Ryan Mulligan

How to Make Your Own Free Website in 20 Minutes

ryan@ryantm.com (Ryan Mulligan) — Tue, 23 Dec 2008 08:47:00 PST

By following this post you will have a website that you can visit in your web browser just like this one, for nearly free(less than 5 cents a year) in 20 minutes. In addition to being easy to set up, your website will be on top of a highly scalable and reliable architecture which will handle traffic spikes with ease.

The company we will use to host this site is called NearlyFreeSpeech.NET.

Signing up

Visit NearlyFreeSpeech.NET now.
Click "Sign Up Now" in the top left.
Click "Create a membership."
Fill out the form and click "Sign Up for NearlyFreeSpeech.NET."
Check your email for the confirmation email.
Click the link in the email, or follow the other sign in methods. Remember the password in the email as well.
Enter your password to log in.

Making your site

Click "Create a new account" on the right sidebar.
Fill out the form and click "Save Changes."
At this point NearlyFreeSpeech.NET will give you 2 cents for free for a 30 day trial usage. (After 30 days, you will have to pay at least 25 cents to keep your site running.)
Click "sites," then "Create a New Site" on the right sidebar.
Pick a name for your site that will become part of the URL of your site. For example, a short name of "ryantm" would give "http://ryantm.nfshost.com."
Click "Continue."
Unless you already have a domain name, select "No" and click "Continue."
Click "Create Now."

Adding your first web page

Open a text editor (on Windows try Notepad).

Enter the following text:

  <html>
    <head>
      <title>My First Page</title>
    </head>
    <body>
      <h1>Hello World Wide Web!</h1>
    </body>
  </html>

Save your text file as "index.html".

Uploading your first web page ( on windows )

Open Windows Explorer (Shortcut: type "windows+r" then type "explorer" and press enter).
Type "ftp.phx.nearlyfreespeech.net" into the address bar.
Enter your username, "YourUserName_YourWebsiteShortname" and the password you received by email.
Click and drag your index.html file into the directory.

Uploading your first web page ( on Linux )

Open a terminal

rcp index.html YourUserName_YourWebsiteShortName@ssh.phx.nearlyfreespeech.net:/home/public

Visiting your site

Visit your site at http://YourWebsiteShortName.nfshost.com.
Enjoy

Writing Review

ryan@ryantm.com (Ryan Mulligan) — Sun, 21 Dec 2008 07:58:00 PST

As promised, I will review the writing of my latest blog entries. By reviewing on my own writing, I hope to learn more about my writing and improve it. If you have any comments about my entries, I would love to hear them, and I will post them in my reviews.

Cheap Memory Foam Mattress

One sentence that strikes me as particularly bad is, "One was how good the bed felt underneath me, and two was the price." My sentence construction here is very unbalanced. The first part of the sentence is a complete idea, while the second part is explained in the next sentence. When sentences become this unbalanced it becomes hard to read them.

This post has a very generic opening. I do not sound excited about this mattress, even though I really am. Starting the post with Tempurpedic instead of an exciting explanation of memory foam was a mistake. It would have been more appropriate to postpone this post until after I could make a better recommendation about the bed. Ending by saying that I have only slept in it for two days instead of a call to buy this mattress is a weak closing.

Now that I have had two weeks to sleep in the mattress, I've found it to be extremely comfortable. I wake up without any back pain or soreness. Also, I can sleep in any position without feeling pain: on coil mattresses I could never sleep on my side, but on memory foam I can. Sleeping on my side was especially helpful while I was sick.

Cutting Out the Middleman

This was one of my best posts of the group. I am passionate about cutting out middlemen everywhere and I think this showed in both the length and quality of this post. I should not have opened the post by talking about the theory of supply chains. This is slightly boring and actually off topic from what I discussed later. Instead, I should have made strong points about why middlemen are bad. Points that I would back up in the body of the post.

Title Insurance Prices

Some of the writing is repeated twice in this post. I should have worked to clean up this duplication. Also, there are unnecessary words in my prose. For example, "and the person you are selling it to" is "the buyer." In addition, title insurance is not an "idea" it is a service.

Consumers reporting the prices they pay for services might make a really popular web application. The prices of services are very irregular and it is hard to know if you are getting cheated. By reporting and aggregating prices, people could be more satisfied about the prices they pay.

Opportunity Monitoring Company

The problems with this post are mostly content related. The idea behind this company is not fully thought out, so some parts of this post were quite vague. I did not explain why an opportunity monitoring company would be an exciting place to work at well enough. There was no plan to generate revenue either.

There is an additional opportunity to post explaining how the calculations done by this company would work in practice.

