Gratitude

Arthur Brooks is the head of a conservative think tank, but his NYT op-eds have been tending in a decidedly Buddhist direction the past year or two. Today, he shares a byline with the Dalai Lama.

Excerpts:

Everyone has something valuable to share. We should start each day by consciously asking ourselves, “What can I do today to appreciate the gifts that others offer me?”

Leaders need to recognize that a compassionate society must create a wealth of opportunities for meaningful work, so that everyone who is capable of contributing can do so.

6 financial facts would-be entrepreneurs need to know

Photo of an empty wallet with an IOU slip inside

So you’re considering quitting the rat race and becoming an entrepreneur — congratulations. Whether you’re working on a killer startup with a few pals or embarking on a career of self-employment, you’re about to discover what life is like when you have maximal control.

In many ways, it’s awesome. I’ve been self employed, running Tweney Media, for a bit more than a year. It’s not my first rodeo: I was a self-employed freelance writer for about 4 years from 1999–2003. Self-employment is way better now than it was the last time, mostly because of the internet, which gives me access to a kind of social interaction that was difficult to come by in the early 2000s. So, it’s less lonely. It’s also easier to network, find new business opportunities, work with people around the world, and to educate yourself.

Self-employment and early-stage entrepreneurship is also an excellent exercise in self-determination. You realize that everything you do has meaning. If you find yourself doing bullshit, you can just stop. Do something else that’s meaningful, or makes you money, or both. If you find yourself working with assholes, you can stop. Life’s too short. Find different partners or clients. If you have an idea for something amazing, you can do it. Why not? You’re an entrepreneur! This attitude leads me to new realizations about my life, the world, and how they intersect almost every day. I have never felt more awake.

But to be successful you’re going to need to know a few things about financing a life of entrepreneurship. I’m not going to give you the usual crap advice: “Skip the $3 lattes at Starbucks.” If you’re drinking so many lattes that it’s impacting your finances, you have a serious caffeine and foamed milk addiction and you may need medical help. No, the real issues facing you are much more serious: Health care, debt, taxes, and housing are all extremely expensive. Cash flow is a bitch. Doing accounting is necessary and hard. And, unfortunately, the U.S. economic system is not going to help you with any of those. In fact, you could say that the U.S. economy actively discourages entrepreneurship.

Here are some things you need to know if you’re considering becoming an entrepreneur.

Health care will fuck you.

Seriously, the U.S. health care system is a travesty. It is the opposite of a functioning free market: It’s a completely opaque market where you don’t know what you’re buying, you don’t know what it will cost until you get the bill, and you can’t compare options. This is as true for a band-aid in the hospital as it is for the insurance that supposedly covers it. And insurance costs more, and covers less, every year. The result: Everything is insanely expensive.

This is not just an Obamacare problem. This is far deeper than that. And even with employer-sponsored health insurance, you may already be spending tens of thousands of dollars on uncovered health expenses. If you’re self employed, it’s just that much starker.

As an example, my family of four in California spends $20,000 a year on insurance, and about as much again on uncovered health care costs. And we’re fairly healthy people. (So far.)

Credit cards will fuck you.

You’re not going to get VCs to back you at first unless you’ve already had a successful startup under your belt. Banks won’t loan you money unless your business has several years of records to show. Unfortunately for you, you’re going to need to fund your business out of your own pockets. Unless you’ve built up a big nest egg, that probably means credit card debt. Once you have it, credit card debt is very hard to get rid of.

Granted, if you have good credit, you can take advantage of low-interest-rate offers and turn credit card debt into very low percentage loans. Pay attention to when those offers come up and how long they last, and you can move the debt around as needed to keep the rates insanely low (for now). That’s a reasonable way to fund your business at first. But just remember, it’s still debt. You need to pay it back. And as long as you’re paying it off, that adds to your monthly overhead.

Housing costs will fuck you.

