Want To Be Rich And Happy? You NEED To Know This…

I’m going to share something with you today that you really need to understand – on a gut level – before you can be rich and happy. Are you ready? Here it is:

Even if you learn ALL there is to know about money (how to make it, save it, invest it), if your relationships with others OR YOURSELF are dysfunctional, you will NEVER reach your full abundance potential.

Years ago, I used to bitch, moan and complain with certain people because it seemed to bring us closer together. Misery likes company, so I sometimes feigned misery so these people would like me. I didn’t want to make anyone feel jealous or envious either, so I talked myself down. It seemed so PC (politically correct).

I learned the hard way that this didn’t do anyone any favors. I curbed this behavior… and I grew wealthy and happy.

I hear from these certain individuals now only when something difficult is occurring in my life. When I’m all smiles and gratitude, I rarely hear a peep from them.

Similarly, a reader suggested that I make some people feel depressed by expressing my satisfaction, gratitude and happiness. He/she said that I should express more humility instead.

Perhaps my blog’s traffic would increase if I discussed the mess my past bookkeeper made of our financial records (and the subsequent late report penalties), the slow down of our construction business during the Great Recession, the exhaustion I feel after two back-to-back colds, or the disturbing mystery behind a missing in-law. We all know that bad news sells. The media is full of tragedy, fear and despair because it works to increase circulation and readership.

But I don’t want to write about bad things, even if it would drive my blog’s traffic to new heights. Sure, bad news sells, but I don’t want to invite that kind of attention. If I focused on hardships, I’d feel like a car wreck on the side of the highway – the type that drivers can’t help but slow down to gawk at (even though we know we’ll get grossed out). I’d be attracting negative thoughts into my mind and people that choose to focus on negativity into my life. No, thanks!

I write to express myself and to share the steps I take to live a fuller, richer, happier life. By doing so, I actively practice my intentions and keep aligned on what is important to me. It brings a higher caliber of relationships into my life, and it gives me the strength to deal with the occasional curve ball thrown my way.

Here are some of the valuable lessons I’ve learned through the University of Hard Knocks:

We become the company we keep. Like attracts like. Be negative and you’ll attract negativity; be positive and you will attract positive relationships into your life.

Limit your exposure to toxic people. We all have them – friends, family or co-workers – that seem hell-bent on bringing us down to their level.  Immunize yourself from their poison by maintaining healthy personal boundaries. Don’t be a martyr, learn to say no. When someone near you behaves badly, don’t engage with them — walk away if you must. Be a positive role model instead. Perhaps you’ll inspire them (when they are personally ready) by modeling a different, healthier attitude.

Envy and jealousy will get you exactly what you don’t want. Acknowledge these feelings, then release them and let go. Compare yourself not to others, but only to your best self.

Don’t be pressured into humility. Definitions of humble include:

  • cause to feel shame; hurt the pride of
  • low or inferior in station or quality
  • marked by meekness or modesty

These definitions don’t fit with a healthy, positive self-esteem, do they?

Choose to use different language. The language you use directs your actions and therefore the path your life takes.

  • Avoid three dirty little words: try, can’t, and but.
  • When someone asks, “how are you?” don’t whine back, “I stepped in dog puke getting out of bed this morning, then I burned my toast, and now I gotta suffer through a dentist appointment…”. Instead, respond with something that is joyfully perfect in your world like, “I just had thee best grilled cheese sandwich for lunch!”

Limit your exposure to mass media. Pull the plug on bad news. Be selective – record uplifting, humorous and educational programs and keep the boob-tube turned off otherwise. I don’t know who was murdered, what poor child was abducted and from where, and who blew up how many people today, and you know what? I don’t want to know!

Focus on the bright side of life. I promise – there is always a bright side! What you think about is what you will get. Practice this skill by keeping a gratitude journal.

Stop looking in the rear view mirror. Live your life from this day forward.

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Talent And Desire Are NOT Enough: What We Must Learn To Achieve Our Goals

The traditional view of achievement assumes that results come from a combination of talent and desire. Therefore, when you fail, it must be because you are not talented enough or that you don’t want it bad enough. However, failure also occurs when talent and desire are abundantly present — but optimism is missing!

Why is optimism an important ingredient for success? What makes some people view the glass as half full while others see it half empty? How are depression and pessimism related? Are optimists born or made? Can we unlearn pessimism? What can parents do to help their children grow optimistically?

