CEO’s are dangerously underpaid

wolf-of-wall-street

I read that some CEO’s get 500 times more than the lowest paid employee. That’s outrageous! CEO compensation should be 10,000 times more than the lowest paid employee. CEO’s are dangerously underpaid.

wolf-of-wall-street
The image of CEO’s as evil scammers is everywhere. Above: The Wolf of Wall Street.

Skills

I lead a pretty good life. Travel all over the world, stockpile of money, limitless options to what I can do. Right now, I can do ~50 different jobs that make 6 figures per year, without additional training. I know several dozen different programming languages/frameworks, multiple advertising channels, professional gambling, and normal things like sales.

And CEO’s have me beat by a mile.

Some CEO’s have a broad range of top-tier skills, while others are the top 0.1% in their field. Elon Musk is known for doing an engineers job for them if he’s unsatisfied with the work (and then fires the employee). Steve Jobs was involved with almost every facet of designing the Mac, right down to the typography.

90% of new businesses fail because the owner has to do everything at the beginning: accounting, marketing, HR, development, IT, etc. The learning curve is really high. But the average employee will always say things like “That’s not my job”. A CEO doesn’t have that luxury. They have to do 7 jobs at once. And that’s why they get paid like it.

Network

An Uber driver asked my opinion on college. College [itself] is a scam, but there’s one redeeming factor: networking. It was worth a lot to my career that I was surrounded by people who would later go on to work for companies scattered around the country. Getting jobs and clients from your network is a very real thing. Was paying six figures for a network worth it? Doubtful, but it’s certainly a bonus.

Even if a CEO isn’t right for the job, their network alone can be worth it to the company. Tesla and SpaceX recruit the top talent out of colleges because it’s cool to work for Elon Musk. Mark Zuckerberg could bring limitless value to a company just by introducing them to government officials around the world. Kanye West and his wife can bring worldwide legitimacy to a brand just by Tweeting about it.

A normal person might ask a friend of theirs to help them move.

Risk

The average person refuses to quit the job they hate. So they work 40 years in a terrible career, self-medicating with drugs. That’s how much normal people avoid risk. Most people throw away their entire lives rather than try something new.

The average person is scared to ask that guy or girl out on a date for fear of being embarrassed for 30 seconds. Embarrassment isn’t even real. It’s a tiny chemical reaction in your brain. You can’t even prove that your embarrassment exists. But it stops people from doing anything remotely interesting with their lives.

CEO’s try new things all the time. And when it doesn’t work out, they get dragged through the mud after being unceremoniously fired. And then the CEO gets up, dusts themselves off, and gets immediately rehired because 99% of people hate taking risks and doing new things is what it takes to succeed.

Perseverance

The gym is filled in January and empty by March. All of the “New Year’s Resolution” people fail before they even get started.

The average working career is 40+ years. Why not spend 5-10 of them trying new things to make sure the other 30 years are stellar? Very few people are willing to commit several years to something that might not work out. But here’s what happens: the time passes anyway and these people who never tried are in the exact same spot.

Amazon.com has never been profitable. Yes they do a lot of business volume, but the profit the company makes is put back into the company. They are on a 20 year timeline to profitability.

Elon Musk wants to go to Mars. His companies Tesla and SolarCity, which won’t have made a profit in their first 10 years of existence, are merely stepping stones to exploring space. It’ll take another 20 years to get colonies on Mars.

Jack Dorsey, CEO of Twitter and Square, works 16 hour days. 8 hours at Twitter and then 8 hours at Square. Neither company is profitable or looks to be profitable in the future. He’s been doing this for 10+ years.

CEO’s have 10, 20, and 30 year plans where they devote their entire lives to the cause. The average person can’t use a treadmill a few times a week for a couple months.

“What would you do with a million dollars?”

If you answered “two chicks at the same time” or “invest and live off the interest” then you will never be rich by your own efforts. The people that have money are constantly working, improving, and pushing themselves. We lived in one of the richest areas of Minnesota (Lake Minnetonka), and the lights on all the houses were dark at night. Those expensive lake shore properties rarely threw parties or saw the boats get used. Because the owners of those million dollar homes were always working.

It’s popular to hate on CEO’s

The world is better than it has ever been in human history, by any metric: health, wealth, or peace. CEO’s like Elon Musk are solving the energy problem by converting cars and homes to solar. CEO’s like Bill Gates are curing Polio and Malaria. CEO’s like Steve Jobs gave the average person with a smartphone more computing power in the palm of their hand than the entire world had in 1980.

Do you really think these people are underpaid?

Fear Isn’t Useful

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Fear isn’t useful in modern society. It helped our ancestors survive tiger attacks and that’s why we have it. Non-fearful people got eaten. But now tigers are in the zoo, and we are afraid of ghosts.

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That little purple guy is an asshole. Kick him out of the group. (Inside Out, Pixar, Disney Pictures)

What is fear?

Fear is a tiny chemical reaction in your brain. It’s gone in a few seconds. You can’t even prove your fear is real. No one can touch it, see it, or hear it. To other people, your fear is literally imaginary.

Yet this thing that doesn’t even exist stops people from living the lives they want.

I can destroy your fear from across the internet

Think of the thing you fear the most. It could be death of you or a loved one, embarrassment, not living up to your potential, whatever. Concentrate on it for a moment and feel it.

Got it? Feel the fear?

