Reasons for Cryptocurrency Prices Falling

2022 was a bad year for cryptocurrencies. I discussed how the blockchain foundation of transactions can’t be hacked, but this does not reach to the companies who have created exchanges and are responsible for how currencies are sent from one place to another.  An exchange is where people hold their currency (kind of like Etrade or Robinhood).  They act as a holding spot and many allow you to convert one coin to another.  Unfortunately, if the systems at the exchange are not protected, hackers gain access to the exchanges or they can intercept currencies from one spot to another and redirect coins to their own accounts.

In addition to hackers able to access exchanges, what we saw in 2022 were exchanges just being bad actors.  In the case of Luna, they had a stable coin that is supposed to be worth $1 and should have had assets to back up the $1 price.  In other words, if you issue $1 million in coins and tell people that the coins are worth $1 each, you should have $1 million in assets to back up the $1 million in coins that are out there.  Luna did not have any assets.  Their coin was backed by the value of other coins and an algorithm that was not supposed to fail.  Well, when a company came out against the stable and started withdrawing their coins, a lot of other people started to withdraw their coins causing a run on the coin and the value dropped to almost nothing.  This shook the market and all coins started to drop in value.

Cryptocurrencies have experienced several significant price crashes throughout their history, and there is rarely a single cause for these events. However, some of the common factors that have contributed to cryptocurrency crashes in the past include:

  1. Market speculation and hype: Cryptocurrencies are a relatively new asset class, and their value is largely determined by market speculation and hype. When investors become overly optimistic about the potential returns of cryptocurrencies, prices can rise rapidly, creating a bubble. Eventually, the bubble bursts, and prices come crashing down as investors realize that the assets were overvalued.
  2. Regulatory actions: Cryptocurrencies are often viewed as a threat by governments and financial institutions because they operate outside of traditional banking systems. As a result, governments may take regulatory actions that negatively impact the value of cryptocurrencies. For example, China’s recent crackdown on Bitcoin mining and trading caused a significant drop in the cryptocurrency’s value.
  3. Security concerns: Cryptocurrencies are vulnerable to hacking and fraud, and there have been several high-profile security breaches in the past. When investors lose confidence in the security of a particular cryptocurrency, they may sell their holdings, causing prices to drop.
  4. Market volatility: Cryptocurrencies are known for their extreme volatility, with prices fluctuating wildly in short periods. This volatility can be caused by a variety of factors, including news events, market sentiment, and changes in supply and demand.

It’s important to note that cryptocurrency crashes are a natural part of the market cycle, and they are not necessarily a sign of a long-term decline in value. As the cryptocurrency market matures, it may become more stable and less susceptible to extreme price swings.

What is Cryptocurrency and Blockchain Programming?

If you recall in 2021, cryptocurrencies and Bitcoin in particular were all the rage in investing.  People were investing all of their government checks to buy crypto.  By the end of 2022, all of the coins had crashed and a market with over $3 trillion in total value collapsed to less than $1 trillion.  So, what is cryptocurrency and why should you invest today?  The following is a breakdown of what crypto is based on and why it will be an important part of the future of investing.

Imagine if you will a technology whereby transactions are recorded and no one can EVER change those transactions once they are recorded.  What kind of transactions would this include?  Let’s say for example, you go to a bank and withdraw $100 from your account with a balance of $1,000.  You would have $900 left in your account.  That is a single transaction that can never be changed or edited.  This would be important right?  What if someone found a way to change that transaction to a withdrawal of $800?  Now, through no fault of your own, your bank account shows a balance of $200 instead of $900.  Now, using that same logic, let’s say you purchased a Louis Vitton purse for $3,000 and you received a letter of authenticity and maybe a number for the purse.  Well, let’s say there was a technology that tracked the ownership of that purse and, through that technology, you could track the number on the purse from when it was manufactured to your purchase.  Now, that specific number proves that you are the first owner of the purse.  Now, let’s say you sell that purse to another person who could also track that specific number to you as the buyer and verify the purse was authentic.  Would that be valuable?  You know that you purchased a legitimate product and tracking shows where that product came from and could provide authenticity to the next person who bought it and, the best part, no one could ever hack the software that provides the history of that product.  This is what blockchain programming is capable of.


The definition of blockchain programming is, “Blockchain is a distributed ledger technology that allows multiple parties to securely and transparently record transactions in a decentralized and tamper-proof manner. The technology is based on a chain of blocks, where each block contains a record of transactions that is verified and added to the chain through a consensus mechanism.”  This sounds pretty technical but basically, this states that the technology of transactions can’t be hacked or changed and is also housed in a decentralized manner.  What does decentralized mean?  This means no one controls the data on the blockchain.  For instance, when you withdraw $100 from your bank account at Chase Bank, ONLY Chase Bank records and has access to that transaction information.  No one can see the transaction information except you and officials at Chase Bank.  With blockchain programming, the transactions are all on a public database.  Now, the transactions themselves do not have identifiers (like who the people are behind the transactions), but they do show transaction IDs that show what the transaction is.

In a blockchain, each block contains a cryptographic hash of the previous block, which creates a link between them and ensures the integrity of the chain. The blocks are distributed across a network of nodes, which work together to validate new transactions and add them to the blockchain.  Blockchain technology was initially developed for the cryptocurrency Bitcoin, but it has since been adopted for a wide range of applications, including supply chain management, voting systems, and smart contracts. Its decentralized and transparent nature makes it particularly useful for applications where trust and security are paramount.


