“Umm, no Egor, you might wipe out my lunch money for a year with those type of stakes!” I replied.

Facebook is by far the biggest internet IPO of the century.  With the bankers looking to raise some $5 billion in new capital, valuing the company somewhere around $80-100 billion dollars, there is going to be a ton of wealth creation!  By many estimates, there will be over 1,000 newly minted multi-millionaires and a few billionaires as well.

Mark Zuckerberg, himself will be worth some $20-$30 billion, depending on valuations.  Unfortunately, not all of us work at Facebook, and not all of us managed to get into Facebook 5+ years ago, even if we did have the foresight.  As a result, we’re left to ogle at the riches and lament at yet another missed opportunity.

Don’t feel bad!  I’m here to tell you how you too can profit from Facebook and live happily ever after.

PROFITING FROM FACEBOOK THE ALTERNATIVE WAY

* Buy a ticket and move to the San Francisco Bay Area.  What took 3 months to cross the country by horse a couple centuries ago now takes 6 hours by plane.  You need to be in the SF Bay Area to really maximize your wealth creation opportunity.  San Francisco is the best place for entrepreneurs to live right now!

* After your arrival, move to either Menlo Park (45 minutes south of San Francisco), or move to beautiful San Francisco and rent an apartment along the Facebook/Google bus lines.  The whole idea of moving here is to increase your chances of bumping into them in the bars, at restaurants, or simply on the street.

* Identify those who are at least 26 years or older, or who joined in 2008 or earlier.  Understand that “only” 1,000 of the 3,000+ Facebook employees are going to be millionaires+.  The other 2,000+ employees are either too young, or joined only in the past couple of years.  They’ll all be hundred-thousandaires of course, and probably millionaires eventually if they stick with the company, but you’re going after the big fish.  A simple way to ascertain this info is to simply ask, “When did you join, stud?” or “When did you graduate, sexy?“.

* Millionaires need love too.  It doesn’t matter how rich you are, if you have nobody to share your spoils with, you might as well be middle class or poor.  As a result, know that these Facebook employees are ready, willing, and able to meet your hot self at a bar, party, or any social setting.  The key is to know one Facebook employee.  Once you know one, you will get to know dozens more, improving your chances of dating, and potentially marrying that lucky person.  Infiltrate like Seal Team 6!

SCENARIO ANALYSIS: There’s really nothing wrong with gold-digging, because if you plan to be with someone, they might as well be rich right?!  I mean come on.  There are two equally hot and friendly girls who looks like Jessica Alba.  Jessica Alba #1 works at the Gap store making $28,000 a year as the store manager.  Not bad. Jessica Alba #2 is a developer at Facebook who joined right out of Berkeley in 2005 and is now worth $20 million.  Who you going to choose?

DERIVATIVE CAREERS TO BENEFIT FROM FACEBOOK RICHES

OK, so for whatever reason, you are still against gold-digging, even though marrying a wealthy spouse will set you up for life.  There are attractive rich people you know!  Maybe you’re a romantic, or a fool, or both?  Here are some other ways to profit from the Facebook IPO that you may consider.

* Apply to work at the BMW, Ferrari, or Lamborghini dealer.  Commissions for these overpriced, flashy cars range from $3,000-$15,000 a pop!  Sell just 20 Ferrari California’s to Facebook friends and you’ll probably rake in well over $250,000 in commissions!  You’ll still probably make well over $100,000 at the BMW dealer, but you’ll probably have to sell 30-40 cars to get to that level.  Why work so much?

* Apply to work at Christie’s Great Estates or Sotheby’s Real Estate company.  As we all learned from the last dotcom bubble, it’s good to diversify your paper stocks into hard assets.  Anybody who sold all their dotcom stock in 2000, and bought real estate in San Francisco are laughing all the way to the bank every day!  I doubt any of these 1,000+ millionaires will settle for renting a place after their stock vests.  Wealthy people don’t rent, remember this.  They’ll want to take some profits, and diversify into real estate, gold, and so forth.

* Apply to work at Shrieve & Co or Tiffany’s.  Another no-brainer industry which will garner a tremendous amount of business.  The first thing many newly rich men want is a new watch.  Perhaps a Panerai Submersible for $8,000 will fit well for the water sport lover.  Maybe an IWC Big Pilot for $9,000 is perfect for the aviator.  Or how about a $15,000 Rolex Stainless Steel Daytona for the speed racer?  If you’re really a big baller, you can get a nice Patek Philippe White Gold Nautilus for $45,000!  All these watches are perfect for your everyday 28 year old millionaire.  For women, the jewelery list is endless!  Perhaps a nice 30 carat diamond necklace, with matching 2 carat diamond earrings in flawless condition for $100,000?  Sure, why not!  Jewelery sales people can easily make four figures from items worth over $10,000.  The margins are huge!

* Consider a career in wealth management.  It’s obvious that if you go from having no money to having $20 million in the bank, you’ll want to give your money to an expert to make sure it lasts a lifetime.  The problem with this strategy is that it’s very hard to get into the wealth management / private client industry.  You need to go to a top undergrad, and then a top 10 MBA program to join one of the big private client banks.  This route is way too hard, so maybe you should forget about it and just work at Tiffany’s!

THE FINAL SOLUTION

Even after laying out an easy to follow agenda and offering up several job opportunities to benefit from the Facebook IPO, maybe you’re still too lazy to try.  You don’t want to be with rich, hot women for some reason and you don’t want to work at the Ferrari dealer, inhaling sumptuous Italian leather everyday.  OK, I can kind of buy that.  If you don’t want to listen to any of my advice, then below is my final tip for you.