Capital Preservation

This post was pretty crappy. Capital preservation is a good idea, but the post suffered from problems that detracted from the idea. Defining capital and income at the start of this post would have made my explanation clearer. The post ended by talking about something unrelated to capital preservation because I got distracted talking about the behaviors of financially illiterate people. My use of bold text makes the post easier to skim. What might help even more would be to have section headings, and also more links. My posts, in general, are devoid of good links and headings, which help to keep a reader's attention, by breaking up large blocks of prose.

Systematic Exploration

I am a hypocrite for supporting the ideas in this post. I have not systematically explored my work environment even though I could probably do it in less than two hours. Also, my attempted systematic explorations of the Walmart near my apartment failed to find what I was looking for. This week I happened to find what I was looking for by random exploration. I made good use of the word "you" in this post, and I had some good examples. A lot of my other posts could be improved by using anecdotes like I did in this post.

Admitting You Suck

I wrote this post when I was very ill, and it shows. It is barely coherent and too short. It sucks! It would have been a lot nicer if I admitted in the post that I sucked, instead it reads like I am telling you that you suck, without first admitting that I suck as well.

Cancun

This post could have a much better title. It is a travel guide to Cancun, but I instead just wrote "Cancun" as the title. Also, I try to appeal to every type of Cancun traveller instead of focusing on the one that I am, or ones that I know I can help. My knowledge of the party scene in Cancun is totally lacking, but yet I thought I could give useful advice about it. I should not have tried.

I enjoyed writing about travel, so I want to write about my other experiences; like my road trip across the US, and my trip to Jamaica.

Non-violence in Iraq

This was a most popular post by number of comments. Jacob Lee's comment was exciting because it made me rethink America's effect on Iraq. Also, iprefermuffins pointed out that I spelled "Gandhi" wrong, which is particularly lame because I had spent hours reading Wikipedia pages about Gandhi.

I did a good job of avoiding passive sentences in this post. Nothing is cut and dry in geopolitical problems, but writing passive sentences does not spark debate or make people think. I was happy with the length of this post as well. I demonstrated again that I am bad at concluding blog posts. My conclusions tend to not reinforce what I have written and instead go off in strange directions. The reason for this is that I see that I am almost done and I rush to finish. I will try to focus on improving my conclusions next week.

Programmers Will Form Labor Unions

I was surprised this entry did not generate any disagreement. I think this just shows how few readers I actually have at this point, which is kind of disappointing. I need to focus on building my readership by writing more valuable posts. This post is not particularly valuable because it is not directly applicable. It just some speculation about the future.

This post was well structured, except for the conclusion. It introduced three conditions for unionization then talked about each point. Use of more examples, anecdotes and evidence would have made this post a lot more valuable.

What I Learned Playing MUDs

I like this post. One thing that could improve it are sub-headings. It is fun to recall what I learned from my hobbies and try to distill it into some useful form. It would be fun to make other distillations about the past. Maybe a post about what I learned in college, high-school, from playing sports. All fun topics to explore in the future.

Google Finance Definitions

This post is a departure from my others. It seems to be improperly formatted to give the best explanation: some of the explanations are part of a description list while two are just paragraphs. Also, I could have added a lot more value by talking about how you should interpret these numbers instead of just providing definitions for them. I just noticed that I failed to highlight a link in the middle of the post. With more work, this format of post could provide a lot of value to people.

Money Burning Charity

This post is pretty crappy. It starts off advocating for this new type of charity I invented, but as I think about it more I find the idea is a bad one. After I realized it was a bad idea, I should have reformatted the post as a joke, or scrapped it entirely. Posting it in an inconsistent state was irresponsible of me.

Reader Comments

My friend Alan Lynn has this to say:

I think the approach of writing a blog post every day is inherently quantity over quality, unless you have a lot of time to invest. You've picked some good topics recently, but the content often seems undeveloped.

If somebody finds your blog a month from now, would they find your articles valuable enough to read through your archives?

My current strategy is to learn to write by writing a large number of sentences. My main motivation currently is not to provide value to others but to improve my writing skills and habits so that I can later provide value to others. I think that posting every day is important until I get into a strong habit of posting new ideas I have.

If it is possible, I would like to increase my quality without investing more time. If I get better at researching and writing content, I will be able to achieve this. I hope that I can revisit some of this underdeveloped content later and develop small sections of it.

Money Burning Charity

ryan@ryantm.com (Ryan Mulligan) — Sat, 20 Dec 2008 07:58:00 PST

Charities usually have a mission. The mission says who to help and how. It helps to be specific. Charities that focus on cleft lips tend to do better than ones focusing on heart disease. The charity I thought of is quite specific with its mission. The mission is to destroy all of the money donated to it.

By destroying all the money donated, this charity will be bolstering the value of the currency donated. For example, when you donate one million USD to this charity, everyone else's US Dollars become more valuable. It is the opposite of inflation. Instead of goods and services costing more because there are more dollars around to buy them, they cost less because there are less dollars around to buy them.

