Kneading Dough Podcast: Athletes Talk Openly About Money

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Another podcast that I discovered late is Kneading Dough, where famous athletes sit down and talk openly about their finances. Created by UNINTERRUPTED (founded by Lebron James and Maverick Carter) and sponsored by Chase, guests over the three seasons range from Lebron James to Serena Williams to Simone Biles. The description sounded similar to Celebrity Money Diaries.

Despite the old saying about death and taxes, studies show that personal finance is actually the most difficult topic for most Americans to discuss. But while most Americans aren’t comfortable revealing their finances, athletes’ money mistakes are splashed across newspapers and the internet.

Chase’s Kneading Dough series connects the money challenges of average people to the hard-earned lessons of pro athletes. In exclusive, one-on-one interviews, famous athletes discuss how they learned to budget responsibly, balance the needs of career and family, and prepare for retirement.

You can view all of the shorter video interviews on this YouTube playlist, but the podcast version includes the full unedited interviews.

In the end, these are often people who were not born into wealth, so I did find them relatable and enjoyed the casual conversational style. You hear straight from Lebron how he handled the fame and responsibility of becoming the family breadwinner at age 18 (and how other athletes handled huge windfalls and learned to manage their budgets), but also how one navigates the more modest WNBA max salary of $110,000 a year (now higher but the average player earns $130k). There are amusing moments like how Serena Williams tried to deposit her first million-dollar tournament check at the local bank drive-thru window, which the teller didn’t know how to handle.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Country Time Bailout: Kid’s Lemonade Stand $100 Stimulus Check

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The summer lemonade stand remains the iconic entrepreneurial opportunity for kids. Well, maybe not this summer. Country Time Lemonade is starting the Littlest Bailout Relief Fund, which is a $100,000 fund to send $100 stimulus checks to 1,000 kids who had to close their lemonade stands due to COVID-19. To enter the random drawing, you must attest to being the parent or legal guardian of a child 14 years or younger that actually operated a lemonade stand. You must also attach a picture of the child’s lemonade stand, and they will review all submissions.

Sure, it’s a publicity stunt, but at least it’s a fun one. Two years ago, Country Time Lemonade offered “Legal-ade” to reimburse any permit fees or fines incurred by a child trying to operate a lemonade stand.

Here is a local news story I shared on Twitter with some real-world kid businesses: Lego kit rentals, mobile baseball lessons, and tutoring/swim lessons. Here is an older WSJ article on teens making serious money doing iPhone repairs.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Forrager Podcast: Start Your Own Home-Based Food Business

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If you enjoy listening to podcasts about entrepreneurial stories on a smaller scale (i.e. not tech unicorns), I recommend the Forrager Podcast about cottage food businesses, where people sell food made in their home kitchens (as opposed to a commercial kitchen). Depending on the cottage food laws in their state, you can learn from successful small (often solo) business owners selling their homemade bread, granola, nut mixes, cookies, pies, and other food products in both retail or wholesale environments.

The cottage food industry allows you to start small with minimal upfront investment. You keep your big potential upside, but you’ve minimized your downside. Being able to take asymmetrical risks like that is very powerful. You only need to hit it big once!

Here’s a quote from an episode with baker David Kaminer, who makes a living selling about 300 loaves of sourdough bread each week:

What’s so nice about the cottage food law is you have the opportunity to start small. Prior to cottage food laws existing, if I wanted to open up a bakery I’d be a quarter of a million dollars in before I could even produce my first loaf of bread. You can start making six loaves a week and trying to sell them on the weekends while you’re working your normal job and then see how it goes.

I feel like as long as you love making bread and you’re comfortable charging people for it and you understand the value of your time you could make a go at it pretty easily. For me it was starting like that just seeing if I could potentially ramp this up. So I feel like as long as you’re you’re ambitious and you love making bread you can pull off a cottage food business almost at any scale. It just all depends on defining how much you need and if it’s worth your time.

However, many people choose to keep it small on purpose. There is a common theme with the financial independence community of being able to work more on your own terms. Owning a cottage food business definitely won’t be for everyone, but it is more of a lifestyle choice that will be very attractive to a select few. Sound familiar? Here is a quote from an episode description with Lisa Kivirist who runs her own farm, bed & breakfast, and home bakery amongst many other things. It could very well be the bio for a personal finance author.

