Amazingly, the technology held up pretty well over the three hours, but for this podcast I pared down the audio to one hour of the best discussions. Joining our talk locally was Lisa Hoag of Lisa Hoag Designs. We kick off the audio via some discussion of what “freemium” means to artists, and then Noel presents on crowdfunding and how musicians have used these tactics. Some of the topics we dig into include:

- whether “free” has helped or hurt artists
- why it makes sense to build a brand before crowdfunding
- why the “Free” digital economy has helped content aggregators (Google) more than artists
- the pros and cons of giving away creative content to build a brand/business
- are we entering a new age of “artistic patronage”?
- why Chris Anderson’s “Free” poses dangers for artists
- targeting narrow audiences versus building a broader platform
- the role of social media in tapping into new audiences
- how “the gift economy” is different than “free”
- the extent of the “content piracy” threat

So check out the podcast and let us know if you have any feedback:

We’re likely to do another installment on this event in the future, looking more closely at the social platform aspects. I may also be presenting a version of this “artists in the free and social era” for the Los Angeles 2011 Independent Music Conference, which is coming up about a week from now.

I’m recording these chapters mistakes and all, but the first one came out pretty good, with a decent sound quality, so I hope you enjoy! This one also includes a brief intro by me where I talk about why I’m doing an audiobook version and how I plan to approach it.

I think Rachel Meyers did a great job on the foreword; it was fun to try to bring her words to life.

Download and subscription options: you can download (and subscribe to) all the chapters in the audio book (free) either in our iTunes store or with our audio book RSS feed.

During this forty minute, unscripted conversation, Jon asks Morris about how he found success with eBook sales, whether eBook sales impacts his traditional book sales, and why he decided to publish eBooks without DRM. Morris also talks about the limitations of trendy digital reading gadgets like Kindle for self-publishers from a revenue standpoint.

Other topics covered in this podcast include:

- Why Morris embeds live URL links in his eBooks.

‘- Which eBook topics are “sellable” for self-publishers and which topics (e.g. fiction) should be avoided.

- How eBooks extend Morris’ books sales internationally.

- Different eBook business models, from the unethical to the naive to the most effective.

- How much content within the eBook Morris gives away and how to make judgements about “free content for traffic” versus giving your books away.

- The distinction between hard-selling tactics and building “virtual trust” with potential readers.

——
Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.
——

After we taped this podcast, both of us felt that we can improve upon this one, so we look forward to your comments. But, there’s enough on here worth sharing, including:

- Why blog “traffic” is deceptive and why web sites structured like books tend to get much better Google “love.”

- Morris explains why his blog traffic is significantly lower than his “static” pages, and why “blogging is a curse.”

- The dangers of publishers skipping the text-based content lessons of “Web 1.0″ and heading directly to the sexy social media era of Web 2.0.

- The continued victory of content over aesthetics when it comes to web business, especially for content producers.

- A juxtaposition of lifestyles between the high traffic self-publisher and the overworked blogger/consultant, as well as unfair dismissals and mockery of “cool bloggers.”

- How Free From Corporate America’s concepts on building income-generating assets mix well with Morris’ views on lifestyle profitability and the value of having a income profit margin versus overworking yourself for top line revenue.

- Morris’s 100,000 plus YouTube visitors and why they have had no positive bottom line impact on his business due to their lack of text-based traffic generation. (as well as the inherent difficulties of making multi-media searchable).

- The value of “contextual links” and why Morris would much rather have a high quality contextual link from an obscure site in his industry than a non-contextual link from a hot blogger.

- The limitations of getting home page links from blogs versus more desirable “deep links” to reference pages on your site from well-regarded sites in your industry.

- A brief review of hot social media sites (Twitter, LinkedIn, and Facebook) and an insufficient discussion of their pros and cons (a topic to be returned to in future postings and podcasts)

- Victory for Jon’s Zoom H-2 Recorder over Morris’ weak Walmart recorder that crapped out 10 minutes into the podcast.

- Traffic stats are cited, as well as how Morris tracks the traffic of his site compares to others using free tools (Alexa, Google Trends, and Quantcast).

FACT CHECK: As stated in the podcast, Morris’ web site traffic does currently exceed (or equal, depending on the tool) the traffic on Amazon’s Mobi site.

SHOUTOUT: To the Enterprise Geeks and Bill Simmons of ESPN for providing further validation of the longer, unscripted podcast format.