By reducing prices in general, this charity makes it easier for consumers to buy necessary items. Instead of each paycheck being able to buy less and less goods and services, it will be able to buy more and more.

If popular enough, it may make a slight dent in the rampant inflation caused by the central banks of the world. In fact, to make it more effective, instead of destroying the money donated to it, it will first invest the money and only half the proceeds. This will create a machine that destroys every increasing amounts of money.

Unfortunately, the burning would not negate the bureau-potism caused by the inflationary system: the system that favors those who are close friends with the government by buying their goods and services with inflationary dollars. It would also not help people pay off loans. Most of the money in existence in the world is because banks loaned it into existence, and when they charge interest on top of the created money, it becomes impossible for people to pay off all the debt in existence even by using all the credit in existence. This charity would be destroying credit, without quenching the debt that created it.

Learning to Write Well

ryan@ryantm.com (Ryan Mulligan) — Fri, 19 Dec 2008 08:09:00 PST

The purpose of starting this blog again is to learn to write well. So far I have been trying to learn to write consistently first. The only way to learn to write well is to first develop a steady stream of writing. I have been cranking out a stream of marginal paragraphs for the last ten days, but I have not been applying an editorial process to my words. All I have done is briefly review each post before posting it. Since I want to get better at writing, I need to apply a feedback cycle to my work.

I have decided that every Sunday I am going to post a critique of the last seven posts that I have made. Starting this Sunday I will post a grammatical, stylistic, and content critique of all of my posts. This critique will give me a chance to examine my mistakes and keep me conscious of areas I could improve in. I encourage anyone reading this to do one of two things. Either one, post a critique of my posts on your own website, or two, send me your comments by email (ryan@ryantm.com). If you write a post I will link to it, if you send me comments I will credit your comments in the post. I will include all the comments I receive along with my own.

I think that over time this feedback will become a fun game for improving my writing.

Google Finance Definitions

ryan@ryantm.com (Ryan Mulligan) — Thu, 18 Dec 2008 08:02:00 PST

Have you ever visited Google Finance and wondered what all of those abbreviated names at the top of it are? Well I am going to explain them to you.

The big unlabeled bold number is the current stock price in the currency it is traded in. If you look at something on the London Stock Exchange this number represents how much the stock is valued in Great Britain Pounds. The New York Stock Exchange is in Dollars.

The green or red plus/minus with a number and a percent in parenthesis right under the current stock price is the price move. If it is a positive number it is the difference between the day's low price and the current price. If it is a negative number it is the difference between the day's high price and the current price. Whether it is negative or positive is determined by the current price's relation to the opening price of the day.

Open: The price for one share as of the beginning of trading.
High: The highest traded price of the day.
Low: The lowest traded price of the day.
Vol: The number of shares that have changed hands today.
Mkt Cap: The 'market capitalization' is the product of the total shares outstanding and the current price. This is what the market thinks the company is worth.
52Wk High: The highest price of the stock in the last 52 weeks.
52Wk Low: The lowest price of the stock in the last 52 weeks.
Avg Vol: The average number of shares that change hand each day.
P/E: The price per earnings ratio. It is the number years before the earnings per share would pay back the purchase price.
F P/E: The P/E using the company's forecasted earnings for the next 12 months. Probably less reliable.
Beta: The coefficient of volatility of a stock. A beta of 1 means the stock is highly correlated with the general price of the market. A higher number means it is more volatile than the market, and a beta of less than 1 means it is less volatile than the market.
EPS: Earnings per share. It is the net income minus dividends divided by total number of shares.
Dividend: The number of cents the company will give you per share you own. Companies typically issue this number of cents to stock owners 4 times a year.
Yield: This is the annual rate of return you can expect to receive from the dividend issues if the company keeps issuing the dividend. Compare this to the yield on a savings account.
Shares: The total number of shares outstanding.
Inst. Own: The percentage of shares owned by mutual funds, pension funds, hedge funds, banks, and insurance companies.

What I Learned Playing MUDs

ryan@ryantm.com (Ryan Mulligan) — Wed, 17 Dec 2008 08:15:00 PST

Multi user dungeons (MUDs) are online games that use text as the primary means of interaction. I created a MUD called DeimosMUD back in the year 2000, and it is still running today. Over this time, I have spent countless hours working on it. The hours were spent coding new features for the game, building new worlds, and mainly dealing with people. The time I spent dealing with people's complaints, training people, arbitrating disputes, and punishing offenders far outweighed the time I spent doing anything else. Some people would say that the reason I spent more time on these issues was because I was an inept administrator of MUDs, and they would be right. I started this game just after 8th grade! Handling these issues taught me a lot.

Solving these human caused problems was great for learning how to deal with people in general. My work helped me became a much better moderator and arbitrator. It also helped develop my leadership skills. The hardest people to lead are those that are working for you for free, and everyone on my MUD was volunteering.

