Break Some Eggs

In December of 2014, I said, “I’m going to talk about rebuilding my life.” I also said, “I’ll do this over the next six months.” 2015 happened. But more than that happening, there was the reality of trial and error applied to a real life. Continue reading

Pride and Poverty

I have a few days left to play out my month long sprint towards $10k of income in a month. I can already tell three things:

  • Our household got close to hitting its goal of $10k.
  • I cannot earn $10k per month
  • There is a better way

Our Goal is Close

I said at the outset: $10k in billables was my goal. I said a consolation prize would be to get the household to $10k. I think we can get our household to $10k. We really needed to hit that number as the move follows on four bloody months of renovation expenses and income shrinking.

Over the weekend, I sent out $3800 in invoices. That alone is almost 40% of the goal. The problem is that this is work from the last couple months that has come home to roost in my bank account. A lot of that more will show up much later.

Combine my employment income, my partner’s income, a $2000 draw from my RRSP (like I said: bloody four months) and yeah: we hit the goal and then some.

 

I Cannot Earn $10k Per Month

Take my schedule and my billable hours: at $80/hr X 160 hrs, I could get to $12,800 per month. The problem is that half of my hours are non-billable. It’s not that I’m lazy: it’s that work takes prep work. “Full time” looks more like a mix of 100% billable time at $45h/hour and 50% billable at $80/hour. Translation: working full out, I can’t earn more than $6500-7000 for a sustained period of time. In Victoria, a household needs to bring in in excess of $100k per year to live alright. My best is going to be in the $78,000 per year by playing the game this way. People can earn more in my field, but how I am doing it tops me out at this low level. Why? It’s because I’m either honest or I think some pride in poverty.

 

Income Problems [SOLVED]

I have been billing hourly. If I sit and suffer for 60 minutes is that somehow more valuable to a client than if I give them the same solution in a few minutes? I have been billing based on effort. People are more interested in results. With 20 years in the business, I know how to do some complex things well and fast. If I do it well, I deserve to get paid. If I do it fast, I will be paid little. In other words, a flailing noob would earn more than me. Does that sound fair? If I can deliver it well, the client can use it quickly. Results and speed are each something. By charging hourly rates, I shoot myself in the foot. The way to make my work, well, work is to estimate how much something costs, factor in the market value of the work and then charge accordingly. On a speed course, I can get WordPress going well in an hour. What used to be 3 days and $1200 in 1997, is now an hour. The value is still there. I should charge something between the $1200 (three days) and the $80 that my work would merit with today’s time and rates. If I decided the median was the “right” rate, then the set-up would be $640 and ready tomorrow. If I can load up tasks and knock out 5 site deployments in a day that used to be $400. Now it would become $3200. That’s how I win: and elite practice tempered by good value.

 

This is an old lesson, but finally, the light went on. Bill based on results, not effort. In fact: take on work based on its likelihood to succeed and benefit the client.

The Complications of Week Three

Into my third week, billables are kicking out. I have my regular gig and a new gig as a Drupal developer for a local tech manufacturing company. The gigs alone won’t get me more than two-thirds of the way to the June Spring goal of $10,000. The side work could close the gap, but that’s where the complication comes in. My current model lets in too much squeakiness and that squeakiness means I won’t be able to earn up to what I could.

Businesses have been putting their ventures on the Internet for over 20 years. That’s 20 years of relationships with developers who run the gamut from skilled and professional all the way to giggly hipsters. Last week’s web developer is this week’s Starbucks barista. Last month’s gas pump guy is this week’s web developer.

They don’t keep track of records. They don’t respond to emails. They don’t do anything to allow for a continuity of service. In some cases, the developer you’re working with doesn’t have the skills to carry out things like setting up web hosting or managing domain names. They relied on a friend who likely got tired of being asked for favours.

For businesses, going to these developers isn’t a mistake. There are three levels of developers: the basement folk (I have to admit that I am one of those); the small shops (a half dozen guys in an office with lots of exposed brick and bare wood), and the big corporations. While I do my work out of my home, I have worked with all three environments. The big difference between the three models is price. Professionalism either exists or it doesn’t. It’s still the Wild West and there are no set standards of conduct: just good etiquette or the lack thereof.

That’s the world I work in.

