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Tuesday, August 27, 2013

But On Building The New... Streams Of Income

I just saw this quote on the site of a newly-minted Sister-In-Law -
The secret of change is to focus all of your energy, not on fighting the old, but on building the new.
With all due respect to Socrates, I'd replace the word, 'change' with 'success'.  

 I recently returned from a working vacation in a nearby state.  Primarily looking at property to purchase which isn't encumbered with a California zip code.  I've lived in California my entire life.  I've seen it go from an economic powerhouse that was a siren to the best-and-brightest, to a socialist sink hole unworthy of contempt.

No mas.

It genuinely hurts my heart to think of the disaster that is now California.  With the last election cycle, the statehouse is now veto-proof Democrat, and they are not letting the opportunity to create emergencies - which only they can solve - go to waste.

An example, via a recently received email from the NRA -

Vital for you to contact the Chairman of the state Assembly Appropriations Committee Now
This Friday, August 30, the Assembly Appropriations Committee will be casting a series of historic votes on gun rights in California.  Currently the following bills are in this committee suspense file due to the excessive cost of MILLIONS of dollars for implementation being imposed on YOU and the other citizens of California.
Senate Bill 47(Yee) would ban the use of the "bullet button" on semi-automatic rifles to comply with current law and classify firearms with "bullet buttons" as "assault weapons" and ban their future sale or transfer.  Continued legal possession would require that you REGISTER and pay a FEE (TAX) on ALL of your semi-autos with “bullet buttons.”

Senate Bill 53(DeLeon) would require Californians to obtain a permit BEFORE purchasing ammunition, require a background check before every future ammunition purchase and require registration of ALL ammunition that you purchase.
Senate Bill 374(Steinberg) would ban the future sale or transfer and classify ALL semi-automatic rifles with a detachable magazine or holding more than ten rounds of ammunition as "assault weapons."  Continued legal possession would require that you REGISTER and pay a FEE (TAX) on ALL your semi-autos newly classified as “assault weapons.”

Senate Bill 396(Hancock) would ban the possession of ALL magazines over ten rounds, including the millions of "grandfathered" standard capacity magazines currently legally possessed by Californians.
It is essential that you express your opposition to these nonsensical bills that would only affect and punish law-abiding citizens.  Please contact Mike Gatto, chairman of the Assembly Appropriations Committee, tomorrow, Tuesday, August 27 and ask him to keep ALL anti-gun bills in Assembly Appropriations Committee suspense file and NOT move them to the Assembly floor for a vote.
Assembly Appropriations Committee Chairman Mike Gatto
In addition, please urge your family, friends, fellow sportsmen, gun owners and Second Amendment supporters throughout California to contact Chairman Gatto and tell him to keep all anti-gun legislation in the Assembly Appropriations suspense file and not move this legislation to the Assembly floor for a vote.
 No. Simply put, I won't, "fight the old" any more.

Not a single person in public office at the state or federal levels received my vote.  Not one.  Neither US Senator (Boxer-D and Feinstein-D), US Representative (McNerney-D), Governor (Moonbeam Brown-D), State Senator (DeSaulnier-D) or State Assembly (Frazier-D).

I've written them.  Nothing.  I've added myself to their mailing lists.  Deleted.  I've called them.  Never there, never a return call, even from a flunky.

Why in Gods name would I continue banging my head against this wall?  I won't.  We all have limited resources - time being one of the most important.  I'm not pissing any more away worrying about what will become of this magnet to mediocrity.

Want a 50 cent tax per bullet?  Go ahead.  Want to put biometric sensors on rubber band guns?  Knock yourself out.  Want to place a tax on the greenhouse gas farts of elephants in the zoo?  Tax away, boys.  Want to build another Bullet Train To Nowhere?  Let's make it two!

I don't give a damn.

Instead, I've been busy - very busy - "building the new" (I do apologize for the lack of recent posting).  I'm finishing up two new upcoming extensions to this business, and exploring two other wholly unrelated ventures.  All will produce income.  All will produce jobs.  All will produce taxes revenues.

None will benefit California.

I've talked a lot about having multiple streams of income - how I believe you're out of your mind if any individual relies on a single income source.  You must assume you will lose your job, or your business will fail.

I don't care how much smoke the .GOV blows up my boxers, I know - with my own eyes - that the economy sucks.

A week ago, 177 of the S & P 500 companies were at their 52-week lows, but the index as a whole was up.  A couple of high-fliers were keeping up appearances for the whole index.

One of the more common stories we hear is like what Cisco Systems announced the week before last.  They reported their earnings were up 18%.  Oh, and they were laying off 4,000 workers.  Wells Fargo made a similar announcement.  Companies are making their profit nut for Wall Street by first cutting costs, and now, like Cisco, Wells Fargo, and hundreds of other businesses, cutting workers to the bone.

You can only do that for so long, before the company dies because it just can't perform at any level of competence. [check out for a listing of announced cuts and closures]

You've got to get those secondary streams of income flowing.  Now.

The ventures I mentioned earlier are all in different fields.  Two in finance/money, one in self-defense and one in health care.  All of them use the internet as the primary (but not sole) delivery mechanism, and all are portable, meaning they are not geographically dependent.

This concept of "geographic independence" is important.  My firearms training and precious metals businesses are based upon relationships built with local folks.  I primarily do the training at a single range, and my PM store has a physical location.  If I want to move them, it means rebuilding my customer bases from scratch.  I'm financially constrained by only having local customers.

Obviously, very limiting.  And very risky.  If the local economy gets any lousier, everything could just go, "poof!"

