The New York Times Doesn't Consider Entrepreneurship an Occupation?

The New York Times offers this tool for determining your social class. When I looked under “Occupation” for Entrepreneur or Business Owner or Investor or Self-Employed, it wasn’t there. Please correct me if I am wrong. I dug for several minutes.

As the traditional media withers and dies, they still don’t value what you do… well… not enough to give it social status.

What Are You Contributing?

After asking, “What am I doing that’s exceptional?”… I  took a walk through a nature preserve and contemplated the question. I didn’t find an answer, but another question popped into my head that led me closer to the answer…

What am I contributing?

That question is at the root of all success, isn’t it?

People say creating value is the key to writing great posts. But where does value come from? It comes from a deliberate intent to contribute to the well being of someone else.

  • Do you want a happy family? What are you contributing?
  • How about a strong relationship? Are you willing to contribute?
  • Do you want more traffic to your website? What does it contribute?
  • Do you want better results in social media? What are you contributing to these communities?
  • What about your business or career? How does your work contribute to others?
  • Do you want more ad revenue? What are you contributing to your advertisers?
  • What about your health? What are you willing to contribute to your own well-being?

Being exceptional requires remarkable contributions.

What Are You Doing That Is Exceptional?

Seth Godin posted today about markets. And he specifically references the blog market – “Being exceptional matters most. Stand out, don’t fit in. Shun the non-believers.”

It got me thinking about this blog… What am I doing that is exceptional, stands out, doesn’t fit in? Am I shunning the non-believers?

What are you doing that is exceptional? Do you agree with shunning the non-believers? What does that mean?

Seth Godin on the Fine Art of Quitting

Seth Godin sent me a complimentary copy of his latest book – the dip.

It’s a book that begs you to examine yourself closely, where you’ve been, where you are, and where you plan to go.

If you want to know the basics, read this post about the dip at the personal MBA.

Let me share some observations inspired by Seth’s book…

Seth stresses the value of the dip and the value of quitting before you ever reach the dip. That’s right, the value of quitting before things get tough. He writes that there is no point in quitting once you are in the dip because you’re already experiencing the pain – if you are going to quit – quit before the dip – it’s cheaper and it’s smarter.

Seth also writes about getting off the cul-de-sacs that breed mediocrity. Getting off the cul-de-sac is the art of strategic and tactical quitting.

Reaching your goals is like climbing a ladder – to grab the next rung you have to let go of the rung you are clinging to. You get in trouble when you’ve climbed to a decent height, get comfortable, look down, become paralyzed with fear, and fail to keep moving, so you sit there… getting tense as you cling…looking up at your goal…looking down in fear…the longer you stay there the harder it is to grab the next rung and the more appealing it is to climb down to a safer level. I believe that this is the dip Seth writes about, and it separates good from great. The good hang on… but the great find a way to keep climbing.

I must admit, I have quit all my big ventures in the dip. But I don’t feel bad about quitting, because each time they were strategic decisions. The only regret I have is not quitting earlier. Let me give you some personal examples of how quitting can be smart.

I once set a goal to be a commercial airline pilot. I thought it was what I wanted… but the dip straightened me out… if I had done some research before I started, I could have saved a lot of time and money, because I wasn’t willing to pay the price – to negotiate the dip – to achieve my goal. I wasn’t willing to join the military and they wouldn’t have taken me anyway. I wasn’t willing to fly the bush in Alaska, the Philippines, or the Caribbean. I wasn’t willing to work 28 days a month for $800.00 flying for a small regional airline. So what was I doing flying airplanes? Wasting my time! I learned of all these hardships after I hit the dip. I quit, and wasted a lot of money. It was a strategic life decision and it was the right one to make before I wasted any more time and money.

About ten years ago, I decided I wanted to be a politician. I ran for office, and at first I loved it. But after meeting successful politicians – the less I liked it. I observed the brutal schedules they kept, watched the moral compromises they made, and saw political life change them. But the worst were the attacks and threats their families had to endure. I realized it wasn’t for me – I wasn’t willing to pay the price – even if I became the best I could be, I’d hate it. So again… in the dip, I made a strategic decision and quit.

I experienced the same scenario playing in a band and starting a dot com in 1998. I quit in the dip. I don’t regret quitting, because each venture and each quit taught me valuable lessons about life.

Well I’m in a dip right now… but I can see the other side…and this time it looks like the place I want to go.

