If You Produce Nothing How Can You Expect To Make Any Money?

Produce nothing? Have a double bagel

Produce nothing? Have a double bagel

Every time I walk into a coffee shop, I see guys fiendishly coding on their laptops. Although the chances are slim to ever make it big as an entrepreneur, thousands of predominantly 20-something year old men try their luck anyway. Huge respect for anybody who tries.

100% of the non-family tenant applicants for my previous house were males in tech, internet, finance, or consulting. No wonder why fellas complain that San Francisco is turning into a sausage town. At the same time, women also complain there are no good men in San Francisco either. Such a conundrum!

The title of this post may seem obvious, but I don’t think it’s obvious for the folks who 1) complain on the bus why their life sucks, 2) complain on message boards why what someone else wrote is terrible, or 3) complain on here why it’s too hard to save money or spend less. There has to be action, otherwise you’re just wasting everyone’s time.

Every single company we know of today started with someone who had a vision and a determination to produce something new. If you’re working 40 hours a week or less and wondering why you aren’t getting ahead, you might as well move to Europe where life is good and everybody makes roughly the same. A 40 hour work-week is an arbitrary amount to work given we have 168 hours a week.

Are You Smart Enough To Act Dumb Enough To Get Ahead?

Are You Smart Enough To Be Dumb Enough To Get Ahead?The smartest people in the world are listeners, not speakers. If all you’re doing is speaking, how do you learn anything new?

There was once this portfolio manager I covered who had this uncanny ability to make you feel uncomfortable without saying anything at all. He had a poker face when you spoke to him, and when he felt like changing expressions, he’d go from solemn to smiles in a millisecond. We nicknamed him Crazy Eyes. It turns out that he was literally a genius with an IQ over 160. He also consistently beat his index benchmark for eight years in a row and made millions because of it.

The earliest examples of acting dumb to get ahead starts in grade school. You know what I’m talking about. Those kids who were too cool to study and too cool to sit still in class as they flicked spitballs from the back of the room. These kids weren’t just acting dumb, they really were dumb.

When you purposefully waste your opportunities growing up, you’re not only disrespecting your parents, but also the millions of other kids around the world who will never have the same opportunities.

This post will do the following:

1) Argue why acting dumb is a smart move to get ahead.

2) Provide some tips to help you look and seem a little dumber than you are.

3) Share three personal examples of how acting duhhh, has helped in work, stress management, and relationships.

Stock Options Are For Suckers Who Accept Below Market Rate Pay

Stock Options Are For SuckersThere’s a good saying in the poker-playing community, “If you don’t know who the sucker is at the table, it’s you.” Given work compensation (cash or stock) is likely the #1 source of wealth for the vast majority of people, I think it’s important we have a thorough discussion on stock options so you don’t get ripped off.

To provide some background as to why I think stock options are mostly for suckers: 1) I am currently the CEO of a privately held online media company who has the ability to grant options. 2) I’m a consultant for a startup where I’ve accepted getting paid in options in lieu of cash for three months worth of work. 3) I’ve been an employee of a couple large financial firms and received stock (not options) as part of bonus compensation from 1999 – today (deferred compensation until 2015 due to severance negotiation). 4) I’ve worked crappy jobs growing up that not only paid me a poor hourly wage of $4 an hour, but also gave me no options or stock.

For those who haven’t been following this site since 2009, my modus operandi is to thoroughly write something against what I plan on doing in order to make sure I’m not missing the obvious. For example, “The Dark Side Of Early Retirement” was written in May, 2010, almost two years before I actually pulled the plug on Corporate America. I still think all the negatives to retiring early in the post are valid. But I’ve learned there are some great positives too about breaking free early.

Working for startups vs. traditional companies will likely make you poorer than richer because most startups fail, and most startups pay you below market rate compensation. Cash is way more valuable to an unprofitable startup than to a company with tremendous cash flow. No cash, and the startup will die due to unmet financial liabilities. Options, on the other hand, aren’t really worth anything until there is some liquidity event.

The CEO could say that each share is worth $100, but nobody really knows. Her job is to sell you the vision with tantalizing options that aren’t currently worth much to get you to work for cheaper. Your job is to make an informed decision on the likelihood of the CEO’s vision turning into reality.

Some startup CEOs make mistakes by not only paying below market compensation, but also hoarding their equity so much that they aren’t able to recruit the right people to help build their company into something extremely valuable. After all, 10% of $1 billion is worth much more than 90% of $0.

