Required Reading: Shoe Dog and the Lessons From Business

“The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen.” This quote sounds brutally honest, gritty, and harsh, which is exactly what Shoe Dog: A Memoir by the Creator of Nike by Phil Knight is. I loved this book and was sad when the journey was over. (Note: I listened to the Audible version of the book, narrated excellently by Norbert Leo Butz).

Everyone knows Nike, but I can’t imagine most know about Phil Knight, it’s founder. I didn’t, but the book appeared on many of the “Best Books on Business” lists out there on the internet. As it turns out, it is an excellent book on business — but not for reasons you would think. There is no section on starting a business, no textbook-like process of following steps to start then grow your own business to success. What Shoe Dog is is the life adventure of Knight and the day by day, year by year struggles of selling (and later manufacturing) shoes. It is a tale as full of wisdom as anything in the Bible or ancient myths.

Knight’s story is an inspiration for anyone who owns their own business (or is looking to do so). I catch myself thinking of the book and Knight as my business changes and grows. When I get stuck or frustrated at how things are going in my company, I think of Knight and the hardships he had to go through. At least I’m not constantly traveling to Asia.

I’ve done this Required Reading for Shoe Dog a little different than past Required Reading posts. I read (listened to) Shoe Dog at a pivotal time in my own business, and much of what Phil Knight wrote resonated with me in a profound way. I wasn’t just hearing the words, I was living them. So instead of listing 5 major takeaways from the book, I’m going to breakdown the ways Shoe Dog mirrors what I’m currently going through — and what anyone who wants to start their own business should know.

Seek a Calling

I’d tell men and women in their midtwenties not to settle for a job or a profession or even a career. Seek a calling. Even if you don’t know what that means, seek it. If you’re following your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt.

Starting, building, and maintaining a business takes an unlimited amount of focus and persistence. The casual observer of a business may think it’s easy, or the owner is talented or even just lucky. It’s easy to dismiss someone as “just lucky” when they have a successful business (or product, or app) but that’s because so much of the work and hardship is usually when you’re not being observed and never shared. This is why it’s important to seek a calling. You need that fuel, that bottomless reservoir of stamina and determination.

There’s been tough times. They’re usually wrapped in uncertainty and unpredictability. You never really know when they start or when they end, but you always know when you’re in them. If you know it’s your calling — that you’re the person to do this and no one else is going to do it as well — it keeps you going. I’m fortunate enough to have two business partners, and we’ve taken turns pulling each other up when one gets run down by the business or some element of it. For Phil Knight, it was mostly him — but he had a strong support group in his coach-turned-business-partner, his father, and later his wife. But it was his calling, the desire to bring quality and life-changing shoes to athletes, that kept him going.

The most important piece of the quote above is “disappointments will be fuel.” You must look at failures as a way to get better, to improve, to adjust and regroup. Too many people suffer a failure and it derails them. They lose focus. They want to give up and crawl away to something else. My business has had failures. We consult companies and schools for technology needs and custom solutions. Not ever job or client went perfectly. One of them was a disaster; several others almost were. My partners and I regrouped: “What went wrong? If we did it over, what would we change? How could we better prepare? What didn’t we know that we didn’t know?” If we didn’t have the calling to drive this business, any one of us could have given up at any time.

Take the hit. Get back up and do better next time. If you take two steps forward for every step back, you’ll still get there. With this comes the next section:

Fail Fast

“Starting my own business was the only thing that made life’s other risks—marriage, Vegas, alligator wrestling—seem like sure things. But my hope was that when I failed, if I failed, I’d fail quickly, so I’d have enough time, enough years, to implement all the hard-won lessons. I wasn’t much for setting goals, but this goal kept flashing through my mind every day, until it became my internal chant: Fail fast.” 

Nothing has driven my company more than failure. Sounds bad, doesn’t it? Only if you look at failure as a bad thing. When we started out, we had knowledge — technical, sales, and legal (each partner bringing one to the table) — but we didn’t have much else. Failing at everything else made us realize what was needed to succeed at our business. We didn’t have paperwork; we didn’t have standard operating procedures; we didn’t have even a real Mission Statement. We knew what we could do, and we knew there were people and businesses that needed it.

Phil Knight aimed to fail fast. Shoe design doesn’t work? Find out as quick as possible and change it. Japanese shoe factory can’t meet demand or is cutting corners? Fine, but find out quickly. If you fail fast, you succeed sooner. Imagine it this way: If you spend a year working on something only to find out it’s a failure, you’ve lost a year. Sure, you learned a great bit from the failure itself, but imagine if the failure happened much sooner.

It is true what he says about business making everything else in life feel like sure things. Having your own business is a risk. The risk goes the larger the business gets. My company recently hired its first full time employees. That means we’re growing, but the risk is that much greater: it’s not just the owners anymore, we’re responsible for five people and their livelihood. The revenue must come in to maintain these employees, let alone hire more in the future.

No Finish Line

“For that matter, few ideas are as crazy as my favorite thing, running. It’s hard. It’s painful. It’s risky. The rewards are few and far from guaranteed. When you run around an oval track, or down an empty road, you have no real destination. At least, none that can fully justify the effort. The act itself becomes the destination. It’s not just that there’s no finish line; it’s that you define the finish line. Whatever pleasures or gains you derive from the act of running, you must find them within. It’s all in how you frame it, how you sell it to yourself.” 

For Knight, running and business go hand-in-hand. This, of course, works on two levels as his business was running shoes (before branching out into other sports). Both are about pushing yourself, finding your own way to measure success, and come to the conclusion there is no real destination.

Why start a business? To become rich? Does that make money the measure of success? Or is it to make life better for others. How many others? How many bettered people would be considered a success? From day one, my business partners and I never discussed what would we considered success. But that’s okay, it didn’t stop us. But looking at it now, what would I consider ‘successful?’ For awhile it was yearly gross profit. That was a way to measure (and how most businesses measure) relative success. Was this year more profitable than last? But now success is measured in other ways to us. We have employees. We couldn’t do that if we weren’t growing; if we’re not growing than we must not be successful.

For a portion of Shoe Dog, Knight measured his success (and relayed it to others) by the number of pairs of shoes he sold. First hundreds, then thousands, eventually millions of running shoes sold first out of the trunk of his car later in company stores. But eventually, that huge number became irrelevant. He used it to try and secure more loans from the bank to keep his business going — buying more inventory and paying employees. But the numbers stopped mattering to the bank to extend his credit line. I believe Knight later found his measurement of success in the athletes he provided for. He speaks proudly of seeing Nike shoes at the Olympics for the first time — worn by American athletes winning medals in running and track and field. To him, success was taking care of these athletes by providing superior shoe design and material.

We recently experienced something similar as we worked to get a payroll loan from the bank for our new employees. We have just received the largest contract ever (by far) from a new, Fortune 500 level client. The contract is used as unsecured collateral in order to receive a line of credit from the bank for our brand new employees. To us, this contract was our measurement of success. To the bank, much like Knight, it doesn’t mean much. Also like Knight’s shoe business, we were only given barely enough to cover. While we saw our new contract as success, the bank clearly didn’t think much of it.

I don’t know if I have a finish line. Maybe I haven’t defined mine yet. Maybe it’s too early to see it. With my business, I’m somewhere in the middle of the race just trying to lead the pack. I’m not worried about it, the important thing now is to keep pushing. Our interim finish line is to provide this new client the best possible service and let the chips fall where they may.