Now spend 2 minutes here and come back.

Your fear is gone. Sure you can summon that fear again by concentrating on it, but why would you do that? Any time you feel the triggers of fear, steer your brain to something else. Wallowing in your fear doesn’t help anything.

How to solve your fear: plan for the worst case scenario

Our brains like to fantasize about what COULD happen. But reality is actually quite boring. If we plan for the worst case scenario, we can stop our brains from creating horror movies in our minds.

Example: Ask that guy/girl out on a date.

Our brain starts the horror movie:

  • I’ll get turned down
  • He/she will laugh at me
  • He/she will laugh at me with all their friends and co-workers
  • He/she will tell my boss and I’ll get fired
  • I’ll be depressed forever
  • Can’t get a job because of depression
  • Cats, lots of cats to comfort sorrows
  • Die

Here’s what will actually happen if you get turned down: small chemical reaction in the brain makes you blush and feel like a dumbshit for 2 minutes and a few future conversions with this person will be slightly awkward. The End.

See? Reality is so fucking boring. That’s why your brain tries to liven it up with make-believe of how your life will be destroyed forever because you think someone is attractive.

But what about the upside? What if that person said Yes and you spend the rest of your life with them? Alicia turned me down the first time I asked her out. I would have missed out on my life partner because of a tiny chemical imbalance in my head.

What are you missing out on because of something that doesn’t even exist?

Inside Out memory balls
Here, Joy is looking at all of the thousands of chemical reactions that happened THAT DAY. Chemical imbalances happen when you eat, sleep, talk with someone, or actually do anything. And one of these little things is stopping you? (Inside Out, Pixar, Disney Pictures)

Here’s another one where you quit your job to pursue another job/career/company.

The horror movie starts in your head:

  • New job doesn’t work out
  • Never find employment again
  • Spouse leaves you
  • Children disown you
  • Heroin addiction
  • Cats, lots of cats to comfort sorrows
  • Die

The boring reality of the situation is that if the new job fails, maybe you’ll have to move in with your parents for a few months while things get sorted out. There’s literally billions of jobs out there and you need ONE. But our brains prefer to dream up ridiculous nonsense.

And consider the upside: what if things work out and your dreams come true? Our brains frequently leave out this part.

Baby steps

Another way to kill fear is to expose yourself to it. Slowly.

I had really bad social anxiety when I was a teen and early 20’s. Like I would wait to walk 50 feet to the bathroom until the hall was empty because making eye contact with people in the hall was too much for me. A few years later, I’d be able to meet people anytime, anywhere. There were a few steps in between.

I started small. I’d walk around the Mall of America making eye contact with women. At work I’d speak up in small groups to get practice speaking in front of an audience. When I first started, I’d blush so hard I could feel the heat radiating from my face. But every time got easier because my mind couldn’t keep making up horror movies. There was too much evidence that everything would turn out fine and my mind was overreacting. The blushing stopped. The fear went away.

Do something tiny every day to whittle away at your fears.

On the other side of fear lies everything you want in life

What you’ll eventually come to realize is that fear is a spice. Roller coasters wouldn’t be fun if they didn’t feel dangerous. Some of the best memories you have right now are when you felt the fear and did it anyway.

Now I chase fear, risk, and pain because I know fear is an indicator of where the good stuff is. We got rid of our house, rental property, and stable lives. Do I know what is going to happen in the next few years? Not even remotely… and that’s why it’s fun.

Fear kept early humans alive from tiger attacks. But today’s tigers are Paper Tigers. It’s an ancient Chinese saying that implies something is scary on the surface, but in reality is completely harmless.

College is a scam, and Kanye West figured it out first

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With record unemployment, skyrocketing tuition, and stagnating wages, America has finally learned that college is a scam. But if you were paying attention, Kanye West called it out first back in 2004 with his debut album: College Dropout.

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“The name of my album is called The College Dropout,” [Kanye] said of his debut. “All that’s saying is make your own decisions. Don’t let society tell you, ’This is what you have to do.’”
– Interview with MTV

Tuition went crazy high

Everyone believed that you needed college to get a good job. So the government started giving out huge amounts of money for college… with a catch: you could never get rid of that college debt by bankruptcy. So colleges knew they had what people thought was necessary, billions of dollars from the government, and the students had to pay it back no matter what. So colleges jacked up the price. Prices rose 300-400% over ten years.

What were people going to do? NOT go to college? All the successful people before them had gone to college. But people didn’t realize yet that the internet changed everything (more on this in a moment).

The actual degrees are useless

This nigga graduated at the top our class.  I went to Cheesecake, he was a motherfucking waiter there.
– School Spirit

A liberal arts, humanities, or gender studies degree qualifies you for a job at Starbucks. Ask the barista what their degree is in, and it’s almost never Computer Science or Engineering. Colleges are pretending like all degrees are equally valuable. Art degree graduates only make 29% more than high school diploma holders while engineering grads make 138% of what high school grads do.

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But everyone knew liberal arts degrees were useless. Here’s a quip from the Simpsons in 2000 that shows society wasn’t totally in the dark about terrible majors:
Dr. Hibbert:  Your playing days are over, my friend. But, you can always fall back on your degree in…
[reads chart]
Dr. Hibbert: communications? Oh, dear Lord!
Anton Lubchenko: I know! Is phony major. Lubchenko learn nothing. Nothing!
[cries]
No one cares about your college experience

Not a single person cares about your college experience after you get a “real job”. Even in our language, we refer to life after college as the “real world” because we all know college is nonsense.

