Here is some excellent business education for the day. Much cheaper than getting an MBA.

In this talk, Milton Friedman gives an overview of free market economics, including how…

• The minimum wage law is discriminatory
• The cost of social security is born 100% by the employee
• Every social program has had the opposite of the intended effect
• Doing charity with other people’s money is flawed

Why this stuff isn’t taught in school I have no idea (I actually have a degree in economics and we never learned anything as useful as this).

If you don’t see the video click here.

This has been bugging me for a while now, and somebody needs to finally say it: Network Marketing is not a worthwhile endeavor, stay away from it!

The number of people who are caught up in this stuff is staggering and it seems like at least once a week I get contacted by someone trying to get me to join some program.

It’s really annoying, and there is no quicker way to ruin your reputation among your friends and contacts then trying to get them to join this stuff. Smart, respectable business people stay away from network marketing like the plague and it will INSTANTLY kill your credibility if they get even a whiff that you’re trying to get them to join one of these things.

I’ll probably piss off half the readers of this blog by posting this, but thats fine because it needs to be said. For some reason the “home based business” industry is surrounded by this stuff…get rich quick schemes, network marketing, and all sorts of shady offerings…and that bothers me.

Even the Google ads which show up automatically on this site seem to come up as network marketing type stuff half the time (haven’t figured out how to change that, if anyone knows leave me a comment)…which means they are targeting people who want to start their own business. Being a network marketer is not starting your own business!

If you want to break free from your job…you’re going to have to do it honestly, ethically, and with hard work. You’re not going to do it by selling some herbal supplement or lower electric bills or energy drink to your friends. And you’re certainly not going to do it by pissing off every contact you’ve ever made trying to get them to join you.

If you can’t explain your business in one sentence, you’re either hiding something or don’t know what you’re doing

I was in an elevator the other day and struck up a conversation with the elderly woman next to me. I asked her what she was up to and she said she was going to a meeting for XYZ (I can’t even remember the name). When I asked her what it was she gave me the most cryptic reply…”well, we do a lot of things really, but mostly…we find ways to help people.”

Right away the little alarm bell is going off in my brain…the same one I get when telemarketers call or Jehovah’s witnesses come to the door…damnit, she is a network marketer.

If you can’t explain clearly what your business is in one sentence…you’re either hiding something or you haven’t figured it out yet either.

Sure enough…her next words were “why don’t you give me your card and I can tell you more about it some time”.

“Well is it network marketing?” I asked.

“Sort of”, she said, “but not really…we really just help people. Let me get your card and we can talk more some time”.

“No offense”, I said, “but if its anything related to that I really don’t want to get involved”.

Her mouth hung open for a second, and then she stormed out of the elevator, visibly shocked.

Why You Shouldn’t Do It

Does network marketing even work? I certainly haven’t researched it extensively…the thing is every network marketer will tell you they KNOW someone who is super rich from doing it, but I’ve never met that illusive person.

On the other hand, I HAVE met dozens of millionaires who are legitimate business owners or are involved in real estate. In fact, EVERY rich person I’ve ever met either owns their own business or owns lots of real estate (or both).

That’s just my personal experience and not conclusive proof, but look at your own personal experience and see if it matches up.

That brings me to an important point. Even if network marketing DID make lots of money (which I don’t think it does for 99.9% of people), I STILL think you shouldn’t do it.

Why? Because in the process of making that money you would have pissed off all your friends and family hustling them to sell your vitamins!

What good is it to have all that money if your family hates you and the only friends you have left are other network marketers?

Does It Feel Like You’re Helping People?

The only way to make a ton of money is help a bunch of people. Period. If you give a bunch of people a tremendous amount of value they will gladly give you some money for that.

I know, I know…your network marketing program is different from the others which all give it a bad name, etc…and the intense motivational weekend you went to made it sound like you were helping people who love the product.

Just be honest with yourself for a minute and forget all the delusional bullcrap, and ask yourself how you feel about what you’re doing. Maybe it REALLY IS a good product that helps people…if so why the tactics to get people to buy it. If it feels dirty get out.

Its the same as people who bring fraudulent slip-and-fall lawsuits or don’t disclose the patch repair done on their transmission when they go to sell a car.

