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Thursday Linkstuff

Weight – I checked in at 182 a couple of days ago.

The Strump is a new (sort of) Canadian financial blog which I just discovered recently.  It is written by Thomas Strumpski who is an accountant among other things.  Check out the blog and subscribe if you like!

Some of the posts I enjoyed:

The Wild Investor asks could you could manage $700 billion?

Canadian Capitalist wrote an excellent explanation as why the big US bailout is necessary.  I tend to agree.

Money Ning has come up with 10 excellent activities for a bear market.  These include things like “invest more”, “stop watching the news” etc.

Blunt Money is not a fan of student loans.  She makes a good point that some people seem to think student loans are ok because they are for a good reason but why limit your future options by using them if you can avoid them?

Clever Dude reveals how his investments are doing.  Needless to say, it’s not a happy post!

SquawkFox has a neat suggestion for getting rid of fruit flies.  I think I’m going to try this – we usually have a lot of fruit in our kitchen and while the flies aren’t too numerous, even 1 is too many!  She also put together some great recipes for Halloween treats – check out the scary photos!

Carnivals

This week the Carnival of Money Hacks was held at Fix My Personal Finance.  Some nice photos.

The Carnival of Personal Finance was held at Girls Just Wanna Have Funds.

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Monday LinkStuff

First off – Nicolas – one of our loyal readers asked me to start publishing my weight again – a great idea since I’ve gained a couple of pounds since I stopped – right now I am 182 pounds.  I’d like to be at 175 but I haven’t been working very hard towards this goal.

On with the links!

I’ve been meaning to highlight “The Personal Financier” for a while since it is such a great blog but for now – just read How can they possibly afford that?

Triaging My Way To Financial Success wrote a very funny piece admitting that he is addicted to dividends.

Last week had a lot of excitement in the US – “bailout fever” – there were a lot of great posts as a result.

The Wisdom Journal explains what really happened in the mortgage meltdown.

The Amateur Asset Allocator says that moving to cash now might be a big mistake.

David from MyTwoDollars wrote a great post asking why the US doesn’t have universal health care – the comments are a great read as well.  I too can’t understand why the US doesn’t cover all its citizens.

Million Dollar Journey wrote a post called 8 essential baby toys – needless to say, anything with respect to babies will generate some debate.

Where Does All My Money Go wrote about funds with mers over 8% – can these even be legal?

The Financial Blogger says that most investors are home biased.

PFN Network

Squawkfox is recovering from knee surgery so her hubby wrote an interesting post – How to buy a beginner digital camera.

Canadian Capitalist did a great book review of Unconventional Success written by David Swenson who runs the legendary Yale endowment fund.  I’m definitely going to be reading this book!

Blunt Money reports that paying in cash is headline news.

Clever Dude came up with a very clever quote – and comment on how to teach your kids.

Money Ning is having a contest for Starbucks gift cards – check it out!

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How To Clone Yourself

As a disclaimer to this post, I’ve only really run one business, which never had any employees and failed. With that being said, the ideas in this post have come from more successful entrepreneurs, and when I’ve run it past other people who run their own business they’ve found it intriguing.

“The E-Myth” by Michael E. Gerber presents the idea that most small-business owners are very good at the various tasks running their own business requires, but are very bad at training and managing other people to do those tasks. He suggests that the reason so many new businesses fail is that they grow beyond what the founder can handle, the founder isn’t able to handle the ever increasing demands, and they’re eventually crushed under their own weight. His book talks about how to consider all the processes that are required to run your business, formalize them, and allow them to be delegated to others.

When you talk to business owners, often they’ll complain that they’re so busy meeting the daily demands of their business that they can’t invest in their business growth. Often this is expressed as “trying to build a dock while you’re treading water” (this may be a Canadian expression, we like docks up here).

A common wish from small busienss owners is that they could clone themselves (and have twice as much of their own labour for business needs). This is actually possible.

The first step to accomplish this is to hire someone fresh out of school. Either high school if there’s no special skills required to run the business, or an appropriate program if there is (if you’re developing software, hire someone fresh out of a computer science or computer analyst program, if you’re running a small law office, hire a recently called to the bar lawyer).