Buy a real big net, with extra long pole.  When Facebook finally goes public, the skies will be raining cash!  You want to have the biggest net possible, hopefully with suction action to inhale all the wealth.  And if you don’t have your big ass net, and don’t want to come to the SF Bay Area, well then, you can always read about what all these folks are doing over Twitter and sigh.

Congrats Facebook friends!  And Egor, I’m gonna chip away at your millions, one bad-beat at a time!

Readers, do you know anybody who works at Facebook?  Have you ever had a chance to work there but, goodness forbid, you declined?  What type of wealth affect does Facebook have on the industry, the Bay Area, and the Economy? 

Are you a buyer of Facebook stock?  Why aren’t you out in the Bay Area if you love the internet, social media, and want to get rich?  It’s 65-70 degrees and sunny every day in winter!

Photo: Facebook Wealth Catcher.  Only crab today, no hundred dollar bills.  Fisherman’s Wharf pier.  SD

PS: We’re re-working our Yakezie Network Facebook page, so ignore the button on the homepage until mid-Feb!  Subscribe to the Yakezie RSS feed and @Yakezie on Twitter to keep in touch in the meantime.

Regards,

Sam

We did it all.  Everything from advertising to the actual labor and renting U-HAUL trucks, we were out on a mission to please our clients.  We would plaster Craigslist with our ads and were hungry to make more and more money.  At the end of the day, our goal was to pay for college.  Unlike most students, I was on my own and all my tuition was up to me.

Working at a restaurant or grocery store was never going to cut it when tuition was fast approaching $8,000 per year.  I had to “go at it alone” and blaze my own trail!  Well, guess what, it worked.  I made so much money that not only did I graduate college debt free, but I was able to buy a car that I had always wanted.

That fire and drive has never left me.  I guess it’s considered the entrepreneur trait.  Ever since the furniture moving company, I have always sought out ways I could be the boss.  Although day jobs are great, they have never fully satisfied my need to be at the top of the ladder NOW.

The World Has Evolved

I think that part of this drive is due to the fact that the world has changed when it comes to career dynamics.  Long gone are the days where you graduated college, got the corporate job, and retired 40 years later.  With the most recent economic depression and things not looking up, Americans (including myself) are no longer solely relying on a single source of income.  With the time it takes to nurture a career for an employer, it’s no wonder people around the globe are turning into “mini-entrepreneurs.”

Complete Ownership Changes Everything

Another aspect of starting a side business is that you have complete ownership over its success.  When you work for someone, you are typically part of a group of people, so the fire to destroy your competition or be better than everyone else simply isn’t there.  I know there are many cases where the opposite is true, but for the most part, Americans are happy with satisfactory career paths where things plateau.

Part of the American Spirit

The United States is unlike any country in the world in that there are limitless opportunities to showcase your best ideas and get paid for it.  I strongly believe that this type of entrepreneurial spirit inside of me comes from the principles of this great country.  If you look at the history of this great country, the great things in this world didn’t get done by people sitting around.  They were achieved by “doers” and big picture entrepreneurs that wanted to change their country for the better.

Doing What No One Else is doing

I’ll be honest, there is a certain allure to doing something that no one else is doing.  You would not believe the faces I get when I tell them that I blog and get paid for it.  Doing something outside of your day job still seems to be unheard of.  I’ve never been one to simply “follow the herd” and will never be.  I enjoy doing things that no one else is doing.  This is probably why I would never make it in the military.  I’m not sure I could handle being told to wear the same exact clothes as everyone else!

I’m Just Getting Started

This blog is just one extension of my self-motivated aspirations.  Just recently, I acquired a big name Christian finance blog and will be looking forward to purchasing additional websites in the near future.  I’m trying to think like a millionaire in 2012!  Along similar lines, I can see myself getting into real estate and buying up properties along the west coast.  Am I an entrepreneur?  Yes, and proud of it!  I’m looking forward to where life takes me in the coming months and hope you enjoy hearing about it in future articles.

Here’s to pouring gasoline on the entrepreneurial fire! 

Readers, do you feel your day job is enough to keep you satisfied and hungry?  If not, what are some of the things besides blogging that you are working on to provide more fulfillment?

Photo: On The Way, SD.

I don’t have time. I don’t have enough money. When I make more money then I’ll…
I don’t know how…

When starting a new year we like to make resolutions and set goals. Whether it’s about your finances, or lifestyle, I think it’s good to start planning for the future. But none of that thinking and planning matters if you can’t get out of your own way.

I know you don’t want to hear this, but if you listen to your excuses and let them keep you from moving toward your goals, I can guarantee that 2012 won’t be like you hope.

WHAT 50+ MILLIONAIRES TOLD ME

In 2011 I interviewed over 50 millionaires and I found one common thing from them all. They have a “No Excuses” approach.

I’m not saying they don’t have excuses. They do, and so do I. But they don’t let their excuses get in the way. I’ve learned a few tips and tricks to get past excuses, and I wanted to share them as we start out 2012.

Definition from Google:
Excuse: noun

A reason or explanation put forward to defend or justify a fault or offense.

 

Recognize Them

Be honest with yourself, because if you don’t know it’s an excuse you will think it’s true!
Be aware. It can be really easy to hear excuses from other people but hard to notice them when they come out of your mouth.

Action Item:

Ask a friend you trust to call you out. Or have a mentor or fellow business owner call you out. This part might be painful to hear, but it will be one of the fastest ways to get you to notice them. (I know from experience!)