These current businesses are also, "me" dependent.  I'm the sole trainer, marketing rep, content creator, etc., for the gun training biz.  For the PM business, I do have two other partners, and half a dozen employees.  Each of us partners have specific jobs we do aside from our time in the shop.

These new businesses - and the MANY more to follow - use a concept I got from a book I've talked about before, The 4-hour Workweek.  The concept is to design a business so that you're the owner, and not the boss.

You bust ass for some period of time building a business with the intention of handing over the reins to someone else.  Your four hours a week are spent monitoring the business, and ensuring that your ownership interest is (literally) paying your dividends.

This "bust ass" period may be a few months, or a year.  The key is to build the business, and incorporate systems that allow you to monitor progress, and only interject yourself into the operations if things seem to be going astray.

Similarly, you may be a subject expert, and write a book, or make a video.  You bust ass, churn it out, and sell it on Amazon or elsewhere.  Your four hours a week are spent marketing your intellectual property.

They same idea would apply if you have programming skills, and can write a program or an "app" for Apple, Microsoft or Android products.

You may be thinking to yourself, "That's just great on paper, Chief.  But the only thing I know how to do is mow lawns and clean yards (or some other skill that is "you" dependent).  I'm living paycheck to paycheck.  How can I translate mowing lawns into a business where the business isn't the 'boss of me?'"

You open your eyes and start looking for opportunities.  Use the "you" dependent business to build a war chest of cash, which you'll then use to build your "owner" businesses.

OK, our guy from above works 5 days a week as an employee at some job.  He only has weekends available to start.  He owns a truck, a lawn mower, a broom and a trimmer.  He goes out and buys an appointment book, and a stack of 250 simple business cards from for $10 (put a list of what you do in place of your address, city, state and fax numbers).

Fresh and early on Saturday morning, he loads everything into his truck, and starts driving neighborhoods.  He goes house to house, knocking on doors telling all who will listen that he'll mow their lawn, right now for $10 cash (or whatever would amount to about half of the going rate).

Everyone he talks to, and every door he knocks, gets a card.  No exceptions.

A brief interlude:  This is where most people crash and burn.  They are unwilling to knock on doors.  Fear grips their very soul.  Cold calling sucks!  They figure a flier in the library and "word of mouth" will git 'er done.  Not gonna happen.  You get referrals - word of mouth - after you've established yourself as a high-value service provider, not before.  If you're going to do work on a house, you go to houses.  If you're going to do work with businesses, you go to businesses.  Period.

Back to our story....

If they say they just mowed their lawn, he pulls out the appointment book and asks if they'd like him to come back next weekend.  He also tells them that he does whole yard clean-ups.  He looks at their front yard and gives them a price a little over minimum wage per hour, PLUS the cost of the dump fees.  "Sir, would you like a bid on the backyard as well?  It will keep your dump fees to a minimum if it's all done at once."  He makes sure he separates the labor cost from the dump fees, so they know his time is a great deal.

After some time, our friend Bob has got steady business.  He's even getting referrals from his current accounts.  When he's not mowing, though, he's back knocking on doors.  He charges a bit more for his new customers - but not too much more.  Every dime he earns either goes into the business for new equipment or marketing materials, or into an envelope in the drawer.  It DOES NOT go into the household budget fund.

All the time he's doing these yards, he's looking.  Looking for opportunities.

When he cleans backyards or garages, he takes the old washers and dryers to a local scrap metal dealer instead of the dumps, and makes a few extra bucks.  He does the same with the bottles and aluminum cans he "harvests".  Nicer furniture and clothing go to the local consignment shop.  He's into this stuff for zero dollars, so he's VERY flexible on his sales price.  Camping stuff, fishing gear, tools and other high-demand items get held for a garage sale his wife runs for him every couple of months.  It's all pure profit!

He's getting close...

Everyone's story or path will be different at this point.  While you're building your war chest, you need to be thinking about your "owner" business.  What is the product or service?  How will you design it to be a business you can hand over to a manager to run?  How do you make it "geographically independent" so if you want to move, it can move with you?  How do you make sure you can sell your product or service to any corner of the US (world?) so you're not reliant on local customers?

You've got to have it in your head that the time you're investing in yourself right now, is going to pay dividends in the future.  Each future income stream means more time for you to do as you wish.  As I preached to my boys when they were younger, Money Gives You Options.  Don't work just for the sake of making money itself (like some sick scoreboard), but as a means to an end.

Build The New...

Copyright 2013 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.


Adam said...

All good points. Have you thought of doing internet sales for your PMs?

I don't blame you for wanting to leave California. Luckily, my state isn't too crazy yet. But I agree the economy is still messed up no matter what the news is reporting.

I'm in the process of figuring out what I want my second job to be. Luckily I'm in a pretty secure job right now and a lot of people would have to go before I would. Pay is a different issue, but I do have job protection for the most part.

Chief Instructor said...

Part of our market niche is that we offer the customer the ability to remain anonymous, plus they walk out of the store with their product in hand. You can't do that if you're paying with a credit card. Plus, the margins for online sales are very slim. You need to carry a massive inventory (which you must hedge against market declines). If someone is buying online, they are buying primarily based on price. Too big of a pool to jump into!

Good luck on the second stream. If you've got an interest in PM's consider going down to your local shop and chatting them up over a period of time. My first employee was a retired LEO, and one of my current employees is the same.

Hard workers, can think on their feet, not intimidated when dirt balls come into the store, and good with a gun...