——
Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.
——

But it’s now ready to play or download:

It’s a pretty large file (10 megs, 45 minute interview), so if you do the “play” option by clicking on the previous link, make sure you have some time and also a broadband connection. Dial-up folks should probably download the file first and then listen to it (right click on the link above and do “save target as” to save on most computers, or save in similar fashion).

The interview was broadcast by Valley Free Radio, based out of Northampton, Massachusetts. The host was Shel Horowitz, and I appeared as part of his weekly “Principled Profits” radio program on ethical business.

In this 45 minute interview, Shel and I touch on a number of topics that are central to the themes of the book, including:

- the origins of the book and the hard business lessons that went into it.

- why the era of white collar outsourcing (and how to respond to it) is integral to this book’s themes.

- the dream of getting beyond the corporate grind and what it takes to break away.

- the formation of my own company and how that changed my economic terms of engagement.

- the key tactics outlined in the book:

1. the importance of taking a chance on your passions but also finding a market for the work you love most.

2. distinguishing between “true assets” and “false assets”.

3. transitioning the “employee’s mindset” to the “owner’s mindset.”

4. why you don’t have to start your own business to change your economic fortunes, and the importance of branding yourself and not your employer.

- how the outsourcing of the information worker is changing the workforce and the nature of the corporate contract.

- how to respond to the loss of a job or to an employment shifts in your industry, and the importance of making pro-active skills changes.

- whether it’s possible to be ethical in business and also achieve financial success.

- why small companies may be more ethical than large ones.

- how the Internet can make it easier to market-test business ideas and accelerate the feedback loop.

I’d like to thank Shel for having me as a guest and I hope folks enjoy the interview!

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.

Readers have been after me. Through the course of writing this book, I’ve been asked about classic entrepreneurial topics like business plans, venture capital, and multi-level marketing. I briefly mocked business plans in an earlier chapter, but that raised more questions than answers. So let’s go through each of these topics, as well as the tactic of franchising, in the context of this book’s themes.

I have no real beef with business plans. I criticized them earlier because business is more about execution than salivating over the “next big idea.” I’ve read lots of business plans over the years; they all gushed with confidence. And yet, none of those companies exist today. Oh well, at least they looked sexy on paper. When I recall the stupid excitement former (annoying) employers felt about their fantastic “plans,” I feel sick. Some of these plans sounded so good they should have been mounted and framed. But now they line gerbil cages.

Sure, writing a business plan can be a great education. As you master the components of the plan, such as marketing and financials, you learn how to tie these concepts into your business model. As a way to learn more about business, writing a business plan is a useful exercise. But the time you spend writing and researching can take you too far into theory. Some would call that an “opportunity cost.” The real learning happens when you take those neato ideas and try to get customers to actually buy them.

A particularly treacherous area is the financials section. Most business plans crunch numbers until they come out right. You have to hold your nose from the stench of these over-inflated fantasy numbers. Fact: there’s no way to pinpoint what the exact costs and revenues of a business are going to be. Contingencies are called contingencies for a reason. Divorcing ideas that aren’t financially viable takes ruthless honesty. Most people rework the numbers until their ideas look good, rather than trashing their ideas. The point of the exercise, of course, is to walk away from ideas that aren’t financially viable. I have yet to see someone who takes their own medicine though.

Jon Reed notes, December 2009: While I’m not a fan of conventional business plans – as in formal, overly polished paperwork – I am a fan of planning in general. Which is why I can strongly recommend Morris Rosenthal of FonerBooks.com and his new “Starting a New Business Plan and Making a Living” flow chart. The opposite of a formal plan, this chart, with jumps to text explanations of each section you might need help with, is exactly the kind of real world thinking that will give you a leg up on your ventures and minimize risk.

Business plans do tie into the world of venture capital, however. You can’t get financed without a business plan, so in that case, a business plan is a mandatory part of the process. I haven’t spent much time on venture capital in this book because I’ve been writing about “freeing yourself from corporate America.” In the first chapter, I contrasted the difference between “lifestyle entrepreneurs” and “Bill Gates entrepreneurs,” noting that this book is focused on the former. There’s nothing wrong with launching the next great American company, but you’re not going to free yourself from corporate America by following that model.

Becoming the founder and CEO of a major American company is beyond the scope of this book. Those kinds of startups typically require large-scale venture capital at some early phase. This book works better for “build as you go” businesses that are not intended to go through the process of becoming a publicly-traded company – a common end goal for most venture capital scenarios.

