Passive Income

I recently read a really great book called The four hour workweek by Tim Ferris. I completely understand and agreed with his critiques of the traditional retirement. I also liked his push for technology to allow us to have a shorter and easier life.

The term New Rich was great. But of course the concept of being happy with what you have, living with less, and working less to spend more time on what you enjoy is not new at all. It is simply a new way at looking at the concept of being rich in today’s economy. The Jewish wise stated in ethics of the fathers, “who is rich, the man who is happy with his lot.” This is probably more in line with what the book is getting at. As while the author pushes eliminating waste from ones life he is fine with latte’s, chartering flights and driving nice cars. Which is quite different from the perspective of the Epicureanism which while being a form of hedonism (valueing pleasure as the most important good), expects its adherents to live modestly and not need much pleasure. As this allows one to limit ones desires and experience a sense of freedom and serenity. The wish for the newest iPhone , keeping up with the Joneses etc. is completely removed. But while being slightly different this philosophy is definitely an exciting and intriguing one.

Tim Ferris also brings up the problem of work and slavery. He points out that there are so many people forking for the sake of work (W4W). He laments this fact and points out that this is no way to live ones life. Ferris points out the many holes in the traditional retirement model. He points out the unnecessariness of saving millions of dollars for a $450 vacation. Ferris also points out that all this saving is just to be able to do what can be done now. Why build up a successful fishing company to retire on an island, when you can retire on an island now. 

However taking away the relaxing work of people in India and low income people to be your personal servant available at your beck and call does raise some ethical issues. As while I get he is saying that’s the world we live in and we might as well outsource as well. It continues the poverty of outsourced virtual assistants (VA’s) working for below minimum wage ($4/hr), as well as taking away American jobs. Thus the unskilled are often the ones left to suffer due to this. On the other hand it does give some power and finance to low income 3rd world countries and is just using the free market globalize do market we live in.

Ferris does not simply lash out at the stupidity of the “system,” but he lays out an alternative route. His system would allow people to be more productive, live their dreams now, and be rich in time and mobility. Tim suggests slowly automating ones life and creating passive income thanks to technology and outsourcing. That was the whole point of the technological age and the invention of robots right?

These concepts are extremely catchy and inspiring. Particularly to those who recently lost their jobs, are in dead ends, or are looking for more time. 
Additionally such advice empowers single moms looking for part time work. As it gives them hope and ideas to gain income flexibly. Such as in between picking up the kids from school, working from the ballgame or ballet. It allows her to be able to pay the rent, school supplies, and bills. This is particularly helpful in our day and age where divorce is so rampant and the number of single moms raising kids has grown.
While the traditional retirement and passive income streams have focused on bonds, stocks, and real estate, Ferris has focused on less risky while still passive forms of income. This Tim Ferris has pushed the affiliate marketing and drop ship options. As they allow you to completely automate your income while maintaining low overhead and low risk.

Not only is this book idealistic, but it is also practical. Ferris offers testimonials from people who have tried the lifestyle as well as pages of ideas, resources and examples for those ready and interested in jumping in to the world of the new rich.

While I felt that having a brief review of Tim Ferris’s perspectives  is helpful to my readers, I think that many of you are interested in my reaction to this, as well as some discussion on the feasibility of such an endeavor.

I think that the concept of mini retirements (or long vacations) are a great idea. I am also very pro working a year or two and taking a year off. As Tim points out what could go wrong? Live while you are young. The traditional retirement model does have some issues. We do live longer than we used to and inflation is out of control.

I also find the optimization ideas helpful. Particularly the 80/20 rule. Of course this is not new and the idea of focusing on priorities and eliminating interruptions has been a big part of the time management literature. I also agree with his points about working smarter vs harder. Calling at the right times planning vs going right out and doing things, etc. I would definitely recommend many of his ideas to those interested in improving their productivity.

However the drop ship model seems to be unsustainable. As opening a sustainable online drop ship business is quite time consuming requiring a lot of study in SEO, marketing, researching products etc. Additionally anytime you ship anything to anyone you risk liability for them not using it correctly, the various legislations and policies regarding what can be shipped into the country, who inspects it, customs, etc. The big super stores such as wal mart, Amazon, etc. take huge bites out of your market or lower the margins considerably. Additionally Chinese manufacturers may steal your product and make it cheaper, or others may copycat your idea and further take away margins. 

