Q&A With Breaking Free Readers
These will be rapid fire responses.
HelpYourSelfGetLucky.com asks:
I was wondering if you can shed some light or give some advice on how to break free when you have a family to support. I have a wife and 2 kids.
I don’t have direct experience with this myself, but I can tell you that many entrepreneurs have still done it.
The only difference is that you can take a little less risk if you are the sole breadwinner. As a bachelor you can quit and live off ramen noodles for a while if you are really dedicated, but as a father/husband you don’t want to mess things up at home. That will just make it even harder to get a business started.
My suggestion is to stay at your current job while getting your business started on the side. Wait to quit until you can match (or at least get close) to your current salary. Set yourself a goal of how much you need each month coming in from your business before you can quit. That will make it a real number to work toward.
This will not be easy, and you’ll be exhausted. Stick with it, its worth it!
Would you suggest using a straight forward domain name such as collegestudenttutors.com as you used for your recent business or would you suggest using something a little more on the humorous side to get people’s attention and them to remember the name such as yahoo.com?
For small sites I like using domains that contain your primary keywords. This helps it rank in search engines and is a good trick. For example this site ranked #1 in Google for my primary keyword phrase “houston finance tutor” or “finance tutor houston” within 30 days just because of the domain name (did no other SEO). Granted, its not a very competitive keyword.
But if you’re going to stick with a site for a long time and are willing to invest in making a real “brand” out of it then go for a more memorable name, even if it doesn’t directly suggest the product.
Quick tip on picking a brand name: the human brain likes names that have repetitive sounds (this is called alliteration). Think about how memorable these phrases are, how they’ve spread, and how if you hear it once its impossible to forget: Coca Cola, Marilyn Monroe, Dunkin Donuts, Rolls Royce, King Kong, Bed Bath and Beyond. Even pop culture phrases like “player hater” or “junk in the trunk” (note it doesn’t have to be the first letter that repeats, just the sound). Anyway, if you can use alliteration it helps an idea spread.
Caroline of Lotto Lifestyle asks:
When working for yourself, what can you do that really works and what we should stay away from?
First of all nice use of alliteration in your domain name! To build financial freedom I like real estate, I like new websites or pieces of software that solve everyday problems, I like subscription products or services, I like advice/information products a lot, I like blogging.
Stay away from any kind of network marketing or mlm type stuff (sorry I know some people on this site do that but I think they are generally a huge waste of time and have nothing to do with starting a real business), stay away from day trading or any stock stuff in general, stay away from trading time for money or labor intensive stuff (like opening a restaurant/franchise, etc), stay away from selling instant weight loss pills or anything you don’t genuinely believe in.
I heard Eben Pagen say one time that poor people have the mentality that “if I can just get a million people to give me one dollar each I’ll be rich”. They have the mentality of getting.
Rich people have the mentality that “if I can GIVE AWAY $100 dollars of value to a million people, maybe some of them will give back $10 in return”. They have the mentality of contributing a MASSIVE amount of value to a MASSIVE amount of people.
All those things I just mentioned to stay away from are (in my mind) more about getting something than contributing value.
Got a question for Brian? Send it to me, or post a comment below.
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Jeff Nabers said,
Wrote on June 13, 2008 @ 3:12 pm
Brian,
I can agree to an extent with the brief portion of your blog that I’ve read… but your advice to completely stay away from retirement accounts is misled.
Kiyosaki makes that advice, and then his advisors write books under his same brand that tout the inarguable logic for self directed IRA and 401k accounts. Here a couple of facts that shake up your logic:
FACT: An IRA or 401(k) can invest in real estate, mortgage notes, private business, and almost any other asset
FACT: You don’t have to wait until you are 59 1/2 to receive penalty free distributions from a retirement account
FACT: The argument for tax deferred growth always wins when approached logically. A tax deduction in today’s dollars, compounding a return on what would otherwise be income/gains taxes, and paying distribution taxes in inflated dollars in the future results is substantially more wealth built, all things considered, than investing as a taxable person directly.
The real problem here is that most people don’t know HOW to use an IRA/401k to grow wealth. Brian, check out my blog (www.jeffnabers.com); I’m curious what you think about this topic as a real estate investor.
[Reply]
Brian Armstrong reply on June 14, 2008 1:02 am:
Hi Jeff, you make some great points and I can tell by your site you have the credentials to back it up.
I think using your IRA to invest in real estate is great. If the money is already in there then it probably makes sense, and I believe there are some CPAs who help you get the cash flow to use NOW even if your IRA purchased the real estate. But it complicates things and if you aren’t already locked into an IRA then I don’t see a reason to do it.
I agree with what you’re saying about tax deferred growth, but doesn’t real estate offer the same tax savings without the limitations?
I never pay tax on cash flow from my properties because of interest and depreciation deductions. If the property goes up in value in 5 years I can refinance out the gain tax free. And when it comes time to sell I can always do a 1031 exchange.
Brian
[Reply]
Jeff Nabers reply on June 14, 2008 1:28 am:
I think where using retirement accounts can add an advantage is by not requiring you to 1031, refi, or follow any restrictive plan in order to defer or eliminate taxes.
Let’s imagine I buy an investment property in my IRA, and you buy a similar property outside your IRA. We both want to eliminate or defer taxes. I have more options on how I can proceed with my investment than you do.
- When I sell my property, I don’t have to buy another one within a few months.
- I don’t have to continue buying more expensive properties.
- I don’t have to use a certain amount of leverage to ensure I have enough interest expenses.
- I don’t have to borrow my gain through a refinance and bear the interest expense. I can just sell.
- I can focus on maximizing cash flow instead of trying to hit a sweet spot of only getting enough cash flow that can be hidden by deductions.
- I can invest in real estate options, mortgage notes, revenue participation contracts, and virtually anything else with my proceeds.
Repeat this situation over and over, and I believe my additional options will sometimes result in better bottom line investment performance.
Overall, I like what I’ve seen on your blog so far, and I’ll be checking out more of it over the next few days. It was great to see another commenter on 4HWW who wasn’t chasing their tail with “beating the market [dealer] strategies”.
Cheers,
Jeff
[Reply]
Brian Armstrong reply on June 14, 2008 7:32 pm:
Touche…I think we see eye to eye ;)
A New Business Website from Start to Finish in 4 Hours? said,
Wrote on June 14, 2008 @ 3:31 am
[…] readers might notice that I used a domain with the keyword in it, to help it rank in search engines. The idea will be to offer free advice and tips on this site for […]
Klaus said,
Wrote on June 16, 2008 @ 3:03 am
I think that people are a bit afraid of jumping into the first time as not all real estate ventures are profitable - especially when the market turns.
[Reply]
Brian Armstrong said,
Wrote on June 17, 2008 @ 11:42 am
Yep, buying that first house was certainly the hardest. It took me years!
[Reply]