Of course its possible to make money in slightly unethical ways in the short term…there is no doubt about that. But I think ultimately the biggest person you end up hurting is yourself…both in terms of your pocket book and self-esteem.

Stay away from network marketing, and if you’re in it already…forgive yourself (we all make mistakes) and get the hell out!

What has been your experience with network marketing and dealing with network marketers? Please post a comment below…

Most people who want to start their own business don’t have a ton of money laying around and it’s probably one the most common questions I get emailed about: How can I get started without a lot of cash?

Well I’ve put together a list below of the best ideas I’ve heard and personally used. I hope you find it useful!

The three basic strategies to starting a business without much money are:

• Delay the normal “business starting” activities like incorporating, hiring, renting office or retail space, etc until AFTER your business has started earning money. This is known as bootstrapping.
• Doing everything yourself and spending your personal time instead of hiring an expert. (Takes longer but costs less.)
• Using some neat tricks and little known deals below.

Start With The Easy Stuff: Eliminate Expenses

1. Don’t rent an office! - work from home. Or better yet work from the best free office with locations everywhere: Starbucks. If you need to meet with a client and are worried about seeming small time without an office, don’t be. Just meet them at a restaurant for a lunch meeting. This is what people with the nicest offices do anyway.

2. Don’t hire any employees! - do it all yourself until you have some $ coming in the door.

3. Don’t hire lawyers, technical people, graphic designers, or assistants (see below)

Legal Stuff and Incorporating

4. Get a free lawyer and legal advice from the mentors at Score.org

5. Find a website with a similar legal document and modify it to your needs

6. An LLC is probably the best business structure, but don’t worry about incorporating until you’re earning money, just do a sole proprietorship, you can always incorporate later (you can get it setup with the IRS in just a few minutes by calling them at 800-829-4933)

7. Learn how to do your own financial statements for your business in Excel instead of hiring a CPA or bookkeeper (again you can do this after you’re making money)

8. Take a Quickbooks class at your local community college

Make a website for your business

9. Don’t pay a premium for a top end domain name, there are plenty of good ones left

10. Test out your ideas by writing to a blog, you’ll get feedback on what people like and don’t like

11. Get a free business website at www.wordpress.com. It won’t be your own domain (it will be something like yourbusiness.wordpress.com) but…

12. When you’re ready to have your own domain, get a hosting plan (new domain included) at 1and1 for $4.99/month, and install wordpress on your own server (instructions)

13. Get a professional website design for free with a wordpress theme that you can install with a few clicks (no programming knowledge needed)
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This is a guest post by Manuel Zeh, a friend of mine who has been travelling the world for 7 years and has come to some interesting perspectives on life. Manuel has travelled 40 countries on all continents and lived in 10 of them. He speaks 9 languages and is a professional pianist who has performed on Indonesian TV, at the Sydney Opera House and on the cruise ship “Sun Princess”, among others. He currently lives in Tokyo, Japan. Take a minute to check out his website at: www.manuelzeh.de

1. Retirement is NOT the goal of the game.

I used to think I want to work *really* hard so I could retire *really* early… when I suddenly realized that I wasn’t living life to the fullest now, while I’m still young. In a way, “working” means putting a price tag on your time, and selling it - and I believe my young years are priceless… they never come back. Yes, plan for later… but live in the present. The “now” is the only time we really have, and life is not a race, in which “whoever dies first, wins”. Statistics show that many people die soon after retirement, because they don’t have a purpose to live for anymore… other studies show that people who never HAVE to work again at an early age usually start to work HARDER then before, because that’s when they start doing what they love. Do these things you love NOW… they are likely your true calling.


2. Salary is NOT a good criteria to choose a job

Many people choose a job based on how much money they will make. Consider this… you spend MOST of your waking hours in your job - and life is made up of time, not money. Make your jobs something you love doing and you’ll never have to work a single day of your life! I believe the best three criteria to choose a career path are:
- something you love doing and are passionate about
- something that contributes / is useful
- something you have a talent for
If you fulfill these three criteria and learn how to market yourself, the money will follow… and you’ll be loving every minute of it.

