Category Archives: Financial

Advice To A Soon To Be College Grad

A close family friend (Burjis) whom grew up like a brother is about to graduate from college with a degree in electrical engineering (which I think right now are the highest paid graduates). He’s recently started asking me question about money, but I sensed he didn’t really didn’t know what to start asking.

Even more sad, was I didn’t know what to tell him, or even where to point him.

There’s a million and one books on the subject, but of course they’re all too long and detailed to give any practical advice which can be acted on in the next few hours (although reading them is a great way to start).

So after feeling bad that I couldn’t immediately impart any valuable knowledge, I decided to write down what personally helped me when I was ready to graduate college.

My own brother Ashdin will also be in the exact same boat in one year, so I figured this is a good time as any to give this sadly un-discussed subject a shot.

So this post is dedicated to Ashdin and Burjis:
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Just FYI:
I’m a little different in that I never started a job hunt (didn’t want to, need to or plan to), but at the age of 25 I’ve seen many close friends go through it, take jobs, and many of them regret their choices.

I can count the people I know my age who like their job on one hand, and still have several fingers left over.

So are the things that helped me most during those pre-real-world-transition years. If you want more detailed advice, go read a book (which is coincidentally tip #3).
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I think the single most valuable thing you can have near graduation is options. This means you have a sufficient amount of money in the bank to live for a while without having to immediately accept a job offer just because they’re giving you a $3,000 bonus, and you have several different good job offers. This is why people usually end up in bad jobs, because they’re desperate.

If you manage to find your dream job before you even graduate, awesome.

By all means possible, avoid being desperate once you graduate. The list below is what I think helped me attain that.

1.) Save money
Stupidly simple advice that is in the #1 spot for a reason. If you go out on the town use a flask, only pay cash for your spending (so you can phsyically see and feel how much you are spending), don’t waste money on dumb stuff, use your money wisely. Whatever it takes.

I absolutely guarantee not spending a little money now will help A LOT later. If you work an internship, immediately put 50% or more away immediately before you can spend it. Let your friends spend $100+ several nights a week at the bar…good for them….your eye is on a bigger goal.

2.) Split up your bank accounts
It’s free and is possibly the greatest financial move I ever made, and you can do it online or at the bank in 15 minutes. Seriously, do it right now. It gives you a MASSIVELY better idea of how much money you can allocate to certain activities.

Do this anyway you like, but what I did in college was:

  1. General bank account: All money earned went into this account and was then distributed to the sub-accounts.
  2. Savings account: I didn’t know what I was saving for, but this proved to be amazingly valuable. When this account gets too big, I max out my Roth IRA with it.
  3. Spending Account 1: Going out, seeing a movie, having fun etc all came from this account. 10% of income was allocated here.
  4. Spending Account 2: I put 10% of my income to this account per month. This account strictly used for vacations and holiday spending (since buying gifts and going out during the holidays puts a strain on Spending Account #1).
  5. Investment Account: 30% of my money went here. This was money that could be used on anything that would help make money or continue my education.
  6. Bills account: 30% of my income went to this account. Paying rent, buying groceries (minus alcohol purchases or supplies for a party), gas, bills, insurance costs, phone bill etc. were all paid from this account.
  7. ROTH IRA: I opened one with Ameritrade even though I didn’t really know what the hell it was at the time. I just knew I needed it. It’s free and easy to open, and you can read a thousand books on how to squander the money in there. Point is, just open one now and learn about it later.
  8. Whatever you want: Open accounts that help you save for a cause like a ‘car account’ or ‘buying a condo in two years’ account. I opened many more, but the aforementioned 6 are the ones that helped kick it all off.

You probably won’t open this many accounts right away, but AT LEAST have 3 separate accounts for now.

3.) Read (about financial stuff)
Go to the public library (don’t bother actually buying these books) and start picking out books about personal spending. Go through at least two of these a month and you’ll start learning a wealth of different financial techniques and simple tricks. I’d say about 20% of what’s in these books is useful (and you’re both smart kids so you’ll know which 20%).

They mainly preach the same things, but they often throw in random gems of information. For example, I read the book “The Automatic Millionaire” which could’ve basically been summarized to this sentence: Setup your bank accounts to automatically transfer money to your savings accounts every month. Book done.

Read the stories, get inspired, learn from each book. I heard Jerry Seinfeld talking about all the books and classes he’d taken say, “I view all these things like supermarkets. I go into them, take what I need, then leave.”

I can’t stress how important it is to educate yourself on these financial matters. It’s enjoyable and will make your life a whole lot easier.