My family, at least three generations deep, suffers from a genetic predisposition towards clinical, chronic depression. It would be fair to say that I didn’t always have the happiest of role models when I was growing up. I’ve never been diagnosed with depression (other than PMS-related symptoms). Why did I escape depression while many of my family members did not?

A therapist, who my entire family visited when I was a teenager, suggested that I had learned to cope by taking on the role of “hero child” in our dysfunctional family. The hero child is the one who fantasizes that if she accomplishes enough, then the whole family will be OK. The hero child is overly conscientious, over achieving, and constantly seeks approval. As the hero child of my family, it was my “job” to help everyone see the light and function well. I became our family’s cheerleader of optimism.

Then as a young adult, my experiences as an animal trainer and behaviorist taught me some useful cognitive skills. (Apparently rats, cats, dogs and humans tend to learn in similar ways!) I discovered how to avoid learned helplessness (giving up because you feel unable to change things) and how to reinforce my sense of personal control. In turn, personal control leads to optimism; and optimism can protect against depression, better your physical and mental well-being, and increase your level of achievement.

I’m reading a fascinating book: Learned Optimism: How to Change Your Mind and Your Life by Martin Seligman, Ph.D. Using evidence gleaned from scientific research done with dogs and people, Seligman demonstrates how optimism enhances the quality of life, explains how to break an “I give up” habit, and offers advice for parents who want to help their child(ren) become empowered by optimism.

What is a pessimist? Pessimists tend to:

  • believe bad events are enduring (will last a long time)
  • believe misfortunes are their own fault
  • undermine everything they do
  • get physically sick more often
  • get depressed more often
  • give up more easily

Optimists, who are dealt the same hard knocks, tend to:

  • believe defeat is just a temporary setback
  • believe defeat is confined to this one case
  • believe defeat is not their fault: circumstances, bad luck or other people brought it about
  • perceive bad situations as a challenge and try harder
  • do better in school and college
  • do better at work
  • do better in sports
  • exceed the predictions of aptitude tests
  • be more apt to be elected into public office
  • enjoy unusually good health
  • age well
  • live longer

How can I help my child learn optimism?

My daughter’s life didn’t start out well: she was abandoned at birth by a mother who could not/would not raise her; placed in a neglectful foster care situation for nine months; then uprooted from her native country to live in a place where very few look like her. In addition to these early traumatic events, maybe her birthmother suffered from depression during her pregnancy (aware that she’d have to give up her baby), which could have affected her developing fetus. When we adopted our daughter, she was emotionally withdrawn and shutdown.

What affects a child’s level of optimism? According to Martin Seligman, Ph.D., director of the Positive Psychology Center at the University of Pennsylvania and the author of Learned Optimism, there is evidence for three kinds of influences:

  1. How parents analyze and explain everyday occurrences: If my child hears me explain things optimistically, she will too. Optimism is learned. It is important that parents serve as positive role models.
  2. The form of criticisms a child hears when she fails: If they are permanent (“You always make such a big mess”) and pervasive (“You are a slob”), her view of herself will turn toward pessimism. If the criticisms she hears have a temporary and specific message (“Your room tends to be messy after you have friends over to play“), she will be hopeful, empowered and optimistic.
  3. The reality of her early losses and traumas: If her losses and trauma are permanent and pervasive, the seeds of hopelessness will be deeply planted. If they remit, she will develop the theory that bad events can be changed and conquered.

I am incredibly proud of my daughter’s strong spirit. She inspires me to see the glass as half full every day. Together, we practice optimism… and we blossom.

Considering the far-reaching and long-lasting effects that optimism has in all of our lives, I wholeheartedly recommend reading Learned Optimism: How to Change Your Mind and Your Life. It’s a national bestseller for good reason.

Podcast: Unconventional Path to Becoming a Millionaire

Recently, I responded to several questions posed by Flexo and Tom from Consumerism Commentary. They created a 21 minute podcast of our conversation. Here is a sampling of the content:

  • how I used apprenticeship programs as an alternative to formal schooling, to land a job, and then to hire my own employees
  • my motivation for becoming financially independent
  • how we purchased our first home
  • my decision to delay parenting
  • the somewhat “unconventional” financial steps I took that lead my husband and I across the millionaire threshold
  • why after 17 years of homeownership, we decided to become renters
  • a few of the ways I am raising our daughter using important life lessons I’ve learned

I think Flexo and Tom do a great job with their podcasts — so much so that I am considering hiring Tom to edit and polish some podcast material for my blog. As part of my book’s research, I am interviewing other first generation, self-made millionaires who are under the age of 55. I am recording these conversations. My intention is to include a variety of these financial success case studies and profiles to illustrate various principles in my book. Before I commit to the expense of creating podcasts, I want to know: Do you listen to and enjoy podcasts or do you prefer that I share these stories in written blog post format?