People who have worked in the industry or elsewhere themselves will be more resistant to doing everything “your way”. They’ll have had the experience of doing things their own way and will figure some of these techniques are better than your approach. The real advantage to someone fresh out of school is that they’re used to learning to do things a certain way, and they’ll be more receptive to learning your approach.

Over the next 6 months, you work very closely with this new hire. Basically you involve them in your day-to-day tasks, and at first explain what you’re doing to them, then directly supervise them while they perform the tasks, then finally delegate increasingly complex business challenges for them to handle themselves (and monitor the outcome). Through this process you’re giving them intense training on how you operate your business and teaching them to think the way you do.

After the 6 months, they may not do everything exactly the same way you do, and there may still be things that are too complex for them, but chances are you’ll be able to trust them to handle the vast majority of business decisions the way you would. At this point you can either semi-retire or focus on higher level business challenges and let them deal with day-to-day operations.

One fear business owners will have is that at the end of the 6 months the person will quit. That’s definitely a valid concern, as you’re investing MASSIVE amounts of time and energy into this person. I’d minimize this risk by: 1) treat them the way you’d want to be treated, 2) pay them very well, and 3) keep a “carrot” dangling that they’ll keep moving up the ranks and eventually run the business. Some owners will try to just use 3 (since its the easiest – all promise, no delivery). The danger there is if the person ever starts doubting you’re word (perhaps you don’t follow through with something else you promised them), then they’ll probably head for the hills and you’ve lost them.

Some people may try to use a “stick” and get the new employee to sign a contract forbidding them to compete with you, or causing some sort of penalty if they quit before a certain length of time is up. No one likes to be treated this way, so I think its short-sighted to try to legally bind someone to you (if they just become a surly and unproductive employee because they’re sick of you but can’t quit, how is that any better than if they’d left?).

Your clone is going to be very valuable to your business for many years to come, so treat them like the valuable resource they are.

Another concern is that veteran employees may resent the new guy who is being groomed to be the second-in-command. This is valid too, and I’m not sure the best way to handle it.

Has anyone ever created a clone or been a clone themselves? Anyone who is currently running a business with employees, do you think this would work in practice?

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On-line / Off-line Toys

My last Wacky Business Idea was quickly debunked as someone is already doing it, so I decided to make it a “two-fer-the-price-of-one” this week and post another.

Webkinz is an incredibly popular toy for kids (at least it was incredibly popular last year) created by a Canadian company.  I thought the whole idea was great, so I bought one for my girlfriend at the time to check it out.  The basic idea is you buy an overpriced stuffed animal that comes with a “secret code”.  You enter this in their website, and it creates a virtual version of the stuffed animal.  You can then buy things for your virtual pet (toys and home furnishings), name it, play games with it and whatnot.  Each new webkinz you buy gives you another “friend” to play with.  Eventually they introduced “trading cards” that you can use to add new items for your pets (or sometimes new pets).

The actual “world” they created was kinda lame (the games weren’t much fun and the production quality wasn’t so good).  Apparently kids ate it up though, and would quickly discard the stuffed animals (but were happy to be paying $12 for the next virtual pet it represented).

It seemed to me that there were all sorts of ways this idea of tying virtual objects to real objects could be executed.  One possibility might be action figures (think GI Joe) that come with a code.  On-line, you can send your men into battle accomplishing missions using the skills at their disposal (so if you buy a figure with a flame thrower, you can use this to overcome obstacles in the on-line game).  You could buy different equipment, that would then be used in the virtual missions or battles with friends on-line (maybe a plastic med-kit could be bought for a buck, then given to one of your figures to save him if he gets injured).

Another idea might be lead miniatures, like those used in Warhammer.  Hobbyists could purchase figures and units and paint them and do battle in real life.  Each would also come with a code which would let you have an identical virtual army, that you could fight with using the same rules on-line (against a computer opponent or against other people).  Perhaps your virtual soldiers could even improve as they fought battles, getting better as time goes on (so your regiment of high-elf archers might become veterans after a number of battles and get some sort of bonus).

