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	<title>Rules Optional &#187; Financing All This</title>
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		<title>Leveraging Failure (Part 4 of 4)</title>
		<link>http://rulesoptional.com/failure-and-leverage-part-4-of-4/</link>
		<comments>http://rulesoptional.com/failure-and-leverage-part-4-of-4/#comments</comments>
		<pubDate>Sat, 24 Oct 2009 05:50:31 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Financing All This]]></category>
		<category><![CDATA[Lifestyle]]></category>

		<guid isPermaLink="false">http://rulesoptional.com/failure-and-leverage-part-4-of-4/</guid>
		<description><![CDATA[[CONTINUED FROM PART 3] 2008 One Sailboat and One Corporate Takeover When I closed out the last post I touched on the end of my time as a Marketing Director. I glossed over the fact that I found myself newly homeless, jobless, and relationship-less in the span of a few weeks. I’m not a big fan of...]]></description>
			<content:encoded><![CDATA[<p><a href="/failure-and-leverage-part-3/">&#8230;continued from Part III</a><br />
<strong><em><span style="font-size: 17px">2008 One Sailboat and One Corporate Takeover</span></em></strong></p>
<p>When I closed out the last post I touched on the end of my time as a Marketing Director. I glossed over the fact that I found myself newly homeless, jobless, and relationship-less in the span of a few weeks. I&#8217;m not a big fan of stress, so I figured my only option was to check a goal off my list and try living on a boat. If you didn&#8217;t make the connection between living on a boat and having no stress, don&#8217;t worry. It was a complete non sequitur.  Oops.</p>
<p>Since this series is supposed to be more about the how than the why, let&#8217;s just say that I bought a sailboat in a tiny town on the Southern Oregon Coast. I was able to pay for it in cash so my monthly expenses remained fairly low. I don&#8217;t think I received a monthly utility bill for more than about $23 while staying on the boat. Most of the time the bill is so low that they don&#8217;t even bother sending it out for three or four months. The slip for the boat was less than $1000. Oh yeah&#8230; that&#8217;s measured in years.</p>
<p>Despite &#8220;housing&#8221; costs lower than what I paid in Panama, I still needed some kind of income. I didn&#8217;t quite have that figured out and was burning through cash reserves fast enough to prioritize finding a solution. After poking around on local websites, I found a web development company that appeared to have a good corporate culture. They had a feeler ad out for sales in another division of the company. Here we go again! I fired them off a two paragraph email. Here&#8217;s an excerpt:</p>
<blockquote><p>&#8220;I was most recently working as an Internet Marketing Director for a small company in Portland. I also have several years of business management, design/development, and sales experience. If you have any interest in seeing my resume, please call and we can discuss that option.&#8221;</p></blockquote>
<p><span id="more-520"></span>That&#8217;s pretty much the meat of the email. I didn&#8217;t have a resume, and I don&#8217;t think I ever put one together for them. They responded right away. After a few emails back and forth, we set a meeting for the beginning of the following week. There wasn&#8217;t much of an agenda. I&#8217;d already told them I wasn&#8217;t interested in a sales gig, but we decided to meet and see where it went.</p>
<p>I did as much online due diligence as possible between setting the meeting and attending the meeting. It was pretty clear that these guys were design/development types who&#8217;d started a company and took it to its current state. Beyond that, I started looking for gaps. It didn&#8217;t seem like they did much of anything in the way of SEO, PPC, or anything marketing related. I didn&#8217;t have a position fleshed out before I arrived, but that&#8217;s what was kicking around in the back of my mind. My thought was only that I needed to show them a degree of competence in an area or two that they didn&#8217;t possess. I was fairly confident that I could do that.</p>
<p>As I&#8217;m writing this, I&#8217;m becoming more and more aware that the story I recounted at that meeting was probably pretty similar to the first three parts of this series of articles. Sure, it was more heavily skewed to the internet and marketing related functions, but the framework likely mirrored what you&#8217;ve read. So I told the story up to this point, I asked them a few questions, and we parted company with a mutual feeling that we might be able to work something out.</p>
<p>After I left, I distilled the conversation into the bits leading to one goal: Building an Andrew sized hole in their minds. In this case, that was an amalgamation of building and managing an internet marketing program they could sell to their clients, project management, and a hint of design, development, and account management. Once I had that, I packaged it up into a pitch that made sense and we set another meeting.</p>
<p>I can&#8217;t stress two points enough. First, I have always focused on general knowledge rather than specialization. I believe generalized knowledge and skills combined with superior troubleshooting and problem solving skills is a much more compelling package than finely honed specialization.</p>