Redefining ‘Winning’

“It seems wrong to call it “business”. It seems wrong to throw all those hectic days and sleepless nights, all those magnificent triumphs and desperate struggles, under that bland, generic banner: business. What we were doing felt like so much more. Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while the stakes were forever creeping higher–and none of us wavered in the belief that “stakes” didn’t mean “money”. For some, I realize, business is the all-out pursuit of profits, period, full stop, but for use business was no more about making money than being human is about making blood. Yes, the human body needs blood. It needs to manufacture red and white cells and platelets and redistribute them evenly, smoothly, to all the right places, on time, or else. But that day-to-day of the human body isn’t our mission as human beings. It’s a basic process that enables our higher aims, and life always strives to transcend the basic processes of living–and at some point in the late 1970s, I did, too. I redefined winning, expanded it beyond my original definition of not losing, of merely staying alive. That was no longer enough to sustain me, or my company. We wanted, as all great business do, to create, to contribute, and we dared to say so aloud. When you make something, when you improve something, when you deliver something, when you add some new thing or service to the life of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, the way everything should be done but so seldom is–you’re participating more fully in the whole grand human drama. More than simply alive, you’re helping other to live more fully, and if that’s business, all right, call me a businessman.” 

I founded my business out of the needs of others. The kernel of my business idea was planted by my former job at Apple — hours, days behind the Genius Bar working with customers who weren’t able to get their needs addressed by the company. Particularly professions and businesses who were unable to bring their problems into the store. From there I convinced others that there was a need in this market, and I had the ability to fill it.

I’m proud my company was founded on solving the needs of others. Nobility aside, it proves of our right to exist. We meet a need that wasn’t being solved by others. Regardless of the size of the business, the need remains the same.

There’s something else above Knight’s quote above and Shoe Dog itself. Business is not glorious. Glory can be a component, an aspect of achievements earned by the business. But it’s mostly inglorious work. It’s bookkeeping, taking notes and making lists. Paying bills and contractors and employees. Knight’s allegory is correct: a business is very much like the inner workers of the human body, it never stops. Cash is merely part of that system; money goes in, money goes out. It’s these processes that keep the business moving to fill a need.

They say entrepreneurs learn to love the process. I think you have to or else you’ll never make it. If it’s all about the money, and you’re just waiting for the next payday, you’ll begin to lapse on the inglorious work. Things won’t get done or will slip. The business will break down.

There’s a tremendous more to Knight’s book than just his philosophy of business. The book itself is an experience from Knight’s adventures around the world (such as climbing Japan’s mount Fuji or seeing the Temple of Athena Nike in Greece), how a business goes from idea to full fledged movement, and the life of a runner in search of the perfect shoe. The book contains philosophies of life, quasi-mysticism of the business world, and just what never giving up can truly bring.

I miss this book. I loved listening to it and following Knight’s adventure. I was sad when it was over and it’s one of the few books I’ve read or listened to that gave a sense of true fulfillment. I cannot recommend it enough, especially if you’re thinking of going into business or even just looking for some guidance.

I think I’ll start it over again today.

Click this link to check out the book on Amazon. If you purchase it, it doesn’t cost any extra but I get a few cents from Amazon! You can also click on the image of the book all the way back at the top of this post to do the same.

California and the Death of the Gig Economy

A lot of people I know drive for Uber or Lyft (or sometimes both). They use it as a side hustle, a supplementary source of income. They like it because they choose when to work and for how long; it doesn’t interfere with their work or life schedule. A former coworker of mine has used Uber to pay down debt, driving forty or more hours a week on top of his full time retail job. I also know another coworker who quit his retail job to drive for Uber and Lyft full time. It didn’t last very long until he gave up.

I always chat with Uber drivers when I use the service as it’s always interesting to see how people are using the driving app to conform it to their lives. Sometimes the drivers are retirees. Some are in school. Occasionally there will be the full-time driver who drives daily all day. They all like the flexibility of making their own schedule, they can take breaks whenever they want, they earn as much as they want, and they collect their fares every week. (Under Uber’s new Uber Instant Pay program, some areas can even withdraw instantly when a threshold is met.) These ridesharing businesses are the quintessential ‘gig economy’ jobs — you perform a service (gig) for a company as a contractor and you’re paid for your service. No strings attached, everything’s temporary and it’s essentially on the contractor’s terms: when you want, as much as you want, and you accept what the company is offering for compensation. This is the new normal.

So is it any wonder labor activists are against it? This past week a bill was passed in California’s senate to “end rampant misclassification” of workers as independent contractors according to The Sacramento Bee in an article entitled “California sees to make Uber, Lyft drivers employees with passage of new California labor rules.” From the same article:

“It makes sure that the one million independent contractors in California get the wages and benefits they deserve,” said Assemblywoman Lorena Gonzalez, the San Diego Democrat who authored the bill.
But the loudest voices raising concerns about the bill have been gig economy companies. Ride-share companies Uber and Lyft and delivery service DoorDash have pledged to spend a combined $90 million to take the issue to voters in 2020 if they don’t secure some relief from the new employee classification test.

If you’re unfamiliar with it, a contractor is not the same as an employee. A contractor is someone a company pays for a service, who is not employed by the company, and is paid 100% of their compensation — the employer does not do any withholding and it is up to the contractor to claim his compensation on his own taxes (You may have heard of the 1099 form that companies send to their contractors at the end of the year totaling everything they were paid that year for services). An employee is someone who is contractually bound to work for the company, and is bound to various state and federal labor laws. A contractor receives no benefits, insurance, pension, etc from the company because the don’t actually work for them.

In the first five years of my company, I relied solely on contractors to grow my business. Why? Because my company had very few contracts with clients. We were hired on a per-need basis, not on an extended contract. This meant there was no guarantee of work and we could only sub-contract help when it was needed. Employees would have been a huge drain — we would have had to make payroll (including payroll taxes, benefits, etc) twice a month even if no jobs or new clients were coming in; we’d be out of business in months. Contracting allowed us to hire when we needed to and not be beholden to paying someone when there wasn’t work.

So back to this California bill to give “one million independent contractors the wages and benefits they deserve.” The problem is in the fact they’re independent contractors to begin with; they agreed to Uber (and Lyft) terms of service when they started driving for them. Like my former coworker who quit to drive Uber full time, these contractors are attempting to make a career in ridesharing. It’s not designed to be such. It is, after all, a ‘gig economy.’ It’s a chance to make money on the side, on the schedule you set, and in turn you’re helping Uber and all the people who need a quick ride somewhere. By making these independent contractors employees, California is going to upend this free market system.

Let’s think it through, shall we? California forces Uber and Lyft drivers (as well as various others such as port drivers, musicians, translators and even freelance journalists) to be classified as employees. The drivers sign contracts with these companies and are now entitled to health benefits, unemployment insurance, workers compensation, etc. Big win for Ms. Gonzalez and the labor activists. Drivers will now get more than they bargained for, and so will riders.

Right off the bat costs go up because employees are expensive. In addition to the compensation (which shifts from a per ride basis to an hourly wage, given labor laws and must be $12 an hour per current California law, and even higher in other California towns), employers must pay towards medical benefits, unemployment insurance and employer payroll taxes, workers compensation, and the HR expansion to meet the new 1 million employees added to the company. That’s a lot to ask from a company that just posted a $5.2 BILLION loss in one quarter this past April. The company suffered billions in losses for the years 2017 and 2018 as well. So who pays for these employee benefits?

You, the rider, do of course. Uber and Lyft fares in California will have to increase to compensate for the increase cost of the driver — remember, the driver was only making money per ride, now they must be paid for every hour on the clock. At some point it might be just cheaper to have your own car if you Uber regularly.