World of Warcraft did something SORT OF along these lines, when they had special rare cards in their trading card game that would “unlock” special items for your on-line characters, but it wasn’t an integral part of either game.  I think an important part of making something like this work is to strong tie the real world object to the on-line version.

One of the challenges with computer games is their isn’t usually any sort of scarcity.  If I’m playing a computer wargame, I can build an army of any size I want, and switch to a different sort of army if I get bored with the first.  This makes a large, well-constructed army unimpressive, since anyone can quickly and easily make one.  Limiting players’ options to only the pieces they’ve purchased, while being profitable for the company, would also have the effect of making an army more impressive.    In real life, its always impressive when someone has a big army they’ve assembled themselves, and typically if you don’t own certain figures, you can’t use them in a battle.  Newer players wouldn’t be able to participate in larger battles (or would have to play a smaller role), just because they don’t have enough soldiers.  Players would also become more invested in the army that’s theirs, because its theirs (and isn’t just something they created 10 minutes earlier in the software program).

I’m not so sure either of these ideas is a amazing, but I really think that Webkinz will just be the first of many toys / hobbies entering this space.  Any other ideas for something along the same lines?

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Off-Shore Tailoring

Years ago I was in Thailand renewing my visa to teach in Taiwan.  Throughout Thailand tailoring shops are common, where you can go in and get custom made clothes .  You look through a catalog, pick out the style and fabric that you like (they’ll even make knock offs of designer clothes, or try to make you something from a magazine).  Then, come back a few days later and pick up a complete, tailored wardrobe.

The individual tailoring shops don’t actually do the work themselves.  They just take your measurements and show you the options.  A number of the westerners I met were loading up on bootleg dvds and tailor made clothes.  I met an Irish podiatrist who was on his third trip there and he assured me that the clothes were far cheaper than back in Ireland, and the clothes he had purchased in the past were good quality.

I bought a suit there.  If you’ve never had anything custom tailored, it really rocks!  Basically it feels like that rare piece of clothing that just fits right.  Except it all fits well the first time you put it on.  I hate wearing dress shirts, but the dress shirts I got in Thailand felt great.

Sadly, I’ve since lost a bunch of weight and I look like a hobo when I wear it (its baggy everywhere).

You definitely want to be careful when you’re buying anything like this in a developing country.  Don’t pay them upfront (I’d give them AT MOST 25% of the cost when you order it), and make sure there’s plenty of time between when you get the clothes and when your plane leaves (so you can get them to fix any problems).  I’ve heard of women making a trip to Thailand just to have their wedding dress made, and apparently they save more than the cost of the trip.

An idea for a business would be to have a shop just like what they have in Thailand, except in a western country.  Get someone who can walk customers through their options and take measurements, then fax / e-mail the orders to the main tailoring facility in Thailand (or another country with cheap labour).  Get the clothes shipped back, and make any adjustments in person.

You’d offer your customers much cheaper rates for tailor-made clothes, in exchange for them being willing to wait while its shipped form overseas.

I’m not sure what the shipping costs would be, but its clothing so its certainly not very heavy.  You could get multiple items in each shipment (maybe get one big shipment every week).

One other issue was I went to a partial fitting, where they did a rough cut of the clothes, put them on me and made some more custom measurements, then they went back to the main shop for final fittings.  If you had to send it back and forth overseas repeatedly it may get to the point where the cost to produce the clothing is as high as locally tailors custom clothing.

For this post, or any other of the wacky business ideas I post, obviously I’m releasing any ownership claims I may have over these ideas. If you like something I post and feel like you can make money from it, please feel free to do so! Let me know when you’re opening and we’ll do a post on it to give you some free advertising.

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Friday LinkStuff

The Amateur Asset Allocator is at it again with his Top 5 Budget Date Ideas – quite funny!

Money Grubbing Lawyer had a funny story about his laptop catching on fire.  He also discusses online computer backups, which are something I’ve looked into as well.

