can make you cringe, but you have to ask yourself, what is really going on here? Is her mom desperate for money or is she just crazy? Keeping receipts for 18 years shows intent like she has been waiting deviously to cash out. Staying out of it would be the easiest thing but because they are married paying back this loan will be affecting both of them. The guys think that the most important aspect is to try and salvage the relationship. Sit down and have a talk with the mom and try to come to some middle ground. If she needs financial help, she should just ask, and they can figure it out together. Don’t lead with anger and find her intent before making any moves. Question Three: My name is Matthew, I’m 25 and just recently married and am on my way to having my first child. I have been looking at buying a house but after recently finding your podcast I’m not sure if I...

Becoming a new parent is a wonderful life experience, but it also comes with a ton of work, sleepless nights and some financial stress. Today the guys talk to Kim Palmer, mother of two and author of Smart Mom, Rich Mom about how to build wealth while raising a family and preparing financially for parenthood. New Expenses There are many new expenses that come along with a new family member. According to Kim, on average a new child will cost $11,000 in their first year which doesn’t even include childcare but well get to that. It just goes up after that costing you about $250,000 by the time they are 18 years old. Besides the basics like diapers and baby food which can cost upwards of $75 per week, you’ll want your new bundle of joy to have the best and most safe baby gear. Some of those big-ticket items like cribs and strollers and cost hundreds. You can buy gently used clothing, but car seats and crib are being recalled all the time so avoid buying those second hand. Most families have to make the decision whether or not to pay for childcare. Cutting one parents salary out of the equation and it’s a tough call. With all these new expenses the thought of removing a salary even for a few months can be a scary thought. On the other hand, childcare costs are pretty high. Depending on where you live, it can cost $2,000 a month for daycare and $4,000 a month for a nanny. Child care will likely be more than your mortgage payment. Kim loves using Amazon Family which gives Prime members save 20% on diapers subscriptions plus additional family-centric discounts and recommendations. She buys a lot online so she can compare prices and maximize her family savings. Start saving sooner than later. She and her husband saved for fives years before having their first child. It will get much harder after you have children. As a parent, you also need to start to think about saving for college tuition or buying a larger home for your growing family. Maternity Leave Unfortunately, most women do not get paid maternity leave. If you are planning a family in the future, this is critical to take into consideration when looking for a job. Unless you are planning on giving birth at your desk, then you will need some time off before and after the baby is born. If you want to know more about the company culture and policies of a potential employer, check out Fairy God Boss. They offer a platform for women to get the scoop about companies, and their policies from other women. Before asking about taking your time off, talk to other co-workers about their experiences with maternity leave. See how they navigated it and came up with a plan – how long will you need (providing exact dates) and who will be taking over what duties in your absence. This will give your boss a clear picture of what the next few months will look like without you. The Future Saving for your children future and education should start as soon as possible but not before you pay yourself. Contributing to your retirement is a priority then you can begin saving for your children’s’ future. College costs are rising and if you want to help your kids pay for college, opening a 529 savings plan is the way to go. You can set up automated monthly payments so you can make steady progress over eighteen years. How much should you be saving? Kim says Fidelity suggests $5,000 per child per year if you can swing it. Eventually, your kids will leave the nest, and you want them to go with as much financial knowledge as possible. Talk to your kids about sacrificing now for future goals. When they ask questions, try to give an answer that will introduce them to new concepts.