[poll id=”2″]

Please take a second to respond to the poll above, then head on over to Consumerism Commentary to listen to the podcast. I’d appreciate your feedback about this podcast — and your experience with podcasts in general — in the comments section. (Note: Email subscribers and RSS feed readers, you will need to click through to my blog to do so.) Thanks!

3 Essential Components to Financial Success

In my last post, I suggested that financial success takes more than learning the how to of creating wealth. I challenged that our mindset often gets in the way of reaching our financial goals. I asked you to weigh in with your personal experiences. Thank you for your comments and emails – they will help me as I design the structure and content of my book.

As promised, I am following up by sharing several very specific factors that I attribute to my own personal finance success. In my opinion, there are three basic components that I think helped me to achieve my financial goals:

  1. Being
  2. Believing
  3. Doing


Honest Take inventory of your finances. List your assets and all of your debts. Track your spending. Quit sweeping what you don’t want to acknowledge under the rug because until you face it head on, your finances are unlikely to change.

Compassionate Be as kind to yourself as you are to those you love most dearly. Stop the blame games and guilt trips. Your net worth will grow faster when you stop wasting time with negative energy.

Courageous Change takes courage. Despite what we’re often told, we learn more from our successes than we do our failures. (I will share some very interesting research on this soon!) Break down your big financial goals into small steps. Build upon each small success — momentum is everything!

Committed Are you committed to getting out of debt? Reaching financial independence? Do a gut check. You have to want it bad enough to do everything it takes to make it happen. There is no “try” in commitment. Do or don’t do — which will it be?

Focused Keep your eye on the prize while you enjoy life’s little pleasures along the way. Keep a journal or organize a support group to help you keep on track.

Consistent Practice makes perfect so consistently practice!

Resourceful Think outside of your box. Learn to let all judgements go when you brainstorm and solutions will expose themselves.

Likable Emotional intelligence and social skills lead to better outcomes. Likable people are more likely to be promoted, to sell more to their customers, to better manage and lead groups. Be likable and you’ll find others are more willing to help you reach your goals

Patient Unless you inherit a fortune or win the lottery, you won’t get rich overnight. Be okay with this. If you keep doing what you need to be doing, your money life will get better and better. Eventually it will take astounding leaps and bounds. This is the magic of compound growth.

Healthy If you don’t take care of your body, someday it won’t take care of you. Don’t be rich and dead. ‘Nuff said!


Believe that your financial independence and security is more important than the house you live in, the car you drive, or the clothing you wear. Live life your way. Don’t go the way of the Joneses’.

Believe in, appreciate, and honor your interests and abilities. Do so and you will be driven by a passionate energy. This passion makes the journey as rewarding as the destination.

Believe that you deserve success and happiness. Replace negative thoughts with positive ones.  Visualize the success you seek.

Believe in your ability to learn. Use both sides of your brain and exercise your creativity. Allow your curiosity to lead you as a lifelong learner.

Believe in yourself. Believe in you, even when others don’t.

Believe in solutions, not excuses. If you want it bad enough, you can find a way to make it happen. Focus on the things you can do, not on the things you can’t. Seek solutions to your problems and you will find them.


Create and implement a financial plan, compare your progress to this plan, and modify your plan as needed. There will be obstacles. Go around them. Keep your eye on the map, but remain flexible so you can take detours when needed.

Control your income by being the boss of you. Choosing your occupation is important. The majority of millionaires are entrepreneurs for a reason. Working for oneself means no limits on income.

Live below your means. Duh, right? But you need to DO it. Swap short-term, short-lived gratification for long-term benefits and a financial security.

Harness the power of compounding. Save a portion of income and allow ample time for compounding to perform it’s magic. Time is one of our most valuable assets so start right now. Yes, I mean today!

Take financial risks given the right return. Make well-considered investments and allocate your money in ways that are conducive to building sustainable wealth.

Push yourself past your comfort zone. Do you want a better job? Better pay? Your family to cooperate with the family budget? Have you asked for what you want? If not, what are you waiting for? Get in the habit of stretching your comfort zone. Start by asking for what you want.

