NevBlog

Neville's Digital Surrogate Brain

Archives for April 2005

Benefits of Business

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I love doing business and entrepreneuring because I feel proud of the accomplishments I achieve. I am young and trying to make it, so business is a pretty high priority right now…but all work and no play makes Nev a dull boy.

I am definitely a party person. I cannot stay home on the weekends.

I regularly go out on business lunches to places most college students cannot afford on a regular basis, but my hosts can. These lunches, trips and special accesses are all part of the fun of business. Most of the time they are not even about money. It’s important to form a good business relationship, but more important to form a good personal relationship.

Last night I was treated by two very generous hosts to a night on the town, let’s call them “Bob” and “Vinny”. Both are very young and very successful. We went to a bunch of hotspots all across town, no waiting in lines, no identification checks, all V.I.P. and I didn’t spend a cent.

I’m not going to reveal exactly how much money they dropped this Thursday night, but let’s just say they could’ve paid my tuition. Businesses is good, eh ;)

Now it’s Friday…time for some more partying!

Rising Trend: Tablet PC’s

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The popularity of Tablet PC’s is on the rise. As a 2-year user of a Toshiba M200, I firmly believe that all laptops will soon be outfitted with the flip screen and pen function.

If you get in early, I think there are some great opportunities to a piece of action in the…

Audible Inc (ADBL) – Provider of Internet audio information.
Sigmatel Inc (SGTL) – Designs and develops analog-intensive, mixed-signal integrated circuits.
Portalplayer Inc (PLAY) – Designs, develops and markets comprehensive platform solutions.


As a college student and a proctor in a computer lab, I can personally attest to the fact that laptops are getting ever more popular as described in this USA Today article (here). Mark Cuban writes in his personal blog how desktops are boring.

This tablet technology will soon burst its way into mainstream when prices come down a bit and people become more familar with the technology. I consider myself an extremely fast and adept computer user, and a simple mouse does not cut it. ESPECIALLY those slow touch-pads on laptops.

So if you happen to have any inside information about where certain specialized tablet parts come from, let me know!

Stock portFOOLio

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During and after the market hours I tend to glance at my stock prices on Yahoo Finance, but I don’t really look at my gains/losses as I am currently going very long on my stocks. The little changes no longer concern me.

Turns out Fortune Brands (FO) has been sitting in my lazy ‘ol portfolio gaining green. As of today I am at a %17.72 gain on Fortune Brands which equates to a $270 profit.

I remember Charles Kirk (TheKirkReport.com) saying, “Investors are often willing to hold onto huge losses, but sell too early when they start making huge profits”

Point is, I’m not going to sell Fortune Brands for a very long time. One thing I was proud of was my non-reaction to the news of my gains. When I first started trading my heart would beat faster while just logging in to check my stocks.

I’m beginning to think with a clearer and more rational mind than in the past. I have TheKirkReport to thank for this, I think I might drop him another donation soon!

On another note…..

I started a new business two days ago which I think can make me approximately $200-300 in extra income a month. This business will require even less work than my current online business. I will post the business on this site in about two weeks . Total business costs so far: $9.20

Being "Rich"

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Many people want to be “rich” in the future so they can do things like: Travel, buy nice cars, support family etc…who wouldn’t?

I believe “rich” means many different things to different people. Here are a few materialistic wants I feel would make me “rich” :

  • Being able to travel to Dubai and lodge, dine and recreate in the Hotel Burj Al Arab for a week with family and friends in a 3-bedroom suite.
  • Being able to buy a $40,000 car without really denting my disposable income.
  • Being prepared and able to buy a $300,000 home in cash.
  • Have enough disposable income to comfortably shop at Nordstrom and other higher-end retailers with a personal shopper.
  • Be financially prepared for all the unexpected expenses life throws my way.
  • Eat Ramen Noodles when I know I can easily afford a 5-star meal.

I’ll share a joke:

“The American Dream is a German Car an Italian wardrobe and a Swiss bank account. “

I think the fun of becoming rich is getting there. I like a good challenge. So until I can do all of the above without breaking a financial sweat, I will be working my a$$ of to achieve it.

Alternative Funding

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An anonymous poster left a post (here) on my site which partly stated:

“….if you had a business degree, then it would possibly be easier for you to obtain financing to finance your entreprenuerial dreams.”