<p>Second, if you&#8217;re good at what I described in the last point, all you really need to do is get in. Once you&#8217;re in, you can build a position around your vision. Forget undersell and over-deliver when you&#8217;re talking about yourself. Oversell and over-deliver. You can learn enough to blow most people out of the water with a few days of intense research and study if you&#8217;re smart enough and confident enough. &#8220;Fake it &#8217;til you make it&#8221; is an adorable saying, but I&#8217;d tweak it a bit. Fake it, then make yourself into what you described&#8230; but fast. The buried passive tone of the old axiom is the the real problem. Unfortunately, a lot of people get hung up on the word &#8220;fake&#8221; and get all &#8220;when keepin&#8217; it real goes wrong&#8221; on us. That&#8217;s fine, let them be real and authentic and bore everyone with proclamations of their own real-ness. As long as you have enough time to get the chops before you need the chops AND actually develop the skills, everyone wins.</p>
<p>So anyway, I got the gig and got to work. In the first month I sat at my desk and absorbed and observed and churned out tons of material that became the company&#8217;s internet marketing program. I started off with a salary, and after 30 days, set up an arrangement where I&#8217;d get paid on all the work done by the ad hoc marketing division. After 90 days, I was making more than anyone else in the company. I didn&#8217;t find that out until later.</p>
<p>How I found out I was making more than anyone else was less than fun. I can&#8217;t get into too many details, but there was a certain aspect of their business that was hemorrhaging cash and the thins I was working on were essentially financing it. That eventually rippled through the finances in ways that required me to be informed. It was then that the idea of an equity position was first mentioned to me. Long-story short, I was the majority owner and Managing Partner at the beginning of my 8th month with the company.</p>
<p>A couple months later, I found I&#8217;d faked myself to a level above the scope of the company&#8217;s work and beyond the distance my partners wanted to travel. I started planning to launch my own venture, then resigned effective eight days past a year with the company. I&#8217;d had some fun. I&#8217;d learned a lot.</p>
<p>For those of you not still keeping an accurate timeline on your napkins, that&#8217;s the second gig in a row I left at almost exactly a year. I have a loose internal rule that if I don&#8217;t like something after trying it for a while, I can&#8217;t stay longer than a year.</p>
<p>The company I started was an advertising agency. Rather than build another Andrew sized hole in the minds of another employer, I decided to try building Andrew sized holes in the minds of clients. I went through the same process I&#8217;d undertaken in each of my previous jobs. I leveraged my skills together, connected the dots in logical package, and wrapped a package around it that made sense. My time on the client side of the marketing world combined with the creative and strategic side of internet marketing combined with my Art Institute days writing scripts, shooting video, audio recording, et cetera made an ad agency a logical fit in my mind. And guess what? It worked again.</p>
<p>Ad Agency Blog<br />
<a id="p8dh" title="jetswithbombs.com" href="http://jetswithbombs.com">jetswithbombs.com</a></p>
<p>Ad Agency<br />
<a id="crmf" title="Jet Atomic" href="http://jetatomic.com">Jet Atomic</a></p>
<p>Having recounted my journey in writing for the first time, I realize that the &#8220;how-to&#8221; aspect is a little lacking. Curses to you, &#8220;curse of knowledge&#8221;. I&#8217;m working on a post that distills the non-obvious things bouncing around in my head that were woven into this.</p>
<p>If you have any thoughts or questions on any of this, please comment below or send me an email through the contact page.</p>
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		<title>Leveraging Failure (Part 3 of 4)</title>
		<link>http://rulesoptional.com/failure-and-leverage-part-3/</link>
		<comments>http://rulesoptional.com/failure-and-leverage-part-3/#comments</comments>
		<pubDate>Fri, 23 Oct 2009 05:21:00 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Financing All This]]></category>
		<category><![CDATA[Lifestyle]]></category>

		<guid isPermaLink="false">http://rulesoptional.com/failure-and-leverage-part-3-of-3/</guid>
		<description><![CDATA[[CONTINUED FROM PART 2] 2007 From Voluntary Exile to Forced Exile So I arrived back in Portland, Oregon just in time to ring in 2007. I had somewhere in the neighborhood of $37 in the bank as I mentioned before. You know the moment when you start trying to figure out if there’s an ATM that dispenses...]]></description>
			<content:encoded><![CDATA[<p><a href="/retired-to-criminal/">&#8230;continued from Part II</a><br />
<strong><em><span style="font-size: 17px">2007 From Voluntary Exile to Forced Exile</span></em></strong><br />
So I arrived back in Portland, Oregon just in time to ring in 2007. I had somewhere in the neighborhood of $37 in the bank as I mentioned before. You know the moment when you start trying to figure out if there&#8217;s an ATM that dispenses cash in denominations smaller than $20? Yeah, I was at that point.</p>