Happy 4th of July! While you are watching fireworks, remember how much hard work and dedication it took the founders of the United States to declare independence. It takes the same effort and dedication when it comes to financial independence. These are the best habits for independence. Finding financial independence takes a lot of hard work too. Today the guys talk about building habits for independence and what mindset you need to become more freedom financially. What Retirement Should Be Andrew was recently having a conversation with his father about retirement. He said even when he has enough money to retire, the thought of having a finite amount of money and slowly burning it down its a pretty scary. The Concept of retirement is changing. Thomas read a book called The Happiness Equation, which talks about where the idea of retirement came from. In the 1880’s the German started making it mandatory for people over 65 to retirement to free up jobs for younger people. Back then the average lifespan was 67, so they only needed to have enough money to survive a few more years. Fast forward to today. The retirement age is still 65, but people are living well into their 90’s. They need a lot more money to live out the rest of their lives comfortably. Because retirement is a time of leisure, and travel, you will need to save more than just the cost of living.  After reading this book, Thomas believes the idea of retirement is broken. Retirement for Thomas is having enough money so he can work on not for profit projects and still be able to support himself. Independence is not retiring; it’s the ability for you to put your time where you want to put your time. Getting Out of the Rat Race Many of us feel trapped in the cycle of going to work every day so we can pay the bills every month. This never-ending cycle is called the rat race. It is a period where you are required to put in a certain amount of time to get a certain sum of money. Always trying to get those TPS Reports to your boss. The ability to step off of the wheel and claim your time back is true independence. Although it isn’t going to happen overnight and it indeed takes some work but it cane is done. If you have your mind set on financial independence, creating habits for success will help you get there faster. Do three things every day Take an hour in the morning plus an hour when you get home and dedicate them to accomplishing daily tasks that will help you reach your goals. A bunch of those small steps will lead to bigger things. Keep your expenses low Recently, Andrew and I played Cashflow with some friends. It’s a board game where the goal is to get out of the rat race. You have a job, investments, balance sheets – it’s pretty intense but super fun. Get out of the rat race by increasing your passive income to twice that of their expenses. Keeping your costs low is just as important as making more money. Budgeting aside, once every few months go over your reoccurring costs and make sure all those things you’re paying for are still important in your life and making you happy. Beware of lifestyle creep. Don’t let your expenses increase your income. Invest In Your Labor-Asset By 2020, 40% of the US workforce will not be full-time workers. Being your own boss will be the new norm. Labor is your biggest asset. It is crucial to building the value of your work by actively trying to learn new things.

Season two of Listen Money Matters has officially reached 100 episodes. Thomas and Andrew have learned so much from each other and from the excellent guests we’ve had on the show. Today the guys discuss the top 10 things they have learned in 100 episodes this season. Andrew’s Lessons Having routine changes everything. Andrew learned the power of habit and made better use of his time. Having a routine has done wonders for his productivity and has actively and consciously built himself a daily routine so he can achieve more throughout that day. #gettingshitdone. Allison’s real estate investment strategy rocks. This episode caused a significant mindset shift for Andrew on how he approached wealth building. Allison inspired and opened his eyes to how easy it is to get into real estate investing. She was an excellent example of a typical family creating passive income through hard work and time. Real estate investing isn’t that hard. On a similar vain, this episode further educated Andrew on how the whole process works. He learned how hands off real estate investing could be making it a great passive income stream. Take the emotion out of money. Joan Sotkin was one of our favorite guests on the show, and her interview came just in time. Andrew was so caught up with work and was being driven by anxiety. He as approaching a burnout again and Joan was able to help him find balance. She taught him to stop worrying so much about money and focus more on healthy relationships and being in good physical health. Turn your family into a business. Great episode! Natali Morris was very inspiring and had some great advice on how to grow your family’s wealth. Since that episode, Andrew has taken the business more seriously and reduced our families costs by utilizing business write-offs. She also introduced us to the self-directed IRAs. Thomas’ Lessons The importance of Delegating Work. This was not part of an episode, but since working with Andrew, Thomas has learned to offload some work and hire some help. He was overloading himself but still resistant to the idea of having a team, but after a few of Andrews