4.) The Investment Account
I liked experimenting with different small business ideas in college, so I create the Investment Account so I could use that coffer of money for anything I deemed would improve my understanding of something, satisfy my curiosity, educate me or make me money (primarily the last one).

I put a full 30% of my income into this account. In the past I have used it for piano lessons, guitar lessons, books, weird musical instruments, buying a tuxedo to crash parties in, making trips for business purposes and various money experiments for this blog.

Freely spend this account when needed. Investing back in yourself is absolutely imperative…and you’ve often gotta have money for it. I feel this particular account was a great help during those years.

5.) Have Job Options
Since I’ve never had a real job don’t take one bit of this advice…but hear me out:

Want to do electronics research…or maybe environmental design? Make sure you’re in the right place. Don’t be fooled by euphemistic job titles which sound cool but mean nothing. The term “Analyst” comes to mind.

The people I know who enjoy their jobs and learn the most from them are the people who made absolutely damn sure they get to do what they want on the job.

What I mean is they properly planned out the type of work environment they liked, what type of talents they’d like to develop, what industry they’d like to learn, and what type of work is the most intellectually stimulating to them. They then sought out companies which could offer this.

How could they do this? Because they had options. They had enough money to live for a while without having to take the first opportunity that gave them a starting bonus just so they could pay rent.

Oddly enough, these people were usually the FIRST to find great jobs and have offers thrown at them! I guess there’s something about a confident applicant who knows what he wants.

If the company gives you an offer you don’t like, you can tell them to, “Take this job and shove it” (of course never say that out loud…no matter how hilarious and satisfying it may be)! Your work will take up over 60% of your waking hours, you might as well get something worthwhile out of that time besides a check.

Don’t get ‘having options’ confused with laziness. The friends I see in good positions were also the friends who went to the MOST interviews and wisely and respectfully played company offers off each other.

…but I’ve never had a real job, so please don’t listen to me.

Good luck both of you, not that you need it.
-Neville

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In the comments anyone can impart their own advice to these young 20-somethings who are about to enter the working world. What worked for you? What didn’t work? If you could do it all over again, what would you have done?

Experienced advice is likely far greater than mine.

How Gas Prices Do and Don’t Affect My Life

All this talk of rising energy prices, just for fun I decided to see how this affects me personally. Since everything has some correlation to transportation which is directly related to gas and energy prices, the prices of pretty much everything has (or will) rise.

I want to see what areas of my life are affected more than others in respect to rising energy prices.

How They DON’T Affect Me (much):

  • Driving in Austin. Thankfully most things where I live are pretty close. My gym is 5 miles away and I usually ride a bike (bicycle) there. Downtown is also about 5 miles away.
  • The Scooter. I bought a scooter a while ago to bypass traffic and parking when I was in college. That scooter gets 122 MPG (Yes, one-hundred and twenty two miles per gallon), and I can comfortably ride anywhere within about an 8 mile radius (can’t use freeways). Full tank of premium gas (1.9 gallons) used to be about $4.30, now about $7.80. However it’s still negligible. 200+ miles of travel for less than $10 is pretty good.
  • Groceries. I know all the prices have gone up, but I eat a very simple diet of mainly fruits and a few other things, so each trip to the grocery store (about once per week) costs me roughly $20. Simple trick: use one of those hand-carry carts instead of a normal shopping cart. It’s hard to stuff that little thing with more than $20 worth of food and it forces you to only buy the essentials, no junk. So while rising energy prices DO affect this area, it’s not extremely significant yet.
  • Going to work. I wake up, walk to the next room and BOOM I’m in the office. Zero commute time = zero transportation costs.

How They DO Affect Me:

  • Prices on my websites go up. For example HouseOfRave’s shipping prices have literally doubled in the last year. Many products have also gone up in price to correlate with higher shipping costs from Asia. People accustomed to paying $5 for shipping are sometimes surprised to see $10+ shipping charges on relatively small orders.
  • When I drive to Houston. My family and lots of friend live in Houston so I try to go back often. It’s exactly 150 miles from Austin to Houston, so a 300 mile round-trip (Roughly one full tank of gas in my GS300). Each trip to Houston equates to about 450 miles of driving which equates to nearly $110 in gas per trip.
  • When I drive IN Houston. This city is huge, and no matter where you go, I’d say it’s at least a 15-30 minute drive. There’s really no way around this in Houston.

Conclusion: So far rising energy prices are more of an annoyance to me than a real issue. They haven’t really had too much effect on my lifestyle, although I’m pretty sure this is something that will slowly become more of an issue in the coming years.

*By the way…this article really tested my grammatical ability to differentiate between ‘Effect’ and ‘Affect’!