Lisa talks about living off the land, moving away from the corporate life-style, creatively packaging products, diversifying income streams, advocating for your laws, and everything in between.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Creative Business Idea: Selling Baked Goods Online via Etsy

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My family enjoys watching Kid’s Baking Championship on Food Network, and I’m always impressed how many of these 8-13 year-old contestants have a side baking business! Last weekend, the WSJ article How Etsy Became America’s Unlikeliest Breadbasket profiled home bakers selling their baked goods online through Etsy. That could be a perfect business education for a teenager, including concepts like business plans, accounting, customer service, online marketing, and basic coding.

Cottage food laws. Many states allow exemptions that don’t require you to use a commercial kitchen to sell “non-potentially hazardous” items like bread and other baked goods. I knew about “cottage food laws” in terms of church bake sales, but I wasn’t aware that some states have much more relaxed laws than others. For example, some states require you to sell in-person and you must hand-deliver it yourself to a customer within your home state. However, the following states allow you to sell bread and other baked goods via online marketplace and deliver them via mail:

  • Colorado
  • Idaho
  • Iowa
  • Maine
  • Maryland
  • Nebraska
  • Ohio
  • Oregon
  • Pennsylvania
  • Tennessee
  • Utah
  • Vermont
  • Virginia
  • West Virginia
  • Wisconsin

Source: Forrager.com, May 2020. Note that some states will require an annual home inspection and/or permits.

The WSJ article profiled the Etsy shop ChickensintheRoad by Suzanne McMinn. She lives in West Virginia, which has some of the most open cottage food laws. McMinn shares some of her Etsy history in this blog post. Both an experienced baker and soapmaker, she realized that the competition was much more intense in the soap category. She now specializes in fresh baked goods as well as various dry food and seasoning mixes.

What is a hand-crafter worth? Can you buy biscuits–or cookies or fudge or soap or bread of whatever–for less at the grocery store? YES. But you don’t get the hand-crafter. You don’t get the individual batch per order. You don’t get homemade. You don’t get that attention to detail. You don’t get that packaging that makes every order of a dozen biscuits (or whatever) look like a present under the Christmas tree. That is what you get from a hand-crafter on Etsy.

Making the most out of your valuable knowledge. Thanks to a recent profile on Good Morning America, it looks like McMinn isn’t even taking any new orders until late June. She’s booked solid! Her skills are definitely valuable, but I can’t help but notice that if she is not baking, she’s not making money. She’s still selling her time for money.

What I would love to see her do is create a series of online videos for making some of her specialties, and then charge for access. Yes, there are many videos for free on YouTube, but what about those superfan customers that want to recreate her exact biscuits? The best part is that it would only take a one-time commitment of say, 10 hours. After that, the upside is unlimited.

Actually, you know what would make the most money? A full digital course that would teach others how to start their own online home baking business. For example, her blog post also revealed the triple-wrapping method that keeps her biscuits at maximum freshness even when delivered in a USPS box. I’m sure she has make many mistakes along the way that would be valuable to know ahead of time. You could charge anywhere from $100 or far upwards depending on how much detailed, step-by-step content was included. Again, the upfront cost is fixed and the upside is unlimited. She could make $1,000, but she could also make $100,000 if she sold 1,000 copies over time. She could always keep on baking, but now she’d also be making money 24 hours a day, even when she’s sleeping.

Indeed, she’s pretty funny and I appreciate her sense of humor:

Remember that year, when I first moved to Sassafras Farm, and all the pipes froze, and I had no money, and it was like, Kids, be happy we have running water, that is your Christmas present? This year is almost like that, but with running water, and it’s like, Kids, be happy there are a couple leftover cookies after I make this batch I’m shipping, cuz other than that, you can just starve! OR PAY ME BECAUSE I CHARGE FOR FOOD.

There’s nothing like someone telling you that what you’re doing isn’t worth what you’re charging right when you’re dying of exhaustion from doing it.