Perhaps a guy in a suit who lives at the bank from 9am-5pm might think a simple business degree makes me a better entrepreur, but there is a way around this. Here are a few of the people I have met who have become extremely successful without the initial help of a bank:

  • James Flores – CoFounder of Ocean Energy – He started his oil/gas exploration company when he had no money. He borrowed from family friends and maxed out close to 30 credit cards totalling over $120,000 at 26% interest.
  • Robert Sek – Started an internet company with a relatively small investment. Rapidly grew his company and used the profits to invest in larger ventures.
  • Tim League – Founder of Alamo Drafthouse chain of movie theater/resturants. Needed several hundred thousand dollars to convert a parking structure into a movie theater. He used his $50,000 of savings, his wife convinced her parents to re-finance their house, they got a small-business federal loan (which almost anyone can get) and they maxed out 26 different credit cards.
  • Family Friend 1 – Built up small savings from working, then started buying/selling condos. From there he has moved onto multi-million dollar commercial properties and full apartment complex’s.
  • Family Friend 2 – Was working an everyday job when he landed a small government contract for an environmental cleanup. Reinvested profits and the business grew into a multi-national environmental cleanup corporation with operations in almost every state in the U.S.
  • Family Friend 3 – Worked an engineering job for many years, intelligently saved his money and bought his first piece of commercial property. He now owns a highly successful real estate company.

As you can see, the bank did not play a crucial role in the beginning of these lives. In a case such as Tim League’s, I think his borrowing methods actually drove him harder to succeed. If he didn’t succeed, he would have lost his family money, lost his savings and absolutely obliterated his credit score.

So even if a business degree can make you more qualified for a loan, there are always ways around it.

Knowing What to Waste

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My most useful tool to help me understand how much money I truly have to waste is immediately distributing incoming money to its respective accounts soon as it comes in.

For example, yesterday my bi-weekly paycheck was directly deposited into my general account (The point where all money goes in and out of my hands). The total came to $246. The FIRST thing I did was login to my Bank of America account and transfer the money in the following amounts:

  • $49 to Bills Account (20%)
  • $49 to Spending Account (20%)
  • $74 to Permanent Savings (30%)
  • $74 to Investment Account (30%)
  • Total = $246

So the money has been distributed into the different accounts and it can no longer tempt me to spend it by sitting in one giant account. Only 20% of it goes into my spending account which can be spent on any frivilous expenditure I choose. If I don’t have enough money in the spending account, I don’t buy it.

Yesterday was one of those awsomely hectic days where you run from place to place (I love those), but the highlight of the day was seeing Carl Stuart speak at a University Investors Association meeting. He has been hosting a personal finance radio show based in Austin for over 10 years. The man KNOWS HIS STUFF. I’ve never seen someone so adept at quckly answering a barrage of quick, tough personal finance questions. He also manages over $250,000,000 of other people’s money.

Some of the interesting points he brought up:

  • We experience financial losses twice as hard as we experience gains.
  • Only two investments have consistently outpaced inflation: Stock and real estate.
  • Doing financial research on the interenet is like taking a drink from a fire hydrant.
  • The two best teachers are Trial and Error

It turns out he too was a political science major who just wanted to get out of college and jump into the real world. It seems he’s done pretty well for himself so far!

Ideal Income

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As I struggle to tack some zero’s onto my bank accounts, I found this comment left on my site by Jack Miller very inspiring:

“The first $50,000 is tougher than the last $5 million.”

Tell me about it! I can also attest this is true from all the highly successful people I have spoken with, they all went through some sort of struggling period before they finally hit it big.

I’d like my first $50,000 to be made primarily by ME. This means I want to make the bulk of my money through any means other than a 9am-5pm job. I am more proud of the $5.43 I made from my water experiment than the $3,121 I have made from working at my job.

Water Reflections

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The water experiment was a success, but I got lots of emails saying that $5 in profit per hour was not worth it….some points to consider:

  • I made that money in 30 min, not 1 hour.
  • I overpaid Barry.
  • I only had 24 bottles. Lesson learned: Next time bring several cases.
  • I can get someone else to do this for me.

And the MAIN POINT: I can turn almost no money into a much larger amount now that I have learned the above lessons. That was the point of this experiment.

This could easily be a $40 an hour activity for a kid looking to score some quick cash.

Some said I was still being paid for my time much like a job. This is true. BUT….I have made an agreement with Barry to set him up with 5 cases of chilled water and a large cooler with ice. He will sell them all day from 11am till 5pm and we will split the profit.

If he simply runs away with my investment I stand to lose approx. $33:

If all goes well, I can possibly make approx. $48.50:

If Barry does all the selling, all I have to do is drive over the cooler, water and ice to his corner. Not a bad deal.

Bottled Water Experiment

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Purpose of Experiment: To prove my make money with no money business ideas can work.

Hypothesis: It is possible to take less than $10 in startup capital and make money.

Experiment: Buy a 24-pack of bottled water and sell it on the side of the road. Possibly utilize the labor of pan-handlers.