Commit to Something Way in Advance

Let’s say you want to grow your business, and know that public speaking or even cold calling would help. Most people (and many clients of mine!) come up with a million excuses not to head down that route. Instead, don’t let the excuses stop you, but make the commitment far enough away that you don’t need to sweat about it right now.

This technique helps your brain (which is full of excuses) know that it’s not in any immediate danger, and still allows you to do the things you want to do. Yet the event will be booked and much harder for you to get out of later!

So book a speaking gig in 4 months. It’s not scary because it’s so far away. Or create the list to cold call, but don’t do it until next week. (When next week comes, just set a time limit of only 10 minutes at first to make as many calls as you can!)

Action Item:

Mark a date to do that item in your life or business that you are scared about.

Get to the Root of It

A lot of excuses come down to fear: fear of failure, fear of admitting you were wrong, etc.
So what is the fear? Frank McKinney, a real estate developer (creating 30 million dollar dream homes), said:

“Realize there is a force at work subconsciously in your mind that is tempting you to say no. That’s the primary difference between my career and most others especially in real estate, is that I don’t let the fear that is there stop me. I do not let it stop me. That is the primary difference. “

I’ve used a tactic called the worst case scenario. You write down the worst things that could go wrong. Then you figure how probable that might be (usually < 1% and only if 17 other things go wrong first!) and work out solutions to those problems. It helps to ease your mind in knowing you can figure it out even if the worst happens.

Action Item:

Accept your fear and do it anyway. Try writing down your worst case scenario and what you would do to prevent or fix it.

Logically Counteract It

Pretend you are in a debate and you need to prove this excuse false. GO.

Action Item:

Role play with a friend, or just write the logical defense in a .doc or journal.

You want 2012 to be the best year yet. So let’s start acting like it now. You can only control your thoughts and behaviors (even though many times we wish we could control others!). Work on eliminating excuses from your vocabulary this year.

You may be surprised to see what happens!

Photo: San Francisco’s Transamerica Building In The Morning, SD.

I’m no accountant, but I have read hundreds of financial statements and understand the basics of maximizing revenue, minimizing costs, and thereby maximizing profits after tax.  A company’s expenses are different, depending on industry.  The Cost of Goods Sold (COGS) for an individual blogger might be $0, since the individual is writing all his or her own content.  COGS is very straight forward.

It’s the operating expenses which gets a little gray.  Operating expenses are essentially all expenses that are necessary for you to make profits happen.  There are a whole set of rules of what you can and cannot deduct.  What I’d like to do is have a open discussion using an example to understand more.

AN INCOME STATEMENT SNAPSHOT

Hero Media is a small media company set up as an S-Corp  owned by Pat.  The main source of income is advertising and the main product is written content.  What are the line-items that stand out the most?  What can you say about this company from just looking at the income statement?

The first thing you notice is how small Cost of Goods Sold is.  Pat basically does all of his own writing and pays just $250 for acquisition of content.

The second thing you see is a relatively large Travel & Accommodation expense of $2,000.  Clearly, Hero Media must write a lot of travel-rich content, at least for this month.

Finally, you an see that Pat draws a $2,000 salary for all the writing, marketing, and coordinating he does for the company.  Pat has to pay normal taxes + all payroll taxes on the $2,000.  Meanwhile, Hero Media makes a net profit of $2,660 after paying 20% Federal Tax and 10% state tax.  The amount is called “retained earnings” that accrues on the company’s balance sheet.

LET’S DISCUSS BUSINESS EXPENSES AND CURVE BALLS

Hopefully the way I’ve laid out the income statement and the description that follows makes things sound perfectly legitimate and straightforward.

An operating profit margin of 38% and a net profit margin of 27% is relatively healthy and doesn’t raise any red flags in my opinion.  Meanwhile, if you are in the media/internet/blogging business and have only a 10% operating margin because you have tons of expenses, that might raise some eyebrows.  And if you actually have mega expenses that surpass your $10,000 in monthly revenue, then you might really have a problem.

Travel & Accommodation

The $2,000 Travel & Accommodation expense is a round-trip ticket to Hawaii with three nights stay at the Kahala Resort in Oahu.  Pat lives in freezing Michigan and decided to take a trip in January to write about how it would be like to live a location independent lifestyle in Oahu.  He entitles the article, “The Best Place For An Online Entrepreneur To Live And Work“.

Some of you may raise your eyebrows and wonder whether this is a legitimate expense, since Hawaii is a vacation destination.  Well, how else is Pat going to gain credibility in his article above if he doesn’t go visit the place!  That’s like a blogger teaching you how to be a millionaire without being a millionaire himself!  Or a relationship guru who still lives at home with his parents.  No credibility means poor content, no traffic, and no ad revenue.

Does visiting Des Moines, Iowa for only $300 sound like a more legitimate?  If so, why do you think this is more OK?  How nice of a place should be irrelevant, so Hawaii is in!

Pet Bunny

Somehow, I feel this business expense is harder to justify even if it’s just $50.  Pat claims that his pet bunny provides him relaxation during his 5 hours a day writing marathons.  Without his pet bunny, he would be more stressed and would therefore write worse content, leading to lower revenue.

At $50 a month, Mr. Rabbit’s expense is minimal, and only 0.5% of gross revenue.  Is this a business expense?  Maybe, as I’ve seen people/companies expense hundreds of dollars worth of massages to maintain the health of the owner.  Is this a red-flag?  Maybe if you wrote it as “Pet Bunny” above.  But, if you put the $50 into the Miscellaneous category, it would likely go undetected.

