January 21, 2011
Sunil contacted me asking if he could apply to become a columnist on Entrepreneurs-Journey. I asked him what are the highlights of his “career” as an entrepreneur so I could be confident in his credibility and he had stories to tell that we could all learn from.
It turns out Sunil has done a few things. As you will see in this introductory article, he has plenty of experiences making money in different ways. He only touches on them briefly in this article, but rest assured I will ask him to break down the details of each success he has had so we can learn from his case studies in future articles.
For now, Sunil answers the question of why leave a well paid corporate job to become an online entrepreneur…
My name is Sunil and the title of this blog post refers to me. I have been following Yaro for over a year now and feel privileged to be allowed to write for his blog. Many of you may know me or have heard from me through comments on this blog.
I will be discussing what I have accomplished as an entrepreneur over the years, what I have learned in that time as well as why I pursued “side gigs” despite having a successful career in a Fortune 100 company that paid well in the six figure range.
Before I get into what I have done and why I know what I know, here is a brief background on myself:
My Background
The name is Indian, but I was born in South East Asia (just above Yaro’s homeland) in an upper middle class family of entrepreneurs. My Mom and Dad are not formally educated, but they self-taught how to practice business.
I’m still not sure if it was lack of education, fate, or just pure bad luck, but my Mom and Dad lost it all, gained some back, lost some more and finally stabilized at a much lower level than where they had built themselves up to. The biggest of all losses was my Mom’s passing away when I was only 10. I have seen and been through it all.
I am first generation high school, college and post graduate in my family’s lineage. English is my fourth of five tongues. Professionally, I am a Certified Public Accountant (CPA), may also be called a Chartered Accountant (CA) on your side of the globe, a Finance Charter-holder and a Certified Financial Planner.
I attended the University of Michigan in Ann Arbor, a top ten business program year-in year-out and love to pretend to brag about it. No matter where I am or what I am doing, my heart still bleeds Maize and Blue on Fall Football Saturdays (GO BLUE!).
Right out of Graduate School, I started my career with one of the big four accounting firms in their M&A (Mergers and Acquisitions) practice. I was trading real heavy hours for heavy dollars, and led a very mobile, demanding and by choice, a pressure packed lifestyle.
I travelled all over the world wherever business deals were happening, gained tremendous experience and exposure to the Corporate landscape, and learned invaluable life lessons in my career. By the way, I am also the first in my family’s lineage to work for a paycheck.
Fast forward a few years, I am now living in the United States of America as a naturalized citizen. If you are interested in learning more about my roller coaster life, you can read About Me further on my Blog.
What Have I Done And Why Do I Know What I Know?
I understand my profession. I understand numbers. I understand personal finance. I understand business entity establishment. I understand taxes inside out. I understand wealth building, management, preservation, protection and estate planning. I use my knowledge to my advantage in all I do. I understand entrepreneurship. I understand business.
Without getting into the painful details behind the “how” and in an effort not to go off the road, below are just a few tidbits summarizing how I have put the knowledge learned to use.
Stock Market
In my Junior year in college, I started day trading and grew a $2,000 pot to over $40,000 thanks to a big one-hit wonder. I got carried away and started trading on margin only to lose all $40,000 and then some more out of pocket. This hurt big time.
Outside of that terrible experience when money was most scarce for me, I haven’t gambled much in the market. I have been satisfied with my 8-12% return over the last few years, thanks to a hedge fund that kept my overall return afloat when the market turned sour in the recent past.
I am not a guru in stock trading. In fact I don’t care to be. I don’t mind paying someone 2% of my earnings if that someone is able to generate 12% for me when the best I can do on my own is 8%. The arbitrage simply works.
That said, I have some of my stock portfolio in hedge funds managed by folks I know (I know you are thinking Madoff at this point), and most in vehicles that are on auto-pilot. A small part of my portfolio is purely in speculative plays, but I believe in value investing over time.
I believe in maxing out tax advantageous vehicles like the 401(k) and Roth IRA, and dollar cost investing over time in no to low load mutual funds, including index funds.
Where do I get the money to invest in the markets? From various sources of income that I have established over the years, including the paycheck I receive from my employer.
Real Estate
After college, I studied all aspects of real estate investing for close to a year before I finally bought my first property. I bought it with no money down and a 5% interest rate, thanks to market conditions, a solid, stable cash flow from my job and an excellent FICO score.
I worked out a similar deal the next go around, and the snowball started rolling from there. The zero down days ended shortly, but I was still able to purchase significantly undervalued properties with low down payments and great interest rates, taking into account the option of owner financing (having the seller finance my purchase rather than taking a loan from a bank).