Before you accept options as compensation please ask the following simple questions:

* What is the current fully-diluted total shares outstanding?
* What is the exercise price of each option?
* What is my vesting schedule?
* Is there a cliff? If so, what is it?
* Is the company currently raising funds, and at what price?
* Do the venture capitalists have a minimum take if the company is bought?
* Will my unvested options become fully vested if the company is bought out?

The CFO, CEO, or person in charge of granting compensation should be able to answer these questions in a relatively straightforward manner. Getting 100,000 options sounds fantastic, but not so much if the exercise price is at $10 and the company recently raised outside investment at $2 a share. The stock has to go up 500% before you break even! Furthermore, if there are 1 billion shares outstanding, you only have ownership of 0.01% of the company.

Don’t be a sucker by not at least understanding the exercise price, the number of shares outstanding, and your vesting schedule. 

Your Obsession With Being The Best Is Killing Happiness

World's Happiest People

World’s Happiest People

Since I can remember, I’ve been made fun of and criticized for trying to be the best at whatever thing it was I was interested in at the time. My AP History teacher in high school was amazing and I would sit in the front of the class engrossed by all the stories he told about the Civil War and how he got to be an extra in Matthew Broderick and Denzel Washington’s 1989 movie, Glory.

At the end of the year, Mr. Stanton was kind enough to give me the AP History Award for most outstanding student. I was honored, but surprised because I wasn’t a great student and this was my only academic award I ever received. I think he just appreciated someone always attentively listening instead of dozing off like some of my other classmates.

But I disappointed Mr. Stanton in the end because I didn’t try harder. When I got the award, a couple classmates made me feel like a loser. They said I was a dork for liking history so much. As a result of such feedback, I decided not to study a lot for the AP History placement test, which could have given me college credit if I scored a 3 or better out of 5.

When Mr. Stanton enthusiastically asked how I did once he knew the scores were out, I didn’t want to tell him because I only scored a 2. I was not the most outstanding student he had envisioned and I felt horrible for letting him down.

“Sam, don’t worry about the exam,” replied Mr. Stanton. “It’s hard to remember everything in history anyway. But if you remember one thing, remember to never let anybody keep you from going for what you want. Thanks for always attending my classes and playing a good game of Risk!”

After Mr. Stanton’s talk, I began feeling angry that I let people negatively affect something I cared about. The battle was on between trying to be the best, not wanting to be a disappointment to others, and never letting anybody keep me from doing what I enjoyed again. Perhaps you’ve experienced a similar battle growing up and as an adult today.

How To Convince Your Spouse To Work Longer So You Can Retire Earlier

Retiring early on the beachOne can either work hard for their wealth, inherit their wealth, or marry into wealth. No way is the right way to get rich. Although the most honorable way is probably getting wealthy with your own two hands.

When I wrote the post, “Stay At Home Men Of The World, UNITE!” in February of 2012, I was being a little silly. The post was just a fun way of forecasting life as a stay at home man as I sought to build my online media business. Two years later there’s still a huge bias against men who are stay at home dads or non-breadwinners. Men who work traditional day jobs love to poke fun at men who don’t. Women, on the other hand, don’t seem biased at all against men who don’t work. In fact, I know several men and women who don’t work who ended up being secret lovers!

One of the strategies to retiring early is to have a working spouse. I have a couple lady friends who retired at 32 and now enjoy playing tennis and drinking chamomile tea during the day at my club as their husbands work their private equity jobs. One lady worked in advertising, and the other lady worked in corporate retail. When I asked whether either of them missed working they laughed in unison and said, “Not at all!”

During my time away from Corporate America from 2012-2013, I also met a lot of guys at Golden Gate Park (where I also play tennis) who retired early because their spouses worked. They were a little older on the early retiree spectrum (40-50). One husband’s wife is a cardiologist at UCSF Hospital. Another guy’s girlfriend is an executive at Salesforce.com. No doubt both their partners are doing well. All of the early retiree guys employed nannies to take care of their children during the day so they could play tennis as well. Gotta love it.

Thanks to the strengthening equality of men and women in the work force, more men are able to break free from corporate bondage to live alternative lifestyles. Men can be the stay-at-home parent now. Men can drink beers at the country club after a round of golf with their buddies and not have to worry as much about money anymore. The equalization of the sexes for career advancement and pay have been a big boon for men as well.

In this article, I’d like to share some tips from early retirees who successfully convinced their spouse or partner to continue working so they don’t have to.