Ask questions and keep an open mind so you can continue to grow. Read, find a mentor, arrange for an unpaid apprenticeship, seek advice from those who you see as successful. There is much to learn from the experience of others.

Don’t give up. We all fall off the wagon now and again. The key is to get right back on track. @FrugalDad tweeted this morning: “I love the first day of the month. It’s like having a giant Etch-A-Sketch. Shake your budget around & wipe the slate clean!”

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Entrepreneur CliffsNotes from a Penny-Pinching, Pajama-Clad, Self-Made Millionaire

Aim, Ready, Fire!

Entrepreneur CliffsNotes from a Penny-Pinching, Pajama-Clad, Self-Made Millionaire

Japanese Archery(photo by Okinawa Soba)

This is a lengthy post (2500+ words) as it contains nearly everything I know about how to be your own boss, in an abbreviated 3-phase format. If you’ve ever dreamed of making money doing something you love to do, I think you’ll find it well worth your time to read. First, a little about me and my entrepreneurial background to provide context for this filled-to-the-brim resource…

I’ve bootstrapped half a dozen small businesses including a couple of dog training schools, home and pet care services, a construction company and most recently, a coaching business. I started each business with less than $1,500 in capital investment. Because I hate alarm clocks, rigid working hours and panty hose, I choose to operate businesses that honor my personal preferences. I wake when I am rested, eager to do what I want to do, when I want to do it. More often than not, I work from home in my pajamas.

My entrepreneurial success didn’t require a diploma. Impatient with seemingly pointless prerequisites and eager to start making my own money, I dropped out of college. I now consider myself a lifelong learner and return to school whenever I want to learn a specific new skill.

“Most self-made millionaires possess average intelligence. What sets them apart is their openness to new knowledge and their willingness to learn whatever it takes to succeed.” (The Seven Pitfalls of Business Failure and How to Avoid Them by Patricia Schaefer)

Unfortunately, I was a drop out with no vision for my future. I began my adult working life as a graveyard shift donut and coffee waitress. Fortunately, I realized that I was too good to settle for minimum wage. I quit pushing donuts and took a job that would allow me to explore my interests. Because I’d always loved animals, I applied for a job with a veterinary hospital and during this same time, I also negotiated an unpaid apprenticeship with a professional dog trainer to learn marketable new skills.

Don’t tell me what to do! I am the boss of me. As an employee, I resisted standard operating procedures — particularly when I could see a more effective process for said procedures. Recognizing that I found it difficult to do business someone else’s way, I took what I learned as an employee and apprentice and moonlighted with my own business. Once my own business income matched my employment income, I quit my job. I’ve been self-employed since my early twenties.

How much is enough? Unlike the typical American, I have resisted the temptation to inflate my lifestyle to match my income. Rather than make more and spend more to keep up with the Joneses, I enjoy a lifestyle of voluntary simplicity. I value my time, hobbies, recreation and personal relationships more than I do money. Therefore, my moneymaking ambition has always been to make just a little more than enough. Because I pay myself first, I am 100% debt-free and have accumulated over a million dollars. I can afford the luxury of free time. Here’s a wonderful story, written by an unknown author, that aptly illustrates the concept of ‘enough’:

Story of The Mexican Fisherman

(photo by CaptPiper)

Mexican Fisherman StoryAn American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “Only a little while.”

The American then asked him why didn’t he stay out longer and catch more fish. The Mexican replied that he had enough to support his family’s immediate needs. The American then asked, “But what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats; eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would sell your company stock to the public and become very rich; you would make millions!”

“Millions – then what, senor?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

Author Unknown

What drives YOU to want to be your own boss?

Aim…   (Step One: Zero In On The Right Business)


(photo by AjDele Photography)

What do you love to do? Do you make money doing this? If not, why not? What are your unique talents? What are your personal priorities and values? Your quirks? Your passion will be evident to your customers and will prove value. Put aside all judgement as you brainstorm ideas. Need inspiration? Try these exercises:

Is there a need for what you offer? Next time you can’t find what you are looking for, realize you just identified a business opportunity.

What is your risk tolerance? If your tolerance for risk is low, avoid reinventing the wheel. Pick a known moneymaker.

Example: While plumbing isn’t a romantic business, it has been in steady demand for as long as humans have enjoyed running water.