As a professional writer, can you write without your right hand?  Well, Mr. Bunny is Pat’s right hand fur ball.

Business Meals

This is one of my favorites.  Eating great food is heavenly.  We all have to eat anyway, so we might as well take clients out for meals on the company to help subsidize our foodie tendencies, and potentially do some business as well.

There’s no IRS law that says you have to say more than once sentence about business during the meal.  A simple, “How’s business doing?” can suffice!  No matter how wealthy a client they are, everybody loves a free meal.  At $500 a month, it looks like Pat is spending a healthy amount of time wining and dining.  I believe there is some stipulation that you can only expense the portion of the bill which the client accounts for e.g. $100 bill for two, you can only expense roughly $50.  That said, what if all you had was free bread and water?

Miscellaneous

Relatively speaking, $500 is a large Miscellaneous expense.  This line item is a catch-all expense for everything he’s missed.  This can include parking tickets, coffees he bought at the airport, magazines and books about travel and Oahu he needed to read for his writing, tips to the valet, and so forth.

Pat has most of the receipts.  He’s just too lazy to categorize every single $5 expense, so he puts in Miscellaneous.  Is $500 really a business expense?  Probably.  Is Miscellaneous as a category a red-flag?  Hard to say, because even $500 is only 5% of total revenue.  There’s a big category called “General & Administration” in the Selling, General & Administration vernacular of operating expenses, which is also a catch-all phrase.

Perhaps all the owner has to do is change the word Miscellaneous to General & Administration!

THE POWER OF JUSTIFICATION

The reason why I no longer have 4-pack abs is because I spend too much time in front of the computer writing.  Who has time for exercise?  The reason why I’m poor is because of the evil 1% top income earners and marketing companies who peddle consumption.  Spending less than I earn is hard, and I have bills to pay.

We can use the power of justification to justify practically anything we want.  As we return to the post title’s question of, “What Is A Business Expense?”, share with us whether you think the above examples are indeed business expenses, and bring up several more examples of your own. Accountants and financial gurus, please also feel free to blow holes in my article as well.

Note: Think about categorization, expenses as a percentage of revenue, margins, industry standard, cash flow and profitability.  If the industry standard is a 25% operating margin, and you somehow year in and year out show only a 5% operating margin because you load tons of non standard expenses into your income statement, it will seem fishy.  As a business, you are also ALLOWED to lose money too once in a while, therefore paying no taxes.  We can’t all be winners.

Photo: Drinking a Mythos Beer at the top of Santorini, 2011.  I’ve written three posts about my cruise and generated more income than the cost of the trip.  My favorite is, “Dream Big And Execute Your Goals With Purpose!” $5,000 business expense no problem right?

Disclaimer: I am not an accountant, although sometimes I feel like one after staying at the Holiday Inn Express.  Please seek a professional accountant for business expense advice.

Regards,

Sam

Since I’ve started blogging, I’ve seen the potential to build up a piece of online real estate (yes, a fancy word for a simple blog) into a platform to explode your idea into something awesome.  I’m sure you can relate to the thrill of watching your subscribers, AdSense, or visitors reach record levels – it’s exciting!

But…it’s like crack.  (No, I’ve never used crack, but you get what I mean :) )  Once you find success with one idea, you get inspired to do it again and seek out that same high you got from the first one.

If you go about it in the right way, you can really build up an empire of great sites built from excellent ideas.  If you go about it in the wrong way, you can really screw up your primary blog, and feel defeated by the lack of results.

Bringing Life to Your Projects Without Feeling Overloaded

Use the momentum of the idea to ‘write it out’

You’re going to keep having ideas for books, e-courses, and other websites.  There’s no question about it.  (In fact, I just thought of an exciting new idea this weekend and wanted to get started right away! But I didn’t ;) )  We normally hear people say, “Write down the idea and walk away,” but you know how difficult it is to step back from a fresh idea!  That’s why I like to take 30 to 60 minutes and ‘write it out.’  If a new idea is threatening my current project, I’ll use the momentum to outline my thoughts for the project in one or two pages.  Then I save it in a folder called “new ideas” and get back to it when I’m done with my current project.

The power of focusing on one project at a time.

There’s no question in my mind that you can get more done when you focus on one task at a time.  I’m a serial-multitasker and usually try to juggle quite a few projects at once.  My first year of blogging felt a little like that, and I felt like I was always playing ‘catch-up’ on my ideas.

My focus really sharpened after FinCon11 and I accomplished more in the last two months than the previous 14.  I also saw my adsense double and my visitors more than quadruple.  Why?  It’s because I stopped spreading myself too thin.  The biggest help to boost my focus was to write out my goals and put them in a place where I can see them every day.  Next to the goals is a little quote “Is what I’m doing right now the very best use of my time?”  Asking myself this question and looking at my goals is the motivation I need to keep on task.

Holding to a deadline makes a world of difference.

There were two major goals that I wanted to tackle for the last year: create 6 months worth of email autoresponder messages and create an eBook teaching others how to coupon.  Month after month I would put these goals on the backburner because I’d let other new ideas take the lead.  There was a huge flaw with my goals – I wasn’t setting a timeframe to get them done.

Once I refocused my energy on one project at a time and set a clear deadline, everything seemed achievable.  Within three weeks, I was able to create 16 email autoresponder messages – a goal I had wanted to achieve all year.  The excitement of crossing that off my list propelled me into my second goal, which will be done by the end of January.  In just one month, I started and finished my 5,000 word eBook that teaches people how to coupon.  Words cannot describe how good it feels to overcome that feeling of project overload.