<p>For those keeping score, that&#8217;s two legit businesses started&#8230; two businesses rendered illegal by the government. This is but one reason that if you see me in another country and lecture me about how stupid I am as an American for electing Bush twice, we are not likely to be fast friends. The fact that I never voted for him is not even important. It&#8217;s called &#8220;<a id="gnrt" title="tyranny of the majority" rel="nofollow" href="http://en.wikipedia.org/wiki/Tyranny_of_the_majority" target="_blank">tyranny of the majority</a>&#8220;. Make Wikipedia your friend for a few moments you&#8217;re not familiar. And in this case&#8230; Heavy on tyranny&#8230; Light on majority.</p>
<p>This was one moment in my life where I&#8217;d almost had the entrepreneurialism driven from me completely. I can&#8217;t say completely, because if I had $137 in the bank instead of $37, I&#8217;d probably have tried to turn that into $237. I&#8217;m not cool enough to eat and start a business on $37, so I caved and started thinking about getting a (cover the children&#8217;s ears in case they can spell) &#8220;Jay&#8221; &#8211; &#8220;Oh&#8221; &#8211; &#8220;Bee&#8221;.</p>
<p><span id="more-509"></span>I wasn&#8217;t going to go down easily. I couldn&#8217;t imagine a scenario in which I started sending resumes to a bunch of online places and slogging through newspaper classified ads. A friend worked at a car dealership as a finance manager. His dad, who I also knew, was the GM. He mentioned in passing that I could take a job as a salesman if it got to that point. While appreciative of the off and a worst case scenario one notch above starvation and destitution (prostitution?), the idea of selling cars makes me throw up a little every time I think about it. That&#8217;s not entirely fair to car salesman. Sure, they have pretty much the worst rep on the planet. Sure, lots of them are sleazeballs, but that&#8217;s not the problem. I&#8217;ve just seen &#8220;Say Anything&#8221; about a hundred times too many. You know the scene&#8230;</p>
<blockquote><p>&#8220;I don&#8217;t want to sell anything, buy anything, or process anything as a<br />
career. I don&#8217;t want to sell anything bought or processed, or buy<br />
anything sold or processed, or process anything sold, bought, or<br />
processed, or repair anything sold, bought, or processed. You know, as<br />
a career, I don&#8217;t want to do that.&#8221;</p></blockquote>
<p>Since my personal philosophy has been shaped as much by about ten movies as all of the post-modern thinker pap I&#8217;ve crammed into my skull, I take these things very seriously. Point being&#8230; I didn&#8217;t want a job, and if I had to get a job, it wasn&#8217;t going to be a sales guy. The one good thing about sales is that they tend to supply coffee measured by the gallon rather than by the cup.</p>
<p>At this point, the wheels were spinning. I headed to my parents for a couple weeks for the extra attention and cooking effort that often accompanies the &#8220;thank God you didn&#8217;t die in a foreign country, we were so worried about you&#8221; moments. I spent zero time looking for jobs and a lot of time trying to figure out a solution that would be acceptable to me.</p>
<p>During the thinking process, I checked out the website of the car dealership I had a tentative job offer at. I&#8217;d say it was the worst website I&#8217;ve ever seen, but I&#8217;ve since seen other car dealership websites, so it&#8217;s no longer in the Top 50. Also, we totally rebranded the company before I left, so the original wouldn&#8217;t be around even if the rebranded company didn&#8217;t go out of business in the great car industry collapse of 2009 (well after my departure). The point is that the sight of the site instantly kicked my mind into gear. I knew from pure intuition that websites had to be the cornerstone of car shoppers&#8217; shopping arsenal. So I ask you&#8230; Do arsenals even have cornerstones? Wait, no&#8230; wrong question. Nevermind.</p>
<p>In my subsequent research, I discovered that the number of car buyers who started their shopping online was something like 85%. Yes, the motivation to avoid salespeople is strong. I was formulating a proposition. The company clearly needed help with their web presence. After a little questioning, I also discovered that their process for handling leads from the website was cumbersome and resulted in people getting contacted days later&#8230; if ever. From there it was just a matter of connecting the dots between my education/training, sales experience, and internet marketing. Once the dots were connected, I had to wrap a cohesive story around it and mentally diagram an Andrew shaped hole in the minds of those at the company who signed the paychecks. A week or two later, I was hired for the position I created for them.</p>
<p>I don&#8217;t want to slog through all the details, but within a year, my position morphed from Internet Manager to Internet Marketing Director to Marketing Director. It wasn&#8217;t a huge company, so that might not be super remarkable. What you might find interesting is that in the process, I also managed to stop going to work.</p>
