Dog Sitting: My Two Month Review

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A couple of months ago, I announced that I'd be jumping a new gig - dog sitting. It was a no-brainer because dogs are awesome, they love me, and we have a perfect fenced set-up for it. Oh and I noticed that I could make around $30 a day per dog. As if that wasn't enough, the dogs will be good company for own dog.

It's responsibility, but think it is what some professional athletes think, "I get paid money to play games... life is good!" Unfortunately, dog sitting will not be making me quarterback money any time soon.

I'm on two dog sitting services, and I prefer DogVacay as the interface is better and the rates for hosting seems to higher. Unfortunately, I seem to find every technical glitch with DogVacay. I got an anxious dog mommy a couple of weekends ago when the DogVacay app didn't send pictures as it claimed to have. Lesson learned: Still with good old MMS or uploading through the website.

The worst part was that their dog Vincent has been by far the most well-behaved we've had. It's not that the other dogs weren't well-behaved, but he was like a movie dog where he'd sit and ask for permission a paw wave before coming into your lap. After their stay, I wrote back that I'd give them a discount. I didn't get a response. Oh well, you can't please everyone.

Enough of that, let's get to some numbers:

How much can you expect to earn dog sitting?

This is going to vary greatly depending on how many reviews you have, how you set prices, and demand in your area. The person I take my dog to when I'm on vacation usually has 4-6 dogs there and her rates are higher because she has awesome ratings and sends pictures about every half hour. (Seriously, I once got at least 20 pictures in the first two hours.) Some of the dogs are her own, but if we just to estimate $40 by 4 dogs and account for a little vacancy, it can be $150 a day. That's more than $50,000 a year. It's a lot of work dealing with that many dogs, but it does have income replacement potential for the top sitters.

But I didn't title this a 2-month review to write about that person. I want to give my own data.

I have a spreadsheet that I set up. Record keeping is key. It has the dates the dog stayed, dog name, dog breed, age, owner information, vet information. I'm tempted to create a little database, just because it would be fun.

The thing I use the most though, is the money columns. I have what owners pay and what my cut is. The services take 15% for insurance and matchmaking. It automatically extends numbers based on the dates of the dogs' stay. I then let some Excel formula do their thing. The result gives the following information:

  • I've netted (including booked) $976.65 through the end of October.
  • In September it was $15.27 per day due to a popular Labor Day with multiple dogs (and a lot of days with no dogs).
  • In October it is $10.97 per day. For some reason, Rover has come up big for me this month.
  • Annually, I am on a pace to net $4,193.85 or around $350 a month.

I think that $350 a month is the number I want to focus on. If that average holds up over the long term, it's like eliminating a car payment. That's not chump change by a long-shot.

Much of my personal finance situation this year has stayed the course. I think I'm going to add a projected dog-sitting income to my annual $200,000 in retirement income next year. I'll probably be conservative and put it at $2,500 in case we travel more in retirement. In either case, it feels good to add another diversified income. Every little bit helps.

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Posted on October 14, 2015.

Are FortuneBuilders’ House Flipping Seminars a Scam?

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[Editor's Note: This article was refreshed on October 2, 2015. See the end of article for general change history.]

The other day I overheard a conversation between two people about flipping houses. One person went to a seminar over the weekend to learn to flip houses. I cringed, but bit my tongue and didn't say anything.

I've been hearing commercials on the local radio for these seminars for a couple of months now. One of the stars of "Flip This House!", Than Merrill, was pitching the seminar saying something to the effect that he needs a few business partners in the area. The company running the seminars is called FortuneBuilders. Medford, Oregon's KTVL News 10 covers a few snippets of the commercial here:

Radio Ad:

"Do you want to learn how to make a ton of money flipping houses right here in Medford? My team and I are looking for a handful of people in the Medford area who want to learn how to consistently make a lot of money, per deal, in your spare time, without using any of your own money... Medford is a perfect market for my system.

KTVL News 10:

"It almost sounds too good to be true... kind of like a scam."

Did that wording make your Spidey-sense tingle like it did mine?

Are Flipping House Seminars a Scam

Are Flipping House Seminars a Scam?

It definitely sounded like a scam to me as I heard the same pitch in Rhode Island, thousands of miles away. It make you wonder if there are a lot of "perfect markets."

As my friend likes to say, "We have 'The Google!'"

Using "The Google", I found that there was a warning about FortuneBuilder seminars on a couple of years ago. Than Merrill's seminars have gotten a review of NBC12 News Investigation that found, "Some of the advice we heard ranged from the questionable - to the absurd." You kind find the warnings about the seminars in Michigan as well. Even in Washington state where you'd have to be more or less a registered contractor to flip a house, the advertising continued.

Indeed it seems like FortuneBuilders has found a lot of "perfect markets."

Getting back to the conversation that I had overheard. The person was obviously excited about what she learned this weekend. She explained to her friend how that seminar was free, but that this next one was going to cost $1200 to get into all the details. As that article says, "The Cincinnati Better Business Bureau, which sent staffers to one of Merrill's seminars downstate two weeks ago, said organizers told the crowd that its three-day real estate investment course costs $1,200 but those signed up that day could get it for $200."