Now that you understand what blockchain programming is, we can discuss crypto currencies.  Basically, the blockchain programming allows people to create software programs and apps that use the blockchain process as a basis for their programs.  The most obvious use for blockchain programming is for financial transactions.  How long does it take to wire money?  If it’s before 1pm, you might get a wire confirmation in minutes or hours and there is almost always a fee to send the wire.  After a certain hour, wires don’t process until the next day.  With blockchain programming, you can transfer funds in seconds.  And you don’t have to pay a bank or 3rd party to wire the funds for you.  You can send currency directly to another party.  At this time, you can’t send US Dollars using blockchain so you need a cryptocurrency if you want to send money to someone.  How does this work?  You can open an account at a Crypto exchange like  Once your account is open and verified, you can connect to a normal bank account and deposit money.  Let’s say for example you deposit $1,000 from your bank to your crypto account.  Now, you have $1,000 USD in your account at  From there, you need to BUY crypto currencies if you want to send to someone else.  One crypto currency you can buy is USDT (Tether) which is a cryptocurrency pegged to the US Dollar so 1 tether = $1 in US.  If you buy $1,000 worth of Tether, you would have $1,000 worth of Tether.  Now, you can send that to someone else and their crypto account and they can withdraw that to their bank if they want.  It would take you seconds to transfer the money.


Outside of financial transactions, there are thousands of programmers creating new programs that use blockchain programming processes.  These programmers are creating their own projects to help society in a number of different ways.  Now, in order to finance these projects and their work, these programmers have created their own “coins” or their own cryptocurrencies to raise money and that will be used for people who want to use their software.  So, in other words, a programmer wants to create a project to track the ownership of a home.  This project will let people or banks transfer title to a property using this software and no one can change the registry.  In order to create the software, the programmer creates a new crypto coin called “TITLECOIN”.  The programmers release 1 million TITLECOINS at $1 each.  People think the project is going to be huge so 1 million buy the coins at $1 each and now the programmers have $1 million to build their software.  Once the project is completed, people who use the software will have to use TITLECOINS as a fee to use the software.  So, let’s say every Title transfer costs 5 Titlecoins.  People will have to buy the coins to use the project.  Understanding this, people think the TITLECOIN project is going to be huge and can trade the TITLECOINS on multiple exchanges and instead of $1, the demand goes up and now people are paying $2 – $3 for the coins.  Now, if you can imagine how many projects can be developed, you can see why so many coins are being created.

On top of specific projects like the above, some companies are creating easy to use platforms whereby multiple programmers are creating different projects.  Those companies and their platforms issue their owns coins that are required to use their platforms.  What does this mean?  Let’s take for example your cell phone.  Odds are you have a phone that uses Google App Store (Android) or an iPhone that uses the Apple Store.  That’s it.  There are two main platforms that are available for programmers who create different Apps.  In the blockchain space, there are a lot more than 2 players and companies are fighting for programmers to use their platforms for their blockchain software.  Some examples of platforms are Ethereum, Cardano, Polka Dot and Solana.


The blockchain programming industry is just like the internet in 2000.  We all knew the internet was going to change people’s lives and people put money into anything internet until the crash.  Then, the real businesses began to evolve.  Unfortunately, some of the major players of the time didn’t last long.  Think Netscape, Yahoo! or AOL.  Blockchain programming is very similar and the platforms I mentioned above may or may not make up.  Some blockchain programs will become the next Google and some will be the next Yahoo!  It is hard to determine the best ones, but my opinion is the major platforms (like Ethereum) won’t go away and Bitcoin is being purchased by institutions and they won’t likely let it go away so it’s worth putting some of your portfolio into cryptocurrency.

Second Steps in Starting a Business

After you decide what you want to do for your business, the next steps including getting setup legally and for taxes to run your business.  The first thing you need to know here is that you absolutely must separate your personal spending from your business spending.  For accounting and tax purposes and for your business analysis, you need to know how much your business costs to run and how much money you are making to determine if you are losing money or making money.  If you are adding things like shopping for toys for your kids to your business expenses, it’s very hard to see if your business is making any money. s


In order to split your finances between personal and business, you need to create a business entity.  There are different types of business entities, but the most common are: Sole Proprietor, Limited Liability Corporation (LLC) and Corporation (S corp or C corp).  The big difference between the sole proprietor and corporations is liability and who is responsible in case something goes wrong and your business is sued.  If you are a sole proprietor and you get sued, the person suing you could include all of your personal belongings and assets in the lawsuit.  For example, you start a business selling donuts.  Someone eats one of your donuts and it gets stuck in their throat and they sue you because the donut was too hard.  In this example, his medical bills cost $75.000.  And yea, people pull that crap.  As a sole proprietor, you could be personally liable for the $75,000 and might have to sell your house, your investments and car to pay that money back.  If you have a really low risk business, maybe this isn’t a big deal and you can start as a sole proprietor, but if you are concerned about any type of lawsuit, I recommend you open an LLC.

A corporation is a type of business entity that protects your personal assets and becomes its own separate entity from your personal life.  In this case, the corporation can get sued for any reason, but the person suing can only go after whatever assets the company has.  If you run a service based company, the odds are that you don’t have a lot of assets and technically you could just say the company is bankrupt.  Then, the person suing would get nothing.  There is a higher cost for having a corporation, but the ability to shield your personal property and assets is a pretty big deal, especially if you have a house or stocks and investments.


If you decide to set up a corporation, there are three different types: LLC, S corporation and C Corporation.  An LLC is a low-maintenance legal entity that’s best for a simple business. An S corporation is a tax status created so that business owners can save money on taxes. A C corporation is a more complicated legal entity that’s best for businesses looking to keep profits in the business.  The following graphic outlines the benefits and features of each type of Corporation Entity.