Anyhow, I thought this was a cool example of how someone’s special knowledge can be turned into a living by taking advantage of new opportunities, in this case new cottage food laws and the Etsy online marketplace. I’m also always trying to show my kids ways to decouple time and money, and not forever work for an hourly wage.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

68 Bits of Unsolicited Advice by Kevin Kelly

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The best thing I read this week was a “Things I’ve Learned…” list called 68 Bits of Unsolicited Advice by Kevin Kelly – a very interesting fellow (see his bio, about me pages) who must have secretly figured out how to freeze time given all the things he does! I’m most familiar with him as the editor of Cool Tools.

Certain items on the list will sound familiar and only a few are finance-related, but chances are you’ll find something new that clicks. Here’s a small selection:

– When you are young spend at least 6 months to one year living as poor as you can, owning as little as you possibly can, eating beans and rice in a tiny room or tent, to experience what your “worst” lifestyle might be. That way any time you have to risk something in the future you won’t be afraid of the worst case scenario.

– Don’t be the best. Be the only.

– Perhaps the most counter-intuitive truth of the universe is that the more you give to others, the more you’ll get. Understanding this is the beginning of wisdom.

– Separate the processes of creation from improving. You can’t write and edit, or sculpt and polish, or make and analyze at the same time. If you do, the editor stops the creator. While you invent, don’t select. While you sketch, don’t inspect. While you write the first draft, don’t reflect. At the start, the creator mind must be unleashed from judgement.

– Following your bliss is a recipe for paralysis if you don’t know what you are passionate about. A better motto for most youth is “master something, anything”. Through mastery of one thing, you can drift towards extensions of that mastery that bring you more joy, and eventually discover where your bliss is.

Definitely something to bookmark and read again.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

My Unconventional Best Work-From-Home Gear Guide (What’s Yours?)

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I’m quite familiar with working from home in my tiny 78 sq. ft. “office”, but after looking at some online WFH gear guides recently, it’s all about standing desks, latest laptop models, and USB hubs. Eh? My desk is a basic folding table and my laptop is a 2015 Macbook Pro (with real scissor keyboard and real moving trackpad) that recently underwent DIY battery replacement surgery (way too complicated, Apple!).

My favorite WFH gear is different. Maybe yours is too? These are real things that I bought with my own money and I would buy them again if I had to do it all over again.

Quiet, Please! – 3M PELTOR X5A Over-the-Head Ear Muffs

I wear these every day to help me focus. They have the highest noise reduction rating (31 dB) available on the market. You even have to certify that you are using them for “professional/commercial use” (which I am while working for money, as far as I am concerned). At ~$30, they are also about $10 more expensive than other similar models, but I think the extra $10 is well spent to know you have the quietest experience possible. If you have kids running around the house, you need all the help you can get. They are “over ear”, which means they don’t put pressure on your ears and I can wear them for a relatively long time without discomfort. (I try to take regular breaks anyway.)

Budget Noise-canceling Headphones – Mpow H5 Active Noise Cancelling Headphones

After a certain member of the house (ahem) stole my trusty old pair of wired Bose QC25 headphones, I decided to try out a budget pair of $50 bluetooth noise-cancelling headphones. These over-hear headphones worked out quite well and I really don’t miss the old Bose ones. I’d say they are 80% as good while under 20% the price of new Bose QC35 headphones.

Note: I do own a pair of regular Airpods, which I got as a nice gift. I do like them and use them for phone calls around the house and outside, but I use the Mpow headphones while at my desk listening to music or editing things.

Dependable Printer – Brother Monochrome Laser Printer

This thing is the workhorse of my home office, and yet also the oldest electronic item here at over 10 years old. Which is rather crazy, given that it has moving parts and is used constantly to scan PDFs, make copies, and of course print. These Brother black-and-white laser printers are like the Toyota Corollas of the printer world – cheap yet reliable. The cost per page can be very low thanks to generic toner cartridges (that link is for two of them) if you don’t mind a slight decrease in quality.

Dry Erase Whiteboard – Magnetic Dry Erase Whiteboard

Another inexpensive but important addition for a variety of reasons. Sometimes drawing it out in real space is just better than the digital alternative. This one is lightweight and thus easy to remove from the wall and move it around. You can also put up complex equations or obscure drawings and put it behind you during those Zoom and Webex meetings and impress/confuse/scare your colleagues. I like these BIC markers as they are higher quality and have finer points.