<p>Much fuss has been made about Tim Ferriss and his book The 4-Hour Workweek. <a id="tm2-" title="Penelope Trunk apparently hates him" rel="nofollow" href="http://blog.penelopetrunk.com/2009/01/08/5-time-management-tricks-i-learned-from-years-of-hating-tim-ferriss/" target="_blank">Penelope Trunk apparently hates him</a> and her legion of sycophants agree with her that he&#8217;s a fraud and a big meanie. The list of doubters who point out that he works more than four hours a week is a mile long. Ad hominem, red herring, and necessity fallacies may fly unchallenged in religious or political discourse, I have little tolerance for them. I read Tim&#8217;s book shortly after it came out in April 2007. For those of you not drawing a timeline on a napkin, that&#8217;s just four months after I returned from a life similar to the one idealized on the cover of the book. People tend to have a strong reaction to the book, but my first reaction is probably in the minority. The first thing I thought was&#8230; &#8220;Fuck, I should have written this book.&#8221; I&#8217;d been practicing some of the same things Tim writes about while he was writing about it. In all fairness, there&#8217;s a ton of stuff I wasn&#8217;t even close to discovering at that time, but I respected what he had to say because a lot of it was stuff I&#8217;d lived&#8230; sort of. Since I knew a lot of it was true from my own experience, I sought to implement some of the other tactics.</p>
<p>The steps about how to free up time by removing yourself from the office while stilll keeping your job were the first I tried. You already know the gist of the outcome. For the bulk of that job, I went into the office maybe two days a week. On those days, I showed up largely according to my own schedule and left largely according to my own schedule. I made this more possible and more acceptable by taking the lead on a lot of IT related initiatives as well. I made sure there were communications tools in place that allowed me to be out of the office. I didn&#8217;t ask. When I saw communications system problems, I dug through dusty closets and found manuals and resurrected them. When new options were being considered, I built test systems so the decision-makers could see exactly what I needed and why they should want it to. The &#8220;IT guy&#8221; didn&#8217;t like me very much by the end, but the people who used the systems for their jobs  loved me. I&#8217;m okay with that trade-off.</p>
<p>By the end of the first year I&#8217;d reloaded the bank account. The business was starting to decline because of the credit crunch. I was ready to go and the company was having a harder and harder time making payroll so we parted ways amicably.</p>
<p>I intended to wrap this series up in three parts, but I don&#8217;t think I&#8217;m going to be able to fit a semi-hostile takeover of my next company and starting an ad agency into this without making it so long that your scrolling-finger falls off. So go grab a drink and mentally prepare yourself for Part IV!</p>
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		<title>Leveraging Failure (Part 2 of 4) Retired on the Beach to Criminal</title>
		<link>http://rulesoptional.com/retired-to-criminal/</link>
		<comments>http://rulesoptional.com/retired-to-criminal/#comments</comments>
		<pubDate>Thu, 15 Oct 2009 19:00:39 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Adventure]]></category>
		<category><![CDATA[Financing All This]]></category>
		<category><![CDATA[Lifestyle]]></category>

		<guid isPermaLink="false">http://rulesoptional.com/failure-and-leveraging-part-2-of-3-semi-retired-on-the-beach-to/</guid>
		<description><![CDATA[[CONTINUED FROM PART 1] The Rest of 2004 Through 2005 [Diving into Internet Marketing] After the demise of my stillborn career as a hedge fund manager, I was pretty much clueless as far as what to do. I had some meager savings in the bank and some credit cards with available balances. What I didn’t have was [...]]></description>
			<content:encoded><![CDATA[<p><a href="/failure-leveraging-hedge-fund-manager/">&#8230;continued from Part I</a></p>
<h3>The Rest of 2004 Through 2005 [Diving into Internet Marketing]</h3>
<p>After the demise of my stillborn career as a hedge fund manager, I was pretty much clueless as far as what to do. I had some meager savings in the bank and some credit cards with available balances. What I didn&#8217;t have was a plan. I was at square zero. I had an anti-plan. I&#8217;d rather die than get back into the sales world with the trappings of my former life. To conserve funds, I didn&#8217;t even use gas to drive to the library. I surfed the internet for any possible way to make money.</p>
<p>I eventually stumbled upon affiliate marketing. This was during the poker craze and online gambling was ultra hot. I played around with some ideas, but never made any money. I&#8217;d also started doing a little online gambling myself. One of the things I soon realized was that it was a major pain to get money in and out of the accounts. Various methods would take a week or two from deposit to play to withdrawal. Out of necessity, I became well versed in the nuances of each payment method. It turned out that the sites I used for gaming were influenced more by the payment methods they accepted than the graphics or other experiential differences. The odds and bonus levels varied from one to another and those were the only things I valued more than the ease of getting money in and out.</p>
<p>The flash hit me after a few PBR&#8217;s (measured by the pitcher, not by the glass) at the Matador in Portland, Oregon&#8230; Flip the idea of rating casinos on experience and bonus around&#8230; Rate them based on payment method. It took me a while to put this into practice and tweak things, but I eventually saw results from it. That was a good thing, because I&#8217;d already planned to move to Panama and some sort of income was long overdue.<br />