The other thing that will immediately change for the drivers is schedule. As employees, they become beholden to when Uber or Lyft schedules them to work. No longer can an Uber or Lyft driver pick up a fare on the way to somewhere the driver is already headed. You can’t drive for an hour and then take the rest of the day off. Or take a whole week off and come back and start picking up fares again. You’re an employee now, and the company will tell you when you need to be driving and for how long.

Drivers would also no longer be able to reject a fare, take breaks whenever they wanted, and would be forced to drive during slow times when there may be no fares at all. This last one is essentially waste — an employee is driving a car, using gas, with no fares because it’s slow time. It costs the driver and the company.

As an independent contractor, federal law allows you to write off expenses related to your work. Uber and Lyft drivers write off their gas, mileage, car repairs and maintenance. These expenses can be deducted from federal taxes. You lose these deductions when you’re an employee. Uber and Lyft can technically offer to reimburse you for them, but they’re not required to do so. You definitely cannot claim mileage and gas as an employee on your federal taxes. (I know this because I once tried to argue claiming miles and gas for having to drive to work with my tax accountant, who laughed at me.)

A lot of drivers will also use both Uber and Lyft apps to maximize fares. Since drivers are paid only when they take fares, using both apps ensures minimum downtime and the maximum amount of fares. If you’re employed by Lyft, you can’t use the Uber app while you’re on the clock. This means lost fares and also means less of a supply of drivers for people who need to get somewhere. An employee of Lyft driving around will drive right past an Uber rider looking for a ride.

There is also the issue of automation. Uber (along with other companies) has been spending heavily in research of self-driving cars and automated driving. Right here in Pittsburgh, Uber has their ATG (Advanced Technologies Group) developing self-driving car systems. If Uber was forced to take on the additional costs of labor under California law, the first thing they’ll want to do with automation is relieve those costs. Guess which state Uber will start piloting their fleet of automated vehicles when they become road-approved. If McDonald’s can do it with kiosks, Uber will do it with self-driving cars.

Given the shift drivers will undergo, I have to wonder if people will just quit driving for Uber and Lyft after becoming employees. On the flip side, both companies could also lay off drivers to save costs. Those that drove on the side in their off hours would likely have to quit driving for Uber or Lyft or risk it impacting their other employment. My coworker who drove in the free time of his retail job would have to choose one or the other since Uber would be providing a set schedule. Regardless of his choice, his income drops because he loses a source of revenue.

From the first glance here it appears Assembly Bill 5 could have disastrous effects on personal income in the state of California. People working as contractors on their terms will be forced to conform as am employee or lose out on their former gig. Jobs could be lost to automation. Some companies may up and move, taking their jobs with them or choose to cut back because they can’t afford to take on these contractors as employees. So why would California’s legislative body and Governor Gavin Newsom pass AB 5?

Very much like the Fight for 15 movement, it gives the perception of looking out for the ‘little guy.’ As Newsom himself said, AB 5 “will help reduce worker misclassification — workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.” But there’s another big shift not being mentioned here — payroll taxes.

As an independent contractor, any compensation does not have taxes withheld. If a company hires you for $100/hr and you work 5 hours, you receive $500 from the company and are responsible for filing your own taxes. After making $600, the company is legally required to send you a IRS 1099 form, showing how much you made. Under AB 5, this goes away. You’re now an employee, and beholden to tax withholding. Your taxes are taken out of your paycheck immediately…including California state tax and all applicable local and federal taxes.

As the Tax Policy Center puts it:

But California’s new law goes well beyond mere tax reporting rules. It reclassifies these workers as employees, with all of the tax and labor law effects that implies. Massachusetts already has adopted similar rules for defining employment, and New York’s Labor Department has said that Uber drivers are employees who are eligible for unemployment insurance benefits. Now that California has jumped in, don’t be surprised if other states move aggressively to turn on-demand workers into employees—both to protect worker rights and collect some additional revenue.

And without being able to write-off your expenses, you — now as an employee and not a contractor — will pay more overall in taxes. It also prevents creative accounting practices, deductions, underreporting, or any other method that could potentially be shortchanging the state of California on tax revenue. As an employee, they’re just taken out of your paycheck.

Regardless of what actually happens, this California senate bill will certainly change the nature of the gig economy.

5 YouTube Channels You Should Be Subscribing To

Just a quick disclaimer: I am in no way affiliated with any of these channels. There’s no kickback or monetization for mentioning them on my blog. I personally follow them and wanted to recommend them to anyone interested in personal finance, investing, or wealth.

The following are five informative YouTube channels I subscribe to for ideas, inspiration, or just taking my brain for a jog. If you have an interest in personal finance or want to become entrepreneurial, these are a great place to start.

#1. Ryan Scribner

Ryan Scribner is a great intro to personal finance. He targets beginners and those early in the investment game. His videos cover passive income and ways to earn it, the stock market, and social media growth strategies. Recent videos have shifted to more gimmicky topics like “I Bought 7 Boxes of Amazon Returns” but I recommend any of his videos on passive income or stock market investing.

The other thing I like about Scribner is he isn’t shy about sharing his end of things. He’s very open about showing his metrics and actual revenue. One of my favorite videos he did is one where he spent two hours online taking surveys for money. Online surveys are always touted on blogs or online lists as easy ways to make money from home: just fill out surveys and get paid! Scribner actually tried several sites and found them to be essentially a sham (unless you spend thousands of hours doing it, and even then you’re not assured you’ll see any real money).

#2. Valuetainment

Patrick Bet David is an eccentric fellow. He’s a physically huge, fast-talking, money-making businessman. A Persian Wolf of Wall Street, minus the criminal element. Valuetainment is an interesting mix of financial philosophy, motivation, and an interview series. Videos include things like “How to Start a Business for Under $500“, “Hiring Your First Employee as an Entrepreneur“, and one of my favorites, “The 20 Rules of Money”, which is embedded above.

The interviews have a variety of guests, from financial gurus to comedians and athletes. I find myself unable to binge watch this channel, probably because it is so eclectic and wide ranging. I like to pick and choose from time to time for what I’m in the mood for and I can usually find something to fit the mood. Bet David is also a prolific poster, constantly generating new content.

#3. Practical Psychology

This channels covers a lot of ground. The topics are many and cover habits, mindsets, and general human psychology. There is also the occasional book reviews and ‘takeaway’ videos, such as one of my favorites above: “14 Big Lessons from 341 Books.” The channels is not one I watch so much for investing or money, but to learn more about how my mind works.

If you’re looking to change your habits up or understand more about why you do the things you do, this is a great place to start. Each video consists of a whiteboard animation with voice over, so the look of the videos can become repetitive over time.

#4. Joseph Carlson Show

This is a recent discovery for me. If you’ve read this blog before, you know I’m a fan of dividend investing, which happens to be Carlson’s focus. The channel has a very specific theme: Carlson opened an investing account for the purposes of illustrating dividend investing and he posts regular updates on how the portfolio is progressing. (Each video thumbnail gives the current value of the portfolio.) He takes the time to breakdown his portfolio, why he chose what he did, and how dividend reinvesting and adding more of his own money over time creates growth and profit.

Recently, he’s also beefed up his channel by adding economic commentary, news, and financial trends. It’s informational and interesting, while showing what dividend investing looks like in real-time. If you’re interested in investing or new to it, this is a great place to learn more from the ground level.