Is the money worth your time? Calculate how much you anticipate making and how many hours you’ll need to work to earn the revenue. Then calculate the dollar value of your time.

Ask many questions:

  • Talk to people in your chosen niche: vendors, sales reps, technicians, consumers, your future competition.
  • Ask for feedback from those who are supportive, optimistic and successful. Avoid naysayers.
  • Interview those who have been-there-done-that.

Try it before you buy into it:

  • Find a mentor.
  • Be a shadow.
  • Volunteer.
  • Work to learn, not to earn. Negotiate an apprenticeship.
  • Work for your future competition.

Would you be better off buying an existing business or starting from scratch?

  • An existing business with a successful history is more likely to succeed.
  • A start up is attractive due to a lower beginning investment.

Ready…  (Step Two: Set Yourself Up for Success)

Missed the target(photo by andreasnilsson1976)

Do your research:

  • Be an ethical mole and work for your future competition. Learn how to navigate the maze on someone else’s dollar.
  • Analyze your competition: supply, demand, prices, strengths, weaknesses. What can YOU offer that your competition doesn’t?
  • What are the demographics of your targeted customer? How will you reach them?
  • Clarify your business identity by carefully selecting your niche and business name. Be sticky! (ex: Jen Smith versus Millionaire Mommy Next Door)

Spin your web (create a support system):

  • Don’t try to wear all the hats. Reports on business failures cite poor management as the number one reason for failure. New business owners frequently lack business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees. Build your team of players and seek help from a bookkeeper, CPA, attorney, manager, sales and marketing specialist, etc. Weigh the advantages of hiring subcontractors versus employees.
  • Participate in networking, professional and business support groups.
  • Limit your exposure to toxic people. Don’t allow negativity to bring you down. Surround yourself with those who are happy and successful.
  • Be mindful of your own internal dialog. Eliminate the words ‘but’, ‘try’, and ‘can’t’ from your personal vocabulary.

Get your dollars in a row:

  • Starting a business is risky. As a rule of thumb, new businesses have a 50/50 chance of surviving for five years or more (source: Small Business Association). Don’t let statistics discourage you; just be properly prepared for success.
  • Plan for the best AND have an exit plan in place.
  • Start with sufficient capital and operating expenses. Establish an emergency savings account equal to at least one year of operating and living expenses.
  • Cover your ass(ets). Obtain appropriate insurance policies to protect you from catastrophic events: medical, disability, liability.
  • If money is tight, moonlight. Keep your day job and work your business between working hours. Cut back on your employed hours incrementally. Once your part-time business is earning enough money to replace your day job, quit.

Establish yourself as an authority in your niche:

  • Volunteer
  • Blog
  • Write a book
  • Teach
  • Speak

Eliminate the need for costly advertising expenses. I’ve never spent a dime on advertising. Referrals and word of mouth come free.

  • Seek symbiotic (mutually beneficial) relationships with existing, complementary businesses. For example, I offered on-location dog training classes for the clientele of participating veterinary hospitals.
  • Allow potential referral sources to experience the value you provide firsthand by offering them free or discounted services. Example: I offered free dog training classes to veterinarians, groomers, kennel owners and their staff.
  • Find relevant ways to help your community. Submit public service announcements to your local newspapers, radio and TV stations.

Fire!  (Step Three: Become the Boss of You)

Bullseye(photo by – POD –)

First impressions can be a matter of life and death for your new business. Now that you know what you want to do and what you need to do, it is time to launch!

Focus. Keep your commitments. Don’t branch out in too many directions.

Prevent burnout. Assuming you plan to be your own boss for the long haul, it is imperative to keep your work and personal lives balanced:

  • Take time off to play.
  • Get adequate sleep.
  • Hug your family.
  • Be there for your friends.
  • Eat your vegetables.
  • Express your gratitude. Psychologists say that establishing a habit of gratitude plays a significant role in a person’s sense of well-being:

“The study required several hundred people in three different groups to keep daily diaries. The first group kept a diary of the events that occurred during the day, while the second group recorded their unpleasant experiences. The last group made a daily list of things for which they were grateful.

