Investing in the Giants

Yeah yeah, gambling is not investing.  But at the rate my investments are going lately I am beginning to think I have a better chance of making some SlugMoney by gambling on sports.

My mutual funds were down almost 10% in January. I made $0.00 from my Internet endeavors in January. I have not had one offer on a house even counter-offered let alone accepted in January. But…

The Giants are getting 12.  I got $200 that says they’ll do it.  Either way, it makes the game a little more interesting. Maybe with a little luck I can turn things around in February.

Happy Superbowling. Go NY!

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Mortgage…To Pay Off or Not To Pay Off?

I am currently reading the book Trump University: Wealth Building 101 supposedly edited by “The Donald” himself. I feel like such a sucker reading this book. When I picked it up from the library I got the exact same feeling that I get when I get sucked into visiting tourist traps while on vacation…like I’ve once again fallen for cheesy marketing and commercialism. Oh well.

However ashamed I feel for reading this, I must say it has some excellent tips from many experts in various fields. This is the book that inspired me to start my Financial Roadmap and to really take a look at my current Income, Expenses, Assets, and Liabilities.

One of the strategies this book recommends is to put 10% of Gross Income toward debt including your personal home mortgage. It says to get rid of debt as fast as possible. I am in a position to do this but it goes against everything else I have come across.

Example:

Gross Income - $100,000
30yr Fixed @ 5.5%
Mortgage Debt - $112,000
Suggested extra payment toward principal $833/m ($10,000/12)

Pays off house in about 12 years.

Doesn’t it make more sense to put that money into an investment yielding 10% ???

I know I could use some online calculator to figure this out but remember this is SlugMoney and I am lazy.

Any thoughts?

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My Roadmap to Wealth

I spent a lot of time this week getting my finances in order, looking at my stock portfolio, and updating my budget. This inspired me to go the extra yard and finally put my long-term financial goals an steps to achieve them, down on paper…er, blog. So here it is (and as always, a work-in-progress):

SAVINGS/CASH

Maintain 6 month Emergency Fund

INVESTMENTS

Maintain an average ROI of 10% or more utilizing:

Tax Free Retirement Accounts

• Roth IRA - Maximum payment every year (now $5000)
• 403b - Currently add $10,000 - could do more but want more money to try other investments this year (RE, eBiz)
• Taxable Mutual Funds - Add anything extra. I currently automatically put in $200/m for kicks.

Real Estate
My goal is to Lease Out Single Family Homes w/ an Option to Buy in 2yrs for ROI of at least 25%
2008 - 1 house
2009 - 1 house
2010 > Purchase 2 properties for each I sell

Online Businesses
2008 - Start an online biz that generates $500/m in profit.
(attempt 1 failed but I learned much)

A great quote I read recently (sorry, don’t remember where or who):
“The most successful people are the ones that fail the most”
- just don’t fail the same way twice.

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Is Now a Great Time to Invest in Real Estate or What?

Or What.

So as I said before, the reason for this blog is show the world how inept I am at creating streams of income that are supposed to catapult me towards financial freedom. Obviously one of the most hyped ways to get rich quick is through real estate investing. We’ve all seen those Carlton Sheets commercials at 3 in the morning. I have to admit that I have always been interested in real estate. I mean it just has to be the fastest way for an average person to grow a large nest egg…doesn’t it?

For the last year I have been reading everything I can get my hands on about real estate investing and have even purchased a few courses. I could honestly probably write my own book on how to do different real estate investing techniques. The thing is, I still have not done one single deal! I haven’t been sitting on my but either. If anyone every tells you that investing in real estate is easy please slap them for me. (Note to Self for Later Post: The Trials and Tribulations as a Newbie Real Estate Investor)

No matter how hard I try to give up this addiction I have with REI, I just can’t shake it. I have read about and seen first hand too many people who have made money doing it. I am not one to give up very easily so I “walk on”.

So is this a great time to invest? Absolutely! Buy Low Sell High. There are some good deals out there to be had but it just seems that with every good deal I find, 5 other people already know about it and offer more than I am willing to pay. Even in this slow real estate market which it supposed to have scared away most investors, the pros and full-timers are still out there gobbling everything up!

I am on a mission to make money this year from REI. I read somewhere that to find a good deal you have to look at 100 houses, make 30 to 40 offers, and you might get one! I have made a total of 10 offers so far. All rejected of course. I’m beginning to think I purposely make such ridiculous low-ball offers because I’m scared about actually having one accepted. It turns out that real estate investing is not exactly SlugMoney. It actually takes a lot of time and effort. But like I said…I’m addicted to the challenge of making it work so I push on.

If you have any suggestions for me or are in a similar situation please join the conversation. Until next time…

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My First Attempt at an Ebiz (Part 2)

OK, so maybe using the word “successful” in the title was a little misleading. But I promise you that at the time I thought starting a “successful” eBusiness was going to be easy.

So as promised, here are my current Adwords numbers for my product test last week.

Now what does all this mean? Well, out of the 303 clicks I received, I actually made 3 sales with a gross income of $180 ($60 profit per sale).

Was it successful? 3 sales from 303 clicks is a 1% conversion. Not bad, about what I expected. So in terms of my website and sales copy…a success. But obviously as a whole, this ad campaign failed. I spent WAY to much money getting 303 people to my site. With the ads costing me $330 and making only $180, this business is losing money hand over fist. $150 in the hole.