As Kanye puts it:

after all the partying and crazing,
And don’t forget about that drug habit you picked up at school being around your peers!

– School Spirit (skit 1)

I’m 37. If I ever mentioned what I learned in college to a prospective client or employer, they’d rightly laugh me out of the room. No employer wants to hear about where you lost your virginity.

And it’s not just because that was 15 years ago either. I could talk about a programming project I had at my first programming job to illustrate how experienced I was.

Colleges love to sell the idea that you need even MORE college to succeed

You pick up all those books that you’re gonna read and not remember
And you keep it rolling man
You get that associates degree, okay?
Then you get your bachelor’s degree
Then you get your masters
Then you get your masters, masters
Then you get your doctrine
– School Spirit (Skit 2)

“But you need college to make money!”

  • Bill Gates, Founder of Microsoft: Dropped out of college
  • Mark Zuckerberg, Founder of Facebook: Dropped out of college
  • Steve Jobs, Found of Apple: Dropped out of college
  • Jack Dorsey, Founder of Twitter: Dropped out of college
  • Mark Cuban, Owner of Dallas Mavericks: Never went to college
  • Daymond John, CEO of FUBU: Never went to college
  • Evan Spiegel, CEO/co-founder of Snapchat: Dropped out of college
  • Kanye West: Dropped out of college

Sure some people went to college and succeeded. See if you can spot the trend:

  • Peter Thiel, Co-founder of PayPal: B.A. Philosophy
  • Elon Musk, Founder of Tesla: B.S. Physics
  • Larry Page and Sergey Brin, Founders of Google: B.S. Computer Science
  • Jeff Bezos, Founder of Amazon: B.S. Computer Science and Electrical Engineering
  • Brian Acton, Co-founder of WhatsApp: B.S. Computer Science
  • Pierre Omidyar, Founder of eBay: B.S. Computer Science

That’s right, our economy is run by college dropouts and computer nerds.

STEM (Science, Technology, Engineering, Math) degrees are the only kind of degrees that are useful. For all the rest, read a book.

I’m going to get super smart, so I, too, can die without money.
But I’ll be the smartest dead guy! When I’m dead, know what’s gonna keep me warm? That’s right, those degrees
– Lil’ Jimmy (Skit)

So how do you fix college?

The easiest way to fix college: let people declare bankruptcy. Tuition will come back down and the worst colleges will die off. And this solution is literally free to the country and takes 5 minutes for a vote in Congress. But it won’t happen because the dirty politicians got paid to implement these rules in the first place.

That leaves us, the people, with only one option: stop going to college unless it’s for a STEM degree. Your general education is available on the internet for a tiny fraction of the price. You can do anything because of the internet. Even get paid for drinking beer.

As Kanye says, you just have to pick up leave behind what is broken. And don’t look back.

Now let’s go, take them back to the plan.
Me and my Momma hopped in that U-haul van.  Any pessimists I ain’t talk to them, plus I ain’t have no phone in my apart-a-ment.
– Touch the Sky

And if your alma mater has the brass balls to call you and beg for money, lay into those fuckers. Colleges cheated an entire generation out of their future. And Kanye West knew it first.

Want to Get Paid for Drinking Beer?

drinking-beer

Yes you can get paid for drinking beer. Don’t believe me? It wouldn’t be the most ridiculous way people make money. Not even close. Let’s look at a tiny portion of the ways people make money before I tell you how.

Tucker Max is an asshole. He says it right on his book, I Hope They Serve Beer in Hell. It’s a collection of stories of Tucker being a bastard in every way possible. It became a best seller.

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This wouldn’t even rank in the top 100 most ridiculous ways of getting paid.

Jackass is a movie where they kick each other in the balls and drink horse semen. It started as a group of skateboarders screwing around, daring each other to do stupid things, and laughing at each other’s physical pain. They recorded the idiocy on video and it would later be picked up and broadcast.

Grumpy Cat is just a house cat with a sad looking face on him. The owners created video of this cat and posted in on YouTube. They made so much money that they quit their jobs. The goddamn cat has an agent.

EL James, creator of 50 Shades of Grey, started out by writing erotic Twilight fan fiction. Fantasizing about Edward lead her to a net worth of $90 million.

@TweetofGod is a Twitter account that was made into a Broadway play.

@ShitMyDadSays is a Twitter account that was made into a book and a short-run TV show starring William Shatner.

Fashion Instagram bloggers are people that Alicia worked with while at Target. They’d pick out clothes in the store, go to the dressing room, try them on, take selfies, and post them in Instagram. And not even buy the clothes! These people make 6 figures and are flown to fashion shows around the world.

Video games are an endless ecosystem. Pick any popular game and there will be streamers, fan websites, strategy websites, coaching, professional players, and mod creators. When that video game goes stale, move your audience to next game of the year.

Bloggers of all types make their living online. Mommy blogs, DIY blogs, Investing blogs, Travel blogs, and I even heard that some sites on the internet are about sex. Pick your interest and I guarantee there’s an audience out there no matter how ridiculous you think it is. Like underwater basket weaving.