I’ve never seen a venture capital scenario firsthand that worked out well for a business. True, you can look to today’s business pages and find some that did, and in a big way. But it’s a high stakes game. I’m referring less to the pressures of big-time financing, and more about losing control of your vision. I’ve seen venture capitalists alter businesses beyond recognition. And I’ve seen owners lose control to investment vultures and literally weep with remorse. The old saw “be careful who you get into bed with” never applied more than it does with venture capitalists.

Some people are drawn to venture capital because it’s glamorous. When good looking people in power suits fly to your business to talk smack, things seem pretty swell. If you go the venture capital route, just make sure you are clear about the amount of ownership you are going to have and what the downside might be. Make sure the money folks are either going to step out of the way or be true partners. In the end, venture capital is just one form of financing. There are always other options. I tend to be a bigger fan of debt-financing or business loans. Loans can give you a similar cash influx but perhaps more control over business direction.

Multi-level marketing (MLM) is another topic that comes up when people look at business startups. One of the biggest appeals of MLM is that a legit MLM operation can give you a good head start with a pre-defined product or service. Some businesses would be offended if you labeled them as MLM, for example Avon. This is a good sign. The only worthwhile MLM companies would object to the label.

If an MLM venture is simply about selling products and getting commissions, and if it doesn’t require a hefty down payment on your part, then it may be an option. Once you start talking about making money from folks you recruit into the business who are “downline” from you, junk the literature and take a shower. MLM can provide a useful sales and marketing education, but they are a cop-out from developing your own materials and ideas.

Franchises are a similar concept. If you buy into a franchise, you get the benefit of the umbrella company’s products and marketing. There are franchises in almost every industry. For example, you can buy into a home inspection franchise and get the credibility of being affiliated with a bigger company. Of course, you give up a lot of money in exchange for that credibility. I don’t have a “one size fits all” opinion on buying into a franchise. It can be a good option for folks who are looking to get something off the ground, have a bit of money saved, and have a passion for a business concept that already exists. Some franchises give you a lot of leeway to define how your business will look and run. Others do not. I tend to lean toward inventing your business rather than buying into somebody else’s, but there is a time and a place for franchises.

Another way to look at franchises is to flip the concept on its head: roll out your own business as if it might someday be a franchise. To some people, that’s a repugnant idea, and to me, I guess it is too. I would never want to get into a “Jon Reed’s Beef Stew for the Soul” book series. Franchises can be financially powerful but they are also limiting. However, it doesn’t hurt to think about the re-usability (or scalability) of your ideas. Expanding beyond one location can be a key to streamlining your costs through volume and having a competitive business. It’s important to understand why franchising works, though we might make a conscious decision not to take that route.

There’s no one way to succeed in business. If you’re like me, you’re more interested in maintaining control of your ideas, lifestyle and values than losing all of those things in exchange for a cube in a venture you no longer control. If that’s the case, I recommend keeping the options of venture capital and franchises at arm’s length.

And if must you do a business plan, don’t waste months on it. If writing a plan gets you off the couch, then by all means, do the plan. Just remember that when the plan is done, the business is exactly where it was before you started – a good idea in dire need of execution. Business planning is oxymoronic, because there’s no real way to plan for business, any more than there is to plan for life. A good plan might help you to sleep better at night, but there are contingencies on the way that you didn’t and couldn’t predict. Having the resources to adapt (and knowing how to adjust your venture on the fly) is a lot more important than a pretty plan. That said, I’ve already noted that number crunching is vital to successful business. It’s just as vital to personal finance. But the best numbers are not hypothetical numbers, but real ones, certified by our own sweat.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.

Remember all the idiots who said that the Internet was going to change everything? I was one of them. Yep, I was a card-carrying member of the mid-90s gold rush. The money felt queasy easy, but I still wanted a piece. The Internet’s value to businesses has swung back and forth ever since. Where we’re at now: a pretty good market for smaller players with attitude like you and me.

True, giants like eBay are now entrenched, but the Internet still provides an avenue for those who want to test new businesses without risking shirts. And it’s a great place to experiment with the feedback loop – you can get instant response on new products. And you can get a great handle on the popularity of your pages by crunching traffic stats until your eyes dry.

Ever since the mid-90s, companies have been trying to figure out how to (wank word warning) “monetize” their web sites. The obstacles have changed, but the challenge continues. As of this writing, youtube.com is getting a lot of business press for how much money it is losing despite the site’s huge popularity.

There was a point in the late ’90s where advertising was supposed to save struggling web site sites and solve their revenue problems. But the first wave of Internet advertising collapsed. Banner ad rates came down to earth as companies wised up to the fact that intrusive, “one size fits all” advertising has severe limitations.