The point of sharing my two goals isn’t to boast about my accomplishments.  Many of you have done even greater things this past year!  If there’s one thing I realized, it’s that the concept of managing ‘project overload’ isn’t new or revolutionary.  What’s new about organizing your thoughts, focusing your goals, and setting a deadline?  Absolutely nothing.  But if we don’t do it, we’ll be stuck in the same rut chasing our ideas until we feel burned out.

This is a challenge for you to realize that your biggest goals can be done in less time than you think if you stop letting the new ideas overshadow your main goals.  Are you up for the challenge?

What goals do you want to achieve this year?  If you’re brave enough, share them in comments!

Photo: Heavy Load, Olympia, Greece. Sam.

Has it been over 6 months already?  Yes it has!  Congrats on making it through the Yakezie Challenge, where you’ve each strived to develop great blogs and new friendships in our online community.

The Yakezie Challenge is open to all who desire to be a part of a collaborative community of bloggers. Once you are a Member, you will be listed on the official Yakezie Blog Network page and gain exclusive access to various Yakezie initiatives.  Our mission is to help our readers, help each other, support educational efforts through our Yakezie Writing Contest, and have a fantastic time in the process!

THE COMMUNITY IS PRIORITY

The Yakezie Network is a very tight-knit community based on trust and community service. We are all friends, and we only want those who are truly dedicated to their blogs and to the community over the long-term to join.  We have a “no asshole, no drama” policy because life is seriously too short to deal with unproductive things.  If you need more time to get to know Members and other Challengers, please feel free to take the time and join the next class if necessary.  Don’t worry, we plan to be around for years!

Please note that not everybody who enters the Challenge will be accepted into the Yakezie Network. Each applicant will be reviewed and decided on by the Yakezie Membership Committee, whose Members are not disclosed.  Furthermore, there cannot be any black marks against you by a Member.  If so, the issue needs to be worked out before you can join.

By submitting a form, you verify everything you input and write is true on your honor.  After your application has been reviewed and accepted, we will organize each new Member by the date you entered the Challenge and upgrade your account so you can upload your Member post and switch to a Member Badge.

Once a Member you will gain access to the private forums, be able to contribute other member posts on Yakezie.com to help promote your own site and share your knowledge to authoritative bloggers and readers everywhere, and participate in any Yakezie leadership roles you desire.

The Yakezie is what you make of it.  Some have managed to leverage the network to triple their blog traffic.  Others have managed to gain a tremendous amount of side income after they lost their jobs to keep things going.  Meanwhile, some have even managed to leverage the Network to quit their jobs!  One of my key reasons for creating the Yakezie was so that nobody would ever not thrive with their online endeavors.  If a Member needs help, the community will rally around and support.  I’m glad to see this goal coming true, and look forward to the new Members adding further value to the Network.

Yakezie Delta Challengers please sign up here!  Please allot roughly 15 minutes or more as the application is quit thorough.  I also recommend you review the application, think things over and apply when you feel 100% ready.

TIMELINE AND THE NEXT CLASS

All Delta Class Challengers should sign up by January 31, 2012.  Make sure you make sure your fellow classmates are aware so as not to miss the window.  The Yakezie Membership Committee will review all applications by February 15, 2012.  Challengers will be informed of their acceptance, and invited to upload their Member Posts.  Once uploaded, save as pending, and the editorial staff will review and schedule in the order of when you first entered the Challenge. We highly recommend you read all Yakezie Member Posts first so you can really get to know everyone in the Network.

The Yakezie Epsilon Class window is open and anybody can join the Challenge up to February 15, 2012.  To join, please read the original post that started the Yakezie Network and follow the instructions at the bottom.

Please note that there are no exceptions to the 6-month Challenge time frame.  If we publish our first Delta Class Member posts on February 15th, then the cut-off date for joining the Delta Class is August 15, 2011.  The 6-month Challenge should be considered the minimum amount of time rather than the maximum.  Family is for life after all!

Thanks everyone,

Sam

Photo: Yakezie checking to see if it’s the end of the world. Chichen Itza, 2010. Sam.

The feedback was obvious: add a picture. Without a quality camera and not wanting to bother with crediting other photographers, I turned to the basic graphic design package already installed on my home PC, PowerPoint. This Microsoft presentation software that most of us have on our computers was a great starting point to produce simple visual anchors that would hopefully lead to more clicks and longer visits. My goal was to efficiently create unique bright images for each post, without cost.

If you have ever played with PowerPoint you’ll know that as well as text, it handles simple graphic design pretty well. Starting out was like going back to kindergarten for me as I clumsily produced combinations of rectangles, circles, and triangles. With some practice it became easier to layer the available shapes, mix colors, add 3-D effects, and more. I found PowerPoint to be a powerful package for my simple needs, but there are several other cost effective packages available that would be a good fit for blogging.

As I fumbled through the first few weeks of producing images I made lots of mistakes and they were very basic. However, I discovered that this inexperience worked to my advantage. Still a long way from earning my PowerPoint ranger badge, my clumsy designs were more symbolic than sophisticated. Despite their simplistic look I noticed a spike in Facebook referral traffic; the jump was immediate.

Like fish are attracted to bright shiny lures, Facebook users also seemed to be attracted to colorful symbolic images. Facebook remains the single biggest referrer to Financially Consumed and I credit this to the simple images.

Step By Step

Open your graphic design application and begin by removing the text boxes, you want to start with a blank page. These steps apply mainly to PowerPoint, but I’m sure you could achieve great results with any platform you have access to.