I have a soft spot for Mike Maloney. Born dyslexic, Maloney had a difficult time reading and writing that plagued him into adulthood. He finally discovered the dictation function on his Macintosh computer that allowed him to eventually correct and moderate his reading and writing issues. He has since gone on to author several books on investing! Maloney’s YouTube channel serves several purposes, including advertising his company, which deals in investment-grade precious metals.

I like Maloney’s presentations and level-headed economics criticism, but the real wealth (so to speak) in his channel comes from his documentary series “Hidden Secrets of Money.” Maloney goes back to the beginning — the earliest days of human history — and revisits money through the ages. More importantly, he defines what money is and its relationship to currency.

The real knockout is episode 4 of the series, entitled “The Biggest Scam In The History of Mankind” where he dissects how the Federal Reserve system and our current monetary system works. It’s a dense, cryptic topic that Maloney easily breaks down for the casual viewer. It’s well done, highly informative, and, in the end, shocking to see how things really work. It’s impossible not to walk away from without having an impact.

The Other Side of $15 Part 3

Beware of strangers bearing gifts

The following is part 3 of an on-going series. The first part dealt with the immediate impact on business costs and barrier to entry; part 2 looked into the result of $15 per hour in the New York restaurant business. This section will cover big box retailers pushing for higher minimum wage in 2019. You can read part 1 here and part 2 here.

If you recall from part 1, the sudden spike in labor cost creates an immediate burden on lower paying employers. In the case of my fictional restaurant (and later shown in real life results in part 2), hours are cut, prices increase, and in some cases layoffs occur. Considering all of this, I was (at first) surprised to see big box retailers like Walmart calling for a $15 minimum wage.

This past summer, Walmart CEO Doug McMillon called out the federal government for the minimum wage being “too low:”

“The federal minimum wage is lagging behind,” Doug McMillon said at Walmart’s annual shareholder meeting in Bentonville, Arkansas on Wednesday. 
Congress has not raised the minimum wage since 2009, but McMillon’s surprise comments may give lawmakers an incentive to act. McMillon’s call may also ease pressure on Walmart. Senator and presidential candidate Bernie Sanders, along with workers’ rights groups, have called on Walmart to raise its wages above the company’s current $11-an-hour minimum.

As of 2010, Walmart employs 1.4 million Americans – 1% of the country’s working population. Certainly not all of them are wage employees, but the number of wage earners is large enough that Walmart will absolutely feel the increase (again, these are 2010 numbers, so the number of employees could even be greater). Even if 1 million of the 1.4 million are wage earners, a few-dollar increase per hour quickly translates to millions of dollars per hour in labor costs. That’s huge! So why publicly push for $15 at such a great company expense? (It’s also worth noting here that when Walmart bumped hourly wages up to $11 per hour last year, they also closed numerous Sam’s Club stores at the same time.)

A reactionary thought is that it’s good PR. Just like politicians calling for a “living wage” of $15 per hour for the good of the people, Walmart leading the charge for $15 per hour gives a boost to public perception: Walmart cares about its employees. Walmart is listening to the people. You can make a living working at Walmart. Walmart and Amazon have become targets of the $15 per hour camp as of late. By embracing the higher minimum wage, it relieves public pressure and image tarnishing.

A second potential reason for hiking wages could be inter-company competition. Amazon and Costco have both recently upped their hourly wage to $15. Amazon claims they are not caving to pressure from Senator Bernie Sanders but doing it for the good of their employees. Their increase will impact 350,000 full-time, part-time, and seasonal workers. Costco raised their wage to $15 this past March. Perhaps it’s about staying competitive with other big box retailers. I can see how no one wants to be caught as the lesser-paying and risk losing employees to the other.

But there’s something else at work here. If it really were about public relations, saving face, and remaining competitive among large retailers, why would these companies champion a national minimum wage hike to $15? If anything, being able to pay $15 when smaller competitors cannot or aren’t willing gives Walmart and Amazon an advantage in the labor pool. In the quote above, Walmart CEO Doug McMillon is pushing for a $15 per hour federal minimum wage. Jay Carney, senior vice president of Amazon’s global corporate affairs, declares that Amazon “will be working to gain congressional support for an increase in the federal minimum wage” and to “advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.” In March 2019, McDonald’s ended their lobbying against a $15 per hour national minimum wage.

These companies are free to pay their workers $15 per hour and set an example for others, so why do they want to push it on the entire country? There’s really only one reason.

To crush their competitors.

Walmart and Amazon can afford to absorb the cost of $15 per hour. They can also afford to invest in automation or to cut hours from large store rosters. If need be, they can even close a store or two — as Walmart did in 2018 when they raised their wage to $11. Small businesses cannot afford to do these things.

Imagine Bob’s Discount Bunker is a small chain of discount retail stores. Maybe their prices are competitive to Walmart, or they have stores where Walmart doesn’t. One of the ways they can price their products lower than Walmart is lower labor costs. If these costs are raised on par with Walmart’s, that means Bob’s can no longer afford to charge lower prices. Or they go out of business altogether after a death spiral, like our fictional restaurant. Either way, the higher wage is severely disruptive to smaller competitors; it saddles them with more expensive labor.

Why else would these large corporations be willing to absorb such huge labor cost increases? By flipping the script and embracing the higher minimum wage, politicians and labor advocates are doing big companies a favor.

After the field of competitors is wiped out, big box retailers can then either raise their prices, induce layoffs, or replace workers with automation to bring their labor costs back down. As a CNN article entitled “Why Big Business is Giving Up Its Fight Against a Higher Minimum Wage” puts it:

Although the wage premium for working at a large company has decreased over time, big businesses still achieve economies of scale through centralized HR and benefits departments. They also have the upfront capital needed to invest in automation, such as the purchasing kiosks now in place at McDonalds, that will make businesses less subject to labor costs in the future.

When it’s all said and done, Bob’s Discount Bunker employees will likely be looking for jobs at Walmart or Amazon.

In the case of McDonald’s, it’s not the company that feels the increase of $15 per hour, it’s the franchise owner that the employees work for. As of 2016, 85% of the company’s restaurants were franchisee-run locations. This means they’re not owned by McDonald’s, but by a private business owner who pays McDonald’s a monthly franchise fee to use the name, logo, menu, etc. and purchases their stock directly from the company. It’s up to the franchisee to hire and pay employees. This makes the argument for McDonald’s being able to afford to pay their employees more somewhat disjointed: advocates look at McDonald’s annual company profits when it’s likely not McDonald’s paying their wages. McDonald’s, after all, is really a real estate company. Their primary income and tax breaks revolve around property. So a $15 minimum wage would still impact their competitors, but the franchisees are left footing the bill for the labor.

In the end, the government is just making large companies stronger by raising the wage to $15 per hour. It becomes a win-win-win scenario for Walmart, Amazon, or McDonald’s. It’s a win with the power of the federal government making the decision, coercing all employers in the country to abide by the increased national minimum wage — whether they can afford it or not. It’s a win because it’s good PR, allowing these companies to look like advocates for the common worker. And it’s a win because it wipes out competition and potential future threats.

How A Metallica Concert Changed My Life

…and my ties are severed clean
The less I have the more I gain
Off the beaten path I reign

Metallica, “Wherever I May Roam”

This title will undoubtedly cause a lot of strange looks. Bear with me here.

Metallica came through my city in October 2018. Twenty years had passed since they last visited. Twenty years I waited for a chance to see them. Metallica has a central role in my adolescence, from my older brothers listening to them in the 80s, to my friends and I in junior high listening to them, to eventually forming a garage band and covering their songs. (We were awful, but man was it fun). I listened to the ‘black album’ through my most formative years. When I heard they were coming to Pittsburgh, I splurged on tickets. I was going to finally see them, and I was going to do it right.