In order to determine the best entity for you, you should contact a Certified Public Accountant (CPA) and explain what you are doing and they can help define the best direction for you.  If you change the entity type, you would have to changes your EIN number and other documents that could be a pain down the road.  For my businesses, I have simply gone with LLC because they are easy to setup and the taxes at the end of the year are pretty easy to complete.


Once you decide what entity you want to use for your business and you have a business name,  the next step would be to get an Employer Identification Number (EIN) from the IRS.  This is a specific number for your business that tells the IRS that you have a separate business and that the business will be responsible for filing separate taxes.  Your EIN number for your business is like your personal social security number.  It’s your business “social security” number you need to file taxes for your business.  Getting an EIN number is really fast and cheap.  Don’t pay an online service for this.  Just go to the application here:


By this point, you should have your business name, your business entity type and your EIN number with the Federal government and IRS.  You will need to register your business with three different local levels:

  • State: Register your business name and entity
  • County: Register a Fictitious Business Name
  • City: Apply for a Business License

On a state level, you need to register your corporation with the state.  Every state is different but it’s pretty simple to do a google search for your state and how to register a corporation name.  Follow the instructions and fill out a form and there is usually a small fee associated.

On a local level, you will need to have to two items: a Fictitious Business and Business License.   In order for cities and counties to make more money, most places will require you to get a fictitious business name.  This is not a fake name, but a business name that you register at your county’s recorder office.  Basically, it allows you to conduct business with your business name in your county.  Most important, major banks like Chase require you to have a Fictitious Business Name to get a bank account.

On a city level, you will want to get a business license to conduct your business in the city you’re in.  Almost every city requires businesses within their city to have a business license.  This is a pretty easy process that includes a single form and a small fee.  Most times, the fee is based on your yearly business income so, when you start out, the fees are small.


If you have all of the documentation above, you can go to a bank to get a business bank account.  This is really important because this provides a way for you to separate your personal finances and business finances.  As customers pay your business, that money goes into your business account and you or an accountant can then import all of your income and expenses into software that will breakdown everything you need to analyze your business.  After 6 months to a year of running your business, you can print a very easy report that tells you how much money you are generating, what your expenses are and then your profit or loss on the business.  With these reports, you can then tweak your spending, your marketing or find ways to increase your revenue to make more profits.



First Steps In Starting a Business

So you are ready to start your first business. The first step in creating a business is to find a business you want to start.  Ideally, you should do something that you are good at and you enjoy doing. Most people will tell you that if they really love what they do, it’s not considered work.  I love building web sites and being creative and transforming someone’s online presence.  This will be the most complicated part of your journey because once you start and focus on the business, it should be something that you feel like you are good at and having fun with.


One of the easiest ways to start a company is to work in a field you were already working in if you have a job. In other words, let’s assume you’ve been painting houses and working for someone for the past five years. Over that time, you have met other people in your field (who you could hire later) and you have been learning all of the ins and outs of how to paint a house professionally. If you decide to start your own business, you can start promoting your services to family and friends and work nights and weekends on projects for yourself.  If you have learned a lot about painting and you do great work, you will get referrals to grow your business very quickly. On the flip side, if you are not good at what you do you will run into problems and people will not be happy and you could end up facing legal issues.   You absolutely must work on a basic tenet of owning a business; under promise and over deliver.  If the job is going to take 3 weeks, tell the client it will take 5 weeks.  They will be amazed if you complete the projects 2 weeks early OR it gives you time in case of an emergency.


If you decide you want to sell a product then you need to start with figuring out what your product is going to be, how much it cost to create and what other competitors are doing and how they are creating the same type of product. You need to understand what competitors are charging for a product that might be similar to yours.  Make sure you are not infringing on someone else’s idea or using a name that is already trademarked (see below).  The most important question here is “Is your product filling a need that isn’t out there or is it something people might want, but don’t need?”

If you have a product that everyone needs, it will be easier to sell.  For example, I have a friend who makes candles.  The process of making candles can be very hard as far as keeping the candle wick straight.  She invented a very simple tool to hold the candle wick vertical while pouring wax around the candle.  It was a simple invention (patent pending) that all candle makers could use.  Based on this invention, she checks off some boxes:

  1. Focusing on a targeted group of people (albeit small) that make candles
  2. Creating a product that people need
  3. Creating a business with recurring revenue because the more candles someone makes, the more of this little tool they need

Not every product needs to be invented, but by finding a niche and creating something that fills a need will go a long way to building a successful business.  On the other side, you need to look at where we are headed as a society.  Creating a cleaning product for DVDs is probably not the best use of your time or money.


Once you decide what type of business you were going to start do you need to figure out a business name and what kind of market you are targeting for your business.  This can be complicated, but you need to do some research here.  The beautiful part of today’s environment is that you have the Internet at your fingertips and you should be able to research online if anyone has a product similar to yours or even better a business name that is similar to yours.  The worst thing that can happen is that you come up with a business name and start marketing to thousands of people and then you find that there is another company with the same name.

I was a co-founder of a company that created an alcohol product where are we sold shots of alcohol in little pouches.  We called the product Pocketshots. After branding and logo design and manufacturing, we did a search on the US Patent and Trademark web site and found there was another company with the exact same name! Unreal.  We had to redo everything we had done from the name to the logo to all of the product packaging.  It was a very brutal lesson to learn and a very big waste of money for us.  It set us back about 6 months in our business.