Looking around my desk, other random things that I probably like more than I should are my TI-85 calculator, classroom-grade pencil sharpener, and an ancient Swingline stapler (sadly not the red 747). The only thing that I have been thinking about upgrading is my office chair. Any suggestions?

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Bank of America Paycheck Protection Program (PPP) List of Required Documentation

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As a follow-up to my initial post on the Paycheck Protection Program (PPP), there has been a some speculation as to the specific documentation required to prove your eligibility and payroll numbers. Each lender may have some discretion as to exactly what they require, but here is what Bank of America has listed as required documentation to submit:

Organizations with employees who file Tax Form 940:

  • Tax Form 940 from 2019
  • Bank of America Paycheck Protection Program Loan Amount Template
  • Bank of America Paycheck Protection Program Application Addendum
  • Tax form 941 or Payroll processor records for the period including Feb 15, 2020

Documents for Sole Proprietors or Self Employed, who do not file Tax Form 940:

  • 1040 Schedule C, if filed for 2019 OR
  • Draft 1040 Schedule C for 2019 if not filed
  • Bank of America Paycheck Protection Program Application Addendum

Documents for All Other Small Businesses:

  • Form 1099-MISC for 2019, for services rendered as an independent contractor
  • Bank of America Paycheck Protection Program Application Addendum

As far as I can tell, the BofA Application Addendum contains the same certifications and questions as the paper PPP application.

Hopefully, this will help you get your documents in order ahead of time so that you can get your applications approved more quickly.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Paycheck Protection Program (PPP): Forgivable SBA Loans For 2.5x Monthly Payroll

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If you are a small business impacted by COVID-19, including self-employed and independent contractors, you have hopefully been following the developments of the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Emergency Advance (EIDL) being rolled out by the Small Business Administration (SBA) and U.S. Treasury. Details are still being ironed out, but PPP could cover up to 2.5 months of your payroll costs. Here are some general highlights from the Treasury PPP overview PDF along with some details from the Bank of America PPP application:

Loan Amount = 2.5 times Average Monthly Payroll. “The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.” In the Bank of America PPP application, two possible options given were to use 2019 payroll or 2019 1099-MISC totals, and then multiple the average monthly payroll by 2.5. So if you averaged $6,000 per month, you can ask for a loan for $15,000. Income over $100,000 annually per employee isn’t covered. Here are some details:

For purposes of calculating “Average Monthly Payroll”, most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee. For seasonal businesses, the Applicant may elect to instead use average monthly payroll for the time period between February 15, 2019 and June 30, 2019, excluding costs over $100,000 on an annualized basis for each employee. For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.

Fully Forgiven. “Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.”

In my Bank of America, the details are given that it is a 2-year loan at fixed 1% interest. As noted, payments are deferred for the first 6 months. If you use the money in an eligible manner (see below), it is fully forgiven and not treated as taxable income.

Must Keep Employees on the Payroll—or Rehire Quickly. “Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.” In other words, this is supposed to encourage companies to keep employees and is separate from unemployment insurance.

All Small Businesses Eligible. “Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.”

Businesses are limited to one PPP loan. Each loan will be registered under a Taxpayer Identification Number at the Small Business Administration (SBA) to prevent multiple loans to the same entity. Owners with more than one business may apply for a separate loan for each entity.

Application Dates and Details. “Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap. […] You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.”

While technically you can apply at any SBA 7(a) lender, as of 4/5 many of them don’t even have any formal application process at all! Bank of America started accepting applications early, but first required both an existing BofA business checking relationship AND a BofA loan relationship as of 2/15/20. They later relaxed the rules to require at least an existing BofA business checking relationship as of 2/15/20. Most banks are limiting the applications to existing clients, but I’ve tried to list a few that don’t have such a restriction.

In addition, the US Treasury now has a paper application that you can submit to any eligible lender. I have no idea what will be the best. Small local bank? Mega bank? I would assume that if you have an existing relationship with a bank, they would be able to just deposit the money into your primary business account. But I’ve learned to stop making assumptions in 2020!