lectures, Thomas was convinced. He now has a small team, and his business is growing as a result. Investing in yourself is important. Before he started the LMM podcast, Thomas was a set it and forget it mutual funds kind of guy. This season has opened his eyes to different types of investments. One of our latest episodes was with Doug McCormick, author of Family Inc. He talked a lot about labor as one of your most valuable assets. Thomas learned it is super important to invest in yourself and your business. In the end, it could be a much better return on investment. The borrowing against your 401k battle. So, we got our asses handed to us on this one. After the borrowing against your 401k episode aired, Thomas began doing some hardcore research on the subject and learned a ton, but the real lesson for him here was understanding his responsibility as a podcaster. Everyone listening to the show has a different financial situation, so when discussing personal finance topics like this,

Growing your wealth is not just about keeping up with your budget and investing some money in the stock market. To achieve financial independence, you need to have a solid plan, and that starts with better decision making. Today on the show the guys talk to Douglas McCormick- Army veteran, entrepreneur, and author of Family Inc. He teaches us about managing your family finances like a business and how to use business principles to maximize your wealth. Many Americans of all ages struggle with finances. Douglas wrote Family Inc to provide everyone a straightforward and holistic way to manage their money and build wealth for their future. He wants to empower people to strive for financial independence and give them the education to make the right decisions. Appoint a CFO: Like any business, someone needs to be in charge of what is going on financially. Although the whole family will make decisions together, there should be one person who will be in charge of making sure all the money is managed correctly. This person is going to be the family’s Chief Financial Officer, and every family should have one. They will handle cash flow, risk management, small business investments, education investments, tax planning and most importantly be a teacher. The CFO will use the tools of the business world to customize a family financial plan and actively manage it. The CFO will use income reports and balance sheets instead of a traditional budget. Budgeting is a useful tool but can sometimes be short sited and distract us from what is paramount. Marking off every penny you spend month after month is pretty tedious and can easily get neglected after a few months. Douglas believes with budgeting; less is more. You want to focus more high-level expenses like rent and electric and less on tracking packs of gum and coffee shops. If you are ready to ditch budgeting for balance sheets, you can create your own on his site.  Value of Labor In Family Inc., Douglas talks about the value of labor and how it is factored into the families net worth. Although we never really think about our labor as a financial asset, the family’s labor (selling skills for money) is a huge asset and it needs to be managed like one. You carry this labor asset with you throughout your life, and you’ll need to maximize it from your first job into retirement. With this value of labor mindset, you can make better choices when it comes to education and career. Higher education is certainly important, but you don’t want to pay for “excess” schooling. Let’s say you want to get your MBA. As chief financial officer, you will need to figure if the skills you’ll acquire can push your career to the next level while still being beneficial to your overall financial goals. Don’t just jump in head first without a clear goal. The value of labor also factors in when deciding on a job offer. We typically focus on the compensation, but you should also consider what about this job can drive more long-term value like developing new skills that can help you earn more in the future. Entrepreneurship “The surest way to financial freedom is entrepreneurship.” Douglas believes that it is unlikely you will create real wealth through traditional employment because of the competition in both the labor and capital markets. Starting your own business does come with some financial risk because there are no guaranteed minimum earnings, but there is no ceiling as well. The nature of employment has changed in the last decade and every year more and more people are moving out of the rat race and taking the leap into entrepreneurship. Besides the tax benefits and being your boss, when you own a small business,

Ever wonder how to people make money selling wholesale on Amazon? Andrew trawled Quora and found someone to teach us how to do it. Eddie Lichstein has been in the e-commerce business for 13 years selling wholesale on Amazon. He has always been a car nut and runs a site, TH Motorsports, which is the Amazon of car parts. He also runs Rejoiner, a site to help e-commerce business owners improve sales. Eddie has been very generous answering questions on Quora and he came here today to answer our questions. America Was Built On Small Business Small business makes up 99.7% of US employer firms. America has always been a country that fosters small business. And right now, certain sectors like e-commerce, are like the Wild West. In 20 or 30 years, people will look back with amazement at how easy it is to make money right now. So why aren’t more of us starting small