3. A fun life full of experiences and achievement are NOT mutually exclusive

When I started travelling the world 7 years ago, I used to think that you have a choice to either ACHIEVE a lot or to EXPERIENCE a lot… and I consciously chose the latter. I’ve since found that if you follow your heart and your passions, things just fall into place and you’ll end up achieving a lot as a by product. Sometimes I’m surprised when I look at my CV and how impressed many people are by it, even though (or maybe because!) I’ve spent the better part of a decade travelling and having the most amazing life I could have dreamt up for myself.


4. Your parents do NOT always know what is best for you

Once I was dating a girl who, when she was 19, had wanted to travel. But she succumbed to family and society pressure and went with the responsible, financially secure choice instead. She went to uni, postponing her travels and became a dentist. When I met her, she was 26 and almost done studying… and she realized that she doesn’t even want to be a dentist, but it was too late. She also realized that she couldn’t really travel anymore because at 26 you’re not as free as at 19… she was already tied up with career, family duties, bills, a relationship, and so forth. I firmly believe that, if she had travelled at 19, she would have found herself. She would have discovered her true identity and what she really wants in life, instead of taking on a profession that she’d end up resenting. She would probably also have been a lot more motivated during university… studying with the serenity of knowing that she has already lived out her dreams, and that she’s pursuing a career she loves.


5.You do NOT need to be rich to travel the world

If a week in Florida can easily cost a few thousand dollars… how much is it to travel the whole WORLD for many YEARS? People sometimes ask me whether I’m a millionaire. Far from it… the formula is, I work in first world countries and save up. Travel in 3rd world countries. Latin America, Africa and Asia are ridiculously cheap… whereas in Europe, North America, Australia, Singapore, Japan and South Korea, you can make very good money. But there are many different ways to travel… most recently I worked on a cruise ship. Good salary, no tax, free food and accommodation, access to all the pools, gyms etc on board, lots of free time, travel in the South Sea on a pay check, and free excursions to all the islands.

Don’t come to the end of your life regretting the things you did NOT do… don’t dream your life, live your dream!
My best to you all,

Manuel Zeh.

Take minute to check out Manny’s website at: www.manuelzeh.de

Derek Sivers discusses the exact point I made a few weeks ago (with a much better example than mine)

If you sell pens for a living and someone orders a million pens, no problem! You just place an order with your manufacturer for a million pens, get them to the customer, and celebrate.

But if you do hands-on massage for a living and a recent spot on Oprah gets you a waiting list of 10,000 people, “you’ll wish you were in the pen business.”

This is Why MLM and Network Marketing Don’t Work - ask yourself these before getting too far into a new business idea

Why are we doing this?
What problem are we solving?
Is this actually useful?
Are we adding value?

Don’t Listen To Negative People

I’m sure that the moment man discovered fire, there was some guy nearby saying, “Too smoky. Can burn you. Lame.”

Scott Adams at the Dilbert Blog Forgets the Best Option: Self Employment and Passive Income Streams

Sleep: 8 hours
Exercise: 1 hour
Work: 8 hours
Eating: 2 hours (leisurely)
Hygiene: 1 hour
Travel: 1 (Commute, errands)

That leaves you three hours for family time, sex, shopping, food preparation, chores, household repair, volunteering in the school, and so on. If you have a dentist appointment, or your talkative relative calls, or American Idol has a two-hour special, you’re tapped out.

37 Signals Celebrates People Who Quit Their Jobs

Five little companies were featured to showcase the owner’s decision to leave their daily rat dace of a life behind and dive into the uncertainty of following their dreams. Here’s the kicker: These 5 companies are some of the most mundane, normal, average little companies out there.

These companies aren’t going to beat Google, they aren’t building a better iPod or bread slicer. There’s no “the next Facebook” and not a mention of angel funding. These entrepreneurs are doing simple things they love and making a pretty decent living from it.

Oprah discusses: What should I do with my life?

People tell me their business ideas all the time. They usually want to start a restaurant, or sell something they made, or give their advice as a consultant or coach.

But those businesses don’t scale. The only way people get rich is by developing a product or service that can help a LOT of people, not just a few.

If each person that you help requires your personal time then there’s only so many you can help, and you probably won’t get rich doing it. (Even if you don’t care about getting rich and just want to help people, helping individuals is still an inefficient use of your time, more on this later.)