Whenever I get a web project these days, it’s an inherited project. Last month, I did a new website for a client who was establishing a new web presence. It took two hours from “let’s have a website” to “there’s your basic website.” The other projects are inherited from clients who have had a falling out with their previous developer; or their developer is not in the business; or their developer doesn’t know how to pull off anything remotely complex.

To get past those obstacles, I have to get into a long cycle of educating people and reaching out to former developers or the web hosts. That adds anything from a day to a month into the mix. When I load up projects to execute, I am ready to move at 100 miles/hour. Instead, I have to slow down and move at a mile an hour. Goodbye productivity. Goodbye billing velocity. Goodbye income.

An inexpensive transaction can be profitable if the time and cost of execution is even smaller. If the time to execution becomes too huge, no amount of money will make a project profitable. Forget waiting for Godot: try waiting for receivables.

There are changes in the practices that I could implement. I do not often ask for 50% up front, which is a standard practice in my field. My jobs have been numerous but small enough and incremental to justify being billed after the fact. Asking for fifty percent in advance would jam up some projects as they hum, hah and try to get some advance work done. Some clients would just go to someone else who doesn’t need money up front. Asking for a deposit would turn more leads into dead prospects, but it would free me up as I would have more money coming with work, as opposed to hoping for money after the work is done.

So the stop-and-start of billing is my big source of jeopardy. The remedy around this isn’t hard: it amounts to either changing my billing and intake practices; or changing what I sell. Doing one of these could clear the way to making more money and frequently getting above the $10k mark everyone month.

Income & The Boogaloo of Week Two

Eleven days into this one month pledge. Where does the big plan and the sprint sit: there’s progress.Did I think this month was going to be filled with wonder and magic? No. I figured it would be a month of focus and the less definable universal alignment of wishes and results.

Income Incoming

On June 1st, I got a really good lead: an ongoing position. The timing and the dynamics of the position couldn’t be better. To qualify for the ideal mortgage terms, I needed to nudge my income upwards. I have a regular job: a three day per week position. I love the place even if the income isn’t as high as one would see in the private sector. My intention was to use the two days per week for consulting. That happened for a short time, then I got lost in renovation land. Last month, I got back to consulting and that has been prosperous. The problem with self-employment: banks hate the self-employed. For my self-employment income to count in the eyes of a bank, I would have to show off a two-year history and they’d likely look at the poorer year as the income level I was capable of. So be it. When I spoke with my mortgage broker and we ran the numbers, we qualified for a decent mortgage– one capable of giving us a perfectly acceptable townhouse. What if we wanted more wiggle room? I couldn’t invent two years of financial fortunes in six months. Even if I clocked in at $100k per month, they would look at 2015, when I took a year off from consulting and say, “looks like things aren’t very good.

The alternative to time travel or a lottery win? A job. I asked my mortgage broker: “What if I got a job for those couple days per week? How would that change things?” I gamed out the what-if based on my likely private sector income and done as an employee. Presto-chango: the mortgage numbers would look awesome. I was contacted via LinkedIn with a job offer. I came back with a lot of swagger: something to the effect of “I make a lot of money consulting, I only want two days per week, and I want to work as an employee to qualify for my mortgage.” The prospective employer said, “sure.” We juggled around some details as of Tuesday night, it looks like it’s a go. It’s not $10k in June– not all by itself. But between my 3-day gig and this 2-day gig, I get two-thirds of my way to my goal. I still have a healthy amount of consulting work coming in, so my task now is how to handle this influx of work. How do I deal with having a lot of work coming in? Triage and skills division.

Triage

The high level stuff I do is hard for others to accomplish. It’s not an elite set of skills: it’s just uncommon. Some of my work is very turn-key and mundane. Those tasks are trainable. For the work, only I can do, that stays on my plate. For the lower hanging fruit (data entry, site set-up, domain transfers), I can task that off to my partner. As serendipity would have it, her job shifted from full-time giving her more time to help with my work. While giving her work and income is great, no one buys ⅓ of a puppy. Her capacity and incomplete skill set coupled with my limited capacity but full skill set means we can combine our strengths. I can figure out the game plan of a given project and keep the tasks that can’t be easily taught, then give her the remainder of the work / money. The upshot: with her help, we could make a healthy amount this month and my chunk of that work could allow me to hit my June sprint goal.