So go ahead and pick up a copy of Seth’s book – the dip… you won’t regret it…it’ll be the best eight bucks you’ll spend this year.

Thanks for the book and thanks for the encouragement Seth. I’ll see you on the other side of the dip.

Are Bloggers Pushing Society Closer to a Technological Singularity?

Singularity? That’s a pretty geeky word isn’t it? If you are familiar with it at all, you’re probably an astrophysicist or an astronomy/sci-fi buff. But what does it mean to bloggers? You are creating a new era by creating global, collective, shared, intelligence.

Reason Magazine has a fantastic article with futurists regarding the possibility of a major positive upheaval in the structure of society, due to our growing interconnectedness.

From the article:

There is a national interest, and not just in America, in providing the illusion of freedom for the millions of people who need to be happy and creative to make the economy go. Those people are more diverse and distributed and resourceful and even coordinated than any government.

That’s a power we already have in free markets. Computer networks, supporting data
and social networks, give this trend an enormous boost. In the end that illusion of freedom may have to be more like the real thing than any society has ever achieved in the past, something that could satisfy a new kind of populism, a populism powered by deep knowledge, self-interest so broad as to reasonably be called tolerance, and an automatic, preternatural vigilance.

Is the Unexamined Life Worth Living?

Robert Gerzon asks, “Is the unexamined life worth living?”

This famous quote from Socrates has always intrigued me. Does it intrigue you? We are told to live in the present and set goals for the future, so isn’t examining your life living in the past? If you examine your life frequently… are you living in the past?

My posts between essays will be similar to this one… what do you think of it? Let me know?

Blog Update: Changing Post Frequency and Style

After skyping with Liz Strauss at Successful Blogger, reading The Pressures of Blogging Consistently by Nate Whitehill and analyzing this outstanding post on building blog traffic by John Wesley (Man, that was good post John!), I have decided to take this blog in a slightly different direction.

It won’t be a 180-degree turn, maybe a 30-degree turn. I haven’t been happy with this blog for the last two months. The posts aren’t what I expect from myself; they’re forced.

While traffic and subscribers have grown, I don’t feel the current direction is serving you.

So here’s the deal…

I prefer to write long essay type posts, but they take an inordinate amount of time to write well. Paul Graham spends 40-80 hours writing his essays and it shows and I aspire to write as well as Paul. But I’ll never do it trying to pound out one or two essays a week. I just don’t have the time to do it right. Well… I do, but I am unwilling to sacrifice my time with my wife and kids and I have little desire to quit my job – some cool innovative things are happening at work.

So I am going to post essay posts only when I know they are ready. You may only see one essay post every two weeks – maybe longer – it just depends.

In between essay posts, you will get links to other posts and content I hope you will find thought provoking and interesting, adding a paragraph or two of review and commentary.

Let me know what you think of the change. Are you willing to wait if the quality increases?

Blogger Call Out!
Leo at Zen Habits and Wendy at emoms… I don’t know how you keep up your level of activity. I’d like to know how you balance home, work, and blogging. Will you share? Leo… Do you still have a full-time job?

Personal Responsibility is the Cornerstone of Financial Literacy

The most obvious failure of our education system is the number of ‘educated’ people who are financially illiterate and seem to have no concept of personal responsibility.

This story was recently presented at KARE11 news about the Nelson family.

The Nelsons jumped at the chance to take more than $100,000 in equity from the house they originally purchased in 1999 for $117,000. The new 2005 mortgage was for $240,000. They applied for another 30-year fixed-rate loan, but they say their broker told them they only qualified for an Adjustable Rate Mortgage (or ARM).

They “jumped” at the chance to dig themselves $123,000 deeper into debt on an adjustable rate mortgage? I barely passed the 8th grade and I know that’s foolish. At 25, when I purchased my first home, the broker told me I could buy a bigger house in a better neighborhood if I took an ARM instead of a conventional mortgage. I saw the obvious risks and said no. But this next paragraph really gets me…

They had been lured in with a so-called teaser interest rate of 6.9 percent. The monthly payment was about $1500. It was steep, but Shawn and Roxanne managed. They didn’t realize that the rate would jump to 8.9 percent after just two years and readjust every six months after that. Shawn sighs, “Signing all those documents, I couldn’t tell you what I signed.”

They were lured? To me “lured” is what a pervert does to a child using a bag of candy. It implies something sinister and immoral. Wouldn’t “offered” be a little less biased?