Add Grid Lines & Ruler. Do this by clicking the view tab, and ensuring the check-boxes are marked. This helps to create an image of the required size. I normally create a 300 pixel square for each article, but you can create images of any size for headers, banners, or even advertisements.

Select Shapes. PowerPoint offers ready made shapes: basic shapes, arrows, flow chart symbols, lines, and others. These can be dropped into the workspace and manipulated to build your picture.

Add Text Box(s). Choose one or more text boxes to add symbols, letters, and words. The shapes can be typed into directly, but choosing a text box offers far more flexibility when manipulating the look and placement of the words.

Format. Each shape can accept color, shading, and 3-d effects. Shape borders can be heavily manipulated also. This is the time consuming aspect of graphic design because it takes patience to experiment with the capabilities of your software to find the look you want. The options are infinite. The TV image on the left has several layered shapes using multiple effects to create the desired look.

Save. I prefer to save these files as .PNG for flexibility, but you won’t be able to change these again in PowerPoint. Save also as .PPT if you think you might want to edit the image later.

Open In Paint Shop / Photo Shop. These packages make cropping to the exact size easy. Plus, they offer another level of effects to create your desired look. I often brighten or clarify the colors to help make them pop.

Insert. The finished images can be placed directly into your blog post like any other.

These simple pictures are quick and easy to produce. They’re definitely not going to fit the style of every site, but if you’re tired of sourcing photographs then PowerPoint offers a graphic design alternative for the blogger on a shoestring budget.

Readers, what are your thoughts about using pictures for your posts?  What other free resources have you found on the web to use pictures?  How do you go about attributing the free pictures you use?  Have you heard of blogs getting in trouble because of using pictures, even though they provided attribution?

Thoughts on creating a Yakezie.com/photos section where the community can just upload their own favorite pictures to share with the Network?  Every Member has full use of the pictures with a simple attribution link back.

For thousands of years, people have understood the Golden Rule. The essence of the golden rule is to treat others as you want to be treated. We are taught this from such a young age, and its wisdom proves itself on a daily basis, if you employ it.

Helping others selflessly is the primary tenet that the Yakezie Network was founded on, and that is how it went from being a post on Financial Samurai’s blog to being the full-blown financial blogging network it is today.

There are many marketing strategies out there, but few will ever equate to the success and power that you achieve when you help others. The reason for this is because you begin forming a team. And while we are talking about old adages, two heads are better than one.

How Can Helping Others Help Me?

First, I want to state that it won’t always help you. If you begin helping others with the expectation of reciprocity, then you will probably end up disappointed and bitter. That is why you should start out with a genuine desire to help others.

Once you begin helping others, you will begin to forge strong relationships and build a network that is more than a loose association of people you’ve followed. Instead, you will forge relationships where the collective success of the group will be far stronger than the individual success of each person.

As you forge these relationships, people within your network will naturally reciprocate, but not everyone. This is OK, and normal. Enjoy the reciprocity, and even reward it by providing more assistance to those that do reciprocate.

Should I Help Those That Don’t Help Me?

To this I would say yes. The reason I say this is because you don’t understand the circumstances. Moreover, you also don’t know what the future will hold. As an example, if you provide help to a PR 0 website and they give you a link in return, big deal! That’s not much of a help!

But using that example: a year ago, my website, Wealth Artisan was a PR 0 website, being run by a very busy person. To reciprocate, I provided links in articles where possible. At the time, that wasn’t a very large reward, but now I’m a PR 3 website, and those articles have been around for over a year. What didn’t seem like much of a reward, grew into something relatively valuable, and it will continue to grow.

When I’m able to take my online businesses full-time, the people that have helped me along the way will certainly receive the brunt of my thanks. Until then, I will continue doing my best to reciprocate.

Maybe the person who isn’t reciprocating right now doesn’t understand the etiquette, or maybe they are so busy that it isn’t feasible right now. But, when it becomes feasible for them, you just might receive a deluge of support that will take you to the next level!

How Can I Begin Helping Others?

The ways to help are countless, so for now our focus will be online. You help people by:

• Leaving thoughtful comments
• Tweeting their articles
• Giving them links
• +1 their articles
• Mentioning them on Facebook and other social networks
• Providing useful feedback.

The last one was particularly important to me in the beginning. Jesse at PF Firewall was kind enough to let me know that he liked my articles, but they looked like a horrendous wall of text. I’ve since corrected this by breaking up my articles, adding headers, and I have seen huge benefits from his expertise. He may not have received a huge reciprocation from me at the time, but I just reciprocated him in this post. Thanks Jesse!

Another popular way to reciprocate is by marketing on Twitter. Announce others to your followers! You can do this with a personal “Check this person out, they operate this awesome blog” or the less personal follow fridays (#ff).

Share their articles on your Facebook page, and give them thumbs up. Leaving thoughtful comments is probably one of the most effective ways, because it creates community, and it lets them know who is interacting with their content.

What About You?

Do you try to selflessly help others? Do you have trouble reciprocating? What are some tips that you can share for helping others, and finding time to reciprocate? What are some ways that you try to reciprocate for another person’s generosity?

I figured a great way to help my friend was to contact my fellow Yakezie members and ask for their expertise. Any advice or suggestions to my friend is greatly appreciated. Please comment on this post and help my friend out.

My Friend’s Story

My friend has been a computer programmer for over 30 years. With only a high school education he started in the mail room (literally), and worked his way up to the position he is at now. His income is in the low six figures, has no dependents, and lives in a New York city borough. He rents, and the only decent sized asset he has is a truck which is worth approximately $700.