There are a number of online resources you can use to search for names and companies and products that are trademark. The website where you can search is Here you can search for company names and product names and industries where people have a trademark for their products and services.


After you come with the business name, you need to determine who your target market is.  This is another huge part of your business plan.  My advice is to find a business that caters to a specific audience.  If you are selling jackets to a large audience, on one hand, maybe your jackets appeal to “everyone” and you have a larger market to target.  However, the more broad your market is, the more competition there is.  If you are only selling jackets to Biker Gangs, it is easier to find where those groups are via facebook groups or conventions or magazines and create marketing directed at them specifically.

Your target market will then determine how you want your business to look and how marketing materials should be designed. If you are targeting people that are very wealthy then your design and branding must be on par with exquisite types of companies who cater to the same market (like Ritz Carlton, Tiffany, etc). On the flip side if you are marketing to surfers or beach bombs then your branding should be more sports driven or “beachy”.  Again, you need to do your research and look at companies who are targeting to the same group that you are marketing to and that will help you to develop your marketing and branding strategy.

This is an important step because changing your logo and your color scheme and your marketing overall after you have already launched your business is very difficult and expensive.  Keep in mind that your marketing is not as important when you have a service-based business, but if you are marketing a product and have to redo all of your packaging marketing materials, it could set you back quite a long time.


Creating a business plan can take quite a long time. I have created two or three for businesses and they can be helpful, but there are many factors that go into a business. At the end of the day, if you were starting a small business, creating a business plan can take quite a long time.  The main things that a business plan allows you to are things you can do in a word document and spreadsheet:

  • Who are your competitors?
  • What do they charge for their services?  Pretend to be a customer and call them and get their marketing materials and prices
  • What do they charge for their products?
  • What your cost to provide your service?
  • What is your cost to manufacture your product?
  • What other outside costs are involved?
    • Office?
    • Staff?
    • Utilities?
  • What are your start up costs?
    • DO you need an office or warehouse or can you start out of your garage first?
    • How much do you need for marketing? Web site?  Business Cards?
  • How much money do you need to generate to break even?
  • How much do you need to generate to quit your job?

In this phase there is a phrase you should become aware of. It’s called “paralysis by analysis”. What this means is some people analyze and research so much that they do not start their business. There is a point where you have to take the leap of faith for your business to start.  For example, when I wanted to start this blog, I researched other people starting financial advice blogs.  For the most part, the things I am writing here are common themes across most financial advice blogs.  However, I didn’t really find a STEP BY STEP guide to understanding how someone can understand the basics of becoming financially free.  Most of the blogs post concepts and ideas and article resources.  However, there were enough blogs out there to be pretty daunting.  Why would someone read this?  Am I going to get through to anyone? Is this a waste of time (something I desperately need to build my own wealth).

I decided to take a leap of faith and put my time and resources into this because I like writing and maybe one person will get something out of this and go on their own journey to become wealthy.  Back to my point.  If you can answer the questions above about your business, and you still find that it’s worth it to move forward, then it’s time to open your doors.

What’s Better? A Service Business or Product Business?

Assuming you have a job right now and you want to generate another stream of income, you might be looking to start a side business.  The first question you will want to ask yourself is “should I start a service-based business or should I sell a product?”  While both can be lucrative, there are major differences to both approaches.

Service Based Businesses

This is the cheapest service to start.  If you have a skill like accounting, marketing or consulting, you can easily start a side business and work nights or weekends for extra income.  The key here is to come up with a service that requires a monthly fee so you can bring on clients and compound those clients with new clients and generate a steady flow of income that is consistent.  This is key because you will know exactly how much consistent revenue you can generate each month to put into different passive income investments.

My web site design business normally just includes me creating web sites for other people.  They are typically one-off projects that start and end.  Once a web site is up, most people don’t change their sites very often.  So, how did I turn that business into something that could generate monthly income?  I added three services:

  1. Web site hosting
  2. Web site maintenance
  3. Web site marketing

Every single web site has to be hosted on a computer somewhere and the service requires that the computer host be connected to the internet 24/7.  When someone types in the web site name, a signal goes to the hosting computer and tells it to show the web site to that person.  Well, if the hosting computer goes down, guess what?  The site goes down. I outsource the hosting service and purchase servers from companies who have 24/7 tech support and who have servers all over the United States and where the computers are connected 24/7.  I then resell that service to my clients.  A typical server will cost me $85-$100/month.  My clients pay between $30-$40/month and I can get about 40 clients on one server.  So, 40 clients x $40/month is $1600/month and my cost is approximately $100/month.  As long as the server is running, I have passive cashflow from that one server of $1500/month.  Is this completely passive?  No.  Every once in a while a server might not work for a period of time or we have a web site that gets hacked in which case we restore a backup and make updates and monitor it so it doesn’t have issues.  While it’s not completely passive, I would estimate about 5-7 hours a week for over 300 sites.

When I started the business, I was charging $20/month for hosting and have since doubled this rate.  In addition, I added a new service called hosting + 1 hour of changes to web sites per month.  This means we will make text changes (like new staff or adding new projects to a site) and we will manage their web site every month.  This service includes hosting and costs $75/month.  You would be surprised at how many people sign up for this service and do not make changes to their site.  I would estimate about 70% never make changes to their sites.  So, the added benefit to the clients and on demand changes added another 80% to the monthly fees and requires little to no work.

If you are starting a service business (like accounting), you can get 2-3 clients per month and possibly generate an extra $500/month just by doing company’s accounting.  For other services like marketing, you can charge more and bring on less clients.  The beauty of service-based businesses is that your overhead is next to nothing and you are simply spending more time to do it.  When you put all of that extra money into passive income investments, you can start replacing your income from your job and business.