<span id="more-465"></span></p>
<h3>2006 [Panama]</h3>
<p>I shed the bulk of my belongings and boarded a flight to Panama with a laptop bag carry-on and whatever else I could fit in two checked bags. Soon after arrival, I set out looking for an apartment. I eventually found a cool place with way more square footage than I could fill for $300/month. For those familiar with PTY, it was on Calle 13, a block and a half off Parque Santa Ana&#8230; A.K.A&#8230; El Chorrillo. For those of you not familiar with Panama, it&#8217;s probably best that you not visit El Chorrillo.</p>
<p>I&#8217;m not writing this as a travelogue for any particular place, so I&#8217;m going to gloss over most of the details. The important part was that I waited for months for my internet to be installed. It never was. My days consisted of taxi rides to areas of the city where free wi-fi could be found. My workweek was less than four hours. Well&#8230; Only if you didn&#8217;t count the online gambling. I worked a few hours on my sites here and there. I was regularly making money gambling, but it wasn&#8217;t a lot and I didn&#8217;t look at it as a sustainable investment.</p>
<p>Do you remember where you were and what you were doing on October 13, 2006? I certainly remember where I was and what I was doing when I loaded up Yahoo! News to check the headlines. I was sitting in a metal chair outside ClaroCOM sucking down some free internet. I was still frozen in the same place at least 30 minutes later after having read that President Bush had signed a law making just about everything relating to payments involving online casinos illegal and punishable under Federal RICO statutes. For the second time, I was out of business. When I went to withdraw my own gambling funds a few days later, I found the holding company had frozen all access. When I was to receive my affiliate payout a few days later, I was told that they couldn&#8217;t pay me because I was a U.S. citizen. It wasn&#8217;t much, but $800 affiliate checks every couple weeks go a long way in Panama.</p>
<p>Back to square zero&#8230; In a foreign country. Unlike the last time this happened, I had all sorts of other plans this time. I was already working on some of them. However, barring a miracle, I wasn&#8217;t going to be able to survive long enough to see any return from them. I managed to find a casino that would take deposits from U.S. citizens. As it turned out, the law was designed to go after payment processors and banks, not individual gamblers. As a gambler, I was sort of safe, but as a marketer, I could have been prosecuted as &#8220;aiding and abetting&#8221;. I never resumed the marketing, but I did manage to make a couple hundred bucks here and there playing poker. Regardless, it soon became apparent that no miracle was going to come and I&#8217;d have to head back to the states to re-trench.</p>
<p>The miracles did come when trying to get back to the U.S. The first miracle was of the negative sort&#8230; The airline I had a return ticket with had declared bankruptcy after my arrival in Panama and refused to let me reschedule. Through the miracle of friends, I somehow managed to get back to Portland on December 30, 2006. 2007 begins with my non-triumphant return to an expensive country with about $37 in the bank and virtually no possessions. This should be fun!</p>
<p><a href="/failure-and-leverage-part-3/">Part III</a></p>
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		<title>Leveraging Failure (Part 1 of 4) Education to Hedge Fund Manager</title>
		<link>http://rulesoptional.com/failure-leveraging-hedge-fund-manager/</link>
		<comments>http://rulesoptional.com/failure-leveraging-hedge-fund-manager/#comments</comments>
		<pubDate>Thu, 15 Oct 2009 08:12:00 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Financing All This]]></category>
		<category><![CDATA[Lifestyle]]></category>

		<guid isPermaLink="false">http://rulesoptional.com/failure-and-leveraging-part-1-of-3-education-to-hedge-fund-mana/</guid>
		<description><![CDATA[Sometimes I wonder how I arrived at the here and now. I’m not the only one. When you’re more or less an urban kind of guy who lives alone on a sailboat in a town with a population sign reflecting a human population of only a little over 6,000, people tend to ask questions. It...]]></description>
			<content:encoded><![CDATA[<p>Sometimes I wonder how I arrived at the here and now. I&#8217;m not the only one. When you&#8217;re more or less an urban kind of guy who lives alone on a sailboat in a town with a population sign reflecting a human population of only a little over 6,000, people tend to ask questions. It may not be your goal to live alone on a sailboat in a tiny town. It certainly was never mine. Regardless of what you want to do, I&#8217;ll try recount how I got here. You just might be able to pull a valuable tactic or two out of my story. If not&#8230; Well&#8230; Maybe I&#8217;ll read this tomorrow after I&#8217;ve again forgotten how I arrived at the here and now.</p>
<p>I often think of my life in two segments. There&#8217;s whatever happened before August 27, 2004, and there&#8217;s everything else. I seldom talk about my life before that date. I&#8217;m going to break protocol for a bit, but don&#8217;t get used to it</p>
<h3><span id="more-462"></span>Pre-August 27, 2004 [Prelude]</h3>