The beauty of real estate is your ability to leverage. Unlike the stock market, where you can leverage 50% at best (also called trading on margin), in real estate you can start controlling a property with as little as 5% of its market value. In “normal” market conditions, 20% is the norm. In real good times like when I started, zero down was not unheard of either.
Because investing in real property doesn’t demand too much out of your pocket, you can utilize your cash in several investments and amplify your cash flow, the money left from rent payments collected after subtracting your mortgage, taxes, association fees, insurance and all other operating expenses.
Real estate especially gets real fun after you pay off one property. That’s because you can take the cash flow from it and expedite the pay-off of another. The more you do this, the more you can parlay the growth of your real estate empire. Paid off properties also have equity that you can tap into when in need.
Real estate is also tangible, something you can see, touch, feel, smell, and taste. The tangible nature of real estate is a huge psychological factor that caters to certain personalities.
For example, my dad wouldn’t touch stocks because he doesn’t understand them. Well, he does a bit, but at the end of the day it is like owning toilet paper or digital currency to him, which rightfully so it is (just with some value attached). On the other hand, he would be all over purchasing real estate as an investment.
Finally, real estate is a hedge against inflation. When I evaluate my real estate portfolio, I give some consideration to the hedge factor as well.
Where do I get the money to invest in real estate? The same places as above. I am proud of and thankful for my success in real estate. I’m no Donald Trump by any means, but I do trump over my own little real estate empire.
Small Business
After having established myself in real estate, I decided to invest in a small business in my community. Ironically, I did not purchase the underlying real estate (which is a risk I was willing to live with). The business however is doing very well today.
I purchased an undervalued business which I knew I could turn around based on a review of the business operations, researching similar businesses in nearby areas, as well as digging deeper into the financials.
Buying an underperforming business at a price well under market is similar to real estate or even buying and selling websites in many ways. Although I knew I would be working in (not on) the business to some extent, the work turned out to be more than I anticipated, at least initially.
Investment in small businesses require knowledge of transactions and the related aspects such as business valuation, due diligence, deal structuring / financing, contracts, etc. I would never recommend this for a novice, but it’s an endeavor well worth getting into providing one has the knowledge, risk appetite, time and resources.
Of all my investments and purchases so far, I’d say this one taught me the most, a lot the hard way, involving significant outflow of cash from my pocket. Yup, I did pay for on the job training. For example, during due diligence I did not check the condition certain equipment which broke on me within a couple months (big mistake!). I had to outlay nearly $30,000 just to replace these.
But hey, not every day is a sunny day now is it? Despite revenues down a good chunk recently due to weak consumption, the business has been a profitable endeavor overall and currently running well with very minimal involvement from me, thanks to a great management team.
Where did I get the money to buy a business? The same avenues as above. It also helps that I arranged seller financing, which meant I didn’t have to take a loan from the bank.
E-Commerce
Outside of hobby sites, which often involved self proclaimed greatness (including modeling pictures of me showing off my chiseled body), my first for-profit initiative online was the establishment of an e-commerce website. Not just any e-comm website, but one that had a unique twist that no one at the time was offering. I still don’t think anyone is.
Two years later, the website was doing very well, with a good number of recurring members. The website generated a little over $60,000 a year in profits, not an earth-shattering amount at all, but was growing at a very fast trajectory.
Because of a variety of reasons, two of which were poor strategic planning and technology issues (I am NOT a techie at all), there were some hard lessons learned in this process as well, including tarnished reputation due to not being able to fulfill certain customer orders.
I consider this business endeavor as an overall success however. Not so much because of the chump change we made (my distribution partner and I), but more so because of the invaluable lessons learned in the process. Not to mention the quarter million dollar sale of the business as our exit.
Why did we decide to sell the business? We sold it because of several difficulties I referred to, which were mostly a result of growing faster than we could keep up. Yes, growing too fast is not always good, especially when unplanned for.
Most importantly however, we had an unsolicited buyer, and because of this we made the timing right in our minds to wash our hands off it. It was an unplanned, but profitable exit strategy for us. I am still asked today why I sold such a unique concept, and I still claim that any time is a good time when it just makes sense.
As hard as it was initially, I try not to dwell too much on the past, or think of the “should have”, “could have” and “what if”. I do however conduct a post mortem and ensure I learn as much as possible from endeavors I get rid of, especially the failures. The way I see it, life is too long and there will be many more opportunities to mess around with another idea.
Where did I get the money to start this venture? Same as above. Establishing this website cost me less than $2,000 and a ton of man hours, headaches and heart burns to go with it. I plan on discussing this project in detail from end-to-end in my next blog post.
Niche Content Websites
On to my favorite endeavor of all and one that is currently my bread and butter. When I was looking to start a side gig that could be worked on remotely from anywhere, I was exposed to a program that preached creating a content website around a topic I am passionate about.