The seats were amazing. The stage was square and situated in the center of an oval hockey arena. The stage was rotated such that two corners almost touched the center-ice seating areas. I literally had front row seats. When the concert kicked in, Kirk Hammett and James Hetfield alternated standing directly in front of me. It was loud. It was energized. It in no way disappointed. It may have been the best concert I’ve ever been to (sorry, Iron Maiden).

At this point, I know you’re thinking: “Okay, guy loved Metallica growing up and finally got to see them. That’s sweet. Good for you.” It’s heartwarming feel-good-ery. But that’s not what it changed my life. Yes, I crossed something off my bucket list, but it changed my life in a different way.

Metallica was formed in 1981. By 2018, they had been rocking venues and traveling the world for 37 years. Lead singer James Hetfield was 55 years old when he stood before me wailing away. What hit me mid-concert was the fact that these guys had got to spend their lives doing what they loved. They made music, wrote songs, expressed themselves creatively. Because of this, they got to travel the world, rub elbows with all sorts of famous people, celebrities, world politicians. Their scrapbook of memories is endless.

And they were still going when most people were counting down to retirement.

Endless self-help books and financial guide books always ask the reader to know what they want. Tony Robbins harps on it. What do you want most in life? For most of my professional life I knew what I didn’t want: a day job working for someone else, working retail for money for bills, a path to decades of entry-level employment until I retire. But I never had an answer as to what I WANTED. Sure, I always wanted to make movies. I wanted to be a writer. I wanted to go to weird and exotic places around the world. But it was never a coherent, singular want that I could put into words. Seeing these guys rock in front of me and thinking about listening to them for 30 years finally caused it to appear. I had figured it out.

I wanted to live my life through creativity.

Geez, that still sounds vague but here’s what I mean. I want to make my way through my creativity, not through working a day job. If I travel the world, I want it to be because I’m doing something creative — like if a movie project took me to a foreign country. I want to meet people through creative projects, not because they walk into the store that I work at. I want to meet a movie star because I cast them and work with them creatively, not because they’re signing autographs for money somewhere. I want to collaborate creatively. To make things. To explore life as part of the creative process, not on my phone in the bathroom on a lunch break.

During the concert I thought back to a VHS cassette I used to have called A Year and a Half in the Life of Metallica where it was nothing but behind-the-scenes footage of the band making the black album and the album’s tour. The band got to go all sorts of places, meet other elite music acts, travel the world, and play to huge crowds — all as the result of their creative endeavors. I watched it in it’s entirety the morning after the concert.

It seems to miniscule. But life is stitched together by these infinitesimal moments. I was finally able to verbalize what is I had always wanted. A tiny thought became a huge push to finally quit my job. I felt focused. I knew that when I was 55 years old I wanted to be fully immersed in creativity and living my life through it.

Five months later I quit my job.

Why Isn’t Personal Finance Taught in School?

Internet Meme

Think back over your school days. In elementary school we had the basics: writing, grammar, English. Maybe American history. Math. Nature studies. Middle school? English literature, algebra, European history, and civics. High school? College level classes, more English literature, biology, physics, and more history. There were shop classes and home economics. And there was always gym classes.

If the purpose of education is to prepare a young person to go out into the world, find a job, make it in society, then our students are woefully unprepared. After twelve years of education, not one student is better prepared to manage their personal finances — or even understand how taxes and interest work. Over the course of our lives we, of course, use English. We use some math. History might come in to play at some point in the future. But we use financial knowledge. Every. Single. Day. So why is it not taught?

This latest post began while watching an interview with Robert Kiyosaki about the origins of Rich Dad, Poor Dad:

Kiyosaki recalls asking his fourth grade teacher why they don’t learn about money (10:30). She replied that they “don’t teach money at school” but couldn’t answer his question as to why. Kiyosaki continues, saying he eventually asked his father — who worked for the department of education — why money isn’t taught in school. His father’s reply? ‘Because the government doesn’t let us teach it. It’s not in the curriculum.’

So I began to wonder: how is education curriculum set? Why doesn’t the government allow personal finance to be part of public schools? (Note: I never attended private school, so I cannot speak to if it is taught there or not, but feel free to comment if you did. I’d love to know!) It seems not only common sensical that it would be taught, but given these horrendous metrics, Americans are in desperate need of financial literacy:

  • 41% of Americans use a budget (inversely, 59% of Americans don’t track or understand how much they spend every month)
  • The average American college graduate leaves school with $37,172 in student loans, most with no immediate plan to pay them off
  • Two-thirds of Americans would have trouble scrounging $1,000 for an emergency
  • 35% of Americans (!) have debt in collections with the average amount being $5,178
  • A National Endowment for Financial Education study found only 24% of millennials show “basic financial literacy” while 69% of the surveyed rate their own financial knowledge as ‘high.’

So what’s the deal? Before diving into a ‘Conspiracy of the Rich’ that keeps the average person money stupid, I wanted to learn the origins of our public education curriculum. I began to dig to find out just why what’s taught is taught.

It begins with the Prussian Education system.

The Prussian Education system was founded in 1763 by Frederick the Great. The system became the model for compulsory attendance (e.g., you have to go to school), national testing, and, per Wikipedia, “prescribed national curriculum for each grade, and mandatory kindergarten.” It also maintained a specialized training for teachers, essentially teaching teachers how and what to teach. This might be the most important facet, as teachers were not existing specialists or professionals, but professional teachers. The person teaching math or science would not be a mathematician or scientist.

The Prussian system was imported to the United States in the early 19th century, with early advocates including American education reformer Horace Mann (who eventually went to Germany to inspect German schools first-hand). The Prussian system was designed to serve the kingdom, training the populace to be soldiers, farmers, and eventually factory workers when the Industrial Revolution arrived. This is why you hear contemporary education referred to as “factory model” or “industrial era.” Indeed, it freaked me out a little bit when I realized that the reason for “bells” to signal start and end of classes was to train young people for the bells and whistles of the factory, denoting shift changes.

The Prussian system would later be refined in 1892 by the Committee of Ten. The committee’s recommendations became the basis of our modern education system: 12 years of education, eight of which are elementary followed by four years of high school. Curriculum was focused on English, mathematics, and sciences (such as chemistry, physics, and astronomy). The higher sciences such as psychics and chemistry were reserved for the high school level. English, mathematics, civics, and history would be taught at every level.

In the report linked above, there is no mention by the Committee of Ten of finance, money, or taxes.

So is our current system just outdated? What would it take to add personal finance to the curriculum? Why hasn’t it been? In 2013, a poll from Harris Interactive (sponsored by Bank of America) showed 99% of adults agree financial literacy should be taught in school. A 2013 Time magazine article entitled “Why We Want-But Can’t Have-Personal Finance in Schools” cites four major reasons finance has not been part of the curriculum:

  • Only one in five teachers feels qualified to lead a personal finance class, according to a University of Wisconsin study. So we don’t have enough instructors.
  • Personal finance concepts are not part of standardized tests like the SAT or ACT. As the saying goes in education circles: If it’s not tested, it’s not taught.
  • Education is run at the state level. So there is no federal authority to mandate personal finance classes, and each state has its own ideas on how to go about it.
  • There is little academic agreement as to what kind of personal finance instruction works. Many educators are waiting for clarity before they sign on.