<p>This era encapsulates my life through my college days. I started my entrepreneurial addiction with a paper route in the 5th grade. Fast forward through high school and toss in stints studying Computer Science at the University of Oregon, Multimedia &amp; Web Design at the Art Institute of Seattle, and International Business at Linfield College. Don&#8217;t get the idea that anything that happened subsequently was because of any sort of credentials. While I have enough credits to choke a dozen donkeys, I have exactly zero college degrees.</p>
<p>During this era I also put in a fair amount of time in regular jobs&#8230; sales, customer service, and the like. All I really got out of it was some mild depression, a touch of social anxiety disorder, a few bucks in the bank, and a lot of long nights frantically laying in bed, staring into the darkness and trying to figure out an escape route.</p>
<p>In 2003, I started getting into trading financial instruments on my own account. Along with this came frequent trips to the library in order to absorb every book on the psychology of trading I could get my hands on. This went pretty well. I got pretty good at it. I got good enough that I could convince other people I was good enough at it to trade for them. That was good, because I didn&#8217;t have enough money in my own account for proper risk management. My trips to the library started to include mining for every bit of information I could get on hedge funds. This was supplemented by every waking hour researching hedge fund law online. I eventually retained the services of a law firm specializing in hedge fund law.</p>
<p>Ultimately, I became convinced that starting a hedge fund was my out. To launch it, I&#8217;d need to slim down my monthly expenses. I&#8217;d also need time for complete dedication. I put in a 30 day notice on my Seattle apartment overlooking Lake Union, submitted a 2 week notice to my employer, broke up with my girlfriend, and by August 27, 2004, was detached from most of the comforts I&#8217;d grown accustomed to.</p>
<h3>August 28, 2004 [Hedge Fund Manager Failure]</h3>
<p>My brother had two extra bedrooms at his house in Austin, TX and the rent was cheap. I put a bunch of stuff in storage, loaded whatever I could in my car, and ate up 2,600+ miles of pavement en route to a state I&#8217;d never visited.</p>
<p>So then and there was Austin, TX. I had an internet connection, a laptop, and a desktop system with a couple monitors. At the time, that was about 95% of what was required to run a hedge fund. The other 5% was paperwork and an adviser to make sure clients were qualified in order to avoid triggering a bunch more layers of regulation and oversight.</p>
<p>And off I went! Setting up accounts, building a website, working with the attorney on the proper structure. What I wasn&#8217;t aware of was a rule proposed by the SEC in July of the same year. At some point between September and December, the recommendation was made into law and went into effect in one stage on January 10, 2005 and another on February 10, 2005. The law essentially made it impossible for me to avoid the aforementioned additional layers of regulation and oversight. If you&#8217;re not familiar with the SEC, regulation and oversight within the context of the financial industry means at least one thing&#8230; Paying lawyers and accountants thousands and thousands of dollars in fees. The only real question at that point is if the thousands are measured in tens or hundreds. Either way, for the first, and definitely not last time, the government had converted me from legal citizen to criminal with the stroke of a pen. I was out of business.</p>
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		<title>Rule Ignored: Protectionist Investing</title>
		<link>http://rulesoptional.com/protectionist-investing-is-harmful/</link>
		<comments>http://rulesoptional.com/protectionist-investing-is-harmful/#comments</comments>
		<pubDate>Tue, 29 Sep 2009 04:09:47 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Financing All This]]></category>
		<category><![CDATA[Stupid Rules]]></category>

		<guid isPermaLink="false">http://rulesoptional.com/rule-ignored-protectionist-investing/</guid>
		<description><![CDATA[I just saw a random blip about the U.S. dollar becoming less important in the international monetary framework and had to write. This ties into my recent posts a little more closely than I generally like, but it&#8217;s so common and so important that I had to blurt it out. Disclaimer: I am a U.S. [...]]]></description>
			<content:encoded><![CDATA[<p>I just saw a random blip about the U.S. dollar becoming less important in the international monetary framework and had to write. This ties into my recent posts a little more closely than I generally like, but it&#8217;s so common and so important that I had to blurt it out.</p>
<p><em>Disclaimer: I am a U.S. citizen so I will be speaking of the U.S. dollar. If you&#8217;re in another country or from another country, 99.9% of this will apply to your currency of choice.</em></p>
<p>I have heard serious discussions by people who refuse to trade currencies on the grounds of patriotism. While I&#8217;m not sure where the logic comes from, I think the argument is something like trading for another country&#8217;s currency requires giving up dollars which in turn hurts the U.S. economy. Not only is this wrong, it is exactly opposite of the truth.</p>