businesses? Because we get caught up in the details; how do I incorporate? I’ll need an accountant, a lawyer. I’m just a regular person, I can’t deal with all that. Stop thinking that way. You can jump into e-commerce like we’re going to describe with no capital. All you need is a credit card (that you pay off in full every month!) and enough time (but it doesn’t take too much) to do some research and leg work. If You Have An Awesome Dildo, It Will Sell Eddie said that I had couldn’t resist using it as a headline. It’s not quite that simple. You have to love dildos, but really, who doesn’t? The barrier to selling through e-commerce is very low but you will be more successful if you sell something you love because the things you love, you know a lot about. Look around you right now. There are probably half a dozen small things in site that are not terribly expensive that you know a lot about. Choose three or four things and we’ll move on to the next part of the plan. Jungle Scout Jungle Scout is a site that allows you to do research into what sells on Amazon which is what every e-commerce seller wants to know. We used carrot/potato peelers in our example. You research the peelers and you want something that sells somewhere in the middle. If you choose top sellers, you won’t be able to compete with the sellers already peddling those. If you choose those at the bottom, there aren’t enough people buying them. Eddie figures that you will spend about 48 in total researching the product you want to sell. Ali Baba Ali Baba is China’s version of Amazon. But you can get a lot of items there very cheaply because it costs less to manufacture in China than in other places. So you buy 100 peelers. Remember, you are still not really spending money. You’re financing this on net 30 terms because you’re charging it and at least for your first foray into this, you should choose an item that is inexpensive so that if it doesn’t work out, you’re not out much money. You also aren’t taking much risk because you know what will sell after your research on Jungle Scout. Become A Detective You know how to make this whole thing cheaper and more profitable? Cutting out the middleman, Ali Baba in this example. Ali Baba isn’t making those peelers. They’re are getting them from a supplier. You want to see if you can track down the supplier.

When it comes to real estate, breakaway success is found at scale, and Fundrise’s goal is to scratch that itch. Does the Fundrise platform stand up to the hype? That’s what I was determined to find out. I’ve always been a do-it-yourself investor – especially when it comes to real estate.  My wife and I own three rental properties, and the condo that we live in is the result of a successful fix and flip over two years. It goes without saying that real estate is both an essential part of our wealth building strategy and something that we’re particularly interested in. It’s a strategy that is, above all, focused on long-term growth. Over the past one and a half years we’ve interviewed Ben Miller the CEO, twice. First, when Fundrise just started and was only available to accredited investors and a second time after they opened up their platform to normal people – we invested soon after. They’ve since scaled massively, paid me a ton of dividends and relaunched their entire platform as “Fundrise 2.0“. So, I thought it was long overdue that I broke down what they are, why you should care and what they do well (passive income). Let’s get nerdy! What is Fundrise and why should you care? Fundrise is a crowdfunded platform that allows average investors access to real estate returns they could not access on their own or through a traditional REIT. Their bread and butter are real estate deals that are overlooked by large institutional investors and out of reach for most individuals. Investing with Fundrise is available to non-accredited investors. Simply put, that means that anyone can invest with them, you no longer need to be insanely wealthy. And what is a REIT? A REIT, or Real Estate Investment Trust, is a company that owns or finances income-producing real estate. Most REITs are similar to Fidelity’s FRESX in that they manage many billions of dollars in assets and thus have to invest a significant amount of money. So, to be able to invest in new deals and manage the fund’s existing investments they typically need to make larger bets. They simply don’t have time to chase smaller properties. Often large REIT investments aren’t even directly in real estate assets but companies like Public Storage. Because what’s even easier than going out and finding real estate deals worthy of investing in? Investing in companies that do that already. Such is the case with FRESX whose largest holding is just the Public Storage company. Sounds like a shitty deal as there is Such is the case with FRESX whose largest holding is the Public Storage company. Seems like a shitty deal as there is little value added here considering a REIT is so much more expensive than just buying some of Public Storage yourself – for less. The problem is that this is pretty common and there just aren’t many REITs that are strong picks if you’re looking to buy into the rental market. Individuals, on the other hand, are mostly investing in smaller properties ($100k – $200k in value) that are in higher demand making it harder to generate a reasonable profit. It’s also more difficult, and expensive, to manage 100 properties as opposed to 10. That’s why the vast majority don’t go down this road.