I learned that people can have entirely different motivations from you and they can end up doing things that you do not like. For example, the people who made areas on my MUD, builders, would often make the equipment in their areas have better abilities than all of the available equipment. This would ensure that players would want to visit the builders' new zones. The zones did not have to be fun to play, well laid out, or balanced to get players; they just needed to have the best equipment. The builders wanted their new zones to be popular, but I wanted the abilities of players to not get inflated. Player ability inflation deprecates older areas, and makes the game easier to play which is usually a bad thing. I never actually solved this problem of motivations, but I think even just recognizing it was a step in the right direction from my state total ignorance. If I were to try to solve this now, I would try to think of a system that set up larger incentives for the elements I would like to see in an area.

Discipline was something I learned a lot about as well. When I first started the game, I was very lax on discipline. I thought it would be okay to just sit by while people were bad mouthing me and the other MUD administration. This was because I personally believe in free speech and do not really care when other people insult me. I learned that this was not the right approach at all. People who insulted the administration would take the lack of punishment from the insults as license to all sorts of other bad activities: harassing players, exploiting bugs, and conspiring against players and administrators. I learned that the discipline for petty crimes was necessary if I wanted to head of the bigger problem; a lot like fixing broken windows.

Making a MUD also developed my own personal game design aesthetics. At first, I favored the absurd over the realistic. Areas that did not make sense with the theme of the game (Medieval Fantasy) or game mechanics that were just silly, were frequently made. Eventually I rejected this absurdity and started to focus more on simplicity. Instead of making more complex game mechanics, I was trying to think about what I could take out. I now believe the idea that something is done not when you have added everything but when there is nothing left to take out. I feel that simple game mechanics that lead to complex player behavior are greatly superior to complex mechanics.

I had a lot of fun with my MUD and I learned a lot from it. It was my principle hobby for at least 6 years. The end product is still around, but all the memories of the experiences and fun are hard to share. You can still, play DeimosMUD to get a taste of what it must have been like.

Programmers Will Form Labor Unions

ryan@ryantm.com (Ryan Mulligan) — Tue, 16 Dec 2008 08:26:00 PST

We will have programmer labor unions. Labor unions arise when a workforce is stable, there are few opportunities for advancement, and the owners of the businesses are achieving large returns on capital. When these three conditions occur programmers will unionize.

A good number of programmers I have met just like to program. They happily write code that someone else tells them to write and they do not think about writing code for personal gain beyond a salary from their employer. If this dominant attitude continues, programmers will continue to have few opportunities for advancement. If a programmer does not seek to expand his skills beyond mere programming, she becomes interchangeable with other programmers. Another opportunity for advancement is management. Programmers are often also adverse to management. This aversion decreases the opportunities for advancement available to the average programmer.

Programming, as a field, is just old enough that We are starting to see career programmers: people who have remained the same role of writing code under someone else's management with someone else's specifications for their entire working life. This is painfully similar to a career electrician or welder--two highly unionized trades. Certainly the trade of programming as a career programmer advances as new technologies become available but if these new technologies do not change the attitude of the career programmer he remains without advancement opportunities.

It has been shown that large returns on capital are possible by employing a large number of programmers. Microsoft and Google have shown returns on capital that would have astounded the industrialists. These gains will only increase in the short term as more career programmers are marginalized by their own commoditization. By employing more and more programmers at lower and lower wages, companies employing this strategy will achieve absurd windfalls necessary to spark unionization.

The biggest stopping point to unionization currently is stability of the workforce of programmers. Enough programmers do not stay at the same job long enough to make unionization seem necessary. What this group of career programmers may come to realize though, is that even though they do not stay at the same job, they are staying at the same kind of job. The same kind of job doing generally the same kind of work.

Another contributor to instability is globalization of the programmer workforce. The recent labor pool expansions in India, China, etc. have lead to a destabilization in the programmer workforce in developed countries. Jobs moving across the world are hardly jobs ripe for unionization. This destabilization will not last because as the world programmer's standards of living equilibrate, employers will find no refuge in lower standard of living areas. There will be no poor programmers to utilize. When this logical conclusion of globalization occurs, a increasing stability in programmer workforces will occur.

When this stabilization occurs all of the factors will be in place for programmer labor unions to arise.

Non-violence in Iraq

ryan@ryantm.com (Ryan Mulligan) — Mon, 15 Dec 2008 07:36:00 PST

I have come up with a solution for how to get America out of Iraq quickly. The solution is non-violent resistance. If the Iraqis decide to stop providing services and goods from Americans, and stage non-violent sit-ins at Baghdad the US army will have no choice to but to leave. The Iraqis must become stronger, they must decide that it is not worth working and living, if they are doing so under an oppressor.