A tremendous price difference like that raises another huge red flag for me. Is the value of the course $200 or $1200? I understand early bird pricing with seminars, but it usually 1/6th the price to act now or 6x more to think about it and research the FortuneBuilders overnight. I've seen a difference of a hundred dollars for the first few days... but this level is extreme. It reminds me of when a RainSoft salesman offered thousands of dollars in free soap if I signed that day.

I have to give FortuneBuilders a little credit for learning from how drug dealers work. Get them in for free and hook them with a combination of an extreme urgency deal and use the sunk costs to push the next thing.

The "Business" of Flipping Houses

I can see how people get sucked in. I love watching house flipping shows on television. I get sucked into Flipping Vegas. I find it entertaining when Scott goes ape-poop crazy if there's an extra $300 expense. Or when one of his contractors asks for an extra scoop of porridge only to receive 30 lashings (this may not have actually happened). Then he drives off in one of his million dollar sports cars at the end of the show. He might be the nuttiest-nut on television.

I also love watching Flipping Boston. I feel like I grew up with Peter and Dave, just as Boston as Boston can be. I tell my DVR to record every episode. I particularly like these shows for background noise while I do work. I don't have to follow it like an episode of 24.

Here's the thing about these shows: they are entertainment. Have you noticed that they never lose money on a house? I must have seen 200 of these shows in my life and I can't recall ever seeing them end up in the red. They seem to make at least $50,000 for about 5-6 weeks of work... EVERY TIME. It's easy to see how someone could watch these shows and think, "I can make a half million a year doing this."

And when you hear a too-good-to-be-true-sounding radio pitch from FortuneBuilders, you almost wonder how anyone escapes it.

What the Flip This House viewers might not realize is that the people in the shows are professionals and have been doing this for years. It's their full-time job, not something they do on the weekend to make a little extra cash. It isn't done in their spare time as the radio suggests. In many cases they are contractors and designers themselves which allow them to cut major costs of hiring contractors and designers. With the shows themselves, I often wonder if they get a break on some labor and materials as a kickback for having them featured in the show. All of these things are impossible to duplicate for the average amateur. Even a professional isn't going to a break on labor or materials for advertising a brand on television.

FortuneBuilders Criticized by Yahoo Finance

In November 2014, Yahoo Finance criticized their marketing techniques. It called them out for not being transparent that they are trying to lure people into the $34,000 program. It also questioned them for telling people to put that money on credit cards with double digit interest.

The response was that people were "investing in themselves" with a comparison being made to college. That drew more criticism as these seminars aren't accredited and there's no transparency into where the money is going like colleges and universities.

If you want to use the same logic, why not pay me $34,000 to teach you how to blog. Hey it's investing in yourself, right?

FortuneBuilders Isn't Alone. See: Armando Montelongo

Years ago, I meant to write how Armando Montelongo was doing a similar thing using Flip This House to sell his teaching kit. Unfortunately, I never got the article off the cutting room floor.

Fortunately, Forbes did... and their article was a lot more scolding than mine would have been. With an "F" from the Better Business Bureau, he's raking in $50 million selling house flipping kits. The Forbes article is a great read at how dangerous the advice can be in flipping houses (such as taking on a large amount of high-interest debt). That seems to be a theme with seminars costing tens of thousands of dollars. Robert Kiyosaki's seminars were caught doing the same thing.

FortuneBuilders Conclusion

I don't want to discourage people from being entrepreneurs and I certainly don't want to discourage them from getting education. This seems close to some of the MLMs that I cover, where the people making the money aren't the ones digging for gold... they are the ones selling the shovels and pick axes. And like with the MLMs, extremely few people seem to ever find a speck of gold.

The ones that do are trumpeted as examples of success. Consumers aren't given the full picture. If they were, people might not buy the shovels and pick axes.

My advice as usual. Stay away from high-cost, unaccredited, seminars that rarely seem to work. As Mark Cuban says: "I don't broadcast my great deals. I keep them all to myself. The 2nd thing to remember is that if the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker. There are no shortcuts."

In short, if Than Merrill really found a perfect market, he would not be likely to be telling people about it. He'd hire a group of managers and contractors in the area to take advantage of the situation.


This article has undergone what I call refreshing. Sometimes, I get more information from readers in the comments or I'll read another article on the topic. I feel like incorporating this information into the article improves the reader experience. I tend to class them as minor and major refreshes.

January 1, 2015 Refresh (Minor)

- Added information from Yahoo Finance review.

October 2, 2015 Refresh (Major)

- Changed Title from Flip This House to FortuneBuilders. When I was starting my research, I went off the name Than Merrill who I knew from Flip This House. I don't recall the commercial saying anything about FortuneBuilders and my initial research into this was from Armando Montelongo also from Flip This House. Montelongo has his own $25,000 house flipping seminars. Armed with more information, it isn't fair for me to categorize this as being related to Flip This House as the show's producers may not be connected. However, it is worth noting the connection.