What you need to get started:

  • Company name
  • Company bank account
  • Basic web site for marketing
  • Accounting software (like Quickbooks online) to track your income and expenses


The following are pros and cons of a service business:


  • Easy to start
  • Easy to scale
  • No overhead needed (just a home office)


  • Time intensive – you will need to find the extra time to do the work
  • Value of the company is low since the value is solely based on you.  You could sell the client list to another company but it would be low value
  • If something happens to you, the revenue could go to zero (unless you have passive services like above

Product Based Businesses

This one is a little more complicated because you need more overhead to start. Your first question would be whether or not you have a product that everyone “needs” vs. what everyone “wants.”  There are quite a few options when it comes to selling products.  Are you selling a product that is unique?  Are you targeting a specific market?  If you are selling a product, my suggestion is to find a product that ONLY appeals to a specific audience.  What does that mean?  If you are selling ladders or jewelry, there are already hundreds of companies that sell generic items like that.  It will be very hard to compete.  However, if you are selling leather jackets for bikers or comfy mats for yoga studios, it’s easier to find groups that you can market to and you can charge more for your product.

For example, if there is a huge yoga institution and your company becomes the “preferred comfy mats product for the Yoga Institution,” people will go to you for their yoga mats.  There are hundreds of Yoga groups on Facebook you can target as well as other magazines, conventions and marketing methods you can use to target that group.  The more targeted your group, the easier it is to find those people to sell to.

What You Need to Start a Product-Based Business

You need to come up with:

  • A brand for your company (you will want a professional logo)
  • Determine who your target market is going to be
  • What’s your background story?  More people will buy your product if they can buy into an interesting story
  • An E-commerce web site to sell your product online
  • How are you going to produce your product?
  • How are you going to store inventory?
  • How are you going to ship and fulfill orders?


The following are pros and cons of a service business:


  • If the product in its category is heavily needed, there will be higher demand
  • The value of a product that creates a brand can be extremely valuable
  • A subscription based model can create recurring revenue
  • It’s easier to market to a large audience of people in your target market (vs. Business to Business where there is a much smaller client base)


  • There is much higher start up costs required
  • Ongoing costs include: shipping, inventory, staff and more
  • Creating a brand that sticks with consumers can take a lot of investment capital

Tax Advantages of Owning a Business

One of the biggest reasons to start a business is due to the number to tax advantages you receive as a business owner.  When you have a job, your taxes are taken out of your check immediately and, at the end of the year, you have to scramble to try and get some of that money back in your returns.  Businesses take their gross income and then deduct all expenses and then you pay taxes on the profit afterwards.   The key phrase here is “deduct all expenses” BEFORE you pay taxes.  Your expenses in a business can include items that you would normally pay for after your W-2 earnings such as gas for your car, cell phone, meals or housing expenses.


When you work for a company, that company gives you a W-2 worksheet that deducts upwards of 30% of your income from your check along with Social security and other expenses.  The following is an example of someone in California making $100,000 per year and the typical deductions.

In this example, someone making $100,000/year only takes home $70,000 after taxes are taken out ($5800/month).  Now, out of that $70,000, this person needs to pay for all of their personal expenses:

  • Home – mortgage or rent ($2000/month)
  • Car expenses – $500/month
  • Cell Phone – $150/month
  • Internet – $75/month
  • Travel – $300/month
  • Food – $1000/month
  • Child care: $500/month
  • Shopping: $500/month
  • Total: $5025

This leaves about $800 left over.  When you own a business, the government allows you to write off expenses for business after the income and THEN you pay taxes on your profit left over.  So, in the example above, you are losing $30,000 immediately.  That money is gone and goes right to the government.  You’re left with 70% of what you earned and then you have to pay your expenses after that.  How does this scenario work if you have a business.

Your business generates $100,000 a year in revenue.  You pay $25,000 in expenses and marketing to run your business (assuming you are a web designer and you do all of the work).  So that leaves $75,000 left over.  Then, you use your phone for work, you pay for the car out of the company revenue as well as childcare and travel and food for clients.   You can’t write off everything to the business, but let’s run some numbers:

  • $75,000 left over after marketing costs for the business and outsourcing = $6250/month
  • Travel (for work): $500/month
  • Car paid for by company: $500/month
  • Cell phone paid for by company: $150/month
  • Meals paid for by company: $500/month (not all food can be written off)
  • Child care: $500/month
  • Shopping (you need outfits to meet clients): $300/month
  • Total: $2450/month
  • Balance: $3800/month

So, after you deduct all of your work related expenses, you are really only making $3800/month.  If you multiply that by 12, you are making $45,600 taxable income to the government.  In addition, you are able to deduct part of our house expenses where you work so let’s say 10% of house = $200 month tax write off from that expense and it lowers your yearly income to $43,200/year.  In this example, you would probably drop to a lower tax bracket than the person making $100,000 year, but at 30% tax rate, you would owe the government $12,960/year.

So, your company generated $100,000 per year.  Many expenses were paid by the company, your tax rate has been cut by more than half and the best part?

Why Start a Business?

The United States of America has been a world leader for decades because, from the beginning, it has encouraged free enterprise and entrepreneurship.  This encouragement has led to thousands of technological breakthroughs and has allowed people to be more successful than they ever could be in their wildest dreams.  By creating programs to encourage business owners, the United States provides opportunities that you might not get in other countries around the world.