There seems to be a catch-22 in regards to ‘feeling qualified’ to lead personal finance classes. Teachers don’t feel qualified to teach it because they never learned it themselves. In fact, these surveyed teachers may be struggling with their own financial literacy.

I’ve personally always been amazed that taxes are not taught at some level in school. These are something every American must file once per year, yet there’s no education or even explanation on how it all works. But, according to the Time magazine article above, teachers don’t really understand it either. I would say financial literacy should start at home, but parents weren’t taught in schools either. A 2011 Charles Schwab survey of 1,132 teenagers between 16 and 18 revealed 42% wanted their parents to talk to them about how money works. Only 32% of the surveyed teens knew how credit cards and interest worked. But if the parents aren’t knowledgeable (or comfortable enough) to talk about it, then the ignorance is passed on. It’s a death spiral of financial ignorance.

I couldn’t find an explicit reason why finance was left off the educational menu. One could infer that it wasn’t important in the 19th century — money still existed, bills had to paid with interest, although there was no personal income tax (except from 1861-1866 where it was enacted to pay for the Civil War) but property taxes and tariffs existed. Kiyosaki seems to insinuate that it’s more sinister, that financial education is left off the table explicitly to keep people dumb about money. His entire modus operandi for his Rich Dad series is to teach people about financial literacy because it’s not taught in schools.

He is right in that the failure to teach financial literacy in school falls on the government. Some states have taken the initiative, but it appears lacking, according to “Survey of the States“, a Council for Economic Education report. Seventeen states require high school students to take at least one course in personal finance. However, the report also shows “there has been little increase in economic education in recent years and no growth in personal financial education.” So states are aware of the problem, some have made an attempt to change it, but overall it appears to be half-assed or not a priority. I suspect it will take adding personal finance to standardized testing to get the ball rolling, coupled with education of teachers so they can teach the subject.

Until then, hopefully people like Robert Kiyosaki or Dave Ramsey will continue to get guide people. Or maybe blogs like this one can help someone find their way. Perhaps it will be those who are financially literate that will teach future generations.

How Monopoly Teaches You Everything You Need to Know About Quitting Your Job

For many of us, Monopoly was the only financial education we had growing up (further discussion on this is coming in a future blog post!). The depression-era Parker Brothers (now Hasbro) board game was based on an even earlier game called The Landlord’s Game, designed to educate the players about taxes. Monopoly takes it a step further, educating the player (I was always the battleship or car) on cashflow, taxes, financial ups and downs (Chance!) and…jail.


As in life, in Monopoly the name of the game is assets. To quote from a well-known financial literacy advocate, an asset “is something that puts money in your pocket.” This includes stocks, real estate, or a business. To Quit Your Job, you must have assets. Let’s say you’re hired as a retail employee. You are paid a low wage because your only asset is your time. If you move up, or get hired into management, your assets include your time and skills or knowledge.

To break away from this, you need assets that generate income irrespective of your time. Stocks, for example, are an easy asset to obtain. Stocks can go up in value. Even better are dividend stocks, which pay out money to those that hold shares on a regular basis.

Real estate is also an asset. It retails value, the value can go up and then the real estate is sold at profit, or you can charge rent to put money in your pocket. This is the backbone of Monopoly — green houses and hotels. Both generate money for you as your car or thimble roam the board. In real life, you can purchase real estate to rent to create monthly cash flow. You can also purchase REITs (Real Estate Investment Trusts) and collect rent dispersed as dividends.

Businesses are a third type of asset. Represented in the game as utilities (Water Works, Electric Company) and railroads, businesses are a way of generating income (aka ‘cash flow’). A business is the ultimate asset — it can grow in size, become an excellent source of cash flow, and is tax beneficial. Even better, you can continue to collect your $200 GO! salary as a business owner.

To Quit Your Job you must have assets. Saving up a bunch of money and then quitting will only give you a long vacation. Eventually it ends with you having to go back to work. Bills don’t end — even if you own your home 100%, you still have taxes and insurance and maintenance costs. You still need to eat. Life also likes to come knocking at the door. You need income — and assets provide it.

At the start of the game, every player has some savings and a job (this is what GO! is, where you collect your $200 salary). You must balance your income (salary) early on while acquiring property and utilities. You can also save your income for later purchases. For those who don’t have a drive to Quit Their Job, they happily move around the board, trying to get to GO! as fast as possible – to collect their $200. Money is spent on things like Luxury tax and the occasional Community Chest mishap. They are happy not taking any risks with property and thus never get anywhere. In the context of the game, they will eventually be wiped out by landing on a red hotel at some point.

The winner of Monopoly is the one that ends up with all the assets.


Is cash an asset? Technically, cash can put money in your pocket through interest. However, in this day and age, most bank interest rates require a microscope to see and inflation easily wipes out any gains. But to Quit Your Job, you must have cash readily available.

Cash serves two purposes:

  1. Protection. In real life, you’ll inevitably flip that random Community Chest or Chance card. Hospital fees. School fees. It will be someone’s birthday and you have to give them $10. Also referred to as an Emergency Fund, you must have cash on hand when you Quit Your Job. Not having an Emergency Fund will require you to go into debt for sudden expenses, or sell assets like stocks to pay for it. Loss of assets or going into debt leads to going back to a job.
  2. Preparation. If you have cash, you can be ready to strike at any time. Imagine having a cash reserve when the 2008 crash started. Stocks and real estate (assets!) severely went on the cheap. By having cash at opportune times, it enables you to acquire assets at low cost. This is another facet of Monopoly: when another player is in desperate need for cash and looking to auction off a property, those with cash can scoop them up. Or if you already own Park Place and land on Boardwalk and not having the cash to purchase it. You just missed out on the biggest monopoly and biggest potential for cash flow because you didn’t have cash handy.


You want to stay out of jail both in the game and in real life.

It’s scary to think about how in the game, when you have nothing and you’re behind, that the best place to be is in jail. I’m not going to wade into the ‘poor people and jail’ arguments made online or in sociology circles, but there is an eerie correlation between this component of the game and real life.

Other Lessons

Overall, Monopoly is a great education in life. In addition to what’s been mentioned above, Monopoly also teaches about negotiating and compromise. There’s the wheel-and-deal component to it when it comes to trading properties and utilities. It’s also about accepting the randomness of life (I don’t expect to ever randomly win second place in a beauty contest) and the inevitable things ($75 Luxury Tax).

There is a reason Monopoly has been popular for 80+ years. The game is competitive, as is life. ‘Getting ahead in life’ is part of life. Whether it’s trying to get promoted, pay the bills, or Quit Your Job, Monopoly is the early childhood education in doing so.

And for all the realism in Monopoly, there’s always one thing that never happens:

The Other Side of $15 Part 2

“Don’t go around saying the world owes you a living. The world owes you nothing — it was here first.”

Mark Twain

This is the second part to an on-going series. If you haven’t read Part 1 yet, you can do so here.

I never intended to continue on the topic of $15 per hour, but after publishing Part 1 a few weeks ago, I continue to see it come up everywhere. I also found some additional points worth mentioning. Part 1 didn’t really give a conclusion, but the results of the thought experiment showed that there is no economic basis for $15 per hour minimum wage and that there are unintended consequences as part of it.

New York City continues to be a battleground for $15, with some economic reports stating that the increase of minimum wage to $15 this year making the case that it has caused restaurants to thrive, while others — including the government’s own Bureau of Labor Statistics (BLS) — to show a negative impact.

So which is it?