I spent 2.5 years as a professional online poker player. It paid for Alicia’s wedding ring, her BMW x5, and our destination wedding to Aruba with a $1,000 subsidy to each of the groomsman/bridesmaids.

Don’t like poker? Why not try sports betting? Heck, there are even professionals playing fantasy sports.

If you like socially acceptable gambling and not being treated like a heroine-addicted-child molesting-reject, think of becoming a day trader. Yes the stock market is gambling. Take it from me, a former professional gambler.

The Starters are a TV show on the NBA channel who started as a simple podcast. They did the podcast daily for years, eventually getting paid for their work by websites. And later, the NBA itself.

Jenna Marbles creates girly videos on YouTube and makes millions per year. Topics include makeup, boys, and “OMG” stories.

PewDiePie plays video games and uploads them to YouTube. He’s the most watched YouTuber. In 2014 he made 8 million dollars.

Ken M is a professional online troll. He goes to comment sections of websites and tries to trick people into stupid arguments for his enjoyment. This started his writing career and now in addition to writing for Comedy Central and other websites, he was named one of the 30 most influential people on the internet by TIME magazine.

Andy Samburg and his Lonely Island crew started out on YouTube. He’s since gone to SNL, starred in movies, and has a TV show called Brooklyn Nine-Nine.

Justin Bieber made his debut on YouTube and a producer clicked on his video by accident.

E-Books have broken the rules of traditional publishing. It’s easy to release a title on Amazon or other online book sites with minimal effort.

Etsy is a way to make arts and crafts without having to worry about the hassle of setting up a website.

StichFix is a company that gives fashion advice for people. Think you have an eye for fashion? Become a consultant and work from home!

Mythbusters were just a group of guys that liked blowing things up.

Vine NBA parody guy makes short videos mimicking professional NBA players. These 15 second videos pull in 6 figures.

Rick Steves put out TV shows on public access for years before taking off as the travel authority online.

Reaction Videos are simple video blogs where the user is commenting or ranting on a particular phenomenon. Yes people make a living at this.

Online stores are just that. Selling things. Go to Shopify and set one up for yourself. Like selling offensive T-shirts few people will have the guts/stupidity to wear in public? That exists.

SEM/SEO/Social Marketing are skills that are desperately in need by companies, but you can’t go to college for them. Learn about them online and then try them for yourself.

A British teen makes tens of thousands of dollars helping Chinese parents name their babies.

Amazon has professional book reviewers. They wrote so many reviews that companies pay them to read and review their books.

Web comics flourish without the traditional newspapers. Can’t draw? No problem. Not funny but you can draw? Sure.

EatWith is a site for hosting people in your home and cooking for them. Like your own private restaurant.

Take a few years off and teach English in foreign countries. Easy job in exotic locations.

Airbnb lets you rent out empty rooms [you weren’t using anyway] to travelers.

Tripadvisor tours are great ways to give a service in your town. Wine tours, pub crawls, walking tours, fishing tours, historical tours, boat tours, whatever.

Upwork/eLance are freelancer sites to sell your services to people.

Copy writing has become fashionable with digital nomads.

Subscription boxes are small packages that arrive every month in the mail with a new thing to try. There are shaving clubs, wine boxes, candy, BarkBoxes for your dog, and more.

Mike Cernovich has become a media personality with nothing more than a website and Twitter.

Fiverr is a place for people to do their ridiculous skills for others at a low cost of $5. Are you an attractive woman who will record a 5 second video for someone? Great, you just made $5 for doing practically nothing. And you can include a $50 add-on where you will blow a kiss to the viewer. Or blow up a balloon with a message on it that explodes.

Mr Moustache found out how anyone can retire at 30, just by using math.

Buzzfeed is a $100 million dollar company that spews “listicles”. You know, the Top 6 Ways Peanut Butter Will Cause Your Death? That crap.

Programmers will always have jobs, so learn for free at CodeAcademy.com. Gain experience by building stuff and submitting bug fixes to open source projects.

OK, so people make money in all kinds of ways

Here’s something you probably didn’t catch: the above costs almost nothing to start. The device you’re using to read this probably has a camera on it and is connected to the internet. That’s all you need to start on one of the above.

So I hope you can see that almost anything is possible.

What else is required?

Persistence
Courage
Delusion

It will probably take a long time to show results for your effort. The downside is that to become world class at something, you need to spend 10,000 hours on it. That’s a lot of time. The upside is that many skills are transferable and you probably have put a lot of time towards your activity anyway. For example, all that time I wasted debating people on forums over video games drastically helped my writing. As did time spent writing memos in my office job. All the time I spent writing on this blog, Reddit, Twitter, or Facebook also helps my email communication to clients. All the activities I choose to do improves my skill at writing. I suspect you have a talent or hobby that you’ve kept for awhile and are similarly good at. Start there.

Gaining a following will take more time than you’d like. There’s no simple or single route to success other than keeping at it and trying new ways to get your message out there. Sorry. The best advice I can give here it to read Jab, Jab, Jab, Right Hook by Gary Vaynerchuk. Most people try to close the sale (right hooks) with everything they do and forget that providing value to people (jabs) is actually the more important part.

Next up, courage. People will look at you differently for breaking tradition. They may even look down on you. Others will tell you that you “have” to do this and “have” to do that. You don’t. Take advice from people whose life you want to imitate, or from people who have direct success at what you want to achieve. Have the courage to take risks. You will lose friends as you succeed. It’s a cost few people talk about, but it’s there.