Moolomy put together an excellent guide to asset allocation – Everything you ever wanted to know about asset allocation.

Million Dollar Journey wrote about an email he received which criticized him for spending money on consumer goods at the same time as he was thinking about putting his kid in daycare.  According to the emailer, MDJ should be focusing every bit of financial might towards having one parent (guess who?) stay home.  To do otherwise would clearly indicate serious parenting deficiencies…anyways check it out (and the great comments) at The choice between daycare and staying at home.

Michael James on Money worries that online trading might be too convenient.  How do you handle easy access to trades?

Where Does All My Money Go talks about the Bernanke put and whether the inherent moral hazard is raising the risk level in the markets.

PFN Network

Squawkfox writes a lot of food articles so when she did a book review on “The Dip” by Seth Godin, I assumed it was some sort of sexy concoction of hummus, tomatoes and dried beans to dip your chips into.  🙂  Seriously though, after reading her review I’m planning to read the book as well.

Canadian Capitalist wrote about investment asset classes – is there such thing as too much of a good thing?

Money Ning wants to improve his selling skills.

Blunt Money bought 45 jars of spaghetti sauce – check out the photo if you don’t believe it.

Clever Dude wonders how much money you need to make to be rich.

Carnivals

Carnival of Personal Finance with 4% post– hosted by BankerGirl.

Festival of Frugality #142 with Quality Illusion postFrugal Babe.

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Thursday Linkstuff

A very short link post this week because I am out of town and away from the internet this week!

Canadian Capitalist wrote about RBC Direct’s new offer – a bonus of 1% of your assets if you transfer from another brokerage.   Like Kenny said – “It’s gold Jerry, gold!”.  I’m jumping all over this giveaway – will be doing a post on the process involved.

Blunt Money says she is behind in her retirement contributions but I think she isn’t doing to badly because she is going in the right direction.

Clever Dude laments the end of a dream – he sold his bass guitar.  I guess the rock star career isn’t going to happen.. 🙂

Squawkfox came up with 50 ways to leave her lov… ooops, wrong title – 50 ways to save $1000.  I think it would be quite a feat to accomplish all 50 in one year!

Money Ning has more thoughts on whether he should buy an investment property or some dividend stocks.

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Lessons Learned Blogging

This is a post with ideas about blogging that I’ve thought over the last (almost) year-and-a-half in the personal finance blogosphere. I don’t make any claims that these are the *best* ways to blog, and certainly don’t claim this is the *only* way to blog. Its what’s worked for me though (I won’t speak for Mike this time).