Especially if you want to live where the opportunities are, like Silicon Valley/San Francisco, or New York, or someplace else where there are creative people doing interesting things and investors fueling companies that might want to pay for your product or services. But housing costs are insane in these places. A 2-bedroom rental in SF or the East Bay goes for $4,000 a month these days. If you have a family, you’re going to be paying. A lot.

Taxes will fuck you.

I’m not talking about the tax rate, but about the process of paying taxes as a self-employed person. You will need to make quarterly estimated tax payments. That means every three months you need to estimate how much money you’re likely to make for the whole year, calculate approximately how much of that will be taxable, figure out what your estimated total tax will be for the year, and then based on that figure how much you ought to pay this quarter so your four quarterly payments wind up being pretty close to the correct total. And then write a check to the IRS. A big check.

Cash flow will fuck you.

In order to write that check to the IRS (and your monthly rent or mortgage check, and your medical bills, etc) you will need to pay close attention to your cash flow and ensure that you’re saving enough money from whatever you’ve got coming in so you make all those payments when they come due. If you don’t manage your cash flow intelligently, it’s entirely possible to go completely bust even while you are making great money. That’s because it always takes the money longer to come in than you expect it to, especially if you have a service business that involves invoicing people. (This is a strong argument for building a SaaS business where you get recurring monthly revenues without having to send invoices, btw.) Some months the incoming cash will be great. Some months it will be terrible, or zero. You need to plan things out to deal with those lumps. And that brings us to accounting.

Accounting will fuck you.

I would be lost in this whole process if it weren’t for my wife, who is also our CFO. She spends hours with spreadsheets figuring out the optimal tax strategy, the optimal health insurance choices (modeling different policies against what we actually use), figuring out our cash flow, and making sure bills get paid on time. It’s an enormous job that she spends many hours on every week. If you aren’t lucky enough to have a partner like this, you’re going to need to do it yourself, or pay an accountant.

Oh, and by the way? Mint is useless for most of this. There are no financial management systems out there that accommodate self employed people’s needs, such as budgeting for uneven cash flow. As far as I know, there’s no financial management system that can deal with the need to manage significant credit card debt either. If you are self-employed, your finances are more complex than most, and you need to do most of the work manually. Google Sheets is your friend. (Update: a friend tells me that You Need a Budget, aka YNAB, is designed for helping manage credit card debt.)

Accounting may be a pain, but you need to do it. The amount of expenses involved in being an entrepreneur — just to stay alive and keep a roof over your head — are not trivial. The complexity of managing those expenses is a pain. But there are significant opportunities for savings if you’re willing to dive in. Just remember that diving in will take a lot of time, or money, or both.

Like I said at the top, entrepreneurship is great. I’m happier than I ever have been in my career, and I’m building a growing business that is starting to generate work for other people too. I’m making more money (on a gross revenue basis) than I ever earned in a day job. I love the flexibility and the self-awareness. I am proud to be supporting my family.

But it is financially challenging. It takes a lot of determination to fight into the headwinds like this. If you’re considering going independent, you need to know what you’re getting into.

Happy Sukkot.

Today I learned about Sukkot, the Jewish holiday celebrating agriculture and … living in huts? As I was walking up to the pool today I saw a U-Haul pickup with a big wooden structure on the back of it. Coming around, I saw it was open to the back, and there was a semicircle of folding chairs facing the back of the truck. “Putting on a show?” I asked the man standing inside the hut. No, he said — he was there to celebrate the holiday with a few Jewish students from the high school. He was still waiting for them to arrive when I walked by. His hut, I learned, is called a “sukkah,” though I am pretty sure I am both spelling it and pronouncing it wrong. I think I’ve seen them before, but never on the back of a pickup truck, and I told him so.

“Are you Jewish?” he politely asked me, though I’m pretty sure my total ignorance gave me away. “No,” I said. “Well, happy holidays!” he said to me. “Happy holiday to you too,” I said. And off I went to swim.