- Added Medford, Oregon's KTVL News 10's coverage

- Added Conclusion

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Last updated on November 20, 2016.

My Dog Sitting Business is Taking Off!

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I mentioned a few weeks ago that I was going to try dog sitting to make some extra money. It's a perfect fit for me since I love dogs and work from home.

I planned to wait a few months before writing an update. However, I'm going to jump the gun after a few weeks and declare it a success. I initially worried that I wouldn't get business because I had no reviews... and that would lead to getting no reviews since I had no business. In an attempt to steer clear of this, I put my prices below market rates.

I also went the extra mile to make sure that my profile popped. I took pictures of our yard that made it look especially huge. (It really is large though.) I waited to take pictures of our house until after our cleaning service came. I tried to show off pictures of my dog enjoying himself at home.

I don't know which played the biggest role, but the combination worked. It took a couple of weeks for the first request to come in. When it finally came in, a second one came the next day. A week later, I had a third request for that evening while I was sitting another dog. I write this having sat three dogs over a span of 10 days and having 8 more days of dog sitting lined up through the middle of September. Even at my cheap rates, I should take home nearly $400 in a little over a month.

It has some room to expand. I didn't get "up to full speed" until the middle of August when the reviews were in. We are on vacation now, which means losing a week of business.

Now that I've given some of the financial highlights, let's look at some of the low-lights. Maybe it's just luck, but so far the oldest dog we've had is 2. Our own dog is a mellow 6 years old. I don't know if it's just that these dogs are young or if it is the excitement of the new environment. In any case, they are super-charged when they show up. Sometimes they get they so excited they can't control their bladder.

With this business, we need to raise our budget for carpet cleaning supplies. In addition, I've found that these new dogs love my dog's bones and toys. The cost of these aren't really significant compared to the income, but it's not zero.

The biggest difficulty is really the feedings. If one dog is getting food, they all want food. Fortunately, our baby gates serve the purpose of separating dogs too. Unfortunately, it is still difficult to feed 3 dogs and 2 kids under the age of 3, which I had to do recently. It's not impossible and I'll certainly get better with practice... and just maybe a plan or system of some kind.

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Posted on August 25, 2015.

Was I Scammed by this Kickstarter Campaign?

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Two years ago, I saw this very cool E-Ink watch on KickStarter. I wish they had a way to import video from here, but I'll let you click that link and open up the campaign in a new tab.

If you watch the video, you'll see the founders saying that they spent a year prototyping. They even show a working prototype. The company, Central Standard Timing, was looking for $200,000 and actually got more than a million dollars from over 7500 backers. Those are pretty big numbers.

In reading the FAQ they state, "You can back the watch on Kickstarter and we will ship you the watch as a reward when we ship. We expect to ship in September."

The campaign was funded in February of 2013. The estimated 7 months has now stretched to 25 months... and it is going on 26. For those keeping track that's 5x the budget and almost 4x the time.

I still have no watch.

A couple of people have claimed to have a received a watch. However, no one has actually stepped up with any proof of it. And those people have quickly disappeared from the conversation. The vast majority of the comments are people exploring legal action. Some have tried to get Kickstarter to intervene, but that hasn't worked so far

It's not as if the two founders have been completely silent. They have had quite a few updates... 29 of them to date. It's just that they've been very irregular. They'll post 4 updates in a month and then be silent for a couple of months. They post pictures like progress is actually happen. On Feb 4th, they posted a photo with 16 boxes saying that they are shipping. They showed a table with what appears to be 30-40 watches.

It's been a month and a half since that update and a dozen comments come in every day asking what is going on. The people can see that the founders are logging into Kickstarter every couple of days and yet, there are no further updates. For what it is worth their last Twitter update was July 2014.

There isn't an update saying that they shipped 30 units out or anything of that nature.

They are still taking pre-orders of the watch on their website. Even that says, "This is a pre-order, expected to ship summer of 2014." Also, instead of the $129 I paid (some got in at $99 I think), they are now asking for $299.

I'm starting to wonder if they blew through all the money and it was much more expensive than they thought.

I think everyone understands that things can go wrong. Over the last two years, there have been enough updates of things that have gone wrong. However, at least that was communication. Communication is free and easy. It really is the least that anyone can ask for.

I read a lot of Kickstarter success stories. My sample size of this one campaign is probably not indicative of how things typically go. However, it should be a good reminder that things do go wrong. And when that happens, there aren't a lot of places you can turn. You can't make the founders give you an update. You can't make Kickstarter leave a message that they are investigating it.

You really can't do anything. And while it does nothing to help the situation, having a blog to vent helps a little.

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Posted on March 13, 2015.

Solving My Too Much Mr. Nice Guy Problem

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When I went to college to study computer science, there was an unfortunate side effect. I became "The Computer Guy." Whenever anyone had a problem with a computer they'd come to me. And I'd help them as I lack all ability to say no. Sometimes that leads to me not having enough time or energy to get my own work done as well as I would have liked.