The New School and National Employment Law Project (NELP) wrote a joint report this month claiming they found a “thriving industry” despite the recent forced increase of minimum wage: “The New York City restaurant industry has maintained substantially faster job growth than the private sector overall in the years since the State minimum wage rose in phases from $7.25 an hour at the end of 2013 to $15.00 at the end of 2018.” However, in reading the report I found this statement on the same page of the executive summary: “This report does not suggest that New York City’s sharp minimum wage increase caused restaurant employment to soar—the more rapid restaurant employment gains likely are due to the city’s faster private job growth.”

So it didn’t hurt employment, but $15 per hour is not the catalyst for the industry to be “thriving” as Business Insider would lend you to believe (citing the same joint report as above). It appears some publications jumped on the report as “proof” a $15 minimum wage is good for business. I’m sure Bernie Sanders would agree with them.

Other reports aren’t so rosy about $15 in the Big Apple. According to the Foundation for Economic Education, New York City has lost 4,000 jobs in the restaurant sector this past year. The article included this Bureau of Labor Statistics chart showing a negative percent change in NYC restaurant employment:

In addition, according to an NYC Hospitality Alliance survey taken only a month after the $15 per hour bill took effect in New York, restaurants immediately started cutting employee hours afterward. All overtime work was halted also. The survey queried 574 establishments in New York City and found:

76.50% of full service restaurant respondents reduced employee hours, and 36.30% eliminated jobs in 2018, in response to mandated wage increases.* 75% of limited service restaurant respondents report that they will reduce employee hours, and 53.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018.

*In 2018, NYC also raised the minimum wage to $13 per hour from $11.

In addition, 87.3% of respondents report they will increase menu prices in 2019 as a result of the wage increases; 60.8% reported their food and beverage menu will be “reworked” in response to the increases; and 34.4% of respondents told surveyors that their repeat customers were dining at the restaurant less frequently than before the mandatory increase.

Graph showing 2019 impact on Full Service Restaurants from the same Hospitality Alliance survey
Graph showing 2019 impact on Limited Service Restaurants from the same Hospitality Alliance survey

Remember what happened to my fictional restaurant in Part 1 of this series? Once my payroll costs were increased 106%, it became a struggle to maintain employment and retail the cost of my hamburgers. Working hours had to be cut, which impacted operations, and the only other choice was to raise the cost of the hamburgers (by more than double), which threatened repeat customers. The findings by the Alliance show that my thought experiment was essentially correct, with real life results matching my fictional ones. The result is the same: increased menu costs and cut hours eventually lead to eliminating jobs.

There’s plenty of other recent articles criticizing the negative impact of the $15 wage increase from the New York Post, Business Insider, National Interest, and the Wall Street Journal. According to the Seattle Times an “upscale” restaurant chain in the city is blaming increased wage hikes for their bankruptcy filing, showing an increase of $10.4 million in additional labor costs.

Overall, the results haven’t been promising. If it is hurting high cost of living cities like Seattle and New York City, I imagine it would be devastating to cities like Buffalo, New York or Omaha, Nebraska — two cities with the lowest cost of living in the U.S. I can’t even imagine the struggle restaurants would have keeping up here in Pittsburgh.

One of the biggest problem with a national $15 per hour minimum wage is that its national. Cost of living fluctuates wildly throughout the 50 states, as evidenced from this U.S. Bureau of Economic Analysis data. An article from USA Today broke it down in easier to read terms (ever tried to read a government economic report?). In Mississippi, a dollar’s worth is actually the highest — equivalent to $1.16. That means that $1 will buy $1.16 worth of goods and services there. The lowest worth (predictably) is Hawaii, where $1 will only purchase $0.84 worth of goods and services. California and New York, two of the biggest advocates for $15 minimum wage, each buy only $0.87 worth. By comparison, your dollar bill is 25% more valuable somewhere like Mississippi or Ohio ($1.12).

So while $15 minimum wage is less disruptive when the dollar buys less, imagine the economic impact in a low-rent city. Prices absolutely must spike to accommodate such a (relative) large increase in labor cost. Cost of living will be forcibly dragged upward, disrupting the entire local economy as locals cannot afford to eat out or do the things they used to do. I can’t imagine that small, rural economies can support a $15 minimum wage either. I suspect it’s the rural areas and lower cost of living cities that have kept the federal minimum wage down, as they cannot cope with a higher one.

For example, in Pittsburgh we have a restaurant chain called Eat’n Park. There are quite a few of them, serving breakfast, lunch, and dinner. Some of them are also open 24 hours. Most dishes are in the $8-$12 range. According to Glass Door, almost all employees in the restaurant have wages that range from $4 per hour (server) to $10 per hour (dishwasher, cook). The store manager, on average, earns a $43,000 per year salary. If $15 per hour were implemented, that’s a 4x increase in server’s pay alone. Everyone in the restaurant (save the manager) gets a significant pay increase. If menu costs are increased to offset the huge wage changes, I guarantee you business will go down. Eat’N Park is very popular with the senior citizen crowd, most of whom are on fixed incomes (which is why they eat at Eat’N Park). Fixed income senior citizens are not going to be willing (or able) to pay the increased costs.

$15 per hour minimum wage is in no way a one-size-fits-all solution.

So why are big box retailers like Walmart advocating for $15 per hour minimum wage? Wouldn’t that hurt them having tens of thousands of employees? I’ll go into detail in the third and final part of this series. Stay tuned!

Required Reading: 5 Takeaways From Before You Quit Your Job

Robert Kiyosaki has written a lot of books. I lost count somewhere in the teens. But when I saw this one on Amazon, I thought it would be perfect to review for this blog. It is, after all, about Quitting Your Job and what you need to know before doing so. I’ve talked about Kiyosaki in blog posts before, so this was a match made in heaven.

I wasn’t sure what to expect. Kiyosaki can be hit or miss. Some of his books I’ve given up on as they’re regurgitated bits from his other books or from talks he’s done. There was nothing new. (Critics are saying that’s all his new book Fake is: rehash) But I wanted to read this one just for the sake of this blog, so I took it head on. Plus, it would be interesting to see what he said after I’ve already Quit My Job. Would I agree? Did I quit my job the way Robert Kiyosaki says to?

The book can be summarized thusly: If you want to start a business so you can quit your job, you must make sure you have X, Y, and Z. That’s it. The rest is padded by life lessons and anecdotes. I was able to finally quit my job because my business grew to the point where I needed to devote myself to it fully, and didn’t need the day job paycheck to survive. The one thing I noticed was that my business DID have X, Y, and Z and we’re now bigger and doing more business than we ever have.

Point for Robert.

So here’s five takeaways I got from Before You Quit Your Job:

#1. What is an Entrepreneur?

I consider myself and entrepreneur. Not only because I built a business, but because I believe if you’re an independent filmmaker, you’re an entrepreneur. So how does one define the word? It’s tricky, and with the explosion of “start your own business” or “think like a business person” channels on YouTube or accounts on Instagram, the word entrepreneur is being thrown around quite a bit. Seriously, look up entrepreneur on YouTube and look at what you get: talking heads telling you how to build a successful business and quit your job to be an entrepreneur. But can any of them actually define the word?

Kiyosaki gives entrepreneurship the best definition I’ve ever seen (crediting Harvard professor Howard H. Stevenson): “the pursuit of opportunity without regard to resources currently controlled.” This also works flawlessly to describe an independent filmmaker. But that’s what an entrepreneur is — you see an opportunity and try to make it real, cash or resource or skill be damned.