What It Costs To Be Alive

I don’t know where this came from, but I was randomly curious on how much it costs me to simply exist here in Austin, TX. per year.

Fixed Yearly Costs:
$1,000 = Car insurance ($84/month)
$1,800 = Health insurance ($150/month)
$960 = Cell phone ($80/month)
$6,000 = Rent ($500/month)
$12,000 = Food, gas, general items ($1,000/month)
$2,400 = Random Costs ($200/month)

Total = $24,160

That’s just to live, doesn’t even account for going out, travelling etc.
I also have few monthly bills because I have no debt, no loans and no car payment.

Hmmm….good to know.

Money Made Since 01-01-2005 – Gone

From the beginnings of this blog on November 17th 2004, I openly wrote how much money I made, saved and spent. However I rarely reported what I earned through partnerships or consulting. This means what my actual finances were and the finances listed on this blog were different.

December 2006 was the last month I publicly accounting my income. For all of 2007 I haven’t listed specific income, and I will finally take off all that income on the NevBlog.com sidebar.

The plethora of bloggers openly listing their income generally hide their identity, write under pseudonyms or don’t name the companies they work for.

It’s not exactly hard to find out that I look like this:

…or that I live in Austin, TX. and Houston, TX., or that my phone number is:

…so listing detailed income gets tricky. Let’s say I do some consulting for a company and I openly list how much they’re paying me per month. It’s not fair to them to openly list that information.

One of the interesting things people found about this blog was the fact I so openly listed income. It was also good for me, as I felt self conscious about my finances if they were too low. An open environment definitely helped.

But for now, I’ll stop writing every piece of specific income on this blog.

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Here is the income for 2005 and 2006. And yes…I know I listed “Change Jar” as income when it’s not.

Money Made from January 2005 till Deceber 2005:
Online Biz – Jan. $ 502
Work $ 253
Work $ 281
Ebay Sale $ 100
Change Jar $ 55
Online Biz – Feb. $ 751
Work $ 271
Change Jar $ 30
Rebate $ 30
Work $ 229
Lottery Experiment $ 2
Web Design $ 100
Online Biz – March $ 946
Syntel Dividend $ 270
Ebay Sale $ 218
Ebay Sale $ 340
Water Experiment $ 5
Work $ 246
Work $ 248
Online Biz – April $ 836
Web Design $ 300
Change Jar $ 32
Surveys $ 55
Books $ 165
Selling Notes $ 105
Work $ 297
Online Biz – May $ 1,024
SYNT Dividend $ 21
FO Dividend $ 6
GE Dividend $ 10
Work $ 213
Change Jar $ 17
Work $ 167
Online Biz – June $ 718
FO Dividend $ 11
Work $ 274
Work $ 261
Online Biz – July $ 834
Work $ 304
GE Dividend $ 10
SYNT Dividend $ 11
Change Jar $ 35
Acco Brands $ 183
Work $ 210
Books $ 30
Online Biz – Aug. $ 804
ACCO Dividend $ 7
Work $ 228
Change Jar $ 76
Online Biz – Sept. $ 654
Selling Pixels $ 1,350
FO Dividend $ 11
SYNT Dividend $ 11
GE Dividend $ 9
Online Biz – Oct $ 1,120
Misc. $ 1,000
Birthday $ 200
Online Biz - Nov $ 1,630
Change Jar $ 115
Online Biz - Dec $ 1,801

Total on Dec. 31st 2005
$ 20,021


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Money Made from January 2006 till December 2006:

January 2006
Selling Pixels $ 700

Online Biz - Jan $ 1,131
SYNT Dividend $ 11
FO Dividend $ 11

February 2006
Change Jar $ 85
CraigsList $ 100
Online Biz - Feb $ 2,016
Adsense Experiment $ 138

March 2006
Mobile Marketing $ 158
Other $ 3,000+
Online Biz - Mar $ 1,915
Selling Pixels $ 100

April 2006
First order f/ new biz $ 30
Other $ 350
Selling Pixels $ 50
MobileCampus $ 110
MobileCampus $ 50
Online Biz - Apr $ 1,080
SYNT Dividend $ 11
FO Dividend $ 11

May 2006
SYNT Sale $ 681
ABD Sale $ 175
Other $ 1480
Selling Pixels $ 50
Change Jar $ 55
Online Biz - May $ 1,345

June 2006
FO Dividend $ 11
PGH Dividend $ 12
DYN Sale $ 250
Other $ 30
Online Biz $ 2,505
FacebookProfile $ 28

July 2006
Online Biz $ 1,770
Other $ 300

August 2006
Online Biz $ 1,600
Other $ 300
Change Jar $ 80

September 2006
Online Biz $ 1,700

October 2006
Online Biz $ 5,000+
Other $ 1,000

November 2006
BIDU Sale $ 230
Stock Dividends $ 32
Other $ 500
Adsense $ 120
Online Biz $ 4,000

December 2006
Stock Dividends $ 30
Other $ 500
Online Biz $ 4,500

Total on Dec. 31st 2006
$ 38,341

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Last Account Snapshot:

Explanation of accounts

Making More Money Than His Job

The Bottled Water Experiment (and part 2) were some very interesting experiments in a micro business, and since then I’ve got tons of feedback about them.