The funds are supposed to go out first come, first served, although they may expand the amount available. I’m sure that is not helping the chaos. No documentation was required upfront for BofA, but I would get your payroll documentation ready to submit as soon as they ask for it.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Solo 401k vs. SEP IRA Contribution Limit Example For $50,000 Income

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I use a Solo 401k plan because it lets you contribute the most tax-deferred money for a modest amount of self-employed income. At the end of each year, I can more clearly estimate my total income for 2019 and thus my maximum contribution limits. There are several online calculators out there (try Dinkytown or BCM Advisors), although I would cross-check your answers to make sure they agree. Your Solo 401k contribution has two components:

  • Employee salary deferral contribution. Employees may defer up to 100% of their compensation, up to $19,000 for the 2019 tax year ($25,000 for employees age 50 or older).
  • Employer profit sharing contribution. Employers may contribute up to 25% of compensation (sole proprietorships must make a special calculation), up to a combined total of $56,000 for the 2019 tax year ($62,000 if age 50 or older).

Here are some sample numbers if you are under age 50 with $50,000 in Schedule C income as an unincorporated sole proprietorship. The numbers are a bit tricky because you have to do things like take out half of the self-employment tax paid, etc. Let the calculator figure out the details, but you can still see that the Solo 401k (aka Individual 401k, aka Self-Employed 401k) offers a much higher contribution limit than a SEP IRA or SIMPLE IRA.

Here are some sample numbers if you are under age 50 had a $50,000 W-2 income from your S-Corporation. These numbers are a bit cleaner, as when you run payroll the employer side of payroll taxes are taken out of the employee paycheck.

Being able to defer up to 63% of your income ($31,500 out of $50,000) into tax-advantaged accounts is great for aggressive savers. In addition, both Traditional Pre-tax and Roth versions are allowed for the employee portion of contributions as long as your administrator supports it. Note that if you are already making employee contributions to a 401k-type plan from another job, you are still responsible for staying under the $19,000/$25,000 total cap across all your jobs. If you are consistently maxing out your 401k salary deferral in another job, then it may make more sense to stick with the SEP-IRA as it comes with less paperwork.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Serious Eater: The Financial Details Behind Food Blog SeriousEats.com

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If comparing this blog to the restaurant world, I like to think of it as the stubborn Mom & Pop hole-in-the-wall with one location. It’s been around for a long time, but there are no second locations, no franchises, no frozen food line. It was never sold to a private equity firm or some publicly-traded corporation. It owns the building and the land underneath, so it can just keep on doing its own thing.

When I first saw the book Serious Eater: A Food Lover’s Perilous Quest for Pizza and Redemption, I had no idea who Ed Levine was. I originally thought that Serious Eats was a little food blog run by J. Kenji Lopez-Alt as a side gig outside of his day job, just as I started MyMoneyBlog.com. I don’t live in New York and had read a few posts like their viral posts like the In-N-Out Menu Survival Guide and now use their reversed-sear prime rib recipe every year.

The truth is actually very different, and I quickly became engrossed in the story behind Serious Eats.

  • Instead of a young blogger working out of their tiny studio and a $10/month web-hosting package, Ed Levine was a former advertising executive in his 50s who started out immediately with a salary for himself, a salaried team, and an office space. This was possible due to a $500,000 loan from his older brother.
  • Instead of running lean and looking for profitability quickly, Serious Eats never made a profit from 2006 to 2015. It grew in viewership and gross revenue, but my understanding is that even when it was eventually sold, the advertising revenue never exceeded the running costs (salaries, office space, other overhead).

Ed Levine was obsessed with food and the stores behind it. You can get a taste of his energetic personality in this 1997 NYT Times article “On an Odyssey With the Homer Of Rugelach” by Ruth Reichl.

Her story in the Times called me the “missionary of the delicious.” Ruth described what I did better than I ever could: “Mr. Levine is on a crusade to see that the people who make food get the recognition they deserve. He sees them as creative artists waging a losing battle against mechanization, and he cheers them on.”

Serious Eats was definitely a passion project. However, Mr. Levine never excelled at the financial side. In fact, this was his first true business venture.

But that was before I understood a fundamental truth about individual investors: just because someone has made enough money to invest in a speculative venture like Serious Eats doesn’t mean they won’t be upset if they lose it. That goes double if they are family. People who have made money usually didn’t make it with a casual attitude about money in general.