What was the problem? Obviously my cost per click was way too high at $1.09. I realized quickly that if I want to turn a decent profit, my cost per click is going to have to be down near $0.20. So after a few hours of playing with my campaign settings, adgroups, and max bid per click, I thought I had it tweaked to where it would work. I let it run another 5 days and my cost low CPC of $0.22 made most of my keywords inactive. I ended up not being able to pull in the traffic that I needed for the business to succeed. Oh well. At least I gave it a shot. I have hopes of trying one new business a month this year in hopes of hitting on a winner. I’ll keep you posted.

Has anyone else made any attempt at an Ebiz using the 4-Hour Work Week method?

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My First Attempt at an eBiz

First off, if you have not yet read The 4-Hour Work Week, stop right now, read it and come back. The entire book it great but concentrate on the “Finding Your Muse” and the rest of the online business related material.
Welcome back!
My general understanding of author Timothy Ferriss’s methods are as follows:

1. Find a Niche Product - This is the hard part. Pick a general area that you enjoy and then really narrow down an audience that you can specifically market to. To do this, after writing down a few ideas you can use keyword tools such as Yahoo! Ovature, Google Keywords and WordTracker to see if the search volume on your keywords is high enough to support a profitable ad campaign. The basic rule of thumb using google Adwords is that about 1% of ad impressions shown on Google search results and its content network will result in clicks to your site. Out of that 1% of unique visits to your site, about 1% of people will buy your product. These number can fluctuate a lot obviously depending on how well you researched your niche product, the competition, and your sales copy on your website.
2. Test Your Product (No Need for an Actual Project to Ship Yet) - There are 2 ways to quickly and cheaply test if your product will sell and at what price.
   • Option 1 - eBay
     

     Write up a 300-600 sales copy for your product that entice people to buy. Put it up as a short Ebay auction and see what people would pay for it. Near the end of the auction, you must cancel the auction! Remember, you still don’t have an actual product to sell to someone if they win so make sure you cancel it. If you are not comfortable with this, go to option 2.

   • Option 2 - Google Adwords
     

     Set up a mini 1-3 page website to test product sales. Page 1 has your sales copy. Page 2 has a form to collect the Buyer’s information. I have them fill out their shipping and contact info with a button that says something like”Next => Billing Info” If they click this button then you can presume that this person was a sale. Page 3 is a simple page thanking them for their interest in your product but due to high demand the product is currently onback order.

     Now, Sign up for Google Adwords and and create a campaign. I am not an Adwords expert so you will have to go elsewhere for tips on how to do this effectively. Your goal is to run the ad campaign for about 5 days. The cost per click (CPC) will vary depending on your keywords, probably between $0.20-$1.00. Remember that if you need about 100 clicks to get 1 sale then it will cost you about $20 (at a low $0.20 CPC) to make a sale. That is why Tim Ferriss suggests a product that sell for 8x-10x cost between $50-$150. This should give you enough advertising room to turn a decent profit. Use Google’s conversion tracking within Adwords to track your sales.

     Run your Adwords campaign for about 5 days. Tweak your ads, your max bids, your keywords. Test a little more.

In Part II, I will go through the numbers I got from my first test business to see if to see whether or not my idea will fly.

To be continued…

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Welcome to SlugMoney!

Calling all lazy wannabe millionaires! Welcome to SlugMoney. Here I will share my experiences in my quest to becoming rich by doing the least amount of work possible. Join me as I explore the hype of making easy money as I jump into the world of real estate, online business, and network marketing. Can an average guy like me actually use some of the overly promoted methods on the internet to make real money? We will see, but I sure hope so.

A little bit about me…I am currently 31 years old. Married (no kids yet which is why I have some extra time on my hands). I work full-time as a middle school teacher but have always made a little money here and there trying new things on the side. I have decided to make 2008 my year of new business and investments. My goal is to build up a few small businesses that will give my wife and I enough cash flow to replace my wife’s income if she ever decides to quit her J.O.B. when the babies start popping out. My goal is also to limit the amount of time I have to personally invest in order to keep the money rolling in. I want to build these automated streams of income that I keep hearing about!

I am going to make an attempt at becoming a mini Robert Kiyosaki. I agree with Kiyosaki’s whole Rich Dad, Poor Dad philosophy of making your money work harder for you, not you working harder for your money. Own a business, don’t work in one.

I also love The 4-Hour Work Week by Tim Ferriss. I will be following his guidance and trying to make my own little online ATM machine by finding a niche product to sell online. I have actually already made my first attempt at this and will have all the details for you soon. I have a goal of 5 - 10 products this year using his methods. One of them has got to hit, right?

Let’s see, what else??? Oh yeah. I am also really going to try to take a shot at the real estate game this year. I am going to try to both wholesale houses and keep some to lease option. I have spent a lot of time and money educating myself on many real estate methods and these are the methods which I feel are right for me. I will also be reviewing many of the books, eBooks and courses I have read. I will summarize the info the best that I can to give you the nuts and bolts of various “guru’s techniques”.

So this is the direction I am headed. I dream of working hard in 2008 so that in 2009 and beyond I will be raking in the SlugMoney! I hope that on this journey I can make you either laugh at my pathetic attempts or motivate you to start something successful…keeping the maximum effort to a minimum, of course.

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