Lastly finding and selling a product online can be time consuming and take quite some time to do. And they usually do not last very long. As Tim pointed out companies need to continue coming out with new products to remain profitable. This means that you will need to continue working to maintain your profits. This all you did was move from a well paid lawyer job to a low paid eBay seller (with your own site instead of eBay).

For thise more interested in affiliate marketing or advertising dollars such as Adsense the situation is even worse. First of all SEO is an ongoing process. One that is not sustainable on the type of margins available. Thus many hours will be spent creating content and optimizing the site. Unlike a regular job that allows you to stop thinking about it once it’s over, you may constantly be thinking about the blog or website. 

Additionally both Adsense and Affiliates don’t pay very much. You need millions of hits to get even a couple hundred bucks. And that is five minutes of fame. As stated above products don’t last very long. You need to continue working on them and pushing out new content and products. This is why the best use of them is brand building and engaging people to come to your business. Not get rich off Adwords. There is a great article from Fake Steve Jobs on how hard he tried to use Google Adsense to make money. And how even after going viral he was still unable to make more than $100 on the day of going viral and $1000 for the day.

I think that blogging may therefore be more like being a musician. It should not be done for the money but for the passion. Going in to either wanting to get rich and famous will not pan out. Instead do either for the love of the medium and the engagement may come. Additionally both of these are not ways to get rich quick.

Stocks, bonds and real estate trusts allow you to get equity in real businesses that have proven themselves and provided their stakeholders 4-15% returns annually. While a little risky this is the true passive income, unless you have trouble sleeping due to it or do not have the ability to hold long, but low and sell high. I suggest starting out by paying off credit caress charging you 15-22% interest. Then sign up for Acorns which is an app that makes investing simple and easy. That’s what I did. Of course I am no expert in finance yet. But I plan on reading all there is to know about this as it seems to be a great way to sustainably make the type of profits that I used to pay in credit card payments each month. It would be great to be on the receiving end of that. I am definitely going to look into investing clubs and lending clubs as well as it may allow me to actuality this wish of 22% interest. 
But I am a little concerned that I will continue the problem of abusing the poor by doing so. As I have watched many friends and employees use payday loans etc. out of necessity or ignorance and it was kind of sad to watch. 

So in short I think the best sustainable passive income is equity. Or bonds, stocks, and real estate trusts. And that these together with a part time or full time job is the way to go. It will allow you to diversify your income and sustainably receive an income higher than most businesses. Of course there are risks but then everything has risks. Invest smartly and get money making assets and hopefully we can all work four hours a week.

Passive Income

Purpose of Humans vs. Animals

As humans have developed an additional faculty of rationality and logic, we may have an additional purpose than those of the animals. As this faculty may make us challenge our purpose of simply procreating and following happiness. It may want us to find an existential purpose, in the way of humanism. It may ask us to bypass our own happiness for the happiness of others. And it may ask us to not procreate to slow the overpopulating of the earth.

Thus while the purpose of animals was to simply procreate and find short term and long term happiness, the human mind has evolved to need other needs as well. These needs may even overwhelm the underlying urges.

It is here that existentialism, humanism, religion, and others thrive and secularism breaks down. But I will do my best to bring a secular evidence and philosophy based approach to this aspect of purpose and meaning of life. As it is here that the work needs to begin.

Purpose of Humans vs. Animals

Purpose of life is Happiness and having lots of kids

The point of life from a purely secular and scientific perspective is for 2 things:

  • Happiness 
  • Having lots of kids that will live long enough and be healthy enough to have their own kids.

By happiness I mean the two types short term (food and drugs) and long term (fulfillment passion meaning etc). These are measured in serotonin, dopamine, etc.

By having many kids I mean a lot of kids that will grow up old enough to have their own kids. I think that this can be seen in the research of evolutionary theorists. And the findings regarding our perceptions of beauty ( http://www.medicaldaily.com/men-perceive-thin-female-body-shape-physically-attractive-due-youth-and-fertility-350476), perspectives, way our bodies look and how life formed.