I found that most people have unrealistic expectations of "Computer Guys." I was expected to have a success rate of 100%. Maybe it's because mechanics generally have 100% success rate. I tried to explain that computers are extremely complex systems. There is a lot of very complex software installed on them... many of which I've never heard of. It's a little bit like being a doctor. You probably are very good at diagnosing and solving the most common stuff, but if someone comes with a Dr. House odd case, it's baffling. And with millions of pieces of software written every day, there's no possible way one person can stay on top it.

The most difficult part, was explaining that I write software, I don't fix other people's software or hardware. It's like expecting a podiatrist to be a great dentist (I'm loving doctor analogies today). They are both in a broad medicine field, but they deal with very different things.

As my interests shifted to creating websites, I got more requests along that nature. You know, "Hey, I want to get my business online. Can you help me?" The good news is that I can get a website up and running in 30 minutes, maybe even faster, if you tempt me with a burrito.

As an optimist, I always think of this best case scenario. I also (wrongly) presume that people are as super-frugal like me. I'm not going to charge people for 30 minutes of my time. I've got plenty of spare hosting space on my server. So I can essentially get them up and running for free... or the price of them buying their domain name. I'd rather solidify our friendship. Maybe they can help me someday.

The bad news is that once I get the website up, there are endless typically requests about customizing it. Most of the time, they don't know what they want. They sometimes see a few websites they like and want to piece together bits from all of them. Then they want to do very small changes, move this icon here... and that pixel there. It makes sense, this is their business and they put in a lot of hard work to make it successful.

The vast majority of these people, such as a local dentist, doesn't need this much customization. In fact, trying to be perfect is the enemy of getting something very good up and running. Most business owners may think they need a lot of information on their website. However, their clients are typically going to Google, typing in the name of their business to get a phone number or driving directions. As long as a website serves their needs and looks professional, it's a win.

Should I start directing people to hosting companies? Most of them, such as 1&1, have design tools that anyone can use to make a website look professional. It isn't free, but it isn't expensive. Also, it's money customers had offered to pay me anyway. And if they get in trouble, the websites often have professional help who can even do it all for them.

I'm kind of stuck not knowing what to do. On one hand, I love helping people. On the other hand, I always seem to be juggling at least five projects without counting these one-off ones. I have one friend who haven't been able to get to in awhile now and it almost seems like a lose-lose situation. Fortunately, she's dragged her feet for years with the website when I was available to help, so she's very understanding.

I think I'm going to try the hosting solution and see how it goes.

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Last updated on March 9, 2015.

Start a Business Today (and I Will Help You)

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When I started Lazy Man and Money, I started it with the idea that I would explore opportunities to make more money and retire early. I still remember one of my second posts was about a condohotel in Vegas that I was interested in buying into. I thought it was in interesting investment because you own a condo, but rent it out like a hotel... almost like many people are doing with full time AirBnB places today.

It was too much money to get in and fortunately I didn't get involved in that mess. I don't think they ever got it off the ground.

What I didn't realize is that I had started a business without even knowing it. It would be 6 months or more until I read somewhere that you can make $100 a month blogging. I lost my poop. I was thinking, "Wait, you mean what I'm doing anyway can pay for electric bill? Sign me up!"

It is 8 years later, and I'm still making money from a blog. The money is a little like reverse Moore's Law. Every couple of years, I have to work twice as hard to make half as much money. Still personal finance blogging has helped me in many ways.

What I realized is that I could start a business, if I didn't think of it as starting a business. I simply grabbed a domain name and got started. If I had stopped to think about all the things that had I'd have to do to have a successful blog, my head would spin and I'd never have gotten started. After all, perfect is the enemy of good, especially when it comes to entrepreneurism.

I'm not sure what is the best business to get started in. With the Moore's Law mention above, I'm not sure I can advise to getting into blogging if you want to make money. However, I can see any number of side gigs that could use a website. For example, a dog walking service could use a website.

I realize that some people don't know where to get started with a website. If that's you I can help you get started shoot me an email. I've built a few websites in my time. Most recently, I've been working on a website for a friend's optometry business. And as a reader of Lazy Man and Money, I'll give you a super good rate. Just promise not to spread it around.

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Last updated on October 14, 2014.

How To Start a $500 Million Company the Easy Way

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I often write about ways to save money or fix your finances, but today I thought I'd share with you an easy way to start a $500 million company. If done well, you'll probably make 8 figures for yourself, enough to live extremely comfortably for the rest of your life. Let's start with one word of caution, I am using "easy" as a relative term. There's still significant work involved. No amount of magic wand waving will create a $500 million company... and no one is just going to hand you $10 million or more.

Finding the Right Product

The first thing you are going to need is a product to sell. I should probably charge a consulting fee for this information, but you'll want a very specific type of product. You are going to sell nutritional supplements. Why nutritional supplements? For the most part the FDA doesn't regulate them. That's not to say that they don't at all, but according to the NY Times article, "DNA tests show that many pills labeled as healing herbs are little more than powdered rice and weeds." If Pfizer was doing this with their FDA-approved medicine it would be a scandal of the highest level and their executives would probably spend extensive time in prison.