However it’s always cool to see someone else take the idea to the next level. Here’s a guy who saw these water experiment posts and tried it out, and is currently making more money selling water than his job!

Checkout this comment on part 2 of the water experiment:

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I started my own water business after reading this post. I put a twist on it however as I replaced the stationary location with a backpack lined with a trash bag full of ice and bottles, and parked my car in a stationary location with the ice chest and other water to come back and refill. I am MOBILE! I made the shirt that says “Bottled Water $1″ and headed to the river on a very hot day. People could not believe that I was doing this, everyone thought the idea was so awesome, and I couldn’t take credit. But I did sell ALL my water. 200 bottles on the first day.

I did this 5 days in the first week, for 4 hours before my shifts as a manager at chick fil a. I found out that I was making more money from selling bottled water than from my real job. So I posted ads on craigslist, offering to pay college students $10 an hour to do my bidding. I got 14 responses, and hired 5 people. Now I have a guy at the river, one at the biggest local park, two on the college campus of VCU and one in the popular downtown business sector. Each person generates about $100 a day for 4 hours of work at ten dollars an hour. thats 20 hours of labor for me to pay so 200 dollars gone, but 300 dollars are mine, minus my costs of getting water from costco, which costs me roughly $100 dollars each day. and I make $200 a day for myself, and all I have to do is go buy water once a day. Thanks nev!
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I love how he took the concept, put a small spin on it then scaled it to make $200/day. That’s some serious summertime cash (not to mention good experience)!

I Bought A House!

That’s right, I bought a house.

Technically the house is still just a plot of land with the builders temporary office and a large trash bin on it…but it’s MY plot of land.

I put down a $500 deposit and instructed the builder (Centex Homes) to build it far out as possible, so I won’t be moving in the new house till around November 2007.

The plot I bought was the last one in the entire neighborhood (71 and Riverside in Austin, TX.). It’s on a cul-d-sac and is an oversized lot so I’ll have a bigass backyard.

SUPPOSE SOMETHING GOES WRONG and I don’t end up wanting the house, I basically get my deposit back from Centex. However I can also sell the contract to someone else and make a nice 4-figure profit as the demand for space in the neighborhood is very high.

The cool thing is this community is strictly no-investors, so the demand for these homes is not coming from people just trying to flip the homes or rent them out, which is a sign that a bubble is not driving the prices, but just shear population growth (Austin is growing like crazy).

The reason this neighborhood had such great prices is because it’s in a relatively unknown area. However there are 4 major projects around the neighborhood under construction (and nearing completion), and a brand new highway with an exit/entrance right near by. It’s also only 5 miles away from Downtown.

There is nowhere to buy a house in Austin for $148,000 with that proximity to Downtown.

This is a bad Photoshop rendition of what the brand new house will look like. In actuality it will look much like that house on the right.

Me on my swath land (and an industrial receptacle in the background):

Move in date: November 2007
First Payment: October 2007
Price: Roughly $148,000 + additional features.
House: One story, 4 bedrooms, roughly 1,500 sq. ft.

One room will be my bedroom, one room will be an office, and two rooms will be rented out. There are 3 very large high tech companies not even a mile from the house, so I can pretty easily find some other young professionals to rent to.

Hopefully this turns out to be a good financial move in the long run, I have a feeling it will with the amount of development happening around here! I also have 8 months before I have to start paying for anything, which means I can get proper finances in place for the mortgage and start saving for all those expensive things associated with home ownership (furniture / tools / TV / bedroom sets etc. etc…).

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Resumite Sold, I’m $145 Richer

Resumite.com was put on sale a few days ago, and now the auction is over.

Total I made was

So all in all Resumite for me wasn’t a failure, but not necessarily a stellar success either. It was something that had potential, but it just wasn’t in my interest or right timing.

All in all I learned something and made a little money. End of that saga!