Then… He couldn’t tell you what he signed? Whose fault is that? He didn’t say the lender lied to him, he said he didn’t know. Whose responsibility is it to understand what you are signing? I bought my first house when I was 25, my wife slung hash at a burger joint, I drove a truck, and I had enough sense to pay an attorney $400 bucks to come to the closing and look at every piece of paper I signed and explain it to me. It was worth it, because he saved me over a $1,000 in closing costs and prevented me from signing several unnecessary agreements.

In the fine print of one of the documents they signed in 2005, was a pre-payment penalty. It would cost the Nelsons an additional $3,000-$4,000 to pay off the ARM with another mortgage. It is money they don’t have.

He didn’t know there was a penalty for early payment? Whose fault is that? Did he ask? Did he read the documents?

The biggest problem facing Shawn and Roxanne is a move by their mortgage company that they caught them completely by surprise. The lender ordered an appraisal of the house in 2005, but only notified the Nelsons of the amount in 2007. The house was appraised at $268,000. The effect of that appraisal is to make any new refinancing almost impossible. The Nelson’s spoke with realtors who told them the house could sell for no more than $225,000. Since the Nelsons’ mortgage was for $240,000, there is no equity left in the home.

He didn’t ask to see the appraisal value before he signed the mortgage? They make it sound like he didn’t understand the amount of his loan, the interest rate, the payment terms, and the value of the home. Maybe he didn’t. But whose responsibility is it to ask? The article goes on to blame the mortgage company for the $268,000 appraisal, but home values have dropped since 2005. Having a mortgage that is higher than the value of your home is always a risk, especially with nothing down. It’s common sense.

“We cannot afford that at all. At this time, I’m the only one working. My husband’s a teacher and he’s laid-off at this time.”

Earlier in the article, he says he has a degree and is working on his masters… I’m sorry… but cmon’… I live in Minnesota…unemployment is very low. He could find a way to make some money, it might not be the teaching job he wants, but he could contribute financially. There is a way.

Shawn lowers his head. “The hard part for me is knowing that I’m supposed to be providing for my family. We got ourselves into this situation, but it’s not because of something we did on purpose.”

Huh? Shawn may not have planned it this way, but his decisions caused it.

Who took out a $240,000 ARM without an income?

Who failed to question the interest rate and the risks?

Who failed to ask if there was a penalty for early payment?

Who failed to question and understand the appraisal?

I am baffled by this. While I can’t believe any lending institution would borrow loan Shawn this amount of money, I am equally baffled by an educated teacher who understands so little about personal finance. I could understand if it was an elderly person, or someone mentally deficient, or even someone unfamiliar with our language and culture, but this guy has no excuse.

I met another guy last year who told me a lender offered him a $300,000 ARM with nothing down which would have created a 55% debt to income ratio. Think about that? After SSI, medicare, income taxes, and your mortgage payment you’d be living on 10-15% of your income (the home maintenance alone will cost another 10%). It is irresponsible to make these loans, but it is also irresponsible to take them when it is clear you can’t afford them.

When I started looking for a new home in 2004, I hadn’t shopped for a mortgage in 10 years. In 1994 lenders would not allow a borrower to extend themselves past a 32% debt to income ratio. So in 2004 when I asked my mortgage guy how much I could afford, I was stunned when he said, “pretty much whatever you want.”

I asked for clarification, “I can borrow any amount I want? 700K? 800K?”

“Yes”, he replied.

“What about debt to income ratio?” I asked.

He said, “Don’t worry about it, we can find a way around that. It just doesn’t matter as much as it used to.”

I instantly realized that game had changed in the last 10 years. While the lender used to show restraint on loan amounts, now I needed to show restraint and judgement. We decided not to extend ourselves past a 25% debt to income ratio and we bought far less than we could afford.

In retrospect, I still paid too much for my house because similar houses in the area are now selling for less than we paid. But that was the insanity of the 2004 market – everyone was paying too much and it happened to be the year we needed more square feet to expand Christine’s home business. But we’re still okay financially because we didn’t buy the home as an investment, and we didn’t over extend ourselves.

The housing market correction is going to be painful for many people, but most have no one to blame but themselves. No one forced them to pay over-inflated prices with risky mortgages; they did it voluntarily. They may have done it because of financial ignorance, but for educated people in the information age, there is little excuse for financial ignorance.