People say that by leaving Iraq the Americans will destabilize the region. An Iraqi people strongly willed enough to oust the Americans with non-violent resistance, is an Iraqi people strong enough to stand up against the insidious foreign rule from other Middle-eastern countries.

The non-violence is crucial. It is already clear that violence does not work for ousting the US army. Violent people will be branded as terrorists, non-violent people will be true martyrs. People can not rally around the banner of violence. They can, however, take up the cause of non-violence.

The non-violent resistance will be a public relations boon. New media always likes to cover the story of David vs Goliath; even more so if David does not have a sling. Imagine how it would look to see reports of the US army firing into a non-violent army. Think of how badly the Khudai Khidmatgar made the British look. Images of the American army doing the same would shatter the American conscience of being the world 'goody-two-shoes', and bring us Americans back to reality.

The ousting not only must be non-violent but it must also be secular. If the Americans are ousted for non-secular reasons, the non-secular ruling class will have even more power in the ensuing government. The Americans should be ousted because they have no right to be in Iraq. Under international law (think not of the charade of UN resolutions), it is clear that America is an invading imperialist with respect to Iraq. Invading imperialists should be repelled no matter what their religion or social practices are. It should be reason enough that Americans have no right to be in the country. There is no need to bring up such inanities as Americans being infidels or spawn of Satan, or whatever gibberish these religious folks come up with. Do it for secular reasons.

Where is Iraq's Gandhi? Where is the leader who will bring about this non-violent uprising that will free Iraq from its complacency and ill fate? Any Iraqi could be the next Gandhi. All they need to do is stand up and be the first not to cast the first stone. The first to preach of non-violence and throw down their work and take up the cause of non-violent resistance against this foreign oppressor.

Cancun

ryan@ryantm.com (Ryan Mulligan) — Sun, 14 Dec 2008 08:06:00 PST

Cancun is a city on the northeast corner of the Yucatan peninsula in the state of Quitana-Roo in the country of Mexico. It is known primarily for its party scene but there is a lot to do besides that. I have visited Cancun four times in my life and each time I had a wonderful time.

If you are going to Cancun to party (which I never have), I recommend you stay at a hotel that is all-inclusive. If you get your drinking done during the day time you will not be so compelled to waste your money on the over priced drinks at the clubs and bars. One hotel that I stayed at, the Tucancun, is a good choice for this schedule.

If you are not into partying you should stay at a hotel closer to Playa Del Carmen. The beaches are much nicer and Playa Del Carmen is a closer to the Mayan ruins and amusement parks. Most of the travel packages you get will include a bus ride to your hotel when you get there and back to the airport in the end, so there is no need to rent a car. Also, if that wasn't enough, there is an excellent public van system called the "cambia" which is subsidized by the government making it dirt cheap to go anywhere along the highway west of Playa Del Carmen. You can even take the "cambia" into Cancun.

One place you must visit if you go to Cancun is Tulum. The Mayan ruins at Tulum are excellently preserved and well maintained. The site has bathroom facilities and ethnic shopping opportunities. The best part of Tulum is that you can climb down the cliffs overlooking the ocean to a beautiful white sand beach. The water is perfect so bring your bathing suit.

If you are interested in seeing more Mayan ruins, there is also Chichen Itza. It features a Mayan castle (Castillo), a 150 meter ball court, many other well preserved ruins. The time I visited they were still letting people ascend the Castillo, but after some tourists got injured by falling, the stairways have been closed to the public. The Castillo is built so that during the spring and fall equinoxes, the sun will hit it just right and make it look like a giant serpent is crawling down the side of the castle. If you are flexible with your trip timing this could be an excellent time to go.

The city of Playa Del Carmen offers some newly built up-scale shopping areas, and a ferry to Isla de Mujeres. Isla de Mujeres is a island just big enough to have its own airport. It also sports a marine ecological preserve where snorkeling is allowed. Back when I visited last, the preserve still had some nice fish and other life to look at. With the continual snorkeling that they are allowing, it is hard to believe that it will stay nice forever.

Mexico is on good terms with the USA, but bringing passports is a must. A couple of times my dad only brought birth certificates for my sister and I, but this proved to be a hassle and usually resulted in automatic customs inspection.

Admitting You Suck

ryan@ryantm.com (Ryan Mulligan) — Sat, 13 Dec 2008 07:36:00 PST

The best way to learn is to admit you suck and then fix it. If you think that you do not suck at something you are done learning it. Being done learning is bad. When you stop learning, you stop improving, and it is only a matter of time before you suck so much that you can not deny it. Not sucking is always a moving target, and it is always relative. Remember you suck and fix it.