My takeaway: There is always more to learn about Judaism. And there is no end of useful things you can do with a pickup truck. crossposted from Facebook
October 19, 2016 at 02:48PM

The South End Rowing Club (review)

The South End (aka SERC) is one of two swimming-rowing clubs that share a building in Aquatic Park, right next to Hyde St. Pier. It’s a terrific group of welcoming, fun-loving people who are into all things aquatic. What’s more, it’s a San Francisco institution, dating back to 1873. Serious history here! Visitors are welcome for a day use fee of $10. Membership is about $400 for a year, which is an incredible deal.

For occasional bay swimmers, the chief attractions are the warm showers and toasty sauna. But once you join, the real benefit becomes clear: It’s a welcoming community with incredible depths of knowledge about the Bay and a willingness to share their experience with any and all.

If you’re have trouble telling the difference between SERC and the Dolphin Club next door, here’s my take:

– SERC’s building is a bit “saltier” (though a new wing is under construction). The Dolphin Club has a prettier interior, with lots of wood paneling and more of a “clubhouse” feel.
– SERC members tend to be a little more wild and fun loving; Dolphins are more concerned with rules and tradition.
– SERC organizes more swims outside the cove (i.e. outside Aquatic Park).
– SERC has a vibrant handball program. I don’t think the Dolphin club offers this.
– SERC was founded by Irish Americans; Jameson’s whiskey often shows up in the sauna after swim events. Dolphin Club was founded by German Americans and doesn’t allow drinks in the sauna.
– It’s easier to join SERC. Dolphin Club only accepts members at specified times.

Both of them have tons of members who are into swimming in the Bay (both with and without wetsuits, but mostly without), kayaking, rowing, and running. Both have excellent athletes in all of those sports. Both have good safety records and take care to run their events responsibly.

I’m biased, as I’m a South End member — but then, I joined because the Dolphin Club wasn’t accepting new members and I didn’t know the difference anyway. Over time I’ve realized that I was lucky to join the group that suits me best. But at the end of the day, both clubs are great stewards of the Bay and Aquatic Park.

crossposted from Facebook
October 17, 2016 at 09:21AM

The cyber

As you start your day, remember that there are so many things we have to do better, and cyber is one of them.

 

Swimming, cold water, and a bunch of awesome veterans.

I was a kayaker this morning for a group of veterans swimming from Alcatraz to SF. It was a great morning… Beautiful, flat water, warm… And a bunch of men and women hauling ass through the water. Including guys missing limbs but swimming just the same. It was pretty cool.

Before the swim I was talking with a vet about the virtues of cold water. In addition to its beneficial effects on the immune system, blood thickness, endorphins, and testosterone levels, I pointed out how cold water swimming really settles my nervous system down. It calms me and levels me out. Now I don’t have PTSD, but the guy pointed out that this effect might be really beneficial for combat veterans, many of whom have stress through the roof. Pretty interesting thought.

He was a photographer for the swim, so he rode in a boat. But he’s thinking about doing the swim next year.

 

crossposted from Facebook
September 25, 2016 at 07:38PM

Minimum entrance requirement

I got invited to join an elite networking club on LinkedIn. Unfortunately the entrance requirement was a net worth of $10MM+. I told the guy I’d been a journalist my whole career, up until last year, so it might be awhile before I qualify.

crossposted from Facebook
September 22, 2016 at 10:50AM

Swim gear

I seem have a real talent for losing swim gear. In the past year I’ve lost two pairs of goggles by dropping them in the surf, one set of fins by leaving them behind in the locker room, a pair of sandals left behind in the locker room, and countless little bottles of body wash. Plus I’ve nearly lost swim trunks, towels, and other things that have turned up in lost & found. Is this an unusual skill, or just part of the swimming life? I have no idea.

 

crossposted from Facebook
August 19, 2016 at 08:31AM