Get good at being delusional. The most successful people I know, meet, and read about all have a positivity force-field which blocks all reason. To these people, success is right around the corner at all times. They know that putting in the effort will get them there.

This post was inspired by someone on Reddit who lamented: “Follow your passion? No one will pay me to drink beer!”.

I disagree.

Craft breweries and pubs are growing like weeds. Become a beer expert (read: get drunk). Know everything about how it’s made and the different styles. Create a beer tour that goes around to different pubs and breweries. Make a simple webpage and put reviews from friends and family on Tripadvisor to start. Pay $10 per week for AdWords advertising and start a Facebook page. Start a subscription box with beer that you curated. Sell beer T-shirts and accessories. Make a YouTube channel all about beer. MAKE STUFF.

When I walk into a liquor store, I am overwhelmed with choices. Hundreds of beers that I’ve never had before. So you might be thinking that no one will pay you to drink beer, but I’m saying that’s exactly what we need right now.

SEO is Dead

easy-proof-seo-is-dead

SEO is dead. It died back in 2010 but people still refuse to acknowledge it.

Here is the easiest proof that SEO is dead, the search results page (SERP) itself:

easy-proof-seo-is-dead
Click for large

The first organic result is barely on the page… or even below the fold!

Any remotely commercial search has tons of ads above the organic results. Even if you’re #1 for your search, your result will still be buried. Mobile traffic surpassed desktop traffic years ago and it doesn’t look like anything will reverse that trend. On mobile, it takes several swipes to get to the first organic result!

Aiming to be #1 in Google means you’re still invisible!

Honestly, it’s hard to overstate this point. #1 in Google still means you’re not even shown until the user scrolls down… IF they scroll down.

Ad are more enticing than organic results

The ads have pictures of the product, pricing, reviews, and sitelinks to other relevant areas on the website. The organic links are bland text that blur together.

Which do you think the user is going to click? In the image above, there are 11(!) ads above the first organic result that all have extra information an organic ad is lacking.

Our agency saw 25% drops in organic traffic for clients, across the board

We have clients in vastly different niches, and all of them saw the same trend: in Q1 of 2016, organic traffic dropped like a rock. This drop coincided with the changes to Google Shopping and removal of right hand side ads. Google didn’t just remove the right hand side ads, they put additional ads in the main column. Our clients didn’t make any huge changes and never invested in scammy SEO services that would get them penalized.

The elimination of the right hand side ads and introduction of more ads appearing in the main feed pushed organic results farther down the page. More scrolling + More ads = less organic clicks.

Ads are now nearly indistinguishable from organic results (other than the cool features ads get and organic doesn’t)

Searchengineland has a great article on how ad appearance has changed since 2010.

“AdBlockers are a thing! People won’t see the ads!”

Guess where the majority of AdBlocker’s revenue comes from? Google, paying the creators to not block their ads. When the next AdBlocker extension gets big, Google just hands them a pile of money to neuter it. Paying a few million dollars to get a few billion dollars is a great investment on Google’s part.

SEO is too slow to be effective – paying for ads is better

Here’s why most people give up when trying to start an online business:

Start a new website. Google indexes roughly once per quarter. That means if the site is new, it’ll take up to 3 months to even get ranked!

So they waited 3 months and now you see their rankings: they suck because the site is new. Do SEO things like like put out content and get links. Wait 3 months for the next index to come out.

It’s now 6 months in and they still don’t have sales because they don’t have traffic because the rankings suck. Most people gave up 3 months ago, but they push on! They’ve put 100’s of hours into cranking out stuff no one sees.

9 months later, they finally have good enough rankings to have some traffic. Still no sales because they couldn’t test conversion optimization, which they start to do.

One year after starting, the website owner is burned out. There’s a few thousand dollars in sales which don’t even begin to cover the cost of the owners’ time.

SEO is a means to an end: getting traffic. Google, Facebook, Twitter, etc are all willing to sell you more traffic than you can possible handle! Before you complain about the cost, remember that SEO isn’t free. It’s the most expensive way of getting traffic out there.

Paying for traffic means you can start seeing results immediately. In SEO, if you picked the wrong strategy, not only will it take months of work to fix, you won’t even know if your new strategy is working several months after that! With paid advertising you can get immediate feedback and change your strategy from day to day. The second you find a profitable niche, you can duplicate it and increase the budget and see results that day.

So what should you do?

Knowing the basics of SEO is still a good thing. There’s no reason to ignore it when the basics are so easy.

View each platform as a search engine. Google is the #1 search engine, but can you name the second? It’s YouTube. People don’t think of it that way, but you should. Buzzfeed reports that social greatly outperforms search for them. They also used email newsletters to bring people back to the website. Stop thinking that search is the main way you get traffic!

Step 1 is creating good content. Good content will always have a place. Unfortunately I don’t have any advice on this topic other than to practice. Create content every day, get feedback, and try things.

Step 2 is spreading your content across as many platforms as you can: Twitter, Instagram, SnapChat, Amazon, etc. Yes you would have to create content specifically for that platform. For example, I could put together a little e-Book from a collection of posts on here and put it up for $1.00 on Amazon. The main purpose wouldn’t be to make a killing on the book itself, but act as a gateway for people looking on Amazon for travel to come here.