  • Post consistently: I really think there’s value in regular posts, ideally every weekday. Our justification for not posting on weekends is that traffic goes way down, so why write a post for days when most of our readers don’t visit? From the readers’ perspective, I think (hope) there’s a point in their day where they say “I wonder what’s up on Four Pillars today?”, I want to make sure there’s something there every time they think that and come to the site. I know from personal experience that it doesn’t take many times with no new content before you just forget to come back.
  • Be sincere: A few bloggers adopt personalities that clearly aren’t themselves. While Mr. Cheap is an exaggeration of some of my less endearing qualities (I annoyed a friend suggesting reusing coffee grinds recently), I think Mike & Mrs. Pillars can attest that I’m pretty similar on and off-line (I think I’m probably a bit nicer in person though). I think it would be EXHAUSTING to always write in a way that isn’t yourself, and I think readers pick up on it when you’re faking it. As Kurt Vonnegut suggests, sound like yourself.
  • Be humble: As bloggers we often can’t really claim we know what we’re talking about. A few of us are blogging about subjects we actually ARE experts in. The rest of us yammer on about things we’re still learning about ourselves. Its striking to me how few of us actually blog about what we were trained to do, or what we do for a living. This should probably be a blog about computer programming (since that’s what Mike and I have both done for most of our working lives). When someone doesn’t know what they’re talking about, then arrogantly condescends to their readers, it doesn’t come across as knowledgeable, it just comes across as arrogant. Luckily these types seem to burn out and disappear from the blog world. I think there’s real value in clearly expressing when you know you’re out past the point of what you really know. Feeding people misinformation is one of the greatest disservices you can do, so I think its really best to let people know when to take what you’re saying with a grain of salt.
  • Have a thick skin: I’m pretty thin-skinned, to the point one of my real-life friends worried about me when I started blogging. Luckily people have been nicer than I could have hoped for. There’s still the odd person who posts a nasty comment here or there, and blogging would stop being fun in a hurry if you let it get you down. I’m lucky that Mike is able to diplomatically tell the trolls to buzz off.
  • Say “Thank you” and make friends: Posting a quick “thanks for the link” (or linking to something you think is interesting) is one of the easiest things in the blogging world, and its also one of the most appreciated. Its always disappointing when a post doesn’t generate many comments, and its good to always show some love to frequent commentors too (I haven’t been as good at this recently as I should be – I love you guys! *kiss* *kiss*). Most blogging software lets you see when people link to you, and even if its a new blog with just a couple of posts, I’m tickled pink when people link to us (and try to always leave them a comment on their blog thanking them for doing so). Carnivals, commenting on other people’s blogs and taking part in networks are all very important activities that I’m horribly negligent at. Luckily Mike covers up my boorish behaviour.
  • Take opportunities: Sometimes great opportunities are offered to us, and it pays to say “yes”. I’ve asked people out for lunch who I’ve interacted with on-line, and had a number say “no thanks” (and seemed offended at the idea). Mike said “sure”, we met up in real life and shot the shit for a couple of hours. In turn, he suggested we merge the blogs, I said “sure”, and that’s turned out better than I could have ever hoped.
  • Make opportunities: Things are often not as hard as we think they are. Mike and I each suggested something to the other, it was accepted, and good things happened. I recently setup a book review & interview that I’m really pumped about. All it took was an e-mail to the author saying “want to do this?” and he did!
  • Humour can be a tough line to walk: I’m ironic more often then I should be . A number of commenters clearly don’t get it, which definitely implies a number of readers are misunderstanding me who never comment. I think its important to write such that you’re clearly understood, but I know Mike, a number of regular commenters and hopefully most regular readers clearly can pick out when I’m writing “tongue in cheek”. Some blogs go overboard trying to be funny and end up just being annoying (I probably do this too often myself). Blogs are less formal than traditional media: we don’t have to suck up to advertisers the same way a TV station would. This leads to less restraints on language, taboo subjects and humour, but things can become unappealing in a hurry when any of these things go overboard.
  • Consider consequences: Mike and I luckily get on the same page with most things, and both of us are realistic of what may result from our choices. We’ve discussed context links and both thought they’d just annoy readers (which is the last thing we want to do). We discussed the casino ads we run, and figured none of our readers would look twice at them, so that was an unintrusive way to make a bit of revenue (the people who buy those links from us aren’t interested in our readers, they just want to bump themselves higher in Google’s rankings). We’re also aware that we’re hurting out PageRank by helping them game Google’s system, but what the heck, a buck is a buck. We talked about putting a “buy us a beer / coffee” link in, but both felt it would be too much like begging (and again we worried about the effect that would have on our readership). We like the idea of TV / Radio / Newspapers where the audience can consume the content for pretty close to nothing, and the advertisers foot the bill. I’ve had conversations with people where they refuse to acknowledge the consequences of what might happen and will say “well, lets just try it”. It drives me nuts when you can see (and avoid) a problem, but someone refuses to do so.
  • Don’t worry too much about spelling and grammar: Occasionally someone will point out a typo or a bigger error you’ve made and you’ll feel bad. I think its good to try to get the right usage of there/their/they’re and its/it’s, but books, magazines and newspapers have people who’s full time job is catching and correcting errors. Don’t beat yourself up if you make the odd mistake, the most important thing is that people understand what you have to say.
  • Be modest: Closely related to “Be humble”, the primary idea behind this is don’t ever do something like a list of ideas telling other people how they should blog! How lame and arrogant would *THAT* be?