We balance these 2 life purposes of happiness and having lots of kids. It is why we work hard to try and attract a mate that is young, healthy and able to have a lot of healthy offspring who will grow up to be healthy enough to do the same. And it is also why we are always looking for ways to give us another high in short bursts or long term bursts. As if you really break it down and ask why a million times it all comes back to happiness and continuing life to the next generation.

Slutshaming, aversion to the “whore” and presentation of the “virgin” as well as monogamy, and other cultural taboos are made to ensure that the children will be able to live long enough to have their own kids. As appears to being children of single moms without support. It is also based on people who can’t get their own pretty healthy spouse and are therefore trying to even the odds (see what the people look like who are the most virulent in these ideas-usually not very good looking). Or based on society’s overall goal of creating an environment where its citizens children will be more likely to grow up and survive to the age to have their own children.

Purpose of life is Happiness and having lots of kids

Progeny

If the point of a cup is to drink from, the point of life is to have children who will live and have children. This is the perspective of evolutionary theory. In the evolutionary theory everything in the world exists to continue existing. Whatever and whoever is more effective at reproducing will continue living.

However what we choose to do with our time here on earth in between this kid making is interesting too.

Some may point out that the in between time is merely about making yourself a better candidate for more kids like getting a good job, making more money, and improving your looks to get a younger better looking spouse to have kids with.

What do you think? Does that sound meaningful? Does life need to be meaningful? Are we just a group of termites replicating and eating the entire world as we grow with our only mission to replicate?

Progeny

Self improvement for Valentines Day

I have a couple of areas I need to improve on which would make me a better boyfriend and partner. Of course this will not be easy. But I guess they will make me a better person anyway.

  • I could work on listening more, 
  • be more thoughtful and empathetic. 
  • I could try to be less cheap, 
  • Not be mean under the pretense of truth.
  • Try to cooperate more and generally be less of an asshole. 
  • I could do boxing in the morning,
  • And watch what I eat.

Of course these will not be easy. But if I really care about myself and my girlfriend / future partners it is probably best that I work on these aspects of myself.

Self improvement for Valentines Day

Dogs, Morals, and Bias

For some time now I have been intrigued by the way we compartmentalize our ethical judgements towards animals and humans. I am not sure whether the judgement regarding humans or animals is more correct. But it definitely highlights the cognitive dissonance like reaction to the moral issues.

For example, a common ethical dilemma is the question of whether to allow Euthanasia, Physician assisted suicide (PAS), and in which circumstances. When this issue is put forth regarding animals, pets such as dogs, or humans each is often met with a completely different set of moral judgements. As a cancer stricken dog is said to be being put out of its misery, while the human is put on to a ventilator to live as long as possible. This occurs even in situations where the pet is very beloved and holds a special relationship to the person “putting it down.”

We also see this in the way we treat stray dogs and humans. I have yet to see an orphanage asking people to adopt or foster youth to save their lives as otherwise they will put down and killed as there simply is not enough room, resources or money to hold them. I have also not seen Facebook pages of children with time limits of when they will be killed if not adopted. To even think of something like this is kind of extreme. Yet this is totally accepted behavior by kill shelters all over the world . They even have shelters called high kill shelters! You heard that they add the word kill and shelter into the same name. Imagine a shelter for youth,  homeless or beaten women called a kill shelter? It could never happen. It almost sounds like a butcher shelter. Buy your meat for a week and a family pet, right? Aweful.

Additionally families that love their pets can leave their young puppies at home with only a bowl of water and food for many hours. Sometimes even tied to a chain around their neck or in a cramped cage for toilet training purposes. They may even have a shock collar on in case they yell or cry. Again can you imagine if this was done to a child?

Lastly there is the spay and neutering thing. If you don’t do this people look at you as if you have not given your dog his vaccine shots or fed him. The publicity campaigns discuss the possibility of dogs having many many babies who will run stray in the streets and have even more children. Yet imagine if this approach would be taken with the homeless, poor or low SES persons? They too have many kids, many even in high school or in the slums. Yet there is no push to sterilize them. And if there was it is seen by the same people that push this as abhorrent.

Lastly there is the idea of eating meat vs your pet or a human (cannibalism). Which is why some people decide to become vegetarians or vegans.

Dogs, Morals, and Bias