Because I was busy with other initiatives but still wanted to test this opportunity out, I somehow enticed my wife to get into it. Little did she know what she was very reluctantly getting into.
I handled everything from a technical perspective of course (website, SEO and marketing) while she focused on web content. We worked at it for over 11 months and saw not a penny in profits.
But just a bit over 24 months today, the website is running very well on auto pilot generating several thousand dollars, and the trajectory still points upward as it is nowhere near its full potential.
Seeing the success of this venture, I established several other niche content websites in other disciplines. I can’t say that I was motivated by the topics, but I was sure motivated by the process.
There are two kinds of people, ones that are interested in the product offering and others who are interested and motivated by the process. I have been in both shoes, and either has worked well for me.
I kept replicating the model, often with help from freelancers, until I had established a healthy portfolio of websites generating income on auto pilot month after month. The next step was to team up with other entrepreneurs to build more niche websites.
This allowed me the opportunity to coach and develop others who were interested in the concept and process but simply didn’t possess the “know how”. I contributed from a technical aspect while they focused on content much like my wife.
The irony behind this is that I am no techie at all. But the tools I use and the knowledge and experience I have gained over the years definitely makes me a perceived expert.
Where did I get the money to establish a bunch of niche websites from? Again, same as above. But that said, one niche content website costs me under $100 to establish, providing I create it myself from scratch to finish. You can hire freelancers and VAs to help you out like I do if you have some disposable cash to invest.
I discuss niche content websites heavily on my blog, and plan on continuing to talk about it in depth going forward, dissecting the various components involved in it and some step-by-step procedures on how to execute each.
Consulting
I don’t really know when I first became a consultant. It was all unplanned. Throughout the years, folks I know and around me have come to know about the various ventures I’ve been involved in.
Due to curiosity and other reasons, I am asked all kinds of things in day–to-day interaction. In fact, it is because of this that I started my blog (discussed below). But long story short, I have ended up consulting several individuals, and more recently even small businesses on various internet entrepreneurship matters.
My most recent gig was for a small, less than $10M company based out of the West Coast of the USA. I was brought in to consult on SEO and E-Commerce re-engineering, whatever that means. Look at the irony in the oxymoron of a non-techie IT consultant. The world has really gone mad.
I hardly take any consulting gigs now because my effective hourly wage rate is much more that what most people can afford to pay me. In other words, I am better of spending an hour of my time on my business, rather than working for a dollar figure. My blog is the best avenue I have for making the most mass impact with my knowledge and experience without sacrificing all my time.
I don’t consider consulting anywhere near my core income producing activities. I consider it trading hours for dollars, just like a job, although this one involving large dollars.
I have not solicited one client to date and don’t plan on it either. That said, I do have a section on my blog discussing the consulting services I offer. I end up referring most of it out to my personal network. If there is something worthwhile that comes across my desk, I will definitely consider it.
Where did I get the money to start this gig? Nowhere. I didn’t need any. But without all of the preceding ventures above, consulting would not have been possible. When it rains, it pours. That is not only a theoretical saying. It is a practical truth that I have seen manifest repeatedly in my lifetime.
The Extra Money Blog
So finally after much nagging (external causes) and dragging (internal causes), in late July 2010 I launched my Capstone Project, The Extra Money Blog.
WordPress was (and still is) completely new to me, and boy am I challenged with so much! For a blog that looks as simple as mine, I have already spent a ton of hours on the design. Yes you can laugh.
Although this latest endeavor is the newest to me, I am dedicated to giving it my all. If I weren’t, I wouldn’t be spending hours writing this post and polishing it up for Yaro on a beautiful weekend.
I mean why would I care otherwise? I hope to continue to learn the ropes from a technical perspective, and am looking forward to all your tips and suggestions, and definitely technical intervention.
After establishing the blog a bit and after I am comfortable with the basics of WordPress, I do plan on outsourcing a complete makeover to someone who actually knows what they are doing.
Where did I get the money to start this project? It doesn’t matter where. I spent $80 bucks and bought myself the Thesis WordPress Theme and started slaving away at it.
Overall take away: Starting a side gig doesn’t have to cost you your arm. Figure out what is it that you want to do and Just Do It! (Copyright & Trademark: Nike, Inc.) Where there is a will, there is a way. You will find a way to find the dollars, but you must first overcome the inertia to get started.
Why Did I Pursue Entrepreneurship on the Side?
Now for the burning question of the moment . . . Drum-Roll . . . Why?
What was I thinking while sitting on that cushy leather recliner looking out to the river from my 48th floor downtown office window? Quite a bit actually, none of which was about my career and my company. I was thinking about Abundance, Freedom and Flexibility. I was thinking about lifestyle design and engineering (Thanks T Ferriss).