The second thing you are going to need is a "hook." This is typically an exotic ingredient. Some examples include acai berries, mangosteen, goji berries, and arctic cloudberries. Berries are a great choice. They are nearly universally believed to be healthy. The ingredient has to be exotic. If it is common, people will buy it elsewhere for cheap. We want this ingredient to be the star of the show. One good place to find these ingredients is the Dr. Oz show.

If you can't find one great ingredient, you can get away a "proprietary blend" of a few fairly common herbals, but it isn't ideal. You might have to pay for "studies" to be conducted.

It might seem difficult to create this product, but there are companies (many of them in Utah where the supplement industry seems to thrive) that will take your formulation and work with you to make a finished product. This is going to take some money to get started, but it can probably be done for under a million.

Hire or Partner with Some "Doctors"

People hold doctors in high esteem (see Dr. Oz). There's a great level of trust there. So you want to get some doctors to speak well of your product. You need credibility, since you aren't going to prove our product is clinically effective.

You can pay them cash if you have it, or you can give them equity. You might not be able to find the most reputable doctors. However, you might get lucky and find an academic researcher nearing retirement age who might take a stake worth several million dollars. Or maybe you can get really lucky and get a "doctor" who has a mail-order degree and comes with his own star ingredient.

Chances are you'll have to settle for a naturopathic "doctor", who couldn't cut it at a real med school. This will still work since you are only selling a supplement. You'll also demonize legitimate doctors and suggest that they want to keep people sick because it is good for their business. This will make your "alternative" person look better by way of comparison. (Hopefully no one is smart enough to challenge you by stating the clear fact that doctors lose their loved ones to disease too. Pretty dark to think all doctors are keeping their loved ones sick to make some money.)

How Do You Sell this Product?

You could put the product on the shelf at Wal-Mart or GNC, but there's a lot of competition there. Also unless you are going to have a big advertising campaign like Pom Wonderful did for its pomegranate juice, people aren't going to know about star ingredient. Either way, each of these two things would set you back a lot of money.

Instead you'll go with Multi-level Marketing (MLM). This is an ideal way for you to sell your product for several reasons:

  • Your Sales Force Will Work Cheaply! - On average they make less than minimum wage. Not only that, but we don't have to pay them benefits like health insurance.
  • Your Sales Force Will Be Forced to Buy Product from You - In order to earn commissions, you'll force them to buy product... even if they don't want it through monthly auto-shipments. You will instill a belief that to be great salespeople, they must consume the product every day. Also since the product is a consumable, they'll have to buy more and more to use as samples.
  • That Product Will be Insanely Expensive - You'll sell people 25 ounces of juice for $40. Or you could sell a bottle of pills with less than $5 worth of ingredients on for $45. This allows you to use the product's exorbitant price to charge admission to the business opportunity. Since you have your special ingredient and your "doctors" validating the health benefits, people will attribute any kind of positive health change to the product. The price placebo effect plays right into your hands. Consumer advocates may expose why your product doesn't 'work'. Let's hope they don't read that.
  • Your Sales Force Will Pay You to Train Them - You'll make them buy your sales materials... pamphlets, posters, and car wraps and such that describe and advertise your business.
  • Your Sales Force Will Make Illegal Claims For You - If you hired employees and they claimed your special ingredient cured cancer, you'd be legally liable and your company would likely get shut down very quickly. Instead you'll make these distributors "independent businesses", which limits your liability. You'll make sure that in the fine print you say all the right things such as "our products are not intended to treat, cure, prevent or mitigate any diseases." However, you'll give these business people training and spread word of mouth that your ingredients actually do help with diseases. Hopefully, no one reads The Huffington Post to see the end result is distributors making illegal claims based on their ignorance of the science.
  • Your Sales Force Will Pay You for a Website and Propaganda - You can make a single website, but have it database-driven on the back-end, so that each distributor thinks they have their own website. You'll charge them $20 a month for this. It is kind of like paying $20 for a Facebook or Tumblr account, but you'll be able to justify it to distributors as "a cost of doing business." You'll partner with Success Partners which partners with all MLMs to distribute a cleverly slanted Success Magazine that gives legitimacy to MLM by mixing in trusted business axioms.
  • Your Sales Force Will Pay You to be Brainwashed at Events - A few times a year, we'll rent out a stadium for our annual "meeting." You'll pepper them with motivational speakers, even songs and clapping. Anything that typical cults use and everything that you'd see at a faith healer show is in play. You'll make sure that no one can talk sense into them by telling them beforehand that these friends of yours are being negative and just jealous of you. Hopefully they won't find this guide on how to get deprogrammed.