On the site I created for SEO testing where I got 100,000 sessions a month in ~6 months, I made sure to use as many “search engines” as possible. Each article had images that were tagged to show up in image searches, videos put on YouTube, links from social media such as Reddit, and links from community forums. There were plenty of ways to find my content because I put it in a lot of different areas. That in turn gave me good rankings in the search engine. But by that point I didn’t really care as my brand was larger than the traffic the search engines were giving me.

When you start out, you probably won’t be good at making content. That’s why I don’t suggest putting money behind your efforts right away: paying to distribute bad content won’t work. But once you find your content being liked and shared, it’s time to get out your wallet.

Step 3 is paying for traffic to build on what already works. If you’re good at creating content, you can get to this step in a week or two. This is also the time to work on optimizing conversions.

The internet landscape is constantly changing

site-traffic-split
This is the split of traffic sources for this site. The key is to not rely on any one source!

Don’t get stuck thinking Google is the portal to the internet. Instead of trying to game Google to be hidden under a pile of ads, spread your message across the other search engines that you didn’t think were search engines. And when you find something that works, pay for traffic and watch your site take off.

I was a Professional Poker Player

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I was a professional poker player for 2.5 years. My database had 3,000,000 hands of poker. I was Supernova on Pokerstars which is defined as the top 1% of the top 1%. My winnings are immortalized in that they bought my wife’s wedding ring and our destination wedding in Aruba. Here are my thoughts on poker as a profession.

These thoughts are going to be scattered, so feel free to jump around. If you feel I left something out, ask in the comments.

What does a professional poker player do?

Here’s what I looked at while playing every day:

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Click for the large version

Here are some thing you might not know:

  1. My database was running in the background collecting data on everyone playing. This isn’t a cheat, it’s open to everyone. If you play online, it’s against people who will have this software. You’ve been warned.
  2. The numbers beside the players represent different ratings for common things someone might do, like bet, raise, or fold. These ratings can quickly show how someone acts in very complicated situations.
  3. Macros or scripts were used to determine bet sizing. If I right-clicked, the bet amount would be 2/3 pot (the money in the middle). If I clicked the mouse wheel, full pot. Rolling the wheel moved the bet up and down. It was important to do this because there were often several decisions to be made per second.

6 tables typically got through 400 hands per hour. That means at least I had several decisions per second, for hundreds of dollars per decision. It’s stimulating for sure.

Stakes

I played 2/4 ($400 buy-in) No Limit Hold-Em on Pokerstars. 6-tables at a time meant I had $2,400-$5,000 at risk at any given moment.

My bankroll for this was $8,000 which was built up over a few months prior to starting professionally. That career change wasn’t exactly planned. I was a verified winner for years prior to this, so don’t think I went from nothing to pro in a few months.

Truths about online poker

  1. There are X professionals at the table, where X is the table limit minus 1. So at a 10 handed table, assume 9 professionals… and you. Guess your odds of winning.
  2. The banking systems behind these companies are at risk of being shut down at any time because they are glorified mob transactions (see: Full Tilt)
  3. There are bots online capable of winning in heads-up play and some tournament structures
  4. ~70% of online poker players lose
  5. ~23% of online poker players break-even after bonuses/loyalty programs
  6. ~7% of online poker players actually win money
  7. Less than 1% of online poker players can make a living at it

Statistics gleaned from my 3,000,000 hand database and talks with other professionals and their huge databases.

Pros of being a professional poker player

  • Challenging and Rewarding
  • Get to shit-talk the losers AND take their money AND listen to them cry
  • No boss
  • Every month you’ll feel like you’re the best poker player ever

Cons of being a professional poker player

  • Everyone will treat you like a drug addicted child molester
  • Legality is debatable
  • No one actually believes you win money at poker, even when shown evidence
  • Can’t verify employment / credit history for apartments or loans
  • Everyone waits for you to go broke
  • High Stress
  • Rule/Rake changes can make beatable games unbeatable
  • Everyone will try and tell you about that one hand they lost 10 years ago that’s completely boring
  • Every month you’ll feel like you’re the worst poker player ever

A professional poker player’s day schedule

  • Wake up at 11 AM because I was up until 2AM
  • Log onto twoplustwo.com and read thoughts by other pros
  • Eat lunch
  • Work out early afternoon
  • Warm up session of poker around 4pm
  • Eat dinner
  • Play video games or read the internet
  • 8PM – ?? AM play poker

A poker player is on a weird schedule because your work time is everyone else’s leisure time. Playing in the day time is usually only against other professionals. That’s not exactly a good way to make money.

How much poker I played per day

Depends on how the day was going. Some days not at all. Some days 3,000 hands. I 6-tabled and averaged roughly 400 hands per hour. Live poker averages 30 hands per hour.

Playing over 6 hours a day is almost impossible due to the lack of mental energy. 6 tables simultaneously means 1-2 decisions per second for several hundred dollars each. My winrate would severely decline after 4 hours of play that day, so I’d pass the time with World of Warcraft.

“What’s the best you’ve ever done?”

My best month was making $18,000. Typical months were between $4,000 and $8,000. At the beginning of my career it was closer to the former, and at the end closer to the latter.

My hourly rate looked awesome though: $100+/hour! Sadly, it was difficult to play more than 50-60 hours in a month due to mental fatigue and motivation. Sometimes when you get kicked in the nuts for a few grand you just have to take a few days off or you’ll waste your entire bankroll in rage.