Around the middle of 2007, he suffered a massive depression. Nothing he did seemed to work in getting out of it. He sought out help from friends and family, but no one was able to help him. He started to see a therapist, but wasn’t helping much either. Another friend of his, who had bouts of depression, suggested he see a doctor. Eventually my friend went to see the doctor, and received medication for his depression.

My friend felt worse for a few weeks, and was trying to get help from wherever he could get it. Someone started to council him through non traditional means, and began to feel better. Eventually the medication kicked in and he felt better. The medication made him feel great about everything, and not have a care in the world.

FINANCIAL MISTAKES AND TAX FIASCO

During this period he made quite a few financial errors. He always carried some credit card debt, but it was never a problem. He started spending money very heavily. Then people started asking him for money, borrowing and such, saying they were going to help him. He unfortunately believed them. He felt better though, and was still in this “higher then life” state.

During this time he made the serious mistake by cashing out some ISO stock options for the company he works for. He thought they would be taxed at the long term capital gains rate, but later learned it was considered untaxed compensation. Untaxed compensation is taxed at a much higher rate, and is added to your AGI for the year. The stock options were cashed out in December of 2007 and January of 2008. This amounted to huge tax bill of over $125,000 (Federal & State). This was in addition to a large set of credit card bills he already had.

After realizing his mistake and not knowing what to do, he hired a tax firm to work out the details. They charged he $8,000 for the services, and was supposed to be all inclusive. They delayed the tax bills by submitting a tax extension with the government. He asked about the state bill, and the tax firm back tracked stating they wanted additional money to handle the state.

My friend decided he would do the state tax bill himself, and got an installment payment agreement. When 2008 rolled around he sent them my 1040 tax form by himself, the tax firm got upset with his decision.

The tax firm wanted more money out of my friend, and forced him to pay for for the state work needed. He initially refused, but the tax firm could not do the Federal with out doing the state first. Unfortunately this was more money out the door.

During this time he asked should he pay something on the Federal tax bill. The tax firm kept telling my friend don’t pay anything until the IRS tells notifies for the amount owed. My friend feels, if he would have just started paying the government, he would have been $15,000 closer to finishing the debt.

Eventually the government put a levy on his bank account because something got lost at tax firm he was working with. Then the tax relief company tried to work out an arrangement, but the government wanted $10,000 a month. There was no way my friend could afford that amount per month. Eventually everything was worked out as the tax relief company got another lawyer to complete in two months what was originally taking two years.

After all of this fiasco the tax firm he worked with is surprisingly no longer in business.

One of the lessons my friend learned about this episode, the government only cares about your minimum living expenses. They want their money, and they want it yesterday by hook or crook. According to my friend he’s on a really tight budget that’s very similar to a Chapter 13 budget. Anything else is disposable, and the government wants it now. At the time of submitting the tax forms, he and his lawyer inflated his expenses so that I had a few extra dollars to live with.

He was able to eliminate the state debt by extracting money from his 401k (not a loan). This caused another tax debt the following year since a 401k extraction gets taxed at a normal rate, and with a penalty before 65 years of age. He then pulled out more money to pay the tax debt, and to continued to pay off the credit card debt.

For the last two years he’s been extracting money from his 401k to pay monthly expenses, and credit card debts.

NOT MUCH LEFT

He’s now at the point where he has no more money left, and has to default on one or two credit card debts so he can continue living. There’s nothing else he can withdraw or loan against.

He tried going to two non profit agencies, and work out an easier payment plan. They were good at explaining everything, but the budget is still too high by about $300-$500/month.

His research found out Chase Bank will not accept their proposal because he was already on an internal payment plan. After seeing how the non profit worked, he went directly to Bank of America about a plan.
Bank of America agreed to his terms, and lowered my monthly payments.

Last credit card company he had to deal with was Citibank. His tax lawyer advised it’s an unsecured loan, and should pay the government first. The lawyer also stated normally a judge does not rule against a tax debt. She said she’s seen cases where the judge sees no money to recoup and forces the plaintiff and defendant to work it out directly. The laywer suggested he should contact Citibank to try and work something out.

After four communications, Citibank refuses to adjust the payment plan. It appears Citibank will not even try to adjust terms if you are current, which he has been for the last 4 years. He was advised by a Citibank representative they will not adjust payment terms unless he’s delinquent. So I stopped paying the Citibank bill. Collections has now called him twice. He tried to renegotiate with them to accept $200 a month until 2015, and then re-adjust when the tax debt is over. The customer service rep stated there were no debt programs for his account available.

All along people had advised him to claim bankruptcy, and not to worry about the credit card debt. He felt strongly that it’s the wrong thing to do. My friend would get a 1099-C, and have to pay the tax on the write off. Either way, my friend still has to pay it in some form. So he’s been trying to stretch things out until this debilitating tax payment is over with, which should be around first quarter of 2015.

He tried contacting the IRS a couple times and renegotiate their terms. Their response is to fill out more forms, and continue to say they only accept necessary living expenses.

My friend is approximately 50% there with his tax debts. He’s finished the principal tax amount for 2007. He owes $22,000 for penalties and interest. Then there is $30,000 for 2008′s tax debt. He’s gone as far as requesting a penalty abatement for the two years. The IRS acknowledges receiving the letter and doctors documentation, but they have not removed any penalties.