Systematic Exploration

ryan@ryantm.com (Ryan Mulligan) — Fri, 12 Dec 2008 07:43:00 PST

Whether you are visiting a new place, or visiting a very familiar, systematic exploration can help you become familiar with your surroundings. Systematic exploration is the process of exploring every possible dimension of the place you are in. A simple example is that you go to the grocery store. Instead of visiting only the aisles that contain things of interest to you, visit every aisle in sequence. While you are doing this hold in your mind the intention that you will find something cool that you've never seen before. This works for new grocery stores and ones you have frequently used. One time, I was in Walmart and I decided to systematically explore the grocery section. Just from this decision I found some great textured vegetable protein hidden in the freezer section.

This technique also works if you start a new job. When you start the job, visit every person's office, visit every workstation on the shop floor, look inside every tool chest. People might think you are nuts but in no time you will not have to interrupt people to find things for you and soon you might even be telling others where things are.

Systematic exploration can help you learn more about where you live. Instead of just driving or walking from where you are to where you want to go, take different routes each time so you can explore where different shops and entertaining things are. Just last week I found an awesome view of east Las Vegas by systematically exploring some roads. I also stumbled upon a large yard that was completely filled with Christmas lights and people touring a chocolate factory. Now I know how to find a great view and a chocolate factory, which was totally worth the extra gasoline I had to use to do it.

All of us have a little extra time each week, extend your commute a little bit so that you can find something interesting. Consider exploring to be a fun date in itself. Instead of planning where to go say, "How about we go exploring?"

Capital Preservation

ryan@ryantm.com (Ryan Mulligan) — Thu, 11 Dec 2008 07:49:00 PST

One financial skill that I have been most interested in lately is capital preservation. Capital preservation means that once you decide to invest some money, you try to never spend that money on a non-investment related activity, or lose it on bad investment. Operating from this frame of mind does two things for you. One, it keeps you thinking about ways to invest your money, and two it forces you to save for the future.

One of my life goals is to invest more and more of my net income over the course of my life. As a start out, it should be tough to save more than 50% of my current income, but as I start earning more money, living more efficiently, and making more money from investment opportunities, this percentage should get higher. There really is no limit to how high this percentage can be, for instance, if you are one of the richest people in the world, you have so much money that you can even possibly spend it all on yourself, so you have to invest it. One of the richest people in the world might have a capital preservation rate of 99.999%.

Increasing your capital preservation rate is a good idea because the more capital you have, the more additional income you can generate from it. Take the simple example of a savings account. When your account earns interest, if you keep the interest in that account, that interest also earns interest. It is called compounding -- one of the most important financial concepts. The more capital you have that generates additional capital, the higher and more quickly your capital preservation rate will climb.

Most financially illiterate people actually try to do the exact opposite. Instead of trying to increase their capital preservation rate, they try to decrease it. If you spend every dollar you make on non-investment activities, your capital preservation rate is 0%. It does not matter if you make $1 million dollars a year, or $10 dollars a year. If you spend it all, your capital preservation rate is 0%.

It is actually possible to have a negative capital preservation rate. If you spend more than you make on non-investment activities you have a negative rate. It does not matter if you are spending money that was in a bank account, or money you got on credit ( credit card, loan, etc.). Either way you have a negative capital preservation rate.

The most illiterate people actually try to maximize their negative capital preservation rate. They will try to borrow as much money as they can from banks, and credit cards for non-investment expenditures. While they think they are living like a rich person, really they are as far from it as possible. A truly rich person tries to maximize their capital preservation rate, the richest have a rate so close to 100% that they stop caring.

Opportunity Monitoring Company

ryan@ryantm.com (Ryan Mulligan) — Wed, 10 Dec 2008 07:56:00 PST

Often I think of ideas for companies that sound great. Upon further inspection, I find that there is some small economic detail that needs to be true before the idea can be a success. For example, my friend David Grayson and I thought up an idea for putting LED stickers on the bottom of glass beer bottles. We figured that we could sell them to beer distributors as a way to promote their glass bottle offerings. The trouble is, the cost of LEDs plus batteries plus stickers is currently too much to make the offer tenable. The price of the promotion needs to be some small fraction of the gross margin on the bottles for this to be attractive to the distributors.

We had this idea about a year ago and we haven't though much about it since. It would be great if there was a company that aggregated ideas like the one above and came up with the criteria for when the idea would actually be economically viable. The company would monitor the inputs: the prices of LEDs, stickers, and batteries. It would also monitor the constraints: the gross margin on glass beer bottles, the total consumption of these bottles. The company might even work with distributors to get them on board before the idea even becomes tenable. The company would then take these inputs and constraints and come up with a equation for when the idea would make economic sense.

By periodically reviewing a large pool of ideas with similar structure to the one above, the company would routinely find ideas that have recently become economically viable. Having a large pool of ideas to select from that have recently become economically viable would be a very valuable service. The company could distribute this value in the form of information, or in the form of implementing the idea using one of its subsidiaries.

