Tag Archives: golden handcuffs

Our journey to downsize our lives

I have searched the internet unsuccessfully to find stories of others that have decided to pull the emergency brake on their existing lifestyle. My wife and I have watched shows on decluttering, but we aren’t talking of just getting rid of stuff in our closet. We have done that and that does not satisfy the longing to take a hack saw to these golden handcuffs that keep us slaving away to make the mortgage payment on our million dollar home and our “way of life”. We want purpose. We want to have the freedom to not be tethered to something and someplace that forces us to not have any choices. We are going to downsize our lives.

I reinvented myself once already

Ok, now I am going to switch to moi. I started my own business about 20 years ago working with my hands, but things out of my control, mainly the internet and cheaper products from China made my services no longer needed. I had to reinvent myself, but in reinventing myself, I chose what would be a great “business idea”, not something else that I would enjoy. You see, I was in the mortgage business making a good living, but hating every minute of it. This is why 20 years ago I reinvented myself and started my own service business, but cheaper products rendered my services obsolete, so I reinvented myself and started selling replacement parts online for the products I used to service. The immediate return or should I say the slow and steady return of dollars started coming in. I had discontinued to use my troubleshooting and mechanical skills due to a lack of need and started selling the same parts that I used to install for people TO people. Just like now, I was tied to a computer screen. I was riding the surf of the internet and after 10 years, was one of the top websites to sell these parts. Life was good, financially speaking, but I had left behind the whole reason to get out of the mortgage business in the first place.

What am I complaining about?

Fast forward 18 years. We are basically living in a million dollar house. I am driving a brand new Tesla. Is it a cool house? You bet! It’s 118 years old with tons of architectural detail. It’s 5,200 sq. ft. and the previous owners fully renovated it. It has a butlers kitchen, a gourmet kitchen that any chef would love to own and inlaid French parquet flooring. I had always wanted to own a home like this in this very neighborhood.  Colonial revival home Freeze frame. We are pretty miserable. You see, stuff doesn’t bring you happiness. It does for a very short time, but not long term. Our job has tons of stress attached to it. Being in business online is like being a fish in the ocean. You never know what is going to gobble you up or if the tide is going to change and sweep you away with it. The amount of money that we have to generate to feed our lifestyle is just crazy and we don’t have any credit card debt, I’m just talking about house payment, health insurance, utilities, etc. Ok, there is the Tesla payment and I do love driving it.

Just because you can doesn’t mean you should.

Just because you can, doesn’t mean you should. Bigger isn’t always better. These are two quotes that I tell others but have obviously been ignoring myself. I knew we could afford to own this house and to buy the Tesla, but when I signed the promissory note for each, I also promised that I would make those payments and to make those payments I must generate the income, no matter if I enjoy the job that generates that income or not.  Guess what? I don’t enjoy the job and I don’t enjoy the friendly reminder that these payments are due either. Owning expensive stuff means that the expensive stuff needs to be maintained. Owning a 5,200 sq ft house when you are both working full time means hiring a housekeeper, that is unless you don’t care what your house looks like and we do. I don’t have time to do the repairs that are needed in owning a home, so I get out my checkbook and write checks for the lawn service, painters, plumbers and electricians that I would normally do myself. That is if I had the time, but guess what? I don’t have the time.

To be able to yell STOP, I have to eliminate what forces me to wake up and “make the donuts”.

baker getting ready to make donuts
Courtesy of Dunkin Donuts

It’s not that I want to retire and play golf. I just want to do something that fulfills me and uses the God given gifts that I was given. I have purposely started to step on the brakes in my business. I eliminated a number of product groups that were requiring a major investment of time, but that also resulted in less income. I had been approached by a company that every one has heard of to distribute their products, but I turned them down. They were kind of shocked, but I said no. That was VERY hard to do because I had been trying to obtain their business for years. That probably cost me a couple of million dollars a year in sales.

hand on parking brake

Now, we are pulling the emergency brake on our lives. We are putting our house up for sale and streamlining our business so that we can eventually sell it. We refuse to go another day like this. We want options for our lives. We may not even buy another house. We may just travel, to places where we can live on the cheap for a while until we figure out what we want to do next.

I am going to take you on our journey into the land of downsizing our lives. I will be honest and tell you exactly how it feels to move out of a neighborhood filled with doctors and CEO’s. It will be a change both economically and socially, but we are willing to do it.

What color are your handcuffs?

Have you heard the term “Golden Handcuffs”? I hadn’t heard of it until my brother mentioned it to me in a conversation a few years ago. Typically this refers to deferred benefits to keep an employee
Golden handcuffswith a company for a stipulated amount of time. What if you are self-employed?  There isn’t anyone that is holding you there, but there is another type of golden handcuffs that has nothing to do with employment at all; whether you are self-employed or work for someone else. Golden handcuffs can be self-created. You forge them yourself through obligations that you have made to mortgage companies, auto loans, private schooling, vacation clubs, resort fees, etc. The list goes on and on. When we see the glitter of something that we desire that has a hefty price tag on it and bite, we are not much different than a fish striking an attractive lure. Many times we find that the lure isn’t real; it’s just a pretty feather, shaped like a fly or worm. Either way, it has a hook in it. It’s called monthly payments or the outgo of cash in exchange for that thing or service we desire.