The saddest truth of all is that this sales force will be nothing more than cannon fodder. You'll be bribing high MLM earners from other companies to come to you where they can get in on the ground floor and be at the top. This will give your company instant credibility in the "industry" and make you look like we're growing, which is what the cannon fodder new distributor wants to see. The people you bring over from the other MLMs will occupy the top levels and promote your company as the reason for their success, even if they had their success at other companies which is why you poached them in the first place.

It may sound difficult to brainwash the cannon fodder into all things mentioned above. It isn't. You'll show examples of those high MLM earners and their fancy cars and vacation cruises. The cannon fodder will erroneously believe that they will achieve the same with "hard work" as that's what we'll tell them. This will set them on a hamster wheel... starting a long quest for riches and paying exorbitant amounts for your products each month. The only way to get off the hamster wheel is to quit. If they quit you'll shame them for giving up and call them failures. If only they knew that failure for them is not a matter of effort, but it was a mathematical certainty all along.

You'll pray that your salespeople don't read Harper's Magazine and realize the ugly truth (emphasis added):

"The women I interviewed for 'The Pink Pyramid Scheme' told me stories about struggling to patch together daycare or to survive high-risk pregnancies while working long hours scouting prospects and hosting parties without any guarantee of a sale. Debts mounted, marriages failed. They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce."

Fortunately, like an email phishing scam, you don't need everyone to fall for your "business opportunity" trick... we just need the most desperate/easily brainwashed 5%.

When Our Distributor Levels Drop...

At some point the cannon fodder figure out that the story of recruiting 3 people through 4 levels to create a pyramid team of 81 people is completely unrealistic. Organizations simply can't continue to grow at an exponential rate. They may blame themselves for not working hard enough, but the circumstances of the scheme we set up screwed them before they even had a chance.

In any case, they'll leave in droves, as many as 90% of them a year. This means you'll have to recruit in droves. You'll do this by hiring more kingpins from other companies and giving them secret sweetheart deals beyond their level of recruitment. It's not fair to the cannon fodder, but they'll be brainwashed to only listen to us.

You'll also expand to other countries. This is an easy growth story to sell your distributors. Since your company is at zero in the other country any growth in distributor numbers at all will offset the drop or plateau in the United States.

Hire the Famous MLM Lawyers

In order to get your salespeople to believe that your business is legal and not a pyramid scheme, you'll hire lawyers. There are about three or four main lawyers that support the MLM industry. Off the top of my head, I'd go with Kevin Thompson, Jeffrey Babener, and Kevin Grimes (from as the big three.

You might want to skip, though. It seems that Kevin Grimes was supporting Zeek Rewards, which was shut down by the SEC for being a pyramid scheme. Now the SEC seems to be suing him for negligence. The law firm has quietly changed its name from "Grimes and Reese PLLC" to "R&R Law Group" (Steven Richards replacing Grimes).

So you'll hope to get lucky with one of the other two lawyers. This is an important step though, because the first question people have about MLM is if it is a pyramid scheme. You need to be prepared to say, "Our lawyers vetted everything and it's all legal." Our victims distributors won't challenge it, because lawyers are professionals and educated in the law. They also likely won't have researched what happened with Kevin Grimes and Zeek Rewards to understand the confidence game here.

Start a Charity

One way to keep the distributors thinking your company is truly awesome is to create a charity. A company giving money to charity is definitely one worth sticking with, right? Instead of actually donating the money to charity yourself, you'll lean heavily on distributors to make the bulk or even all of the donations.

If we want to be really sneaky, you'll use some of the money donated to hire a family member of the CEO to run the charity.

You'll hope the distributors aren't smart enough to realize that if they weren't grossly overpaying for your products, they could make 5 or 10 times the difference to a charity of their choosing.

When the Truth of Our Company Comes Out

The internet poses a huge problem for us, because people can document and share information quickly and easily. When word of mouth stays within your organization you control the narrative. On blogs and in the media you don't.

Inevitably people will catch on and you'll have to suppress this information. Otherwise your distributors may realize the truth before you are able to indoctrinate them into your culture.

You'll use a combination of money and legal threats to get these critical authors to shut down their sites. Perhaps you can talk to others in the "industry" and figure out exactly how they got the following sites shut down: Purple Horror (MonaVie), YPR Pariah (Vemma), and BehindMLM (MLM in general, hopefully down just temporarily).

But We Have to Hurry!

The public, enforcement agencies, and lawmakers are getting smarter. The internet has provided a great tool where people can research information and realize that our berries aren't so magical, our "doctors" didn't go to schools that anyone has heard of, and that we are victimizing our salespeople.

It seems that everyone is catching on that MLM appears to be nothing more than a cleverly hidden pyramid scheme.

In the past you could trot out a series of (somewhat) respected companies such as Avon, Tupperware, Mary Kay, Herbalife, and Amway. However, Tupperware moved away from this because the industry was dominated by apparent pyramid schemes. Avon has followed as well Avon splits with trade group, citing risk of pyramid schemes. And don't dare look at Avon's stock performance over the last 5-10 years... it is horrendous.