Emotions have no place in investing. You rely on cold, hard data to make investing decisions. Today we’ll talk about ways to take the emotion out of buying stocks with the founder of Simply Wall Street. We interview Al Bentley, wind-surfer, CEO and co-founder of Simply Wall Street, an Australian startup that helps people make better investing decisions by turning complex data into easily understood infographics. Buy and Hold Wins Again Confirming yet again the advice that LMM has been giving you from the start, Simply Wall Street does not advocate picking individual stocks but rather the buy and hold strategy. But because there are people who buy individual stocks, Simply Wall Street wants to give them the best information available in a way that is easy to understand so that they can take the emotion out of buying stocks and make right decisions. The site does get incredibly detailed on individual stocks even looking at things like CEO compensation, but when you visit, you’ll notice that one piece of information they don’t include shares price. It is part of the analysis, but they don’t want people to rely too much on that one bit of data. People get too hung up on price when deciding what stocks to buy. DIY Fund Simply Wall Street wants to allow people to pick individual stocks not so they can sell them off quickly, but so they can essentially build their own fund. Individual stocks shouldn’t make up your entire portfolio but using the information that SWS provides makes it easy to have direct shares as a part of your portfolio. Investing for the In-Betweeners There is certainly no shortage of information available to help you pick stocks, but a lot of it is not easily understood by normal people. And what can be easily understood, previous share price, for example, is not a good indicator. You can’t always predict the future by looking at the past. It’s important to look at certain ratios like P/E and P/S, but you need context to understand what those numbers are indicating. Some investors rely on things like Google Finance for information, but that was built by finance people for finance people. SWS wanted to create something for the rest of us, the layperson that doesn’t have all the technical knowledge that some finance people assume everyone has. The founders are not finance guys, so they don’t have those ingrained biases. They were investors though so understood the problems of investors. There are a lot of resources for brand new investors, things like Betterment and Robin Hood, and things for high-end investors but investors that fall between those two categories are under-served. Special Snow Flakes SWS uses a system that is meant to analyze stocks that will be held long term. If you really want to nerd out, they open sourced their analysis model on Git Hub so you can have a look for yourself. There are five main components; Value: Value is based on future cash flow and its price relative to the stock market. Future: The expected performance in the next 1-3 years, based on estimates from up to 50 analysts. Past: The earnings performance over the previous five years. Health: A company’s financial health and their level of debt. This marker is critical to long-term investing. Income: The current dividend yield, its volatility, and sustainability. There is another factor that SWS looks at that many investors and advisors overlooks; management. How long has the board been serving, is the CEO grossly overcompensated,

We get a lot of listener questions, and sometimes we get the same question several times. When that happens, we know a five questions episode is in order! Today we bring you give questions on profit sharing, tradelines, 403Bs, 401ks, and paying off debt. Question One: Can you guys explain the difference between a regular 401k vs. profit sharing 401k? What’s the difference between the two and can you withdraw from both early? Profit Sharing is solely employer-funded. You’re not putting money from your paycheck into it like you would a 401k. It is your employer making contributions towards your retirement. Contributions are usually based on the percentage of salary – higher salary = higher profit sharing. As for withdrawal, the plan administrator has a lot of decision making power in determining pre-withdrawal requirements. For a 401k, the employee is the primary contributor to account. Some employers will match contributions, but not a requirement. Even if they match in given year, an employer can suspend matching in future years. Your contributions are wholly vested right away, but employer contributions can have vesting requirements such as having to work a minimum amount of years. There are certain circumstances where there are penalty-free withdrawals like for hardship, but most early withdrawals will cost you. Question Two: Are trade lines even a legit way to build credit? Or is it just a scheme? Im a late bloomer with my credit and I’m looking for a way to build it up. And where should I put money?  