<p><span id="more-442"></span>There is also a significant amount of the population which refuses to invest in the stock of non-American companies or a myriad of other financial instruments rooted outside the United States. They say that they are supporting the companies by purchasing their stock.</p>
<p>These arguments ignore at least two fundamental facts. First, it discounts the inherent value of ownership. This shouldn&#8217;t be hard to understand; The people who take this stance are also typically the people who are the most offended when non-U.S. entities purchase large stakes in American corporations or other ventures. The people who take this stance are often the same people who are the most offended by large amounts of U.S. Treasury bonds being owned by foreign governments. The reason this feels like an affront is because it&#8217;s essentially financial power being exercised by the buyer/investor. Power is valuable, but it is not unidirectional&#8230; The feeling of being owned by &#8220;foreigners&#8221; is not only unsettling to Americans. If you were to buy portions of non-U.S. companies, you would be exercising the same power over them.</p>
<p>Second, the benefit of purchasing a company&#8217;s stock is typically very small to the company itself. The &#8220;benevolent investor theory™&#8221; (I just made that up. No results found in Google. Dibs!) highlights a fundamental misunderstanding of the stock market. A vast majority of stocks bought and sold in markets are bought and sold by traders and brokers who are already the stocks&#8217; owners. The company sold the stock at an offering at some point in the past and is 100% detached from it financially. Think of it like buying a used car. It&#8217;s a statement of your trust in the manufacturer, but Ford isn&#8217;t making a dime off of your purchase of a &#8217;68 Mustang. Rather than making money for the company, you are making money for brokers, traders, et cetera. Surprise! The owner of the stock you are buying may already be owned by a &#8220;foreigner&#8221; who is selling it back to you for a personal profit. How do you feel about irony?</p>
<p>The stock price of a company does have an impact on the company, but the impact is of a secondary nature. It makes the CEO happy. It leads to bonuses, but ultimately&#8230; Stock prices are little more than a rough reflection of the value of the company. However, this is a theoretical value based on earning potential and assets owned by the company. If you want to make a case for &#8220;buying American&#8221; in reference to products, we might have a more interesting discussion of benefit. Investing only in U.S. companies is narrow-minded and potentially results in results exactly opposite of intent.</p>
<p>The biggest problem with maintaining holdings based on one security is the lack of diversification. I&#8217;m not at all a fan of portfolio diversification for the sole sake of diversification. This is simply averaging down. The duration and liquidity are also in play here, so don&#8217;t take that statement too literally. However, investing in only U.S. currencies and stocks is non-diversification for the sake of non-diversification. This sounds similar, but it is much much riskier.</p>
<p>Diversification for the sake of diversification still typically involves an honest assessment of other investment options. Thus, diversification may limit losses as intended, but it may also limit profits. Non-diversification for the sake of non-diversification is different. It also potentially limits profits, but <em>it also potentially increases losses&#8230; exponentially</em>. It forces selection of investments within a range that may be perfectly sound compared to others within the range, but the range itself may be rendered worthless as a whole. If the dollar loses 50% of its value (which it has more than once), <em>your other investments must double just to keep you at ZERO </em>relative to the global value you&#8217;re trying to protect.</p>
<p>This is not complicated. Retention and purchases of dollars and American investments must be examined within their contexts relative to non-U.S. instruments. Everyone is quick to point out they learned their lesson with Enron, A.I.G., et cetera. However, maintaining myopia within national boundaries shows they have learned nothing.</p>
<p>If you really want to be patriotic, make the smartest investments<br />
possible based on the merit of the investment. Real economic power lies in<br />
the control of valuable assets, not in the control of assets in your own country.</p>
<p>If you&#8217;re like me and think patriotism is cultural arrogance masquerading as virtue, weighing your options on an international scale is the best (only) way to ensure your own sovereignty.</p>
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		<title>5 Tips for Being a Bad Entrepreneur</title>
		<link>http://rulesoptional.com/how-to-be-a-bad-entrepreneur/</link>
		<comments>http://rulesoptional.com/how-to-be-a-bad-entrepreneur/#comments</comments>
		<pubDate>Fri, 14 Aug 2009 08:36:45 +0000</pubDate>
		<dc:creator>rulesoptional</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Financing All This]]></category>

		<guid isPermaLink="false">http://www.sailtotrail.com/?p=386</guid>
		<description><![CDATA[The motivation for this post springs partially from personal annoyance, anger, disgust, or some other negative emotion. The rest comes from my strong desire protect those early in their entrepreneurial development from the fear of a bleak future sculpted by the lies and incompetence of those in positions of apparent authority. Enter the rag in [...]]]></description>