In the last couple years, Internet advertising has seen a huge comeback. Traditional advertising has been complimented by the Google “contextual” ad phenomenon. Google Adwords is now just one form of embedded advertising that is driven by keywords. You can see these ads on the right side of Google’s search listings. But more importantly, you now see Google-type ads on all kinds of web sites. Any web site with a decent amount of traffic can now use this type of advertising as a revenue stream. Enterprising folks such as www.askdave.com can make a very good living solely through hosting these ads on their sites. “AskDave” goes extreme, forcing you to smack into those Google ads early and often, but you can opt for a subtler approach than “AskDave” and still make money.

Contextual ads make a big difference in the Internet economy: you don’t have to be ESPN.com to attract an advertiser’s attention. The days of “if you build it, they will come” have returned – though without the evangelical zeal this time around. You can see this even in the case of youtube.com, which built a hugely popular site without a business model and then sold it to Google before I could finish this chapter. Build a site, get traffic, put ads on site, make money. Advertising revenues are crucial because consumers won’t pay for much content besides porn. There are exceptions: ESPN has found a way to charge users a modest amount per year to access their Insider program, but even CNN.com, which tried charging for its video content, had to revert back to offering video for free, using an advertising-based model instead.

Knowing that “if you build it, they will come” sets us free: we can now build sites that cater to our interests. Keep in mind: not all consumer groups are created equal in the eyes of advertisers, but just about any site that has significant traffic can convert some of that traffic into ad revenue. Of course, the most effective sites have multiple revenue streams, combining advertising with paid premium services and mail order products. A small publisher, for example, would have advertising as well as an online bookstore where customers can order books. Informative free content and book samples would drive people to the site. Of course, some folks have enough industry know-how to build web sites that target businesses instead of consumers (this is typically called “B2B” as opposed to “B2C.”) If you can attract businesses to your site, you may be able to charge more than you could with a consumer-driven site.

But the Internet is more than a revenue stream. For many businesses, the real value of the Internet is relationship-building and product education. The majority of customers now routinely research products online before they buy. You can get a real feel for a company’s offerings through a well-developed web site. And of course a company can develop a nice database of prospects by compiling email lists from folks who sign up to receive product updates or free content.

Once you develop enough web traffic, your site will be indexed by the search engines frequently enough that you will be able to identify visitor trends in a matter of days or even hours. And search engines, particularly Google’s, are biased towards sites that offer quality content. Scoring a prominent place in search engine results can drive prospects to a business and save a huge amount of money on marketing. Even conventional brick-and-mortar ventures, such as restaurants, can benefit from a well-thought web site that attracts new customers, offers halfway accurate driving directions, and builds its brand via local and national “portals” that tourists scour.

No, the Internet can’t eliminate business risk. But the Internet makes it much more affordable to roll out new business ideas without the “empty your wallet” marketing required by a traditional business startup. And the Internet makes it *much* easier to take advantage of the so-called feedback loop. Most of the email you get from your site will be annoying, but all of it (barring herbal Viagra spam) will be invaluable. By posting this book online as I write it, I’ve put a lot of reader feedback to use. I don’t know how good the final book is, but it’s much better because of those who took the time to tell me why it sucked.

People make too much of “slaying giants” on the Internet. You’re not going to beat Amazon or Home Depot at the online game. But even myspace.com is a fairly recent invention, so there’s still room for bad ideas to go big. The best thing: a well-designed web site makes a ragtag team look legit. I’ve ordered products from people who probably had pretty lousy hygiene, but I’ve never been burned. Well, there’s one punk in New Jersey who trashed me on eBay. I’ll be sending James Gandolfini by his house shortly.

So if advertising is such an important part of a small enterprise, why aren’t there ads on this web site? Fair question. In business terms, it’s a mistake not to put ads on this site. I don’t have a good reason, except that it feels wrong. I feel the same way about jonreed.net. There are times when ads can cheapen a venture, or imply that your motivations are about getting paid first and everything else second. Sometimes that’s true, but sometimes it’s not.

Having said that, I am in the process of building a new SAP web site, and when there is decent traffic, I will definitely accept advertising. It’s hard to explain why I would take ad money on one site and not another. I just want to make sure with freefromcorporateamerica.com that people see these ideas are not compromised.

People need to stop looking down on ads and placing themselves above the economic fray. Most folks I’ve met who present themselves as above the world of commerce turn out to be independently wealthy. Their hypocritical judgements of my unambiguous desire to be rich have been a great source of inspiration to me. I have also met a few heroic martyrs who were not about the money and solely dedicated to their cause. That kind of life works for a few of us. But there are way more holier-than-though hypocrites than there are heroes.