Amway paid $155 million to settle a lawsuit that alleged the company was a pyramid scheme. I don't know about you, but I'm not paying out $155 million unless there's a very, very serious business risk. After all, that's about 1/3 of the value of the company we are going to put together.

Smart math people have looked at Mary Kay's own numbers and determined the company is destroying 500,000 women a year. Then there's the matter of the Harper's article above on Mary Kay, as well as this NPR interview.

Finally, there's Herbalife. So many people believe it is a pyramid scheme that it is being investigated by the FTC as well as the FBI and DoJ according to many news organizations. Herbalife stock has responded by losing 45% of its value year to date while the S&P 500 is up 7% (chart).

At the end of the day, the most reputable companies aren't really all that reputable. They've just been around for a long time.

When it All Collapses on Us

You should be able to mint money from your distributors for years, maybe even a decade or more. It may sound unbelievable, but in the past law enforcement have looked the other way. After all, Fortune Hi-Tech Marketing operated for a decade before the FTC shut it down. It took a few years even after USA Today questioned whether the company was a pyramid scheme.

It might never catch up with you, but if it does all is not lost. You'll have paid yourselves millions and lived like a king. There's even a chance you can start a new 500 million dollar business.

The high level MLMers will hook onto another MLM, so they'll be okay.

The cannon fodder are left in ruins: ruined finances and ruined relationships (because they've pushed our miracle product on all their friends and family members, and shut out the "negative" people who didn't buy into it), but that isn't your concern.

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Entrepreneurism, MLM

Last updated on October 13, 2015.

A Great 14-Year Old Entrepreneur

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Yesterday J. Money from Budgets Are Sexy passed along a great video clip on Facebook. Ellen DeGeneres had a 14-year old young lady, Willow Tufano, on her show who bought a house. Turns out that the clip is nearly 18-months old, but it's still a great story. Here it is:

If you don't have time to watch the video here's the short story. This girl (feels like I should call her a woman, right?) made $6,000 by buying and selling stuff on Craigslist. Some of the stuff she got for free as trash that others were throwing away. She found a $100,000 house that was a short sale for $16,000. She negotiated that down to $12,000 and went in as 50-50 business partners with her mother to buy it outright. She fixed it up and now rents it out at $700/mo.... or $8,400 a year. That's enough to buy out her mother's share in a year.

I get the feeling that some of you will be nit-picky, so I will too. Obviously, the deal on the house is incredible. It's unheard of to get a deal that's 16 cents on the dollar... and it takes some stones to try to negotiate that down to 12. It helps that it is in Florida that was perhaps hit hardest by the housing market crash. Outside of Detroit, I don't know if there are many places where this can be pulled off. Secondly, I don't what money she used to fix up the house. It looked like it received a new kitchen and the exterior was painted. Third, one could make a valid argument that she only bought half a house and that her mother bought the other half.

I'm not going to focus on any of that though. Let's focus on the fact that this girl found a way to make a decent (mostly) passive income in a tough economy. She owns a piece of real estate outright, without a mortgage, which is something that I haven't been able to do at 37. (Of course I'm a big fan of mortgages due to the really low interest rates.) Her income in 18 months is going to be more than what she paid for the house.

There's something that Ellen did in the video that I think many people might miss. First she gave the girl a new dryer, which is something she needed for the house. That's nice of her, but it's nothing special for these type of shows. However, the $10,000 gift card from Ace Hardware is worth noting. It wasn't just a gift of cash that she could go spend at the mall (not that I think this girl would). It was something that a landlord would find very helpful, which is something that encourages her do this again. Ellen even worked in the Ace Hardware slogan, so they got their $10,000 worth in advertisement (and maybe a couple of dollars worth of me mentioning it here). In a world of DVR and skipping over commercials, this product placement-type advertisement is smart indeed. It all adds up to a nice win-win-win, for the girl, the Ellen show, and Ace Hardware.

Update: It looks like Willow did buy a second home just a few months after this aired. And she's now looking into a reality show. You can see the trailer for it here.

You may remember me writing about Abigail Martin and her $500 wedding. At the time I called her my hero. Today, I add Willow Tufano to that list. A few more of these stories and I'll have to come up with a Lazy Man Hall of Fame of Amazing People.

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... and focuses on:

Entrepreneurism, Real Estate

Posted on November 26, 2013.

A Man, A Van, A Plan

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Yesterday I met the second happiest person* on earth. It's Billy from Affordable Glass. I needed a windshield replacement and that's what he does. Greeted me with a smile shook my hand and thanked me for the business.

Two days earlier, I had told my wife to book the cheapest guy who could the job. Windshield repair is not something that you do very often... and it's not like we'll be crossing paths again. She insisted that Billy was really nice. I went on a mini-rant (the Patriots were losing, so I wasn't in the best of moods), about how it doesn't matter if he's close friends with the Pope. Nonetheless, Billy's prices were competitive and in hindsight, I should have trusted her woman's intuition. Customer service does matter, even if it's only for a 45-minute job.