I am saving for a vacation. In a capital one 360 savings account, mix in with my betterment build wealth account, Acorns, or some other strategy? Tradeline is an industry term for an account or line of credit. If you Google tradelines all the top result are marketplaces for trade lines or credit accounts. So why would you buy a line of credit? Let’s say Andrew has a Capital One credit line that he has been paying on time for five years which puts the account in good standing. Thomas, on the other hand, has only one line of credit for a year with some late payments and now he wants to build his credit. In this case, Thomas can go to one of these tradeline marketplaces where Andrew is selling his good tradeline. This allows Thomas to purchase his credit line to help build his credit. Andrew would add Thomas as an authorized user. Then, Thomas would remove Andrew as an authorized user and viola, Thomas now has a five-year credit line in good standing and credit score increases. Yes, this is some shady shit, and we do not recommend this. There are many other ways to increase your credit.  Try applying for a secure credit card or use a third-party rent reporting service, so your on-time rent payments count towards your credit. As for the second question, if you are planning on traveling soon, there isn’t a need to put your vacation savings into an investing account. Any short-term savings are better off in a checking or savings account. Question Three: So I stopped my contribution to my 403b today (teacher) because the returns on it sucked a bag of dicks. I was getting guaranteed 3% and paying fees, which I’m confident I can improve upon by managing my investments myself. The money I’ve contributed thus far is less than $3,000, and I’ve been putting into it for a while. I’d like to roll it over into something else, but the company I have the 403b with, Great American) hits me with MASSIVE fees if I move the money before the contract with them is up, and I can’t move that money to anything other than another 403b according to the IRS. All that to say, I am willing to just cut my ties with that money for now, still have it in my tiny portfolio but just stop funding it. Now, I can spare about $150 to throw towards investments.

There are many ways to make money on Amazon, and retail arbitrage is one of them. I know, it sounds pretty badass. We’ll teach you how it’s done. We have Jessica and Cliff from The Selling Family on the show to talk about their experience using FBA to create a successful lifestyle business. They started in 2010 and now make 300K in sales a year bringing in 100K in profits. What is FBA? FBA or Fulfillment by Amazon allows anyone to sell goods on the Amazon platform and store inventory in their fulfillment centers. Simply put, you buy items you want to sell, and Amazon will list them, store them and ship them to your customers. They also handle most customer service inquires, refunds and returns. Interestingly, more than 40% of Amazon’s total sales come from third-party sellers. Amazon is the go-to place to buy anything from vitamins to dog tu-tus. It’s trusted name with a highly trafficked marketplace (understatement) which makes it a perfect place for your products to gain visibility to millions of buyers. FBA gives everyone the tools they need to start a small online business. They now have warehouses all over the U.S. making same day and next day shipping available to many people across the country. Based on what you are selling, Amazon will have you ship your items to whichever fulfillment center would sell the most of your product. If you use FBA, your products are eligible for free shipping which will increase your chances of getting into the “Buy Box.” What Can You Sell? There’s a surprisingly short list of items you can’t sell on Amazon. Unless you are trying to push imitation weapons, baby crib bumpers or foie gras, you can sell just about anything you want. However, you need to be smart when choosing your items. If Amazon itself is listing the same item that you are listing, they obviously are going to take the sale. Jessica and Cliff sell mostly health and beauty products as well as some grocery. They look for items that Amazon no longer carries or that have run out of stock. You have to do your research and test the waters before finding what works best for you. Also keep in mind that to list certain types of items, you may need a Professional Seller account. A Pro Sellers account will run you $39 a month but is entirely worth it if you are selling forty plus items a month. Finding Your Items The Amazon Sellers App offers mobile tools that help sellers search and scan barcodes of items, check prices, sales ranking, and reviews, list items, as well as communicate with customers. You might find the best deal ever on passion fruit candles, but it won’t necessarily bring in the profits your are looking for. Amazon does a 30% cut so you’ll need to find products with high-profit margins. Jessica and Cliff set a minimum of five dollars profit on any one item they sell. It’s important to make sure there is a healthy gap between my purchase price and profit after Amazon’s cut. Make sure the item has good reviews. The profit margin might be 300%, but if it has terrible reviews, you will have less chance of selling it. The size and weight of the items is also something to consider. You do have to pay for shipping to the Amazon warehouse. Although it is heavily discounted, the price still depends on weight. Know the best time to shop.  Learn when the stores around you have sales or push things to clearance.