Sure you can make quite a bit of money in the right job working hourly. Doctors and lawyers get a high hourly wage. But they still have to help each person individually which is why they can never be as rich as someone like Bill Gates who has a scaleable business. His software gets written once, and then distributed to millions of people with very little additional effort for each person who is helped. Bill Gates makes money from his software while he sleeps, whereas doctors and lawyers still have to keep putting in the hours to get paid.

Scaleable businesses require much more work up front, but once they are off and running they require little or no additional time per person. That’s power because once your business system is in place, your time is still “preserved” for you to work on your next business idea and help even more people.

Compare each of the following. Which one scales better?

• Giving a speech to a group of people vs. making a recording of that speech to distribute
• Flipping houses vs. building a real estate portfolio over time
• Cooking for a bake sale vs. licensing your recipe
• Your band playing at a local festival vs. selling songs on iTunes
• Talking to customers over the phone vs. taking taking orders through your website
• Accepting checks vs. accepting credit cards
• One-on-one coaching sessions vs. selling a book
• Keeping in touch with friends by email vs. writing to your blog
• Being a freelance programmer for one client vs. selling subscriptions to your software to many clients

Even if you don’t care about making money and just want to help people, I’d still argue that you need a system that scales. You can do the same kind of comparison for non-profit work…

• Volunteering your time at a homeless shelter vs. developing a city wide program to help thousands of homeless
• Feeding a hungry family vs. improving education/changing legislation/etc

It might give you a warm fuzzy feeling to help an individual, but in general I think you’re setting the bar too low when you do that and selling yourself short. Spend your time on something that will really have an impact.

Making a scaleable business is not easy (otherwise everyone would do it).

While working hourly, you can see a paycheck in as little as a few days or weeks. It’s dependable. But while building a scaleable business, you can see zero return for months or years (or maybe never). All the work is up front.

It’s the old linear vs. exponential growth. That’s why most people don’t get rich. They don’t want to put the time in up front to see the big payoff down the road.

The next time you have a business idea, try to think about how it will scale and if it could ever really help a TON of people. If not, is it really worth pursuing?

Here are some links to various articles I’ve found interesting in the past week…

The Inner Game Of Starting Your Own Business

Entrepreneurship is very, very, very emotional. The emotional rollercoaster is such a substantial part of the entrepreneurship. I haven’t seen any entrepreneurship textbooks address this extremely important issue. If you’re doing anything you’re actually passionate about, this is a necessary requirement. You have really high highs, and really low lows.

Seth Godin on Persistence

Persistence isn’t using the same tactics over and over. That’s just annoying.

Persistence is having the same goal over and over.

Eben Pagen on How Small Changes In A Name Can Make All The Difference

Answer this question, FAST:
Which of these two book titles sells more copies…

Book #1: “A Thinking Person’s Step by Step Guide to Weight Loss & Exercise Program”

Book #2: “Skinny Bitch”

A Thinking Person’s Step by Step Guide to Weight Loss & Exercise Program
was written by two Ph.D.s and based on empirical research by guys with doctorate
degrees.

Skinny Bitch was written by an ex-model and an ex-modeling-agent (if that’s
how you say it).

Time’s up. Which one sells more?

Well, according to Amazon.com, A Thinking Person’s Step by Step Guide to
Weight Loss & Exercise Program is their #437,317th best-selling book, whereas
Skinny Bitch comes in at #56.

My question for you is…

WHY?

Amazing People Don’t Have (Or Need) Resumes

How about three extraordinary letters of recommendation from people the employer knows or respects?
Or a sophisticated project they can see or touch?
Or a reputation that precedes you?
Or a blog that is so compelling and insightful that they have no choice but to follow up?

Some say, “well, that’s fine, but I don’t have those.”

Yeah, that’s my point. If you don’t have those, why do you think you are remarkable, amazing or just plain spectacular?

Why corporate mentality is based on military culture, and an incredibly innovative alternative.

A lot of people shy away from any talk about “finance” or “accounting” because (1) its boring (2) it involves math and (3) its hard work.

Well it’s not as bad as you think. I’m going to show you how to understand financial statements in about 5 minutes. Then I’m going to give you some Excel templates to create your own. (See the video demo at the end.)

But first…

Why Should You Create A Personal Financial Statement?

If you wanted to lose weight, you’d have to weigh yourself right? If you wanted to be a great race car driver, you’d have to time your laps.

Well if you want to get rich (or become financially free), you have to create financial statements.