Was I not happy with my career? Of course I was. In fact I was very happy. But what’s the fun in complacency? Why not diversify beyond my current realm of possibilities? We all know anything can happen at any time. There is just too much uncertainty surrounding us. Why not hedge against it? What about taking matters and control into my own hands? What about dedication to a greater cause? What about X, Y and Z?
There must have been a million and two reasons that had crossed my mind, but I want to focus on just a handful of reasons here to get my point across. The reasons revolve around financial abundance, freedom and flexibility, the three key concepts around which my blog is based.
It is a fact that many people do not enjoy what they do for a living. It is also a fact that out of those many, most hate their jobs. It is a fact that retirement is something many look forward to. It is also a fact that many wished they could retire early, or enjoy a better retirement lifestyle when they get there.
As of late, the concepts of semi-retirements or lifestyle design have also emerged. Human beings are naturally lazy, and people long for easier day-to-day jobs or careers rather than toiling their life away, whether as unhealthy, round-shaped, bald and unhappy I-bankers or lawyers who self console themselves as being happy and satisfied in life. What life they talk about I wonder sometimes?
There are also those that want to “live like no other, so they can give like no other”. The motivations are countless, as are the options. Taking care of family members in need, to be there for friends, to not miss a birthday party or event whether night or day, weekday or weekend.
To be able to do all that requires financial abundance, with the appropriate balance of freedom and flexibility. That is precisely what “side gigging” has allowed me and many others to do, particularly side gigs that are based on the internet platform as they are as mobile and flexible as they come.
When you have alternate sources of income, you have a solid safety blanket that comes with more peace of mind, less financial stress and as a result you perform better in all other aspects of your life. You can position yourself to walk away from your job at any time, or say no to a demanding one that you don’t want to undertake.
The key message here is that you have options. You have a level of freedom and flexibility to live the kind of life you want, or one that is a bit closer to your ideal lifestyle rather than one that is predetermined for you by whosoever writes your bi-weekly paycheck.
I know a gal who because of having established passive side incomes streams has walked away from high paying but high stress career to settle into a 30 hour a week career paying $65,000 plus healthcare benefits, and spend the rest of her time on her fitness, teaching Yoga at night and spending more time with the family.
I know a guy who doesn’t think twice before taking a month or two off from his job without pay to take extended vacations or stay-cations with his family because he has financial abundance thanks to his side gigs. The lost salary simply doesn’t matter enough anymore at that point. Now of course you need an employer who can put up with that, but you get the point.
I know a full-time internet based freelancer who works when convenient for him, and has been able to fit his business plan around his life plan, something everyone should, but don’t or can’t do for various reasons. He has a very flexible and mobile lifestyle because he can work from anywhere he wants. All he needs is his laptop and internet connection. Did it happen overnight for him? No. He side gigged for a while to build his client base before firing his employer, or prison I should say.
I know an older couple who have established enough income producing assets such as small businesses, real estate and a huge dividend portfolio thanks to several successful side gigs over the years to feed the next four generations of their lineage.
Business And Travel
With the advancement in technology today, the automated tools we have at our disposal and gobs of free information available online at our finger tips, starting a business today is easier than it has ever been in the past.
This is particularly true for an internet based business model, which is great for those who are more risk averse. It is also the best business model to pursue on the side in my opinion for those who travel for a living.
An internet-based business can be mobile, flexible and automated, not to mention have a very attractive risk/reward ratio. The cost to get started is very minimal, with tremendous upside and scale-ability. All you have to lose is your time and effort. But even if you do, trust me, you will end up with invaluable lifelong lessons that will make your investment well worth it.
In fact my personal journey on the internet started because I was traveling heavily in my career. There was very little predictability in my life in terms of where I was going to be on a given day and time.
Because of this, it became very difficult to pursue real estate and small business investing further. I missed out on several bargains because I was not in town to make the offer at the right time, or miss an inspection appointment, or one of several reasons that required my physical presence.
Thanks to the internet and the technological advancements today, I was able to find a niche I succeeded in. I feel blessed, and extremely fortunate to be living in a time where I am able to leverage what’s available to benefit me in the way I want it to.
And finally after having taken you through several narrow alleys around the world and giving you a hundred and one different reasons, I am tempted to say that this is un- precisely why a successful corporate professional making a healthy six figure salary resorted to the internet.
If Yaro lets me come back, in my next post I want to present a case study of my e-commerce website, from idea or concept stages, to research, creation, establishment, growth, all the way to the exit – the quarter million dollar sale of the business. I will also discuss post mortem results by sharing lessons learned from the venture.
I look forward to interacting with everyone and engaging in mutually beneficial knowledge sharing.
Sunil
Getting Started
P.S. If you didn’t know, Yaro (with a subtle nasal accent toward the end) means “Friends” in Hindi (Indian National Language).