Claiming economic power, and more specifically, monetizing your ventures, is not a sign of selling out. It’s a sign that you are sick of scrambling and ready to live. Contrary to the beliefs of some, you can help people more when you have resources at your disposal than when the working world has its foot on your neck. Of course, becoming successful does mean sacrificing some precious “street credibility.”

Working towards dreamy goals makes you less cool. People make fun of me all the time because I don’t drink. Then again, that’s probably what I deserve for doing most of my writing at a bar. If the price of being cool in your free time is busting ass for crap wages the rest of the time, I’m more than happy being a freak or a geek or whatever I am. Making money doesn’t mean becoming a corporate tool. If we can find a way to get paid doing something we care about, and if we can use that money to help some people and set some things right, then as far I’m concerned, that’s the new American Dream.

So let’s make some freakin’ money. And yes, the Internet can help us in our quest, but it will never substitute for business know-how. It’s just a tool we can use to launch ventures on the cheap and accelerate the feedback loop. No, we might not win the “cool competition,” but we’ll have the satisfaction of knowing we fought for our dreams instead of giving in to party culture. If that’s a stigma, it’s one I can live with.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.

A balance sheet can be a terrible thing to behold. So we save ourselves the trouble by either not creating one or doing it inaccurately. Unfortunately, listing our home as an asset and patting ourselves on the back is not going to get it done.

A properly constructed balance sheet tallies up the resources we have to throw at our problems. This could be the difference between leaving a crummy job tomorrow versus having to dig in with a long term exit plan. You can’t walk away if you don’t know what you’re working with.

The easiest way to generate a balance sheet is through an accounting program, but that won’t get you the kind of balance sheet we’re after. The best way to make ours is with a spreadsheet like Excel. It doesn’t take much know-how to put together a simple two-column spreadsheet with liabilities on one side and assets on the other. A piece of paper might serve you better than fancy software. A full-featured accounting program is going to classify some things as assets that are not. And it won’t take into account other personal goods that are in fact assets.

Financial advisors promise that your home and retirement account are assets. In this book, they may not be. When you do your “Free from Corporate America” balance sheet, you only list assets that can be converted into cash in a short-term timeframe (three to six months max). Retirement accounts can only be included if you are willing to liquidate them.

Most people are not, and for good reason (If you are thinking of using your retirement account to launch a business, always look into borrowing against it first). For our balance sheet, you can only include your retirement account if you really are willing to liquidate it. Of course, you must subtract the penalties and early withdrawal fees and list only the remainder of your IRA as an asset.

When it comes to getting out of corporate America, cash is our key asset. The extra cash can be applied in several ways: we could step back from our “careers” and pursue a more promising field; we could launch a new side venture, or we could shift to part-time work and pursue our own projects aggressively. You can’t make those choices without an accurate balance sheet.

We approach the balance sheet differently because of our premise that 9-to-5 living is not going to get us there. The new plan is to stop putting all our cash into inaccessible IRAs and instead to use it to fund the creation of our own income-generating assets. These assets will give us a “home run potential” we didn’t have before, and they will ultimately increase our job satisfaction as we get closer to working on our own terms.

With that in mind, what do you do with your home? If you own your home, you may have been advised to list the entire worth of the home as an asset on your balance sheet and then list what you haven’t paid as a liability. Since we are only interested in cash we can put to work in the short-term, we don’t do that. On this balance sheet, there are two ways you can account for the value of your home: if you have enough equity that you could refinance your primary mortgage and take money out, then list the amount of money you could pull out as an asset. (strictly speaking, refinance money is a loan, not an asset, but since it’s protected by the underlying value of the house, we are bending the rules).

Alternately, if you could sell your home and make a profit, and *if* you have no problem selling your home and cashing out, then you can list your home as an asset. If you go this route, you need to determine the price of the new home you would buy when you sold your old one, and then determine the cost of the down payment on the new home. Take the profit you would make from the sale of your old home, deduct the cost of the new down payment, and you have the true amount of your home as an asset for our purposes. We are looking for the cash you have to work with, and nothing else.

This is a more painful process than a typical balance sheet, and you’re certainly encouraged to do a more conventional balance sheet alongside this one. Conventional balance sheets work fine for those who are content to click their heels together and hope that the corporate economy holds up and that retirement will offer a chance to live a little. This book holds that we can’t afford to wait, so we need a different kind of balance sheet. I’m not saying you shouldn’t put any more money into your home or your IRA. But you are going to need some capital outside of those investments (unless you are able to borrow against them in a way that is financially appealing).