The results of the study indicated that daily gratitude exercises resulted in higher reported levels of alertness, enthusiasm, determination, optimism and energy. Additionally, the gratitude group experienced less depression and stress, was more likely to help others, exercised more regularly and made more progress toward personal goals. According to the findings, people who feel grateful are also more likely to feel loved. McCollough and Emmons also noted that gratitude encouraged a positive cycle of reciprocal kindness among people since one act of gratitude encourages another.”  (source)

  • Be happy! Happy people make more money. Newsweek reports:

“although money doesn’t buy happiness, happiness can buy money. Young people who describe themselves as happy typically earn higher incomes, years later, than those who said they were unhappy. It seems that a sense of well-being can make you more productive and more likely to show initiative and other traits that lead to a higher income.”

Measure and evaluate your progress. Regular evaluations using analytical measures are important for keeping on track and staying in alignment with your vision. Identify what works, what doesn’t and what you want to accomplish next:

  • Keep a journal.
  • Maintain an accurate bookkeeping system and chart your financial progress.
  • Track the ratio of repeat customers versus new ones.
  • Ask for feedback from your customers, employees and referral sources.

Stay connected. Nurture professional relationships with people who have the potential to help you with contacts, information, referrals and advice. In turn, be authentic and mindful of how you can add value to their lives. Your professional community is a rewarding place to practice good karma.

  • Send a periodic email that reads, “I’ve been thinking about you. We haven’t talked in a while — I’d love to meet up for coffee or tea sometime next week to catch up.”
  • Build ‘virtual’ relationships via e-mail, conference calls, online courses, blogs, forums, chat rooms, and social networking sites like Twitter and Facebook.

Consider expansion carefully. Remember your priorities and do the math. For example, my husband and I considered expanding our small construction business to include a staff of workers. Here are the two options we considered:

Option A = Continue to manage a small in-home business:

1 full-time tradesman (my husband; 35 hours per week)
1 part-time apprentice (20 hours per week)
1 part-time bookkeeper (me; 15 hours per week)
Total employees = 3 (1 full-time, 2 part-time)
Total labor hours per week = 70

Gross annual revenue = $250,000

Net profit = 50%
Low overhead expenses (work from home, one truck, one set of tools) means a higher percentage of revenue remains as profit.


Option B = Expand our business to include 5 tradesmen:

5 full-time tradesmen (5 x 40 hours = 200 hours per week)
5 part-time apprentices (5 x 20 hours = 100 hours per week)
2 full-time bookkeepers (5 x 15 hours = 75 hours per week)
1 full-time manager (40 hours per week)
Total employees = 13 (8 full-time, 5 part-time)
Total labor hours per week = 415

Gross annual revenue = $1,250,000

Net profit = 10%
Higher overhead expenses (leased storefront location, five trucks, five sets of tools, increased salaries and administration costs) means a lower percentage of revenue remains as profit.

Which business would you rather operate? At first glance, many would likely say, “I’ll take Option B and make one-and-a-quarter million dollars each year!”

Whoa now, let’s slow down and finish the math:

Option A = $250,000 gross annual revenue x 50% net profit = $125,000.

Option B = $1,250,000 gross annual revenue x 10% net profit = $125,000.

That’s right — both options provide $125,000 in annual net profit. Now that we’ve completed the math, which would you choose?

Option A comes with less expenditures of time, energy and capital.
Option A reduces risk.
Option A requires very little initial capital investment.
Option A allows us to work from home.
Option A puts the same amount of dollars in our pocket as Option B.

We chose Option A. Every business is different, of course, so run your own numbers.

Pay yourself first and invest for a lifetime of freedom:

  • Be a tightwad. Thomas Stanley, coauthor of the bestseller, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, found that the prototypical millionaire told him, “I am my favorite charity.”
  • As your profits grow, be watchful of lifestyle inflation.
  • As a rule of thumb, put at least 15% of your net profits into a diversified retirement account.

Once you achieve financial independence, give back and help other get started:


Note: All told, this post took me more than 8 hours to put together (and over twenty years to learn!). If you found it useful, please share it with your friends, bookmark it, Stumble it, Tweet it, link to it from your blog, etc. For your convenience, there is a “Share This Post” link in the footer of this post. Thanks!

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Outwardly Simple and Inwardly Rich

It’s been my experience that frugality can run the continuum from miserly to magnificent.

When I was a child, I never went a day without a nutritious meal or a warm bed. Still, I recall times when I perceived my family as poor. In the school cafeteria, I furtively slipped my free lunch ticket to the cashier — with hopes that my friends wouldn’t notice that my family received government-provided financial assistance. When my father returned to college to earn his graduate degree, my siblings and I shared one crowded bedroom in a tiny apartment. I was teased unmercifully whenever my peers noticed the strips of fabric my mom sewed onto the bottom of my out-grown “high-water” pants to make them long enough to cover my ankles once again.