However, he did raise a million dollars of startup money from family and friends, so you have to give him that. He had the charisma and infectious optimism that convinced people to bet on him:

And just like the folks at a victory party, we really felt we were on a mission: to change and democratize the food culture through food media without dumbing it down or pandering. Maybe art and commerce could coexist peacefully. Maybe they could even complement each other. Maybe my belief that creating good content could and would lead to financial success wasn’t as ridiculous as the money guys seemed to think.

Serious Eats grew in popularity. If you are at all interested in food, you’ve probably heard of it.

Back at Serious Eats World HQ some of our posts were going viral. Kenji chronicled in words and pictures the “In-N-Out Burger Survival Guide,” in which he ate every single item on its twenty-eight-item secret menu. That one post attracted 3.5 million unique visitors in the first year it was up.

However, they never really stopped burning through money. They missed the boom time of website sales before the Great Financial Crisis of 2008. They later tried to sell to a variety of different buyers in 2010 to 2011, but that was a slow period in media acquisitions.

Ed Levine went back and begged and borrowed money from every source imaginable. He borrowed even more money from his older brother, eventually making the total owed somewhere over $600,000 (I lost count). He accumulated $650,000 in personal debt that was straining his marriage, as it was backed by the New York apartment jointly owned with his wife. His wife Vicki later took on a margin loan backed by her personal stock holdings. Multiple close friends lent him $100,000 each. In other words, he was risking all of his closest personal relationships.

In fact, the most harrowing details I’ve had to relive in writing this book have nothing to do with financial security, only the terrifying knowledge of how close I came to doing real damage to the relationship that made it all possible.

You could feel the desperation at this point. It’s all about timing, as if you’re selling an unprofitable growth business, you need buyers with loose money and an appetite for risk. (Look up the current status of WeWork.) Somehow, he finally sold Serious Eats to Fexy Media in 2015. The details are blurry, but it seems that the investors were mostly made whole and Levine was able to pay back all his debts with a small bit of profit. He’s now an employee, not the owner, but perhaps that is for the best.

But thankfully, it’s not quite so personal. Most everyone who works at Serious Eats these days thinks of it as a business first and then, perhaps, a calling. Some people who work at the company may just think of their job as a really good gig. I’m okay with that. Maybe that’s why Serious Eats is doing so much better as a business. Serious Eats is growing up. And that’s okay. So have I.

In the end, this amazing story was powered solely by the energy of Ed Levine (and the equally-amazing support of his wife Vicki). I feel like it really shouldn’t have worked out at all. The climax felt a bit like the ending of the movie The Gambler. You don’t know much about running a website (or any startup), you burn through over a million dollars of money, and your passion is eating and sharing about food. However, he made it out intact and helped establish other talented food writers like J. Kenji Lopez-Alt, Max Falkowitz, and Stella Parks.

This reminded of these tweets about taking asymmetrical risks that have been stuck in my head:

Maybe you can try to make the risk asymmetric, but in the end there is no easy formula. I could not have taken the risks that Ed Levine did with Serious Eats. It would have been a foolish risk for me, as I could never tolerate the financial risk nor the relationship risks. However, when I read about others it seems they are compelled to take such big risks, and somehow it their boldness it can all work out. Of course, I suppose there wouldn’t have been a book about Serious Eats to read if it didn’t.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Pioneer Woman & The Magic of Untreated Boredom

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I hope that everyone had a boring Labor Day weekend! I say that because boredom is a magical thing, especially when left untreated with a computer/TV/smartphone screen. I had a lovely quiet afternoon where I sorted out a big box of old electronics, and my mental wanderings inspired me to make some important changes in my daily schedule.

It turns out that Ree Drummond understands. Now, I’m more of a Barefoot Contessa fan myself, but the Pioneer Woman brand has grown into an empire. TV show, magazine, cookbooks, and I’m sure some sort of branded kitchenware. You’re not a real food celebrity until you have kitchen towels and cutlery with your name on it. Let’s see… Check and check!