Using our system, how do you treat your car? Same as your house. If your car is paid off, take the resale value of your car, subtract the cost of the next car you would buy, and list the difference as your automobile asset. You may wonder why we aren’t allowed to simply subtract the new car’s down payment as we did with the home. The answer: financing a car is not considered the best strategy. Financing a home gives you access to home equity loans and competitive interest rates (not to mention tax deductions). Since car loans do not provide these benefits, the total cost of the new car, not just the down payment, must be subtracted from the value of our current car.

I have a car problem. My car is probably worth $14,000. I could buy a used car for less and pocket the difference. But since I have a pathetic emotional attachment to my car, I’m not allowed to list it as an asset, even though it’s paid off. A paid off car is a good thing, but since I would never sell it, I don’t get to list it on my balance sheet. The benefit of a paid off car will become apparent in our next chapter, when we construct our monthly cash flow statement. But my absurd love for my car is a great illustration of how “assets” can get us into trouble, and how we have to be careful about classifying them as assets if we have no intention of ever selling them.

So what else constitutes an asset? Besides our checking and savings accounts, not much. Some books, including the excellent Your Money or Your Life, tell you to count material possessions as assets if they can be liquidated for cash. I don’t agree – unless you are truly ready to part with them. Extreme example: a wedding ring. I don’t consider it an asset because it would only be sold in dire times. By the time you’re selling your wedding ring, you have more to worry about than corporate America. Divorce changes the emotional ties – then it might be considered an asset at cash value.

The problem with listing our possessions as assets is that in reality, we’re not likely to part with them. My DVD and CD collections are probably worth $1000 in cash (and weren’t a great investment on my part for that matter), but there’s only a handful I would sell – bad gifts like The Mummy Returns. Either way, The Mummy Returns isn’t going to save my balance sheet. Since I wouldn’t freely sell my DVDs, I can hardly call them an asset. In contrast, I have a friend who is a freelance writer. She has technical bling like iPods lying around that she was given for product reviews. I consider that stuff an asset because she has no attachment to them. For this book, if you’re not willing to put it up on eBay, you can’t list it as an asset.

The end result of our asset column might look something like this:

Checking: $10

Savings: $25

House: $50

Car: $20

Household Items (CDs, extra TV, etc): $10

Total Assets: $115

(I have used small numbers so that our examples resemble my own assets).

Then we move on to our liabilities column. For most of us, the liabilities column is not a pretty picture. Typically, credit card debt alone is enough to earn us at least 5K in liabilities. If we owe money to friends, family, or our alma matter, that goes on the liabilities column too. The last one burns, since we can’t list our degrees as an asset. The good news about our system is that if we owe money on a house, boat, or car, we don’t have to list it as a liability here, as long as the resale value of the “asset” is greater than the amount we owe.

Unless we own some bad-luck floodlands, we should be able to avoid listing these financed items as liabilities. The exception might be over-extended houses with several mortgages on them. Businesses make distinctions between short-term and long-term liabilities to get a clearer picture of when the hammer comes down for particular debts. You can do this if you want, but it’s not essential to our purposes here.

A liabilities list might look like this:

Credit Card A: $50

Credit Card B: $30

Family Loan: $20

Student Loan: $20

Total Liabilities: $120

(if you only have $120 in liabilities, you are looking better than most of your neighbors, even the ones who drive nicer cars than you).

Once we’ve added up our assets and liabilities, we can subtract one from the other to determine our “net worth.” In this case, our net worth is a negative $5. It is not unusual to have a negative net worth using this rigid method, which excludes retirement accounts and homes that could balance the equation in our favor. But that kind of “balance” is deceptive, as the cash we are listing for our home and retirement account is not something we can turn to in order to solve the work predicaments that are our focus here.

My own balance sheet isn’t going to win any prizes. My liabilities, which are too demoralizing to include here, involve a modest (but annoying) amount of consumer debt, as well as a business credit line with a balance outstanding. This raises the question: if my balance sheet is so unimpressive, why should this book be taken seriously? If it will help my credibility, my cash flow situation is pretty solid, and that’s a key piece of financial health we’ll investigate in the next chapter.