The most painful part of our family’s frugality, though, was when I overheard my parents argue about money.

At other times, I was aware that my parents purposely chose our frugal lifestyle — they voluntarily chose to live simply. Those were the best of times. “High-water” pants or not, our family was free from the handcuffs of Stuff. We used things up, repurposed them, and improvised. My parents were good role models for me in this regard.

As a young adult, I operated from a mindset of scarcity. I feared running out — or not having enough — of what I needed. After a year of struggling to support myself financially through college, I dropped out. I took another job: pouring coffee during the graveyard shift at a donut shop. Many of my customers were homeless. They nursed one cup of coffee – all night long – to earn a warm spot inside.

One night, it dawned on me that I was one paycheck from becoming homeless, too.

I dealt with my anxiety by hoarding what little money I made. I shared rent for a one-bedroom apartment with three other young women and dined on free appetizers offered at local bars during Happy Hour. At that point in my life, frugality – emotionally speaking – was a defensive action.

“A miser is a person who is reluctant to spend money, sometimes to the point of forgoing even basic comforts. The term derives from the Latin miser, meaning “poor” or “wretched,” comparable to the modern word “miserable”.”


Over time, my fearful and hoarding behavior resulted in a medical insurance policy and an emergency fund. I had stashed enough to see me through a missed paycheck or two. But did I have enough? Would my future always include beater cars, cramped apartments and grocery coupons? Was I destined to earn minimum wage, doing a job I hated, forever?

“Frugality (also known as thrift or thriftiness) is the practice of acquiring goods and services at minimum cost, achieved via economical restraints or creative measures. Frugality can be related to the idea of being conservative or conserving money.”


Frugality continued to feed my savings account and in turn, my savings account afforded new opportunity. Consequently, I was able to become an unpaid apprentice to learn a new skill. After studying animal behavior and learning how to train dogs, I quickly landed a higher paying job. And I loved my work. As my skills, enthusiasm and reputation grew, I started my own dog-training business. Despite my increased income, I continued to live frugally. However, I made a point to shift my mental attitude of lack to one of abundance. The purpose of my frugal behavior shifted from reactive to proactive.

“To be healthy, wealthy, happy and successful in any and all areas of your life you need to be aware that you need to think healthy, wealthy, happy and successful thoughts twenty four hours a day and cancel all negative, destructive, fearful and unhappy thoughts. These two types of thought cannot coexist if you want to share in the abundance that surrounds us all.”
—Sidney Madwed

Today, rather than being driven by fear, I embrace the abundance in my life. I have enough. Rather than flashy opulence and keeping-up-with-the-Joneses behavior, my husband and I joyfully choose a lifestyle of voluntary simplicity. Duane Elgin, author of the classic book Voluntary Simplicity, defines simple living as:

“Living in a way that is outwardly simple and inwardly rich.”

From fearful and miserly to voluntary and magnificent, frugality has had a profound impact on my life.

Simple living (or voluntary simplicity) is “a lifestyle in which individuals consciously choose to minimize the ‘more-is-better’ pursuit of wealth and consumption. Adherents choose simple living for a variety of reasons, including spirituality, health, increase in ‘quality time’ for family and friends, stress reduction, conservation, social justice or anti-consumerism, while others choose to live more simply for reasons of personal taste or personal economy.”


May we all enjoy a magnificent and inwardly rich life!

Yes, I’ve Paid the Price, But Look How Much I’ve Gained!

I was eight years old when my girlfriends and I strutted proudly around our living room singing into our hairbrush faux-microphones:

“Oh yes I am wise
But it’s wisdom born of pain
Yes, I’ve paid the price
But look how much I gained
If I have to, I can do anything
I am strong (strong)
I am invincible (invincible)
I am woman”

In 1972, Helen Reddy co-wrote the song I Am Woman, which became a worldwide #1 hit, feminist anthem and cultural icon of the times. Here’s a YouTube of the song:

(Note: RSS and email subscribers – you’ll need to click to my blog to view it)

37 years later, I am woman. What does this song mean to me today? What impact has being a woman had on my life? What kind of woman do I strive to be?

“I am woman, hear me roar
In numbers too big to ignore”

When I have something important to say, I don’t sit quietly with my hands folded demurely on my lap. I am not afraid to speak out or to advocate for those who can’t. Sometimes I spread my message in a big way, like blogging or appearing on national television.