Like most of the little sales like this, I put the money away:
30% – Bills Account
30% – Investment Account
20% – Permanent Savings
10% – Spending Account 1
10% – Spending Account 2

Online Business Exceeds the $5,000 Mark

Through some simple marketing and a bit of luck, I’m glad to say House Of Rave received 530 orders this October! Profits exceeded $5,000 for the month which is good news. Hopefully I can successful sustain at least 80% of his profit level in the non-Halloween months. According to my sidebar, I made $1,120 in profit from House Of Rave just one year ago in October 2005, so there has been significant improvement in profits.

This is a new milestone because it indicates I could realistically live off just one venture of mine if needed. Now the real work starts, sustaining and growing these temporary results.

HoR still runs almost the same, just a few modifications that cut out certain steps like manually charging each customer or creating orders one by one. My time should be spent growing, marketing and adding content, not caught up in small details which can be easily automated.

Starting Charity Account with AdSense

I’ve complained about Google AdSense many times before, saying I will never put them on NevBlog. Well, that’s changed.

I have a very under-funded Charity Account with Bank of America which I recently started, and not much money has gone into it. This account automatically accumulates money every week from my main account, but relatively slowly compared to the other accounts.

Starting this Feb 1st I put a vertical Google Adsense banner on NevBlog to generate income for this new charity account. I tried to make it very un-invasive:

Leaving the ad relatively out of the way is contrary to maximizing its profit potential, but I don’t want to clutter the site.

So far the return is extremely BAD. The first day I got several thousand impressions, 8 clicks and a grand total of 38 cents. If that’s a taste of the profit to come, then I’m not sure AdSense is even worth it.

I thought this would be a painless way to increase the amount of money I give away, so hopefully the profits improve!

2005 In Review

I came out of 2005 earning around $20,000 for the year just from side projects and while still a full time student. Not too bad, but not a living wage.

I am now graduated and can concentrate full time on the game of making money.

For my own reference, here is the money I brought in for 2005:

-Online Biz – Jan. – $ 502
-Work – $ 253
-Work – $ 281
-Ebay Sale – $ 100
-Change Jar – $ 55
-Online Biz – Feb. – $ 751
-Work – $ 271
-Change Jar – $ 30
-Rebate – $ 30
-Work – $ 229
-
Lottery Experiment – $ 2
-Web Design – $ 100
-Online Biz – March – $ 946
-Syntel Dividend – $ 270
-Ebay Sale – $ 218
-Ebay Sale – $ 340
-
Water Experiment – $ 5
-Work – $ 246
-Work – $ 248
-Online Biz – April – $ 836
-Web Design – $ 300
-
Change Jar – $ 32
-Surveys – $ 55
-Books – $ 165
-
Selling Notes – $ 105
-Work – $ 297
-Online Biz – May – $ 1,024
-SYNT Dividend – $ 21
-FO Dividend – $ 6
-GE Dividend – $ 10
-
Work – $ 213
-Change Jar – $ 17
-
Work – $ 167
-Online Biz – June – $ 718
-FO Dividend – $ 11
-
Work – $ 274
-
Work – $ 261
-Online Biz – July – $ 834
-
Work – $ 304
-GE Dividend – $ 10
-SYNT Dividend – $ 11
-Change Jar – $ 35
-
Acco Brands – $ 183
-
Work – $ 210
-Books – $ 30
-Online Biz – Aug. – $ 804
-ACCO Dividend – $ 7
-
Work – $ 228
-
Change Jar – $ 76
-Online Biz – Sept. – $ 654
-
Selling Pixels – $ 1,350
-FO Dividend – $ 11
-SYNT Dividend – $ 11
-GE Dividend – $ 9
-Online Biz – Oct – $ 1,120
-Misc. – $ 1,000
-Birthday – $ 200
-
Online Biz – Nov – $ 1,630
-
Change Jar – $ 115
-
Online Biz – Dec – $ 1,801
—2005 Total – $20,021

There are some dividends and interest earnings missing, but nothing significant. I also do not publicly publish income made from partnerships I have going, as that violates other people’s privacy.

I ended the year with the following in my public accounts:

-General Account – $ 3,647
-Spending Account – $ 179
-Spending Account 2 – $ 350
-Investment Account – $ 2,234
-Bill Account – $ 1,379
-Permanent Savings – $ 3,342
-Stock Portfolio Value – $ 11,016
-Roth IRA – $ 6,680
-Emigrant Direct – $ 1,002
—Total Liquid Assets – 29,829
-Credit Card Balance – $ 0
-Business Holding – $ 1,647
—Total On Hand – $ 31,476

2006 will be the year I hope to firmly establish myself….or go really broke. Either way will be quite fun and teach me a lot :-)