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Step 1:
I went to my local H.E.B. grocery store the previous night of the experiment and purchased a 24-pack of Dasani water for $5.99.

I put the water in the fridge overnight to let it chill.

Step 2:
Quick Research.
On the way to a party, I stopped to ask a bum what would happen if I sold water by the highway alongside other bums, and it didn’t seem like a pretty picture. He told me, “You are a rich college student, and the guy at the corner is trying to get a meal, the hungry guy won’t be too happy with you.”

To get around this, I wanted to partner with one of the regular bums who knows the in’s and out’s of panhandling. I made an agreement to meet at 3:00pm with this guy, William Austin to sell bottled water with me. I told him whether we sold all the water or not, I would give him $10 for his help.

The picture didn’t come out so well, but in person he was all smiles and very jovial.

I also didn’t want to get arrested or fined. A few nights ago I stopped to ask two very courteous police officers what they would do if they saw me selling water without a permit. One replied, “I can’t speak for every officer, but personally I wouldn’t bother you unless you start causing problems.”

So I now had a partner and no real threat of legal action. The experiment was on for 3:00pm on Sunday Afternoon!

Step 3:
An hour before the experiment I bought two bags of ice for $1.29 each. I packed the ice and water into a cooler.

I could only fit 15 bottles in my cooler, so I improvised and put the remaining 8 bottles directly into the ice bags with ice. I then double wrapped them with clean garbage bags for easy carrying.

Step 4:
Withdrew $20 in case I needed change and to pay my partner.

Step 5:
I made this nifty “Water $1” t-shirt by taking on old shirt, turning it inside out (it had a logo on the front) and using a permanent marker to write on it.

I had a feeling this little gimmick would work very well.

Step 6:
Went out to go SELL SOME WATER. I went to look for William Austin at 3:00pm by the local Blockbuster like we agreed. When he didn’t show up I asked another bum to show me where he lived. I found him under a bridge, red-eyed and looking extremely tired. He hardly remembered who I was and said he had to cancel on me.

Step 7:
A bit disappointed, I went alone to the highly trafficked intersection of I-35 and Riverside Drive. There I met a bum named Barry:

I’ve seen Barry before. He is one of the bums that holds funny signs like, “I gave up caviar for Lent” and “I need new wheels for my limo”

I told Barry about my water experiment, and promised to give him $10 for an hour of his time/expertise, regardless of how many bottles he sold. He was more than happy to help. We shook on the deal and became instant business partners!

Step 8:
START SELLING. Barry knew a little about water selling. He told me to hold three bottles at once and start walking down the idle lanes of traffic yelling “Water Water!” Barry put the “Water $1” shirt on and started selling water like a champ! I stood on a different corner in my plain clothes and started selling. My first sale came within 6 seconds of starting (and it was a $2.00 sale!)


In less than 30 mintues we sold all 24 bottles.

Click HERE to see a video of Barry in action. (1 MB video)

Click HERE to see our progress after about 25 minutes. (1.5 MB video)

Step 9:
Tabulate results:

BOTTLES SOLD:
Me: 14 Bottles
Barry: 10 Bottles

So to make a better profit, one would need to: Preferably perform the experiment by themselves, buy cheaper water, buy only one bag of ice instead of two, buy more than 24 bottles.

CONCLUSION: Selling bottled water can be much more lucrative than sitting on your couch on a lazy afternoon!

You also maybe wondering how to sell bottled water yourself, well here’s a quick cheat sheet:

  • Pick a moderately hot day.
  • Buy a cheap case of water.
  • Put the water in ice an hour before you sell to cool it down.
  • Make a sign or shirt that says “Ice Cold Water $1”.
  • Stand on the busiest street corner you can find and yell “Water Water Water!”
  • Best of luck :)

UPDATE: Bottled Water Experiment Part 2

Nordstrom Return Policy Purchase

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Went to Nordstrom to pick up a pair of shorts and some new sandals for summer. Nordstrom is VERY pricey, but if you are looking for a few nice items for longterm use, I suggest buying from them for a few reasons:

1.) Service. Nordstrom’s legendary customer service has never failed to meet and beat my expectations.

2.) Return Policy. There is none. There is no time limit or reason for return needed to return an item. You can take a beaten up, dog-eaten pair of 10 year old jeans purchased from them and get a refund or exchange. Seriously.

Now, just remember, don’t buy EVERYTHING from them, just a select few high quality items from your wardrobe.

My excursion to Nordstrom cost me:

  • J.W. Nordstrom Khaki Shorts – $32.50
  • Cole Haan Leather Sandals – $145
  • Shoe shining stuff – $6
  • Tax – $15.14
  • Total – $198.64

Eat your heart out Budgeting Babe :)