I used to think I had to roar. But do you know what happened? People covered their ears and tuned me out. So I learned to purr instead. Incessant, impossible to ignore purring when necessary – but I’ve learned to deliver my message in a pleasant way, so that others want to listen.

“And I know too much to go back an’ pretend
‘Cause I’ve heard it all before
And I’ve been down there on the floor
No one’s ever gonna keep me down again”

I’ve been sad, squashed and small. I’ve been a victim and I’ve hit rock bottom. I grew up in a dysfunctional family, I had an abusive boyfriend, I’ve been poor and hungry.

As a newlywed, my in-laws chastised me for “wearing the pants” in our new marriage. They said my husband was the star and I should play the supporting role. They bought me a sewing machine, cookbooks and an iron. They tried to put me in my place.

I strive to reflect, learn and grow from each life experience. I keep an open mind. I choose not to stay stuck. I understand that the only person I can change is me.

“Oh yes, I am wise
But it’s wisdom born of pain
Yes, I’ve paid the price
But look how much I gained
If I have to
I can do anything”

Because I reflect, learn and grow, I am wiser with each passing moment. I’ve learned from conflict and difficult experiences. I change what I can and peacefully accept what I cannot.

Because “I can do anything” (and despite the rough start with my chauvinistic in-laws), I’ve been happily married to the same man, my best friend, for over 21 years. We are not the same; we are equals and we compliment one another’s strengths.

Because I’ve felt loneliness, I cherish my friends.

Because I’ve been penniless and hungry, I’ve learned how to make enough money and I savor nourishing food.

Because I missed spending quality time with my workaholic father when I was a child, I chose to be financially free before I became a parent.

Because I am wise and strong and a nurturing woman, I share my life and my unconditional love with our beautiful daughter — who was abandoned at birth simply because she is a girl.

“I am strong (strong)”

Yes, I am unabashedly strong. And I embrace my feminine qualities: I am soft, gentle, loving, nurturing and beautiful. Strength and femininity are compatible. Strength doesn’t need to be heavy-handed; in fact, gentle strength is far more effective. Purr.

“I am invincible (invincible)”

By definition, I refuse to be overcome or subdued. But I’m not Super Woman, either, nor do I strive to be.

Women today are expected to possess super-human powers: Get Jill and Johnny dressed while cooking a hot breakfast between loads of laundry while conducting an important business conference call before heading to the airport for an out-of-state conference. Don’t forget to drop the dog off at the groomer’s on the way. And wear lingerie under your business suit so you can enjoy sexy intimacy with your husband when you get home tonight – after helping the kids with their homework and putting them to bed, of course. Oops, did you forget to pick up the dog?

I recognize my limits. I can’t do everything and I’m not skilled at every task. When I was a teenager, my siblings and I pitched in our allowance to pay for a house cleaner so we could have our weekends free to do as we wanted. Today, I do my own laundry and my husband does his. And despite my “way” with money, I have a bookkeeper that makes sure my bills are paid on time.

“You can bend but never break me
‘Cause it only serves to make me
More determined to achieve my final goal
And I come back even stronger
Not a novice any longer
‘Cause you’ve deepened the conviction in my soul”

When I respect myself, others can’t walk all over me. I believe in what I believe, because I believe in me.

“I am woman watch me grow
See me standing toe to toe
As I spread my lovin’ arms across the land
But I’m still an embryo
With a long, long way to go”

I am not done. Every experience, every relationship, every thought is an opportunity for personal growth. And I am willing to share my journey with others. I won’t allow you to step on my toes and I promise not to step on yours. I will look you straight in the eye, toe to toe, and share my truth with a warm smile. I am open, nurturing and loving. I love me, I love you, I love life.

“Until I make my brother understand”

Women and men are different in several obvious ways. But regardless of our gender-specific hormonal soup and X/Y chromosomes, I believe that we are more alike than we are different.

I am willing to open myself up to the world. I dream of universal acceptance, peace and understanding, beyond all stereotypes. I am your sister. Purr.

“Oh, I am woman
I am invincible
I am strong”

Note: This post was my response to Steve Pavlina’s provocative invitation to write “How to Be a Woman” and originally appeared on my hacked and defunct blogspot blog in 2008. This submission was selected by Erin (Pavlina’s wife) as one of her top picks.