This type of company would be extremely exciting to work for because they'd always be dealing with the newest possible ideas that could actually work. It would be exciting to run a report daily, and see that two of our 1 million stored ideas have become economically viable over night.

Title Insurance Prices

ryan@ryantm.com (Ryan Mulligan) — Tue, 09 Dec 2008 20:28:00 PST

Title insurance is this idea that the title of your home might be encumbered by some liens and the person you are selling it to might be worried that they don't have the right to buy the property and would get embroiled in legal issues. Title insurance insures agains tthis happening, and in the case that it does they are the ones who pay for it. They should only be charging a rate that is close to what they pay out handling these claims, but I don't believe this is happening. I tried to search for title insurance prices on google but it came up with nothing. I decided that I will try to compile a list of prices people paid for title insurance.

Go here to see the results in real time!

Cutting Out the Midddleman

ryan@ryantm.com (Ryan Mulligan) — Tue, 09 Dec 2008 07:50:00 PST

Cutting out the middleman is one of the best things you can do to improve service, satisfaction, price and overall system efficiency. In supply chain theory there is a concept called the Bullwhip Effect. It says that the more middlemen you introduce into a supply chain the less efficient it can be. As a distributor makes an order he causes demand to whip up as seen the upstream supply chain members and even when obeying the most efficient ordering algorithm, the upstream member has to order more than the demand, leading to a amplification of the demand. Left unchecked this demand can get out of hand and become a giant surplus.

Middlemen are not only inefficient, but they are also costly. Consider how many people are required to deliver a piece of real estate(e.g. your home for example) to you. You have the 2 realtors and their brokerages, 2 lawyers and their firms, a house inspector, a pest inspector, two banks, a title insurance company, an appraiser, and city, county, state, and federal government agents. Each of these people makes enough money to do real estate transactions full time (except the government, they do not know how to make money.). People are the largest expense of any company, and they certainly are the largest expense of any real estate transaction. If you can get rid of any of these middlemen or decrease their compensation you can save a lot of money on a real estate transaction. One example to look into, if you are selling your home, is Flat-fee MLS listing. With a flat listing fee you can save up to 3% of the sale price of your home.

Middlemen can also leave you less satisfied. When is the last time you bought a new car and felt satisfied? With the way car dealers haggle, you know that someone else out there is getting a better price, and you always have to weigh the stress induced by haggling you before you get into it. The fact is car dealers make their money by selling cars in volume and since they buy their cars at a fixed price from the manufacturers, they care a lot about selling each car for as much as they can. It would be great if we could cut out the car dealerships and buy cars from an automotive department store? This is what CarMax has done with used cars. They sell all makes of used cars at a reasonable sticker price and they do not haggle. This leaves their customers feeling more satisfied: they got the same deal anyone else would have gotten, and they did not have deal with the stress of haggling.

The effect of the Internet that has done the most good for humanity has been removing middlemen. It is has become so easy to set up an online store that many factories and manufacturers are beginning to sell their goods online. Even if they haven't begun to do so, the new manufacturers are.

A lot of great businesses were founded with the idea of taking out the middleman. GEICO takes out the middleman of having an insurance agent. The Foam Factory sells cheap memory foam mattresses direct. If you are thinking of starting a business, one of the surest ways to achieve customer goodwill is to take out a middleman. When you take out a middleman, customers go from spending more money to less. When you save customers money, they love you.

What middlemen have you dealt with recently and how could you have avoided it?

Cheap Memory Foam Mattress

ryan@ryantm.com (Ryan Mulligan) — Mon, 08 Dec 2008 07:50:00 PST

The Tempurpedic mattress commercials have always intrigued me. The promise is great: a material that conforms to your body without poking you the way coiled spring mattresses do. This was enough to make me want to try one. I went to a local mattress store to try one and was amazed by two things. One was how good the bed felt underneath me, and two was the price. The beds cost at least 5 times as much as comparable coiled spring mattresses. This was confusing because the process for making a foam bed is actually a simpler process than constructing many metal coils and putting them in the right orientation. With a foam bed all you need is a mold of the right size and the right mix of materials at the correct temperature. My gut told me someone would be selling these beds for less.

After searching the internet for about a day, I stumbled upon The Foam Factory's website for Memory Foam Mattresses. With prices 5 times less than Tempurpedic, comparable quality, and free shipping these beds are amazing. I bought a Twin 5" LUX-HQ 4" 4.5LB Memory for $254.99 + 20 for the nicer cover and had it shipped to me.

The mattress came compressed in tight plastic wrapping, which made it take up less space than it does now. After I took it out of the plastic wrap it started to expand. Once fully expanded it was ready to use, and felt great to lie down in. The strangest sensation is when you go to plop down on your bed, you expect it to feel the same way a coiled spring mattress feels, but it feels totally different. So far I haven't gotten used to this difference.