Am I “there” on the June sprint? No. Am I on my way? Hells, yes.

June is the month I sprint to $10,000

The June Sprint – My Goal Is To Rake In $10,000

The Rebuild has been underway for about three years now. It’s going somewhere, but the results of this process are still blurry to most onlookers. At times, this process looks foggy to me. This needs to be fun and engaging, otherwise someone like me could get bored. What alleviates boredom? A game. In the month of June, I am going to turn one chunk of my goals into a project, a challenge, a game. In the month of June, I am going to earn $10,000.

$10,000 seems like an arbitrary number. When I had my old web design incarnation, I had a series I was working through. “The First 10,000” about getting the first $10,000 in sales from a thing (a product, a venture, etc.). When I sub-contracted for one guy, his goal was $10,000 or more per month in sales. If he ended up spending $12,000 in contractors, that didn’t seem to matter– as long as he cracked five digits. For people who don’t earn a lot of money, $10,000 in a month can seem like a road trip to Pluto. For the ultra-wealthy, it’s less than one day’s pay. It’s all about perspective.

Personally: $10,000 in new cash in one month would go a long way to unwind how the year has progressed thus far. At Christmas, we got hit with replacing our dishwasher: too many months of missing the “rinse your bowl” step turned into a dead dishwasher. Valentines was interrupted by a cat who feasted on living room debris and needed a $1400 surgery. From January to May, I spent something like $6000 on the renovation between construction, drywallers, paint, flooring, electrical, and dump fees. During the same time, the renovations precluded me from earning money through my new business.

So: the June sprint is to bring in or bill $10,000 by the end of the month. I have two sets of qualifiers as what will make me consider hitting that mark a full success or a qualified success.

What affect this are caveats, qualifiers and stretches to put into the mix.

Big Success and Little On The Road to $10,000

The high water mark of success: $10,000 in cash income from consulting, web development and affiliate revenue. The other stuff can go on top. In this ideal version, I have earned the money I get from my work at UVic; my partner her own contract money; and the barter income is over and above this qualifier of $10,000.

The low water mark of success: $10,000 in a combination of household income, barter revenue, and web development revenue. That’s an easy mark to hit: on almost all months, we get to $3600 on auto pilot. Barter revenue is easy to come by. The gap ($1000 – $3000) is where the effort comes into the mix.

The goal is hit the high amount. The consolation prize is to hit the low amount which is still $10,000 all-in.

By putting this out there,  I intend to embarrass myself into accomplishing this June Sprint. My coaching exercises have laid bare the places where I need to work: commitment and getting into the weeds.

I look over my shoulder for where I am not. I hedge my bets. I look at the fears instead of the benefits. I am working to shed those behaviors and commit what I am doing now and what my June Sprint is meant to accomplish. Looking over one’s shoulder is not how one wins sprints. Looking to the fears instead of the benefits is like staying fixated on the starting block and not the finish line.

The devil is in the details. I will sometimes get lost in minutiae and lose sight of the big picture. My work is detail oriented, but everyone’s goal is to get the work done and delivered. It’s my goal. It’s my client’s goal. So that’s the detail for me to fixate on.

My Pledge to You

As I pledged in a post about this sprint, I will do the following:

  • Execute this sprint between June 1st and June 30th. You can call me on “cheating” by getting this under way before June 1st. I freely admit that. Any challenge would be starting from where I am which is a long way from where I started on my respective goals.
  • I will blog about my progress on Saturdays: June 4th, June 11th, June 18th, June 25th, and an autopsy on July 2nd. I will sever some financial details, but what I can retain, I will.
  • I will post something about the progress here and on Instagram every two day throughout June. Some of those may be cryptic. Some may be as simple as showing a cheque.

Ask me how I’m doing throughout June and I will tell you candidly where I am at.

The Nadir

The stormtroopers have the Rebels. Vader has Luke on the ropes. The Death Star’s shields are intact. All is not going well for our heroes. But things turn around. The darkest moment gives into the brightest dawn. Is that how this works?