I just stumbled upon this older New Yorker magazine profile, which revealed the origin story. Before that, she was a stay-at-home-mom that got pregnant on her honeymoon and continued to have four children. Then one day…

One morning in May, 2006, eleven years after Drummond arrived in the country, Ladd announced that he was taking all four kids, including one-year-old Todd, who would sit in the saddle with him, to work cattle. “He said, ‘You stay home and take time for yourself,’ ” Drummond recalls. “It was literally the first time I had been alone in the house for a several-hour period.” Usually, when she had a free moment, Drummond hopped on a homeschooling message board, which she frequented for adult interaction. But that day she decided “to start one of those blog things.” She had read only one blog, Doc’s Sunrise Rants, written by a homeschooling single lesbian mother of triplets in Oregon. But she thought it seemed like a fun, efficient method of keeping in touch with her mother, who had divorced her father and moved to Tennessee.

This struck a chord with me because it was similar to how this blog got started. My wife and I had just gotten married and moved to Portland, Oregon for her new job. I managed to get a remote working position, but that meant that there was no longer a nearby office for me to visit each day. I no longer had a desk. There I was, in a brand new city with no friends, no co-workers, and a wife that worked 60-80 hours a week. I became bored out of my mind! I also decided to start “one of those blog things”, which led to other related businesses, and so on.

Now, I don’t have a global media/cutlery empire, but I still think that boredom can be a powerful thing. According to this Wired article, academic research agrees. When you are in a constant state of stress, when you are constantly putting out fires (or changing diapers), all you are doing is reacting. Occasional, extended boredom gives space for your creativity to grow. When was the last time you really let yourself get bored?

Comic source: XKCD

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Can You Teach Your Kid To Be Rich?

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There is an ongoing debate about personal finance education in school. It sounds like a good idea, but multiple studies have found that financial literacy classes don’t really improve future behavior. It may be too much to expect an easy fix to such a complex problem.

As a parent, how do you best set up your kids for financial success? In the end, how can you really tell if you made a difference anyway? You can only try your best. My personal philosophy boils down to this famous proverb:

Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.

Some parents plan on giving their kids a big pile of fish. An inheritance. Real estate. A business to take over and run. That’s out of love, and I am not judging that choice. I might leave them something, but I’m going to tell them to expect nothing. Instead, I hope they will see that I put in a lot of effort to help them develop the tools to go out and “fish”, and that as adults it’s up to them to make money for themselves.

To be clear, this is not the only thing that I am teaching them. Good relationships with family and friends are more important than an early retirement. However, I have observed several specific traits useful in navigating the financial world. As a result, I want to help them:

  • Develop good character traits like self-discipline, gratitude, and perseverance. If they can control their emotions, have empathy for others, and endure hard work, it helps everything else.
  • Obtain quality formal education. If they are going to solve the world’s problems, they need a strong, wide base of knowledge. A solid education and good teachers can really inspire and change a child’s life.
  • Experience entry-level hourly work in the retail, construction, and/or food service industries. They should understand how hard it is to make a living without specialized skills.
  • Create their own business ventures. I plan on helping them start any kind of micro-business that they want. It might be even better as a non-profit, donating the proceeds to the community. Through this, they will learn basic accounting, marketing, and interpersonal skills.
  • Improve interpersonal skills. Across all of their activities, from school projects to extracurriculars (sports/arts/music) to starting their own business, learning how to work with others is key.
  • Feel encouraged to take calculated risks. There are many ways to take asymmetrical risks where the upside is huge and the downside is small. This especially true when you are young and without dependents. I want them to take such risks.

None of the factors above require a ton of money, although private schools can be quite expensive. The best option may be maximizing the public school options available. My parents rented a small apartment in a good school district, as they couldn’t afford buying an expensive house with high property taxes. I only realized this recently when I visited our old duplex and found a house down the street listed for nearly $2,000,000 (median price in this city is $370,000).

I do plan to contribute to a 529 plan and minimize student loan debt. Maybe college tuition will be more sane in 15 years, but I think this is the best use of cash right now – keeping them from having to fight the power of compound interest in reverse. (I also classify paying for education as “teaching them to fish”.) I want to show them that we value education and also strive to avoid debt whenever possible.

Bottom line. How does anyone get rich? Most people who got rich quickly had equity in a business venture. This takes a combination of specialized skill, interpersonal skills, risk-taking, and luck. Most people who got rich over decades got there with a steady career, work ethic, patience, self-discipline when it comes to spending, and investing the difference repeatedly. I’d be happy with my kids taking either path, and tried to think up a list of ways to help promote these traits.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.