You are a business. You have money come in and you have money going out. You have things that you own and things that you owe.

If you don’t have a way to MEASURE progress and COMPARE what works and what doesn’t, then you are just wandering blindly in the dark.

Robert Kiyosaki talks a lot about this, how rich people are “financially literate” and how this should be taught in schools. That way we wouldn’t have so many Americans in credit card debt, losing their homes, and retiring flat broke only to become a burden on their families.

But that is another story. The thing to remember is that something MAGICAL happens when you start to measure your progress. Your success rate goes through the roof.

If you aren’t looking at your financials about once a month then you quite simply AREN’T serious about becoming rich. (You can pay a bookkeeper or accountant to do it as well if you don’t want to go through the process below.)

Understanding Financial Statements In 5 Minutes

I’ve tutored about a dozen people in MBA level finance and accounting courses. Here is the explanation that seems to work the best.

There are only two types of financial statements that you really need to know: a balance sheet and an income statement.

BALANCE SHEET

• Shows what you own (assets) and what you owe (liabilities)
• The difference between these two (assets - liabilities) is your net worth.
• Shows one particular MOMENT in time, a “snapshot” if you will.

Click the thumbnail to the right to see an example. As you can see, the money in your bank account, the market value of any property you own, your car (if you own it outright), and stocks are all examples of assets. Mortgages, car payments, credit card debt, and other loans are all liabilities. The difference is your net worth. Notice how it says a specific day in January and not just “January 2008″ because a balance sheet refers to one moment in time, not a period of time like a month.

February and March haven’t been filled out yet, but if you spent a few minutes once a month putting in those numbers you can see how easy it would be to track your progress month to month.

INCOME STATEMENT

• Shows where money is coming in (income) and where money is going out (expenses)
• The difference between these two (income - expenses) is your net income.
• Shows what happened over a PERIOD of time, instead of how things are at one moment like a balance sheet.

Again, click the thumbnail to the right to see an example income statement. For most people the primary source of income is their job so you might have that first. After that you can see the income from those two properties listed on the balance sheet, as well as income from a small business you started, just as an example. Secondly, you see expenses broken down by category and net income at the end. I’ll show you how to quickly categorize your expenses in a minute.

Notice how in the second month your cash flow is negative and the number appears red. Negative cash flow is bad! It means you are spending more than you’re earning, and that is the way toward bankruptcy, not financial freedom. If you hadn’t made your financial statement that month would you have ever know this? Probably not.

Thats it. Not as scary as you thought right? On corporate financial statements you will sometimes see some strange terminology, but the basic concept is the same as for this personal financial statement. Balance sheet: what you own, what you owe. Income statement: what you made, what you spent.

Why Quicken and Microsoft Money Suck
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It bothers me when I see people using the touch pad on their laptop while at a desk for long periods of time. I’ve never seen an official study done on it, but I’d guess that you are 25 to 30% faster using a regular external mouse instead of a touch pad. The touch pad is only there for when you are on the move and don’t have access to anything else!

Ask someone what the three most important things in their life are, and in some order you will probably hear: health, wealth, and relationships. The later includes friends, family, and lovers.

Is your job helping you improve each of these areas?

Health: Chances are your job is the biggest source of stress in your life, could be preventing you from getting enough sleep, and forces you to eat unhealthy food while on the go.

Wealth: The story that we’ve all been told as children (work hard in school, get a good job, work and save for 40 years) is a lie. More than 80% of Americans end up flat broke in old age, totally dependent on others, and praying that they die before their money runs out. Having a job is a way to make a living, not build wealth.

Relationships: Spending 1/3 of your life at work means you can form great relationships with colleagues (although you rarely get to choose which colleagues you spend time with), but also means your time is limited with the others in your life.

Starting to work for yourself instead of being a slave to your job poses some interesting opportunities:

• A chance to build wealth as a business owner instead of being a wage slave
• Reduced stress, no rush hour traffic, no boss, no annoying colleagues
• The time to exercise regularly, shop for healthy food, and eat without being rushed
• The ability to get enough sleep
• More time with your family, friends, and lovers
• The chance to meet more new people
• An opportunity to work on what you want, instead of what is assigned to you
• As many vacation days as you’d like
• More control over what you do with your time every day of your life!