“What is the worst losing streak I’ve ever had?”

I think I broke even for 40,000 hands but still came out ahead after bonuses. I had one month where I lost: that was my last month.

My worst dollar loss was $30,000 at 5/10 ($1,000 buy-in) over a month. Interestingly enough I actually made money because of this! Playing with better opposition propelled me to beat my regular games at a much higher rate.

No one wants to hear your bad beat stories. Especially not poker professionals.

I’ve played 3,000,000 hands of poker in my career. That means I got dealt pocket aces/kings ~28,000 times. Even with aces/kings in the hole, you’ll lose roughly a third of the time. So I’ve lost with aces or kings 9,000 times. That’s more hands of poker than most people will play in their entire lifetime.

Your average poker night with the guys will go through 100 hands. Let’s say you have a poker night every week and get aces or kings every single hand. You’d have to lose every hand of aces or kings for two straight years to reach my level.

Losing with a great hand to a perfect hand became routine: quads over quads, straight flush vs royal flush. You could even see it coming in some cases. I’ve lost in ways you didn’t even know were possible, like the US government seizing Full Tilt bank accounts including one where I had a $3,000 dollar check coming my way. But I’m not complaining: I’ve taken far more out of the game than the game took from me. Losing big sometimes was just part of the deal.

No one believes you win money

My barbershop was a real man’s man place with Playboy and Penthouse magazines on the rack. I can’t imagine these guys had ever cut a woman’s hair before. They were just a block away from my place so I went there often.

They were also problem gamblers. Blackjack at Mystic Lake Casino, mostly.

I went to them for two years, and each conversation we had they tried to figure out how I made a living. They’d ask I got money through tax deductions since they could deduct their substantial tax losses each year. I told them I didn’t even know that was possible to have a casino print out your total losses each year for tax purposes. They’d ask if I worked with a string of other professionals to work against the fish. Nope.

They simply could not comprehend how I made money. I thought they were alone in their thinking, and I was wrong. Everyone assumed some form of illegal activity (selling drugs) or just leeching off my parents or the government. There was literally one person on the planet who believed that I actually made money at playing the game of poker, so I married her. It meant a lot to me that she saw poker as a skill activity instead of a mental health issue.

“Do you still play poker today?”

No. As a hobby it would be too frustrating because I wouldn’t be as good as I was and as a money-making activity it pales in comparison to anything I can do with online marketing. That’s why I got out: the games were getting harder and there’s too much opportunity in business.

“Should I become a professional poker player?” No.

First, you’re not good enough. Before I went pro I had been playing for 5+ years, read a dozen books, and posted on forums for advice. As I mentioned before, I was listed as the top 1% of the top 1%. If you’ve never been in the top 1% of some measurable competition (grades, sports, income, hobby), you don’t have the skill. I’m not trying to be a bastard here. I’m trying to save you money and heartache.

Second, if you ARE good enough then there’s far better ways to make money. The top guys in the business make their money from licensing deals and investments, NOT poker. Poker players are very aware that they don’t make money when they don’t play, so at some point it becomes a job with an hourly rate. No one working for an hourly rate ever gets rich.

But realistically, no you’re not good enough. A 6-handed table will have 5 professionals playing on it and one fish. When the fish leaves, the table breaks up. So not only do you have to be good enough to beat normal people (you aren’t), you have to be good enough to not get your ass handed to you by other professionals. The skill level required is off the charts.

“Is online poker rigged?”

No it’s not rigged. There were some online card rooms that reported shady dealings, and people quickly fled.

Are there some card rooms with rake so high that a player can’t be profitable? Yes, but that’s a different question and it’s in no way underhanded.

“What was your worst experience?”

Playing live poker at Canterbury Park, MN. It was early on a Friday night so the table was mostly sharks waiting for the fish to arrive.

A guy sat down at the table, still in work uniform and with the permanently oil-stained hands that signified he was likely a mechanic. He didn’t really know the game and had to be helped by the dealer. Some people tried to spark up conversation with him and it became apparent he wasn’t “all there”. He lost $400 in 20 minutes.

I got up and left. I preferred not to know I was taking money from the mentally handicapped and played almost exclusively online after that.

“What was your best experience?”

Buying my wife’s engagement ring, her BMW x5, our destination wedding, and giving $1,000 to each bridesmaid/groomsman to come to Aruba.

Most people go into debt or have their family pay for their wedding, and it was nice that a “gambling degenerate lowlife” like myself could afford these things. It made me feel legitimate.

“Do people collude online?”

I’m sure some people do collude online. Overwhelmingly they do not. If you’re good, it will make no difference to you because of the concept of “implicit collusion“. From each player’s point of view, it looks like the entire table is against him/her because there can be only one winner.

There have been times where I suspected collusion, but that’s easy to combat: tighten your range (don’t play mediocre hands) and shove (go all-in) more hands. Since at least one of the other players is in the hand by decision and not by card strength, they will be forced to leave the hand. And if they don’t then you have a good enough hand to win.

Fact: two bad players colluding online still won’t win.

The card rooms also check for this behavior and ban players attempting it. For example, two people at the table playing from the same IP address would be banned. They also look for accounts that regularly play together.

“What is your starting range of hands?”

