Monthly Archives: January 2010

Lousy Interest Rates = Spend

When the economy sucks, the government will generally lower interest rates so it’s more enticing for you to SPEND money rather than SAVE.

Well they’ve done that big time right now, and I did a little sleuthing around at some of my non-risk-bearing accounts.
About 5 years ago I set up an Emigrant Direct account because internet banks usually offer higher interest rates than most traditional banks…and I’ve pretty much forgotten about it.
I stashed away about $25,000 in that account and checked it recently to be greeted with:

1.2% annual return??? HAHAHAH!!

This means my roughly $25,000 will earn $300 for a whole year of sitting there. Meanwhile the inflation rate right now is “officially” between 3-4%….and in reality is probably much higher.

So while I earn $300, my money loses $750 in value (at least). The account is no longer a “No risk” account…it’s now a money pit.

Well that’s a losing proposition, so while I already have an investment account I use to throw into businesses that make me money, it looks like I’ll be almost forced to put some of that money to good use.

However with all the current tax breaks encouraging businesses to spend right now, taking money out of permanent savings accounts and spending them on money-making endeavors seems a smart idea right now.

Shopping spree time :-D

My Very First Business

I consider my first REAL business to be House Of Rave (link), but before that were a bunch of other hair brained ideas to make money.

Of one of the very first was selling custom CD’s in 9th grade. I’m taking a guess this was around 1997 or 1998 that me and my dad outfitted the family computer (a 33Mhz CPU with around 600 MB’s of storage) with a CD burner.
This was a relatively rare thing…at least not many of my friends had access to a CD burner back then.
Around the same time MP3’s had come on the scene. Most people didn’t know what they were, but Napster was starting to make headlines here and there as an “illegal” file sharing service. I was all over Napster, downloading as many songs as I could over my dial-up connection and making CD’s for my personal use.
Well it didn’t take long for friends to see I could get ANY song and make a CD with different songs on it. I had something they wanted and couldn’t get elsewhere, so the natural laws of supply and demand kicked in and I started selling custom made CD’s!
People would make me a list of 17-20 songs on a sheet of paper…usually I’d already have the popular songs downloaded or on a CD already. The songs I didn’t have I’d download on Napster (keep in mind…I was still using a dial-up at the time).
I would sell the CD’s for about $1 per song, but would charge a little more if I had to download a lot of the songs. Generally the CD would cost them about $20 or $25. Close friends got special deals.

Making a CD back then wasn’t especially hard, but there were a lot of constraints I had on my old family computer:
  1. It was slow, so everything was sluggish.
  2. I only had 400MB of free space, so I couldn’t make a full 720MB CD at once, I had to chop it up into sections.
  3. I couldn’t store all the songs on the computer, so I’d have to delete something to make space, insert a CD with the song, rip the song to the computer, then burn the ripped song to the custom CD, then delete that file again. Process varied depending on the song source.
  4. MP3’s were so new, so I had to manually convert the MP3’s to huge .WAV files for the burning software.
Making a single CD with all these swaps, changes, deletes, downloads etc. could sometimes take almost 2 hours or boring work. Remember, this was an old computer and stalls were common place. However it normally took me 30 min to 1 hour per CD. I did this all after school.
The next day at school I’d show up with the CD, they’d show up with the money and I’d make a 100% profit since I had no expenses (my parents paid for the computer, burner and CD’s…unknowing I was making money off it)!
Due to all the constraints my limit was about one custom CD per day….and $20 for a CD was a lot to me, so I was fine with it.
Then one day I got caught. I didn’t even realize I COULD get “caught” for what I was doing. It just didn’t seem wrong. I made a CD transaction in my English class, and the teacher saw it….no big deal, I traded all my CD’s in class.
The teacher yanked the CD and questioned me. She got really furious and said, “I read an article about these “M…P……..3’s?” and they’re ILLEGAL.” It sounded like I was selling drugs in her classroom! I remember it pretty vividly because she was a teacher that never raised her voice, but all of a sudden SNAPPED when it came to MP3’s!
She took me aside after class and sternly warned that she wasn’t going to report me…but if I EVER brought an “M…P…3” in school again she would.
I remember thinking, “report me for WHAT?” Since the recording industry was so behind on moving into digital downloads, a whole generation of kids like me never thought twice that downloading a song might be punishable.
So my side hobby of selling CD’s went on for a while (although not in the classrooms of course) until more and more people had access to CD burners, plus summer came and there was no school. Eventually everyone knew someone with a CD burner and the small technology advantage I had faded. I made my cash and I was happy to not have to sit in front of the computer watching a status bar!

Learning from being drunk

In college I was first exposed to people who would get drunk when they go out. It was always fascinating because:

  1. People would be normal
  2. They’d drink this stuff
  3. They start acting differently

After more and more drinks it was very easy to see people getting chattier, louder and generally less inhibited. It’s clear that alcohol is pretty good at spicing up a party, but why do we need it?

It always bugged me that some people HAD to drink to have fun. Maybe they didn’t have to, but it really enhanced their good time…but why?

Being slightly nerdy I would select random people at a party and analyze their behavior from sober to drunk and in between. I would also do it with the best test subject I could find: myself. Now THIS is fun science :-)

I would take mental notes of what I was doing differently when intoxicated. There are a lot of good traits about being slightly intoxicate like the willingness to chat up strangers, feeling less nervous and not worrying so much about things. You tend to become a slightly more “fun” person when you’re a little tipsy.

There are also bad things such as not being able to comprehend things as well, loss of coordination (I can barely play the guitar if drunk), paying lots of money for alcohol, not remembering things as clearly, the whole driving issue and waking up feeling like crap.

So the novel of idea of NOT drinking, yet trying to emulate the GOOD qualities of being drunk popped into my head.

Over the years I’ve randomly decided to not drink on some days….no reason other than to just test pretending to be drunk. Not drinking is easy. It really isn’t that hard to refuse rounds of drinks because you can ALWAYS pawn off a free drink on someone else. You can also easily get a cola or other non-alcoholic drink to keep up the illusion. Almost 80% of the time the bartender doesn’t even charge me for a “plain Coca-Cola” or pineapple juice!

I’d try to mimic the “good” effects of alcohol when I did this, and to my surprise it actually works quite well with practice! It actually helps you have a lot more fun when you “pretend” to be drunk!

For example:

Let’s say you’re shy to dance, I know I used to be. I would always think “I wonder what people are thinking of me” or “I wonder if I look silly” over and over in my head. However if I was a little drunky munky I’d probably dance anyway, accept the fact I possibly look ridiculous, wouldn’t care what people thought and just have a good time.

So if I were sober and dancing, I would think WWDND? What Would Drunk Neville Do….and just do that. It actually takes some mental effort and practice to not emulate some drunky qualities, but it’s well worth it. It can also apply to many other situations in life.

This little technique has definitely helped me have a lot of fun over the years.

Now all this alcohol talk kind of makes me want a drink… :-)