Sorry if that came across and little mean and arrogant… but sheesh! These “victims of a predatory lender” stories drive me nuts.

The Best of the Internet 5-20-07

What Marshmallows teach us about success at World Wide Success. I tried my own variation of this test on my 4-year-old today. I put 5 M&Ms in front of him and told him he could eat them right away, but if he waited five minutes I’d give him 5 more so he’d get 10 M&Ms. He waited and when I brought him the additional 5, he asked, “If I wait five more minutes will you bring me five more?”

A simple 5 point formula for success at the Politically Incorrect Blogger. It doesn’t get much easier than this.

This is simply an excellent financial blog I discovered this week written from a GEN X perspective.

The Unconventional Thinking Blog makes a post about Wal-Mart and makes some good points. I don’t have a problem with their low prices or employment model, the place just makes me feel sick so I’m never shopping there again. They treat their customers, suppliers, and employees like crap and it shows in the atmosphere of their stores. They are also the largest recipient of corporate welfare in the US. I have no problem when they cut taxes…as long as they cut them for all of us… not just Wal-Mart. Some of my free-market libertarian friends love Wal-Mart, but they fail to acknowledge what a government subsidized pig Wal-Mart is. When my wife and I open a retail store, the city makes us pay full tax rates. Property taxes are our single largest expense renting retail space. $12 a sq ft is dirt cheap in our area – $8 of which are taxes. Eliminating them would cut rental expense by two thirds, allowing many more small retailers into the marketplace. But if Wal-Mart did have to pay these oppressive tax rates, they wouldn’t beat all the mom and pops (who do pay these taxes) on price.

Timothy Leary debating G. Gordon Liddy.

An excellent math resource for autodidacts or home schoolers.

Calvin and Hobbes on Entrepreneurship.

All these psychotropic drugs they prescribe for kids nowadays scares me. I’m going to do everything I can to keep my kids away from shrinks.

Seth Godin answers my question about dips at The Personal MBA. Thanks Seth! Thanks Josh!

What Does it Take to Survive an Entrepreneurial Dip

Harry C. Sweere – the founder of the company I work for, told me this story before he died (paraphrased from memory):

In 1988, five years after we started, I was broke; I had no viable products in the market, little cash flow, and no workable plans for a new product. My house was over mortgaged, I owed hundreds of thousands of dollars to my friends and family, and I still couldn’t make the payroll. I sat in my office feeling depressed and defeated. I was about to call a meeting in the warehouse to tell the employees we were out of money and I couldn’t pay them and that I was closing the company. After that, I planned to call all the people that invested in our company and tell them it was over, I was closing the doors, and their investment capital was gone.

But I couldn’t do it. I couldn’t let everyone go. I couldn’t tell the investors I had failed. I called a friend at the bank and he helped me secure a $500,000 dollar loan at 15% interest – enough to keep us running for another six months. I didn’t know how I’d pay back the loan. But I had faith we would come up with some way to save our business. Shortly after that, one of our engineers developed a unique ball-pivot assembly that we sold to manufacturers worldwide. We paid off the loan in less than six months and we never looked back.

Today his company builds the finest ergonomic products on earth and does business in 65 nations worldwide. The drive and compassion of our founder thrives in our culture, even after his passing.

So I thought… how can I apply his wisdom to my life?

My site started out with a frenzy of traffic and attention from social media sites. It started with How to Break a Negative Thought Pattern and really broke through with 10 Things I Learned from My 4-Year-Old. After 10 Reasons Target is Better than Wal-Mart got farked, I felt compelled to thank those who inspired me by posting How this Blog Attracted 100,000 Visitors in the first 30 days.

For the next 4-5 months, writing was easy – it was a daily joy. But around the 6-month mark, I descended into an emotional and productive valley; right around the time I was trapped in my house during a blizzard. I’ve read that the six-month mark is when most bloggers quit – they’ve used up their best material, the newness of it fades, they aren’t making much money, and it seems like work without pay so they quit.

Seth Godin describes these productive, creative, financial, and emotional valleys as dips which serve us if we can identify them and push through them. All people in entrepreneurial or creative ventures experience dips and the dips weed out the competition and create scarcity in the marketplace. Those that make it past the dips are the ones that create the real value. I am grateful Harry Sweere pushed through his dip and made an amazing and positive impact on the world.

What do you do to push through your dips?