Today, you have a great job.  Today, you are being paid well and life is easy.  If you are following some of the guidelines in this blog, you are saving money for retirement, you have an emergency fund and maybe you are able to travel and spend time with your family.  If you are satisfied with your life, maybe you don’t need to read this blog or start a business.  However, if you are interested in a challenge and you are ready to get out of our comfort zone to really get to the next level in your financial life, this is what you need to read.  A job can come and go.  You have no control if a company keeps you or fires you. You have no control over the direction of the company and the decisions that are made at the top.  Unless you are in upper management, you are simply a cog that makes the wheel go round.  You are replaceable at any time and you are expendable if the company starts to go through a rough patch.  The only control you will ever have in your life of your financial situation is if you own a business.   Technically, your family finances is a business and you control how much you spend, what you invest in and how you monitor your personal finances.  This is different.

A business allows you to do the following:

  • Create another source of income (you don’t even have to quit your job)
  • Create something of value that you could sell at a later time
  • Create a stream of income that allows you to write off expenses from the business income so you don’t have to pay after tax money
  • Control your own schedule to work on your own hours without having to report to someone else
  • Control your own destiny by making business decisions that could infinitely grow your income


This is one of the biggest advantages.  If you are happy with your job, you can still start a business on the side.  This depends on a few factors, but really, life comes down to what you’re good at and what skills you have to offer if you want to start a service-based business on the side (like social media marketing, consulting, accounting, etc).  If you want to start a product-based business, what products can you sell, who is the market you’re selling to and how expensive will it be to manufacture your products.



It is true that businesses fail.  If a person doesn’t understand the basics of business, then their odds of success start to drop very quickly.  That’s a fact.  If you are selling a product that costs $10 to make and you are selling it for $13, there is not a lot of money left for expenses like staff, office, utilities and marketing.  In my experience, people who start businesses always have an initial blast of energy to get started.   They get their business cards and web sites set up and start talking to people about how they own their own business and they get really excited about the “IDEA” of owning a business.  The hard part comes next.  Is there business dealing in something that’s desirable?  Is their product worth the cost or is it even hip enough or useful enough to be sold?  Is their service something people want and how good are they at that service?  Is their restaurant location in a desirable location?  There are many reasons why businesses fail, but success or failure comes down to the owner and how confident they are in their product or service and how quickly they can adapt to market conditions.



My Journey in my 20s

My 20s are admittedly mostly a blur.  I graduated college at 21 and lived in Newport Beach.  After college, I traveled through Europe for 6 weeks and went to 9 countries and 13 cities with a backpack and my buddy Will from high school.  It was a pretty epic trip.  If you ever have a transition in your life and you have time to take a trip, get a backpack and a Eurorail pass and just go.  You won’t regret it.


After I returned, I started my job at an engineering consulting firm.  Our company’s largest client was Chevron and we basically ran permits and pre-construction tasks for gas stations and conversions from the old service/oil bays to the new Foodmarts they have today.  I started off just running to building departments and planning departments dealing with permits for project managers, but pretty soon I was running projects.  I got promoted a few times over the first few years and the people at the company were hilarious and fun.  It was still a job, but at least it was fun.  Money-wise I did okay, but the real benefit I received was running multiple projects and multiple tasks at once.  This was a huge skill when I started my web design company and had to deal with numerous clients and projects at once.

The one thing I can say today is that through all of the years and jobs and companies, I was always able to learn at something new.  My first paper route (when people actually read newspapers) taught me how to run my own little business.  I had to collect money for the paper and pay the newspaper company and make sure everyone got their papers on time.  I had to deal with customer service (when a paper landed in some bushes). I had to learn responsibility and get my arse out of bed every day at the crack of dawn to get those papers out and on the weekends when everyone else could relax.  The engineering company taught me how to prioritize projects and tasks and work with multiple people over different companies and agencies.


The time I spent working at the engineering company coincided with the rise of the internet, around the mid 90’s.  The more I learned about the web, the more I realized that it was going to change lives and provide an opportunity for me to create something.  My buddy from college wanted to start an online magazine for colleges and neither of us knew anything about the web, but we started ZERO Magazine anyway.  To be clear, I knew nothing about the internet, how to design in it, nor how to code in it.  So, I started researching and figured it out.  I self taught myself how to build web sites, how to host them and then learned Photoshop to create the graphics I needed to add to the sites.  Admittedly, my first web sites were not amazing, but it didn’t matter.  People were paying $100,000 for crappy web sites at the time.


We worked on the magazine web site for a little while, but it never gained a lot of traction.  As I kept learning how to design, I decided to start building web sites for companies.  My friend decided to sell web sites and I quit my job at the engineering company to work full time on web sites.  There was only one problem.  My buddy wasn’t very good at selling web sites.  He must have told me 10 times that he was ready to sign some deals and they were closing.  Then, days went by and weeks and months and we barely had a few projects; definitely not enough to squeeze out a meager living.  So, with no money and rent due, I had to figure something out quick.  I lived in Orange County and ended up getting a job with another friend all of the way up in Glendale (about an hour and a half away with no traffic) for IHOP corporate.  I got $15/hour to create marketing materials and graphics and worked on employee manuals.  It was a big step back in earnings from the engineering company, but I learned more and more about web design and graphic design and picked up how to design using software for laying out print materials.  I never took classes.  I was self taught.

After IHOP, I still didn’t have enough web business to make a living so while I worked on my business, I got another job at a company that competed with TicketMaster and sold tickets for sporting events and concerts.  I ran an affiliate program and tried to get web sites to add links to concerts and events we had tickets for in exchange for commissions on sales that came from their web sites.  That company paid me a salary and commission on deals I brought to the table.  If I was more of a hustler, I probably would have done a lot more sales on my own for my web business and made enough money to live without working for the man.   I continued to get better at web design and continued to bring in small clients while I worked for the ticketing company.  Well, that is until they found out I was doing projects at work and I got fired.