I have only slept in it for 2 night so far, and I don't have any complaints, but stay tuned for an update.

Compact Fluorescent Lightbulb Efficiency

ryan@ryantm.com (Ryan Mulligan) — Sun, 05 Oct 2008 19:00:00 PST

by lowjumpingfrog

Compact Fluorescent Lightbulbs (CFLs) are quite the rage in home lighting these days. I've replaced most of the bulbs in my house with CFLs. Let us examine the energy and financial efficiencies of these bulbs.

Energy Efficiencies

The input of lightbulbs is their power consumption. Power consumption is measured in Watts. The output of lightbulbs is how bright it is. Brightness is measured in lumens.

The most common type of CFL is the 13 watt lightbulb. It is the replacement for the common 60 Watt incandescent bulb. Table 1 shows relevant inputs and outputs for these two bulbs.

Table 1
	Input Power (Watt)	Output Light (Lumen)	Luminous Efficacy (Lumen/Watt)
Incandescent	60	850	850/60 ≅ 14.16
Compact Fluorescent	13	900	900/13 ≅ 69.23

CFLs have a higher lumen output and a lower watt input resulting in almost 5 times greater efficacy. Note though, that I don't say efficiency. Efficiency is a dimensionless quantity, and Lumen/Watt is not dimensionless. If you had a lightbulb that gave off 1000 Lumens at 9 Watts. You would compute its luminous efficacy to be 111 (1000/9). 111 is greater than the maximum energy efficiency you could have (100%). If your lightbulb is greater than 100% efficient it would mean that it actually created energy out of nowhere.

To compute a bulbs efficiency we need the theoretical maximum luminous efficacy. The theoretical maximum represents a lightbulb that turned all of its power into visible light photons. The theoretical maximum luminous efficacy is 683.002 Lumen/Watt. Give this, the luminous efficiency is given by the luminous efficacy divided by the maximum efficacy. The results of this computation are seen in Table 2.

Table 2
	Luminous Efficiency
Incandescent	14.16/683.002 ≅ 2%
Compact Fluorescent	69.23/683.002 ≅ 10%

So in the case of CFLs 10% of the power consumed is being converted into light. Ideally we want 100% of the energy to be converted into light, but 10% is 5 times better than the incandescent bulbs at 2%.

If we swap incandescents for the more efficient CFLs we will realize a significant energy savings. Incandescents use 60 watts and CFLs use 13 watts. The difference is 47 watts. If we take that over the useful life of a CFL bulb, 10,000 hours, we get 470 kW hours of savings. At a usage rate of 3 hours per day, you can use 51.5 kW hours fewer a year.

From an energy perspective, CFLs represent a significant improvement over prior bulbs. Energy savings alone is not a reason to do something though. If CFLs cost $500 per bulb you would not want to pay for one. Let's see if we can really afford these bulbs.

Financial Efficiencies

To decide whether to invest in CFLs we need to decide if the Net Present Value (NPV) of the bulb switch investment is positive. To upgrade the bulbs capital must be invested. Since you have to have at least one kind of bulb the capital invested is the difference in price between a CFL bulb ($2.74) and a incandescent bulb ($0.36). This investment yields two distinct returns. The first is the energy savings. If we assume an energy cost of 10 cents per kilowatt hour, the switch saves 43 cents each month. The second is replacement savings. Incandescent bulbs are rated for 1000 hours of use and CFLs are rated for 10,000 hours of use. Each year we forgo the replacement cost of an incandescent bulb.

Since cash in the future is not as good as cash now (cash now can be invested in other things) we must use NPV to calculate how much this is worth to us. The NPV calculation discounts cash returns in the future. The rate of discount is based on some rate of return we think we can get doing something else. For instance, at the time of writing the US 10 year bond is at 3.83%. So if you invested your capital in a US bond instead of a lightbulb would you come out ahead? That's what we aim to ask by using NPV. It turns out that the NPV for the CFL investment is $44.73. Since this number is positive, it means that investing in CFLs is a good option compared to investing in US Bonds.

It is useful to look at your break even point. Say you are only living in a place for a short time. If you move before the break even point you will have wasted cash buying CFLs. If you move after the break-even point, the CFLs will be worth it to you. The break even point is the time when the Net Present Value first becomes positive. In this case, the break even point for the CFL investment is at 8 months. At 8 months, you will have recouped your investment and made 17 cents.

Another useful number is your return on investment. The capital outlay is $2.37 and the total return is $57.42. The return on investment is 2422% over 9 years.

CFLs appear to be a good investment vehicle for people looking to earn great returns on their capital. Unfortunately it does not scale well. Once you have invested capital in all of your lightbulbs you cannot continue to achieve such large returns on investment.