All of my credit cards are maxed out. My income is about $1000/mo. short of what it needs to be. I could work more to close off the debts, but I can’t do that because all of my time and energy is going into the renovation of the house. All of my available money is going into renovation supplies. The painting of the kitchen means the kitchen has no flat surfaces and the microwave is only source of heat. Translation: there is no way I can cook at home; and there is no money to buy takeout. My crappy paint job took several days. My partner’s repair of my crappy paint job is taking several more. In the weeks prior to the painting, we knew that the kitchen plumbing was dumping its contents into an unused workshop at the back of the house. We have tried to get an electrician in to do the work we need to close off the renovations, but electricians are a precious and scattered lot of tradespeople.

Closing off the house renovations is necessary to nail its defects. The house is very defect-eriffic. It’s 105 years old– the first house on the block. We need the house prepped for sale so that it can be liquidated. It’s the main asset in my soon-to-be former marriage. In 2007, the wife and I were talking about selling our townhouse. Fiscally: things were good. The finances were okay. My income was good. We had a place that had appreciated a great deal (from $130k to $280k). Around the same time, I learned that my wife was creeping around LiveJournal and cyberring smut to anyone desperate enough to give her an audience. I didn’t like the deceit; and I didn’t like that she would hold me back, alienate my friends, and go out there at the same time. I didn’t want to be married anymore. I told her that. In compromise, she nuked the LiveJournal account that she knew I knew about. I still didn’t want to be married. A month later, in prep for the sale, she broke her ankle. I was into a stressful new phase at my job. Between my stress and her ankle, I put my plans to dump her on hold; and we put our plans to sell the townhouse on hold. A year later, the house sale plans resumed. We bought our ramshackle home. I thought it could be downturn resistant. It felt that we were heading for a global financial meltdown in 2008-2009. I needed us to be somewhere cheap enough to live if we were I to lose my job. We did that. In 2010, I quit my job. With my own shingle hung out, I was fixated on making enough money to provide for my family. My wife went into cheating overdrive. Whenever I confronted her, she denied it. Whenever I confronted her friends, they denied it, too. I didn’t trust her, but I was sufficiently gaslighted to buy her crap enough, and believe that North was South. I lived almost 20 years of “no” from the ex-wife. That’s a lot of years of being hemmed in, held back and shut down. That long game of mental torture leaves a mark. It establishes patterns. Those patterns become almost foundational. I got 20 years of “no”, and I need to have a few years of “yes.”

I was at my financial wits end in 2014 when I got a regular job. Things turned around a little. I started The Rebuild. Then the ex-wife revealed all of the cheating in early 2015. We started the long road towards a no-contest divorce. I thought she needed a viable chance at getting a place for her and my daughter. When wrote the deal, I agreed to her getting 60% of the net proceeds from the house sale. I would take 40% and limp off to rebuild my life. Some people will decry this sexism, but the courts favour women. Case in point: when we did the paperwork for the separation we came to it with our 2014 tax numbers. I have my daughter for twice as many days as my ex. The tax numbers say I earned half as much as the ex. Translation: I owe her $19/mo. in child support. Tell me that’s fair. In the spirit of this unfair system, I wrote a deal to make sure my daughter wasn’t living in a slum.

Now we’re into the thick of things. Every day, I am building stuff, buying stuff, cleaning stuff, or trying to herd tradespeople. I have hated this house since I signed the papers to attain it. I have hated the house and now it’s my obsession. In reward for this monomania and putting my life on hold, I will see 40% of the proceeds. In reward for being cheated on and made into a fool for years, I have all this work and a minority of the reward to cap it all off.

I need to know the shields can drop and that the Rebels can take out the Death Star. I need to know that I get to the point where house goes up for sale. My partner is working her ass off to make the renovations happen. With my money gone, she’s draining her bank account to see us through. I have a lot of guilt around seeing her resources get depleted to make this happen. She reminds me that the money isn’t going to kill us, the bad mood will. Every penny and every hour gone is being replaced with my bad mood. I rail against injustice and this whole deal reeks. Worst still, I feel like I’m the architect of this injustice.

In my ontological coaching exercises, I have “abundance” as a project: a point where my money is good and my time is good. A point where my work serves a purpose and I feel fulfilled. Right now, I feel a million miles away from abundant. I feel scarce. I feel hurt. I feel like a caged animal. I am at my nadir. The last 16 months have felt like I was run through by a spear. It feels like I have to grab that spear and pull it through me inch by inch until it’s all the way out the other side. It hurts.

Does this turn around? Have you been at your low point? How did you come back?