The internet was blowing up after I lost that job and was unceremoniously walked out the door.  For the simple reason I had “entertainment” and “internet” listed somewhere in my resume, I received a call from Warner Bros.  They wanted me back up in Glendale to work on an internet division called Entertaindom.  They thought I would be a perfect candidate to manage a division for double my previous salary, LOL.  Obviously, companies were pretty desperate for internet “experience” and were paying a lot for anyone who had any experience.  How could I pass up working for Warner Bros?  Again, I was commuting every day, but they let me come in at 10am and leave later so I didn’t sit in traffic.

At that job, I started meeting other industry people and wound up with a deal with Warner Music through my side web design business.  I designed web sites for Enya, Stevie Nicks and Reprise Records along with some smaller musicians.  I got paid a lot to do those projects and with my salary from Entertaindom, I had enough to buy my first real estate property, a condo in Orange County.


I started to get tired of the drive to Los Angeles and I wasn’t going to move there.  On top of that, as I discussed the entire business model behind Entertaindom with other people who worked there, I realized it wasn’t going to take long before their model was going to fail.  As it turned out, I left that company right before the dotcom crash in 2000 and Warner Bros folded that division soon after.  At Entertaindom, I picked up a new skill; managing people and a lot of drama between said people.

After leaving Warner Bros, I took a job managing the web division of a software company called Sage Software.  Well, I thought I was managing the division.  It turns out, all of the decisions were made in the UK and I was just an order taker and more of a production guy brought in to make web site changes.  That was boring so while I got paid a really good salary, I kept the job and worked on my side projects while I waited for directions from the UK.  After a year, the company found my side project files on a drive and, again, I was unceremoniously walked out the door.  By this time, my web business was starting to make some money.  I was averaging about $3,000/month in revenue.  It was good enough to pay my bills, but not enough to retire from the workforce.


By this time, I had been trying to get my web business going for about 4 years.  It was making good side money, but I had to keep going back to work while I grew my revenues.  My last job was working for a company called Fancy Publications, the largest pet magazine publisher in the US.  They published Dog Fancy, Cat Fancy, Horse Illustrated and about 10 other magazines.  I handled all of the web sites for the company.  I worked there for about 2 years until a college friend showed me how to market my web business on Craigslist.  Two things happened for me, 1) I found a way to generate really cheap leads and grow my web business to about $4,500/month, 2) I discovered I could make passive cashflow from hosting web sites and charging $20/month and only paying about $2/month for each account.

When I left Fancy Publications, I was officially done with the corporate world!

I had enough money from my web business and from cashflow to never have to work for anyone again.  I had roommates to share expenses and the money from my business covered my car payments, my rent and utilities and food.  I didn’t have a family to support, but I was officially free from having a boss forever.  I was 28 years old.


By the end of my 20s, I learned the following:

  • Companies gave me free money if I contributed to my 401(k).
  • You get fired from companies if they catch you doing side jobs while on their dime
  • I could buy a property and pay less money than rent if I had roommates and low monthly payments
    • I also learned a valuable lesson in real estate – if you have the money and you can make it work, buy a property.  Just make sure to buy a property you can afford and that will allow you to also save and invest
  • I learned about passive cashflow with my hosting fees


College Education not Necessary, but Education Is

If you have been reading these blogs, there might something you’ve noticed.  I haven’t talked about education or college or how smart you need to be to succeed.  The fact is, in order to be successful, you need:

  • To have a goal
  • To have a job or income
  • To change your habits and choices to save and invest
  • Persevere when times are difficult and stick to your plan

I am proud to say that I have a college degree in Civil Engineering for which I used that degree for about three years before discovering the internet.  Then, the degree and all of the classes I took went out the window while I self taught myself how to build web sites and a friend helped me with understanding how to use graphic design software to create images.  I self taught myself how to do “some” programming, but mostly I outsource programmers to do the hard stuff.   I figured out how to sell, how to create passive income with my business (although I didn’t even know what that was until later) and then how to do marketing.

The title of this blog should tell you a lot about what I am about to say.  You don’t have to go to college to be successful, but I can tell you right now that you won’t be successful if you are not educated.  You need to understand what is happening in the world around you to make good decisions.  As the popularity of iPhones started growing and the introduction of cameras on the phones started getting better and better, would you want to be stuck owning a company that developed camera film?  As video streaming became more and more popular, would you want to be the one trying to sell DVD players?  Being educated means you are in touch with the world and how it’s constantly changing and jumping into an industry that could be the future.  It requires you to read the news daily and business news to see what industries are coming up and which ones are failing.

Why do you think I left civil engineering to get started in the internet industry back in the late 90s?  It was obvious to me that the internet would change our lives.  Another reckoning is starting now in the crypto blockchain space and I am moving to that industry next.


So, the question on your mind, “what do I need college for?”  This is a great question and college is great for a lot of things:

  1. It provides a transition for most people living at home into the real world – if you have some financial support from your family, it eases you into real life unlike getting kicked to the curb at 18
  2. It provides your first steps in being self sufficient
  3. It allows you time to reflect on what you really want to do in life
  4. It provides an experience in social skills that you didn’t have growing up
  5. Depending on your major, it provides case studies and a guide in your industry for being successful. From a business aspect. some courses are invaluable if you are looking to start a company:
    1. Business Majors
    2. Economics Majors
    3. Marketing Majors
    4. Law School
  6.   Other areas of expertise could help in starting a business that could change the world:
    1. Technology
    2. Bio – Technology
  7. Getting your foot in the door at a company.  Unfortunately, the minimum requirement to get most jobs is a college degree.  If you are looking for a really good salary while you figure out a business to start, you will need a degree to get a job.