			<content:encoded><![CDATA[<p>The motivation for this post springs partially from personal annoyance, anger, disgust, or some other negative emotion. The rest comes from my strong desire protect those early in their entrepreneurial development from the fear of a bleak future sculpted by the lies and incompetence of those in positions of apparent authority.</p>
<p>Enter the rag in my hand&#8230; Inc., which bills itself as &#8220;The Magazine for Growing Companies&#8221;. This is the September 2009 issue. I&#8217;m looking at the article &#8220;<strong>If Not Now, When?</strong> For entrepreneurs, there&#8217;s never a right time to buy a house, start a family, have a life&#8221; by Meg Cadoux Hirshberg on page 47.</p>
<p>Since I&#8217;m an entrepreneur who was sitting next to the ocean in the sunshine with a coffee in my hand, leisurely reading a magazine when the article title above flashed before my eyes, you might immediately discern where I&#8217;m going with the rest of this. The &#8220;there&#8217;s never a right time&#8221; bit grated on my nerves immediately.</p>
<p>The second sentence of the article reads: &#8220;<em>His business is almost four years old, and it&#8217;s growing well, though it still is not profitable.</em>&#8221; The first sentence of the second paragraph concludes: &#8220;<em>The reality is that when you are entangled in an entrepreneurial life, there&#8217;s never a right time &#8211; for anything</em>.&#8221; Other choice bits&#8230; &#8220;<em>No matter how loudly private life calls out for investment &#8211; of time and of money &#8211; the business screams even louder in its demands for both. An entrepreneurial life becomes all about postponing</em>&#8230;&#8221; and&#8230; &#8220;<em>Theoretically, entrepreneurs control their lives and schedules. But the exact opposite is usually true: Entrepreneurs are whipsawed by their businesses. There is a constant sense of crisis, and every aspect of running a business demands more time than there are hours in a day</em>.&#8221;</p>
<p>So here I am&#8230; in paragraph four&#8230; wondering if I should just go ahead and slit my entrepreneurially cursed wrists now, or if I should read on to find out how I too could learn from this maven of business. Fortunately, my coffee required a refill. On the way to get a refill, a sailboat caught my eye and I wandered down the docks in its direction. After examining the lines (and for sale sign), I meandered back to the coffee shop. By the time I opened the magazine again, I no longer felt like reading more about how badly some people are capable of doing things.</p>
<p>Here are a few things to avoid. I pulled the rabbits magically out of my brain, but they may explain Meg Cadoux Hirshenberg&#8217;s problems</p>
<ol>
<li><strong>Being in the wrong business</strong>. If you&#8217;re running around like crazy all the time <em>and</em> strapped for cash, re-evaluate your situation&#8230; Now. Don&#8217;t make excuses. If you&#8217;ve been running the business for more than a few months like this, you&#8217;re doing something wrong and need to get serious about change.</li>
<li><strong>Being a workaholic</strong>. There are people who will fill all available time with work to satisfy their addiction to work. This isn&#8217;t the fault of the work or the fact that it&#8217;s entrepreneurial. It&#8217;s the fault of the addict.</li>
<li><strong>Being a bad manager</strong>. Do you manage your time poorly? Are you incapable of delegation? Are your plans shortsighted? All of these problems can make entrepreneurial life hell.</li>
<li><strong>Using work as an excuse to escape from people</strong> (usually family). Don&#8217;t try to bullshit me. Lots of people are in bad relationships that they refuse to end for whatever reason. Work is almost always the easiest excuse to spend time away from them. This can be disguised as a work addiction, but it&#8217;s fundamentally different.</li>
<li><strong>Greed</strong>. When you have a big fat check in your hand that represents a lot of work from your company, the temptation to pocket it yourself and do all of the work is strong. If it&#8217;s too much work, hire someone&#8230; an accountant would probably be the best place to start.</li>
</ol>
<p>If you have one of these problems, you have some responsibilities. The first, as an entrepreneur, is to fix the problem! The second responsibility, to humanity, is to shut your damned mouth and stop writing magazine articles proclaiming things are a certain way because of your own inadequacies. Having it in print hurts everyone. It&#8217;s discouraging to the people who think you know what you&#8217;re talking about simply because your bullshit got published. It&#8217;s even bad for you as having your drivel published serves as personal validation that what you&#8217;re saying is correct. Reality check&#8230; The problem lies not with entrepreneurialism, it lies with you.</p>
<p>I suffer from no delusion that running a business or freelancing or whatever is all fun and games. I simply refuse to accept this anecdotal and hasty portrayal of the time deprived entrepreneur. It doesn&#8217;t have to be that way. It shouldn&#8217;t be that way. Stop it.</p>
<p>What reasons for having such a horrible entrepreneurial experience have I missed? I&#8217;d love to hear any of your thoughts on the matter.</p>
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