I have also been able to self-finance the development of several assets. I have two books out; this one is my third. I can’t list them as assets, because at this time I can’t (and wouldn’t) sell them, but one of the books is generating some decent income, so hopefully good news is to come. No, my balance sheet isn’t impressive, but one of the reasons it’s so low is because I’ve spent good money and time creating assets that may one day dramatically strengthen my finances – while giving me a great deal of freedom in terms of when and how much to work. By my own rules, I’m not allowed to list my books as assets, but down the road, I hope that they will add considerably to my financial standing. You may experience a similar “dip” in your balance sheet as you get your new ventures off the ground, but that is the kind of risk you have to take to keep the bigger dreams alive and give your life a serious upside.

My books give me a focus for my future, and you can’t put a price on a plan that shows a way forward. You may have heard of that rule: pay yourself first. (This rule refers to the practice of putting money in retirement accounts before you pay any other bills). My variation on that rule is: fund yourself first. No matter how tight the cash is, make sure those projects are moving ahead somehow. If you live strategically and not just paycheck-to-paycheck, chances are that your balance sheet will eventually reflect the maturity of your approach.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.

It’s hard to master life without mastering business, and it’s hard to master business when you’re slogging it out in the service industry. People have a nasty habit of taking dead-end jobs because “the money is too good to pass up.” Later, they hit a bitter ceiling.

I didn’t know diddly-squat after I graduated from college. Of all the ill-advised decisions I made, I did have one redeeming impulse: I craved new skills, and I was willing to suffer financially to get them. At one point, I took a “job” for forty dollars a week editing a new publication. That’s one way to break into a new field.

When you’re willing to work for pennies, doors open. Friends waiting tables were banking more than I was. But I had this fanciful notion that my real compensation was the business education I was receiving. It might have been the only thing from that entire era I was right about.

Often times, jobs that have the most cash incentives – bartending, waiting tables, and entry-level sales positions – don’t have a skills upside. (Though true sales jobs, where you prospect and close leads, are *vastly superior* to retail “sales” environments where you learn how to scan batteries instead of closing deals).

“Management” positions can be even more dangerous. In most business settings, “manager” is a special role set aside for the biggest sucker, the one who is willing to do the owner’s dirty work in exchange for a chance to boss people around. “Management” experience is valuable to a point, but as a general rule, it’s better to have a life than to get stuck acting like an owner but being paid like an employee.

Full disclosure: I currently manage people for my biggest client. It all depends on what you’re getting out of it. In this case, my situation doesn’t feel stagnant, and I have a profit sharing agreement in place. But I’ve been in crummy management situations before, the kind where you work way too hard for an extra quarter an hour and a bigger set of keys. You can get lost in so-called “management careers.” The real secret is to learn just enough about management to know how to push your own ventures forward.

The preferred approach is simple: “chase the skills, and the money will follow.” There’s no absolute rules – all you need is a knack for knowing when a job is drying up. If you head towards the biggest challenge, and switch jobs ruthlessly to find those challenges, you’re on the right track. Notice that this approach clashes with how our corporate friends want us to play.

Drop this line during an interview: “I’m here to learn as much as I can from your company, but as soon as I’ve outgrown this situation, I will move on.” You’ve broken a cardinal rule by stating your self-interest; no offer will be forthcoming. Nevermind that your future employer would do the same to you in a heartbeat.

Think of your business know-how as a container, and your cash flow as the water. Most people have pretty leaky containers. It doesn’t matter how much cash you throw into a leaky container; it will all flow out the bottom. So what makes for a strong container? Some people think it’s about tracking every expense and clipping coupons. At best, that’s just the beginning.

It’s not as simple as treating expenses like Whack-A-Mole, popping each in the head when it pokes up. Expenses are not created equal; sometimes you have to spend money to make more of it. So we have to understand the power of investing, and that means grasping financial documents like balance sheets and profit and loss statements. Strengthening our grip on cash flow requires more than just financial know-how; it also involves marketing/sales and project management skills. You can learn some of this on your own, but the best place to pick it up is on the job. By learning how a business invests, earns, and spends, you can apply that to your own situation.

Companies assess human resources in terms of their current needs and overall direction. We should adopt this same approach, continually assessing the tradeoffs. When we get seriously off track, it’s time for a career change. For some, this smacks of disloyalty. We have a hard time putting our own interests first. We are conditioned to give everything to our employers, and they are more than willing to take it. But if you are stagnating, you won’t perform at your highest level. By pursuing the best work situations, you bring out the best in yourself. And that’s the real meaning of loyalty.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.

To free yourself from corporate America, you need to join the cult of the expert, and then renounce it. The second part takes a bit more doing.

The logic of becoming an expert is easy to understand: to compete against big companies, you need to excel at something that has been overlooked by the mass marketers. The way to develop that niche is by becoming an expert at something.