Take this simple test to see what color your handcuffs are

Hopefully, you have some record of where you spend your money per month. You can go online and find a sample budget. Here is one here.
Step 1   Find out how much you spend
You have to remember to add all of the things that you spend money on per month. Don’t forget things like:

  • Nail salon
  • Coffee breaks
  • Life insurance
  • Home repairs
  • Gifts (Christmas, birthdays)
  • Vacation
  • Auto repairs, licensing, taxes, and tires
  • Lesson Fees
  • Clothing
  • Medical deductible fees for office visits
  • Vitamins
  • Cosmetics
  • Haircuts
  • Subscriptions
  • Bank charges
  • Credit card payments
  • Dues
    colorful sample budget

These things above aren’t even big things like Rent, Food, Utilities, etc. Once you add all of these things up, write down the total. Now, take this amount and divide it by .70. (federal and state taxes) This amount is the gross amount you need to earn. Hopefully, you make more than this amount. Were you surprised?

Step 2    Go through and change the amounts or eliminate those things that you are willing to live without.

How did you do? You will quickly learn what color your handcuffs are. If you can’t cut anything, your handcuffs are made of gold. If you can only cut back on a few things, they are made of silver. If you can cut back 25%, your handcuffs are made of brass. If you can cut back 50%, your handcuffs are made of wood, and they aren’t handcuffs at all! What most of us find is that we have become accustomed to certain creature comforts and we aren’t willing to give up any of them, even to reduce stress and launch out on something that we are passionate about. We would rather have our stuff and perks than to change our lives. So, is it time to put up or shut up as they say? This depends on:

A. Do you enjoy what you are doing and the money is merely a result of doing something you love?

B. Do you dislike what you do and would instead do something else but the money that you earn from it is too hard to turn down?

If you answered A, congratulations, you are not wearing handcuffs of any color. If you answered B, what color are your handcuffs?

different color handcuffs

The 4 steps to creating a successful online business

There are plenty of people telling you how to start an online business and sell a product online, but how many people tell you what NOT to do when it comes to creating a successful online business?

I’m going to tell you what hasn’t worked for me. Sure, I have had much success with my online business, but as I look back, there are a lot of things I would have done differently.

Find a niche

If you want to be successful, you will need to find a niche. You can’t just be another online business that lists your products among the masses and hopes to get a percentage of the sales. You need to be smarter than that. Ideally, it would be great if your product is so unique that someone in China can’t start making it and selling it on eBay or Amazon. Even if you have fantastic customer service, if you merely distribute someone else’s products, you will be competing on price with many other sites. You do not want to compete on price alone because you will starve your way to the bottom. There are too many big fish out there that can play the waiting game selling at a near loss until you go belly up. I have tried it. You may enjoy a few days or weeks of sales until your competition finds out what you are selling things for and drops their price as well. It’s just not a good business plan.

Is your industry growing or shrinking?

We all enjoy a wave of selling for a time, especially in a market where the winds are blowing our way, but you have to keep an eye on your industry and where it is headed. Is it becoming saturated or is there still plenty of margins to be made? You don’t want to be in the sheet music business when tablets are being used by many to store all of their music. You better know where your industry is headed. You can’t rest on what has worked in the past without keeping an eye on the future.  Are you seeing your competition getting out of the business? If so, why? Is there more opportunity this year than there was last year or 5 years ago?

Don’t diversify too fast

Make sure that you can deliver your products to market quickly and that you can keep sufficient inventory to keep delivery times quick. Today, you are competing with ridiculous delivery times. Amazon even has the same day service in some localities. People are now expecting their order expedited at no additional charge. Forget trying to compete with Amazon on this one unless you are only selling to your local market. If you are only serving the local market, have delivery service that fights against the big boys, but put the cost of this service within the price of your product. You have to have everything from ordering and receiving your product to downloading orders en masse perfected. If you try and sell everything from many different vendors, you will have a hard time meeting the minimums that these vendors require. You will also be spread too thin in areas like product knowledge, sufficient inventory, maintaining pricing and the ability to add great content to your existing pages.

Love what you are selling

Do you love what you are selling? Is it something that you get out of the bed looking forward to doing? Are you excited when you talk to others about what you are doing? I’m not talking about how much money you are making. Nobody wants to hear about that. When you do speak to a customer, do you leave that conversation feeling like that person is much more productive for having talked to you? Do you feel fulfilled at the end of the day? It doesn’t matter how much you earn, if you hate what you are doing, you have made for yourself golden handcuffs.
Gold Handcuffs with money linking the cuffs together. Don't let your online business be handcuffed.

Your online business should be a way for you to get your products to more people, not just getting more people to buy your products.

Of course, we want more people to buy our products, but the knowledge and experience that we offer as well as the actual products that we deliver should be an extension of ourselves, something that we are proud to ship.

 

To learn how to compete directly with and beat Amazon, click here.