My own personal experience fits right into this. I first identified the opportunity — a ‘Need’ — before I had the means or plan to fill it. But it was identifying it that set me on my path. I Quit My Job (the first time in 2014) setting off to build something to meet that need. Before I knew it, I had three business partners and the foundation for the company was being built. I didn’t have that before I left.

When I made my first film in 2012, it was the same thing. I had a script and a desire to make a movie. I didn’t have the money or the people yet. I had to seek them out. I built a team. We raised funds. I found money by selling stuff I owned or holding out my hat.

If you’re going to Quit Your Job, you’re going to need a business. And to start a business, you need to know just what an entrepreneur is.

#2. The Power of Excuses

Kiyosaki spends a small section confronting excuses. To quote: “Any two-year-old is an expert at making excuses. The reason most people who want to become entrepreneur remain employees is that they have some excuse that keeps them from quitting their job and taking that leap of faith. For many people, the power of their excuse is more powerful than their dreams.”

It happens all the time. Someone I know works a day job but has a dream to do something else. I always get excited hearing about what other people dream to do; I talk it up, start to ask them what their plan is to get there. Like clockwork, the excuses come out. Kiyosaki even lists the most common:

  • “I don’t have any money.”
  • “I can’t quit my job because I have kids to support.”
  • “I don’t have any contacts.”
  • “I’m not smart enough.”
  • “I don’t have the time. I’m too busy.”
  • “It takes too long to build a business.”
  • “I’m afraid. Building a business is too risky for me.”
  • “I’m too old.”

It’s like nails on a chalkboard. Excuses are what cause dreams to die. Imagine the amount of art, ideas, inventions, or technologies that we’ll never see because the person with the idea has an excuse.

Kiyosaki later gives a recap of a sit-down with a woman who was struggling after quitting her job to start a Network Marketing company. She took the leap and started the business. But, after 6 months, things were going terribly. Things were going terribly not just because she didn’t know how to sell but she refused to learn how to. She didn’t want to commit to new behaviors to make the business work. Even worse, she only wanted to work a few hours per week. Her excuses were different than the ones listed above, but they were still excuses: “I don’t want to.” She quit her job to start a business so she could work a lot less and make more money. So she failed at her business.

#3. The B-I Triangle

Kiyosaki loves his trademarked shapes and drawings. The CASHFLOW Quadrant is one example. The other is the B-I triangle shown in this book:

The B-I triangle, borrowed from and I make no claim to ownership!

Simply put, for a business to survive and grow, you must have the five components and surround them with your business’s team, leadership, and mission. Kiyosaki gives the example of his early successful business, the surfer wallet company Rippers started in the 1970s. He didn’t have a legal component to his business and Rippers was brought down by competitors.

I look at the B-I triangle and compare to my own business. We cover all five (it helps that one partner is a licensed lawyer!) and we’re still in business five years into it.

I could break down each component, but it would take forever in this post. If you’re interested in reading more, pick up a copy of the book here and dive in. Just know that if you’re looking to build a business to Quit Your Job, it needs to have these bases covered. You’re going to need some sort of legal component (if anything to handle the mountain of paperwork involved with properly filing a business with state and federal governments!); an accountant (‘Cash Flow’) to help with taxes and expenses; marketing and sales (“Communications”) to get the word out about your “Product” (in our case, “service” is our “Product”); lastly, another word for “Systems” is “Network.” You need a network (How are you going to get your product out there? How are you going to get your product made? Packaged? Shipped?)

The other important point here is, if you’re going to grow your business and be successful it takes a team. You cannot try to be proficient in all five components — it won’t work. It’s best to focus or be strong in 1-2 of them and build a team to handle the rest. This is how we did it. I was the Product. One partner was Legal, the other was Systems and Communication. I brought in an accountant to handle Cash Flow. Yes, there are costs to building out the team. But you need to have them or it will all fall apart. If you’re flying solo, you’re going to need to hire a team around you.

One thing Kiyosaki doesn’t mention is that this B-I triangle also denotes the best way to grow. When you have a team in place, you’re not limited by the amount of hours you alone can physically work. A team shares the load, and a team can always be expanded. Think of Apple: Steve Jobs and Steve Wozniak started in a garage. They had a Product (and to some extent Systems). Apple is now huge because it’s not two guys in a garage hand building computers. There’s an entire Legal team. An entire Communications department to handle marketing and sales. Systems is now a network of factories in Asia and Europe building and shipping products.

#4. Working For Free

This section echoes the one with the failing network marketing business woman Kiyosaki met with. It is also one of the most important takeaways from the book. If you are good at your job in sales, that doesn’t mean you’ll have a successful sales business. Becoming successful means “working for free” a lot of the time.

“Working for free” is Kiyosaki’s Rich Dad euphemism for taking the time to practice or learn something without getting paid for it. The examples he uses are doctors (would you want someone who JUST quit their job to become surgeon to operate on you?), professional athletes, and even The Beatles.

“Even The Beatles worked for free before they became world famous and rich. Like the medical doctor or professional, they paid their dues. They did their homework. They did not ask for a guaranteed record contract, a steady paycheck, or medical benefits before they began practicing.”

The point is, you need to learn on your own (without getting paid) to build up your business and make it successful. If you have an idea for a great product, people aren’t going to buy your product if you’ve never made it before. Or tried it. Or even tested to see if it works. Part of the process of building your business is to spend the time learning it before you charge for it.

#5. The Entrepreneurial Process

It’s not as simple as, “I’m starting a business and then quit my job. My business will support me.” I tried it, and it didn’t work. When I quit Apple in 2014 to start my company, I expected enough money to come in early to not have to get a day job again. In six months I was filling out applications. Why? Maybe my goals were unrealistic. Maybe I didn’t appreciate the process enough of building a business. Or maybe I just didn’t know what I was doing yet.

In retrospect, what it really was was it took time. We had our B-I triangle intact. We were in a market space with little-to-no competition. But we had a lot of ground to cover — including failing. As Kiyosaki puts it, “since a new entrepreneur is creating something out of nothing, it is obvious mistakes will be made. In order to succeed, a new entrepreneur needs to be committed to going through these steps as soon as possible.”

  1. Start the business.
  2. Fail and learn.
  3. Find a mentor.
  4. Fail and learn.
  5. Take some classes.
  6. Keep failing and learning.
  7. Stop when successful.
  8. Celebrate.
  9. Count your money, the wins and the losses.
  10. Repeat the process.

I didn’t officially Quit My Job until #8. My business partners and I just hit #9 these past few weeks with the largest contract we’ve ever had. It’s not easy starting a business, and you must appreciate it takes time before you can Quit Your Job permanently. The failures are rough. You’ll want to quit. You’ll question why you’re doing it. But if you keep going, the successes will start to keep up with the failures.

If you’re going to Quit Your Job by building a business, you will not be able to quit your job right away. It took five years of working at it until I was able to finally quit. And even then, I wasn’t really prepared to quit. But my business reached a new peak that required my full time and that told me it was truly time to Quit My Job.

Quick Update

A big THANK YOU to all of you who have visited and followed this blog!

I’m happy with the progress of the first three months or so, and I hope that the reading has been worthwhile. I have plenty more ideas for posts (and books for Required Reading segments!) but if there’s something you’d like to see a post on feel free to request it.

The blog continues to have a rather vanilla look to it, which I apologize for. WordPress is a great platform, but I haven’t unlocked all the amazing features just yet. My goal is to get to 100 posts then pay for upgrades and give the whole thing a visual overhaul.

In the meantime, stay tuned for future posts!