In an earlier chapter, we talked about the crucial distinction between an expert and an “aficionado.” The way I am using the term, “expert” implies that you have mastered a talent that has (or will soon have) a market value. “Aficionado” (as I am using it) means you have mastered something entertaining but financially useless. “Aficionado” means you are good at something but the world is indifferent. Harry Potter figurine collecting, hair band memorabilia, and fantasy football are examples of “Aficionado” activities. Indulge them by all means – as long as you have cash to burn or are comfortable treading water financially. At certain points in life, it’s fine to coast.

Those of us with bills to pay and ambitions to satisfy need to take our heads out of the crossword puzzle and developing a meaningful expertise. How do you know when you’ve become a marketable “expert?” That’s an easy one. You’ll know because the phone will ring, and it won’t be a telemarketer. You’ll be approached with new job offers, new business partnerships, and speaking opportunities.

That’s the point where most people screw up. They start to buy into their own hype, becoming infatuated with how billable they are. It’s true that being a sought-after expert is a big step. It means you have options. No matter what kind of messed-up job you wind up in, your niche is a better parachute than any kind of severance package. But unless you can gross millions yelling at companies like Dick Vitale, the cult of the expert is a trap.

It’s a trap because you can’t step away. If you’re not billable, you’re not making money. And the more sophisticated your expertise is, the harder it is to train someone to step in when life throws you a curve ball or an extreme sports accident.

This book is not about achieving conventional power or feeding the ego. It’s about accumulating the resources to reclaim the ultimate commodity: your own time, spent as you see fit. Work when you want, on your own terms. Experts generally can’t do that. Experts are at the beck and call of their expertise. It is wonderful to feel indispensable – that is, until that terrifying day when you realize you are chained to your desk.

The happiest entrepreneurs I know built systems on top of their expertise – systems that were easily taught to others. Once you figure out how to stay billable, you need to take it one step further, and remove yourself from the equation. You do that by creating teachable processes and cash flow streams that other people can manage. You want to create “turnkey” operations – businesses that are ready out of the box, businesses that smart high school students could run.

The harder it is to teach someone to do what you do, the further away you are. I am still far away. I still count on my expertise in the SAP marketplace to foot my bills. My ultimate goal is to create assets that others can manage. Publishing is one route to that goal. True, I’m the only one who can write the books (unless I hire other authors), but I can definitely teach people to handle the other aspects of publishing (especially marketing and publicity) that take up so much time.

I used to thrive on feeling indispensable; now I see it as a warning sign that I’m headed in the wrong direction again. At this point in my career, there’s nothing worse than a list of tasks on my plate that only I can do. It’s on me to come up with business ideas that are easily implemented by others. The real riddle is to find a way to do what you love without letting it grind you. Either that, or hit the home run: write the bestselling book, become a pro basketball player. At the highest level, you can afford to be billable because you’re banking so much per hour. But the rest of us are better off cultivating systems.

Real life examples of “teachable systems” span across industries. I’ve seen people do it with staffing firms, database consulting, and even restaurants. I wouldn’t wish the restaurant business on my worst enemy, but the most successful restaurant owners *are* able to turn their operations over to managers – if they have their egos under enough control to step away. A lot of people are in the game to lord their power over others. You can’t free yourself until you get over yourself.

There’s nothing wrong with being an expert at something. It’s a lot better than being a generic middle manager that companies can hire and fire at will. But unless our goal is to work ourselves into the ground, expertise is ultimately a trap – unless our expertise is training other people to run our businesses.

Most of us have a hard time imagining the downside to getting paid to babble on about things we are good at. But there will come a time when the only thing you want is the one thing you can’t pull off: to step away from the wheel without having the bus run off the road. There is nothing more frustrating than knowing that most of your ventures cannot do without you for more than a couple of days. And on the flip side, there is nothing more satisfying than income earned with little ongoing effort. To me, that is the true definition of “passive income,” and the more passive your income is, the freer your life can be.

But developing truly “passive” income is no easy trick. Most of our so-called “assets” dry up as soon as we step away. The solution is a combination of perseverance and a willingness to question assumptions about what success really means and how to get there. Profit should be measured partially by how much life energy we expend to get them.

I have referred to my friend who makes a bunch of money from traffic on his web sites. Between advertising and book sales, he is doing well, and his ongoing workload is minimal. I make more money than him, but by our standard of time-versus-money, he is the more successful businessperson. So join the cult of the expert, but move beyond it as soon as you possibly can.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.