He said he's been replacing windshields for 20 years and that it is the best job ever. I wonder how many would believe him, but he sold it well. He said that he gets to travel all over the state and meet all these interesting people. I originally thought he was an employee of a big corporation, but I was wrong. He's literally a man with a van. His wife does the scheduling and internet advertising. She comes with him on some calls. I imagine that she can do most of her work with a tablet or cell phone on the road.

We talked about many things. He ask how I found him and I told him that my wife found him on (I miss San Francisco's use of Yelp.) He told me that they spend thousands each month to appear in such directories. Then he went into something up my alley, advertising on search engines. He said that Google was the most expensive and his competitors would purposely click on his links to deplete his budget (this is commonly known click fraud that I thought Google had figured out). He said that Bing and Yahoo were a much better value for his advertising dollar.

We talked about his son and daughter and their career plans, what my wife does, what I do (I didn't mention the blogging thing). We talked about the Patriots and other teams around the NFL. I feel like I could have brought up complex software algorithms and he'd be able to speak intelligently on it.

At the end of the visit, I thought to myself, "The American Dream isn't home ownership. It's lifestyle ownership." Billy had that figured out long ago.

* Who is the happiest person on earth? My son. Just smiles for days. No one can believe that he is this happy. Yesterday he got four shots for vaccinations and screamed from the pain for about 80 seconds and then resumed his laughter. It's almost like the reaction my dog gets when we go to the dog park, but all the time... lottery-winning level joy.

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Posted on October 9, 2013.

8 Tips for Organizing Your Business Finances

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[The following is a guest post by Annie Davis]

Keeping accurate, up-to-date financial records helps business owners know whether their company is on solid footing. Besides good record keeping, there are ways to organize finances in a way that helps your business in both the short and long-term.

Here are 8 tips for managing your company's finances that will help reduce accounting problems.

Choose a Framework

Decide what kind of company you have so you can register it properly with the federal government. This also determines how taxes on your business get calculated and assessed. Educate yourself on what it means to be an LLC, as opposed to a sole proprietorship.

Also, check out the C-corporation and S-corporation options to see if either of those are a better fit for your business.

Set up Accounts for Checking and Savings

Just as you need personal accounts for your checking and savings, your business needs the same kind of set-up. Choose a local bank, or a national bank with branches nearby. This allows you to pay vendors, employees, the utility company, and others.

Don't Mix Business and Personal Finances

For accounting and tax purposes, it's better to keep separate accounts, one for your business and one for your personal finances. The law doesn't need you to keep them in different accounts if you're a sole proprietorship, but there are benefits to doing it. For example, if you decide to put your business up for sale, it's a simpler process in terms of determining its assets when business finances are not mixed with personal funds.

Use Software to Track Funds

Traditional financial software such as QuickBooks from Intuit and GnuCash, an open-source option, give you powerful tools for organizing, tracking, and sorting your company's finances.

Just as workflow automation software improves day-to-day financial matters, the financial software you use improves your understanding of how your company's performing over time. From printing reports to keeping tabs on cash flow, these software packages allow you to support a strong grasp on your company's financial health.

Monitor Bills and Pay Them

Just as you diligently pay bills on time as a private citizen, do the same as a business owner. Take advantage of automatic bill pay, when it's available. Ask vendors for a discount if you use an automatic payment option, because you're ensuring them that they'll get your payment on time. Just be sure to end those payments when you no longer make purchases from that vendor.

Likewise, regularly check statements for any credit cards tied directly to your business. Watch for potential abuse by employees, billing errors by the credit card company, and changes in terms and interest rates.

Organize Accounts and Debt

For whatever reason, your company may have open accounts that it never uses. It's wise to check for these accounts regularly and close them. Keep a list of all the credit card accounts, savings, checking, IRAs, CDs, and other accounts you have tied to your company.

Also, follow the amount of debt your company has. Check out the possibility of consolidating debt to a low-interest credit card.

Know When to Involve Professionals

Don't just visit your CPA when it's time to pay Uncle Sam. Your CPA can offer advice on how the long-term financial landscape looks for your business. Plan to meet with a CPA a couple of times a year to check your financial records and discuss the next couple of quarters.

Make it Easier to Receive Payments

One part of organizing your finances is deciding how you'll accept payments. Will you accept personal checks, if the payer provides a valid driver's license number and current address? Do you let customers pay with credit cards, practically a necessity in a world where cash exchanges are on the decline?

If you're looking for ways to accept credit cards, there are several devices that attach to smart phones and let you swipe cards. These tools are increasingly popular with small businesses looking for a fast and easy way to accept major credit cards. In addition, consider letting customers pay online through services such as Paypal. Having convenient ways to pay increases the chances you'll get paid for your product or service.

By getting more organized, you'll have a better sense of how well your company is doing financially. From cash flow to debt, you'll get a clear picture of where your company's strengths and weaknesses are in terms of its finances. In addition, you'll enhance your company's profitability by making it easy to pay your bills on time, accept payments, and track financial performance.

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Last updated on September 1, 2013.

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