Now, many of the people I knew went into Social Studies, Fine Arts, History or History of Dance.  In the real world, I am not sure how many opportunities are out there for those people, but a degree is helpful.  What do you get after you’re done?

Many companies require a minimum of a college degree to even get in the door.  No matter how smart or driven you are, if you are looking to land a job in an industry you’re interested in, you won’t be able to compete with other young applicants who have college degrees.  Having a college degree gets you in the door.


There are many industries that don’t require a college degree where you can make a lot of money.  However, this is where being educated is vital.  Think really hard about industries that are up and coming and, more importantly, recession proof.  A few of these industries include:

  • Nursing
  • Home care or Healthcare
  • Computer Programming
  • Accounting
  • Legal

These are industries that will always be around regardless of how the economy is doing.  The baby boomer generation is getting older and there will be a greater need for health care providers than ever before.  If you don’t go to college, there are many vocational schools where you can get degrees or certificates and introduce you to real world cases so you will already be familiar with jobs when you get your certificates.  Also, many of the teachers in these schools work in these industries and if you network right, you can land a high paying job in any one of those industries.  These vocational schools tend to be far less expensive than 4 year colleges also.

Overall, in order to be successful, you do need to start working in a field and generating as much knowledge and education as you can.  It doesn’t mean you need a college degree, but you need to start somewhere and getting a steady income is vital as you look to expand your horizons and goals.


Being educated and well-spoken will help you in all areas of your life.  If you currently have a job, being educated about different topics will help you communicate with higher management and will help you to move up in your company faster.  If you are able to relate to people on topics such as sports, news, politics (although I recommend staying away from this one), world events or even entertainment, the more you know, the more chances you have to connect to people.   Those people can, in turn, help you in your career or provide business opportunities you might not have otherwise gotten.

You don’t have to be an expert in any one field.  However, you should know a little bit about as much as you can so you can carry a conversation on almost any topic with anyone.  By reading the news and knowing about the things going on, your conversations and your knowledge will help you succeed.


You Don’t Have to be Cheap, but Always Look Out For Deals

Do you remember when newspapers were mainstream and they had TV shows about people who would spend hours cutting coupons and walk into a store and buy $1,500 worth of cat food and detergent and Ritz crackers and pork rinds and then use all of those coupons and then only pay $4.50 for all of their shopping?  Yea, that was cool.  The show was so popular that people were stealing other people’s newspapers and mail to get more coupons.  Oh man.  Good times.

Well, I am not here to tell you that you are going to be wealthy by cutting coupons every day. First off, it’s a waste of time unless you’re not working and you have the time to find coupons for $0.25 off a can of tuna.  While many newspapers are going the way of the dinosaur, there is a new discount game in town called “the internet” or “the interweb” as some folks call it.  The internet is full of thousands of dollars of discounts on products and services and you should take advantage of it.

Due to Covid and the nation shutting down, some very large habits exploded over the year proceeding the national shutdown and one habit was online shopping.  Retail shopping was already having a lot of issues, but Covid put the nail in the coffin for hundreds of brick and mortar retail stores.  Now that online shopping has exploded, here are some things you can do to save some cash.


As I am buying items from online shops I am always looking to save some money here and there.  It takes about 5 minutes to do a search for a web site name + discount code.  The easiest example is Snapfish where I create and purchase photo books.  For a 30 page photo book, the typical rate is about $75. A quick search of “snapfish discount code” usually brings up codes that offer up to 70% off the books.   This isn’t like saving $5 or $10.  This is saving like $45.  Another example was a summer camp I was signing my kids up for.  It was really random but I put in “blah summer camp discount code” and lo and behold, there was a code there for 20% for new attendees.  One code saved me about $200 off a sports registration for both of my kids.

Some sites that provide discount codes for thousands of retail web sites include:

Like I said, I don’t hunt around every day, but if you are buying something and it costs over $50 or $100, I recommend that you look for online codes.  It’s fast and could save you some money.


If you are shopping a lot online, you should take advantage of a ton of cashback offers you get through Google extensions.  Browser extensions are plug-ins you can download on web browsers like Chrome or Safari, and some of these tools can do your bargain-hunting homework for you.  How does it work?  If you are browsing a product on Amazon for example, a plugin like HONEY will see the product page you’re on and go out into the web site and compare prices with other sites immediately and tell you if you are able to purchase the product on another web site.

The following are 5 browser extensions you can use on Google to save you money:

    Honey is a browser extension that promises to help you find and automatically apply the best coupon codes at checkout before you complete an online order.
    Giving Assistant is a shopping website that helps people locate deals and donates a portion of eligible purchases to the shopper’s nonprofit of choice.
    Rakuten is a cash-back website that calls its browser extension the Cash Back Button. After download the extension, you can use the button to activate cash back directly at store sites and automatically apply coupon codes at checkout.  Basically you get paid cash back for shopping you are already doing.  You will get notified by email of your savings and a check every few months.

    Save money, earn up to 5x more cash back and get paid faster with CouponCabin’s free, easy-to-use money-saving app! No matter what you’re shopping for, we can find a discount.

How do you get these apps?  Simply click here and go to the Google Apps store and search for the apps above.  Once you find an app you want, simply install in your chrome browser and you will see the icons at the top right of your browser.