My Friend’s Questions Are:

1. What can happen to you if you default on a credit card of $14,000
2. If you are sued, can a judge garnish of pay. Which then will further affect him to survive.
   1. If you do not own anything capable of a lien.
   2. You are still paying on installment agreement on tax debt of $55,000
3. While I know it’s an unsecured loan, by all right it should be paid and if it goes to litigation, what can be expected?

By looking at the IRS payments, the huge tax debt will be gone by first quarter of 2015, but the Citibank refuses to acknowledge or work something out.

Readers: What should my friend do? Any recommendations to help get rid of the debt faster? What lessons can be learned from this?

Photo: Tennessee Valley, CA. SD.

Initially, I was hesitant to offer my review of the Walter Isaacson biography on Steve Jobs, titled…..wait for it….. Steve Jobs.

Wouldn’t one of the Yakezie brethren who is an Apple aficionado be a better book reviewer-for this book?

After some thought I came up with several reasons why me,  a non-Apple addict, would be better:

• I’m unbiased regarding the company, it’s products and founder.
• I am old enough to have lived through the storyline-with Jobs only a couple of years older than I.
• I purchased one of the first PC’s, notebooks, and PDA’s available.  I have lived though all the changes in technology described in the book.

First, about the author:  Walter Isaacson is a former CNN chairman and former CEO of Time Inc.  He is Harvard educated, worked in journalism his entire career, and has written biographies of Einstein, Benjamin Franklin, and Henry Kissinger.  The Steve Jobs book was written with Jobs cooperation-indeed, he approached the author himself.  Supposedly, Jobs agreed to no veto or editorial power over the contents.

The book is well written and an easy read.  To tell the story of Jobs’ complete life, the cast of characters is large. Mr Isaacson identifies the importance of those he included and what influence they had on Jobs.

For purposes of a complete review, I divided the book into general sections:

Jobs early life.

Jobs was an adopted child born in 1955  who grew up in a  lower middle class California household in a community that would subsequently be named Silicon Valley.  Job’s early life would be influenced in part by his adoption, his obvious genetically inherited intelligence,  his adopted Father’s passion for tinkering, and the counter-culture, acid dropping, free love, commune living 60′s revolution.  He was influenced by the music, the drugs, and the Hindu focused spiritualism popular in California youth at the time.

I have to think  a Steve Jobs raised anywhere else but in Silicon Valley wouldn’t have been exposed to the technology hotbed that was already in place, exemplified by Hewlett Packard’s proximity. Other  technology focused in the neighborhood included NASA, Lockhead,  Westinghouse and what became Intel.

His Early Career:

As a college dropout similar to Bill Gates, Jobs, once his commune living days ended, began his business career by joining with another Steve named Wozniak.  Together the built the first Apple in the family garage.

Jobs’ inclination for marketing and his desire for total control of the process from design, to manufacture, to the marketing campaign was evident early in his career.

The other notable characteristics apparent early in his life would be:

• Selfishness
• Impatience
• Bullying
• A total lack of sensitivity to others

Many of these traits were actually cultivated and practiced by Jobs such as his famous non-blinking stare used during intense negotiations.  He was also famous for rapid flip flops in mood from raging out of control to excitement and enthusiasm-sometimes on the same subject in the same 24 hour period.

The Early Apple Years:

The third phase of his life was exemplified by the growth of Apple and his subsequent departure from the company.  He was basically kicked out of Apple for his boorish behavior and the failure of the first Mac.   During this time, he ignored his own first love child and his relationships with the women in his life would be considered rocky at best.

The Exile From Apple:

The fourth phase was characterized by his growth as a person and as a manager during the development and subsequent failure of NEXT Computing.  On the heels of that failure was the phenomenal financial collaboration with Pixar where he became chairman and chief stock holder.  It is  because of Pixar’s successes that Jobs was able to go back to Apple as it’s Knight in Shining Armor to rescue the company from its serious financial problems in the early 90s.

The Final Years:

The fifth and final phase of the book and Job’s life was the story of Apple’s fantastic growth.  Growth due to phenomenal product development away from computers that began with the iPod music player, and then the blockbusters that followed including the iPhone and iPad. The current iCloud focus was one of Jobs’ last legacies.

How Jobs juggled this portion of his life with his diagnosis and subsequent cancer treatment is truly remarkable.

About Steve Jobs

What I learned about Jobs that I didn’t know:

• His continued focus on the culture of the 60′s including it’s music, vegan diet, and Zen like minimalism when it came to his home and surroundings.
• His focus on control of the creative design process and the closed culture that to this day prevents others from legally using Apples operating systems without tight and a very limited control.
• Going 9 months without cancer surgery after his initial diagnosis-wanting to try holistic remedies-that many experts think may have cost him his only chance at a cancer cure. (speculation of course)
• The large part he played in the marketing of Apple products having almost total control of advertising and commercial content and look.

Take Home:

How reading the book has changed me (in my mind the sole purpose of reading non-fiction is to learn, and if you learn something, by definition you will be changed…):

• I have a better understanding of Apple products and understand why they enjoy premium pricing.
• Jobs ability to focus on only 2-3 things at once with absolute intensity. I, like many, have too many interests and hobbies and could benefit from a tighter focus on just a few.
• Jobs was able to get the most from his employees, but sometimes with tactics that I wouldn’t be comfortable using, including intimidation and tearing down of others.
•  His goal was to surround himself with  Grade A minds.  Surrounding yourself with the best is not a bad motto.
• Life is short-treat time with your family as if you are aware of your short time on earth.

 Reader Questions:

Are you an Apple and Steve Jobs’ fan?  What do you think? Can you be a creative genius without being  eccentric and so uncaring of the feelings of others?