This is the least important question that gets asked over and over again. Against raise happy professionals I’m very tight. Against non-professionals I get asked if I’ve ever folded in my life.

I don’t believe in the stock market

Poker professionals always fantasized getting out of the game, especially in the rough stretches. Many went to Wall Street or became day traders. Wall Street liked poker players because they were in the same business: gambling. All our words like “bankroll” and “variance” and “rake” were just other words that Wall Street used with stocks.

Take it from a professional gambler: the stock market is 100% gambling.

“Will you play in my home game?”

I’ve done this before and it never ends well. I place in the money or win outright, all the while listening to people complain about how lucky I am. And people get really angry about losing their $20. Meanwhile, the money I win is meaningless to me and the challenge is non-existent since I’m used to playing 6 tables with 4 other professionals at each table. Playing a single table against terrible poker players is excruciatingly boring.

“Any regrets?”

Not really. It would have been interesting to see what would have happened if I really tried to become great at the game instead of just grinding out money, but I was just a different person at the time.

My plan during my career was just to make it another month and stay out of the hell that is the modern office job. That’s actually still my goal. I’ll consider my life a success if I never have to go back to being a wage slave.

The best thing I ever learned in poker

Don’t gamble with the rent check

Seems weird that this is what I’d learn, right? How could I not gamble with the rent check when that’s how I made money?

Professional gamblers have a “bankroll”: a total amount of money used for gambling that can withstand the up and down swings of the game. The whole point of the bankroll is to make sure you don’t lose all your money gambling. The lower my bankroll got, the higher my stress became. Which in turn lowered the quality of my play… you can see where this is going. Bad days became bad weeks which became bad months spiraling out of control.

Today I keep a lot of cash on hand so I don’t have to worry about “OOPS” payments. I’m willingly losing money by not investing, just for this “feel good” mood. By knowing that my immediate future is secure, I can branch out into other things like growing our business or starting new ones.

Some of the early months in poker I was living hand-to-mouth, putting off buying necessary items until my check came. My stress levels were off the charts as could be seen in my face: stress brings out my Roseaca (adult acne).

If I could suggest one thing to people: get rid of debt and save up an emergency fund. The mental benefits are fantastic. It’s like being high all the time.

Despite the stress and being thought of as an addicted mental patient, I’d do it all over again

Because it’s too much fun to take some loudmouth’s money away from him.

How to find good internet while traveling

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We’ve been to roughly 30 countries so far, and here’s how we find good internet while traveling.

Not having internet isn’t an option for us. Here are the things we’ve learned to continue to work no matter where we are.

Cities naturally have better internet than remote locations

Any large city is going to have good internet just because modern business requires it. This doesn’t mean that just because you’re in Rome that any location will do, but it does give you quite a bit of options. Going to the rural parts of the country can be very hit or miss as the infrastructure isn’t there.

Rural area internet is often based off of cell towers. This can bring unique problems. For example, in Ollentaytumbo Peru, the internet would crash when 3+ tour buses rolled into town at 10AM. Everyone on the buses had mobile devices and it was simply too much for the system to handle. The internet would magically come back on right as the buses left town. Another issue with cell towers is that the house needs to be in line-of-sight of the tower. The reception will be poor if a house is in a small valley or on the wrong side of a peninsula, as we experienced in Christchurch, New Zealand.

Check internet coverage maps of rural areas to check if your place is in a blind spot

This doesn’t mean you have to stay in a big city all the time! We typically schedule city stays for when we know we’ll have a higher workload. We still expect to get good internet in the rural areas by following the advice below, but it wouldn’t be a huge deal if it wasn’t great internet.

Airbnb internet is vastly better than Hotel internet 99% of the time

In one year alone, we stayed in 33 Airbnbs and 24 hotels across the world and have never found hotel to be better than Airbnb. There’s always some jerk in the hotel downloading the entire internet. Airbnb internet is better because there are fewer people on the router. Many times it’s just your devices only. A hotel has to accommodate not only 3+ devices per guest, but also the employees working there.

Note that some Airbnb’s are actually hotels pretending to be Airbnb’s. These are hit or miss. If each room has its own router, then it’s probably OK. If there’s a router per floor, it’s almost always poor.

How to Read Reviews

If the review has ANY bad mentions of internet, move on. There’s so many places to stay that you don’t need to put up with this.

Trust business traveler reviews over normal travelers that just want internet to post a picture or check email. Business travelers often need to download large files or screen-share.

Look for reviews that mention streaming or gaming (two bandwidth intensive activities) to get a sense of how good it is.

Have a backup plan

Let’s say you stayed in a big city Airbnb and read all the reviews, but you didn’t get good internet. That’s going to happen if you travel enough.

Starbucks and McDonald’s, not local coffee shops

Sure it feels bad hanging out in McDonald’s while in a foreign country. But Ronald McDonald doesn’t screw around with internet quality: it’s consistently good from country to country. Starbucks is good too, but there will be more people slowing it down because it’s more typical to go there for internet.

A local coffee place is usually worse for internet. There’s a higher chance the employees are leeching it. Or as we saw in Peru, locals sit on the steps outside and leech it when it’s turned on (it’s usually off since it’s based on a prepaid cell phone plan and not unlimited). We visited several places just for internet, and everywhere we went there became a little group of people sitting on the stairs outside because this is how they got internet access.

Co-working spaces

These are becoming very popular in any large city. While they are more expensive than hanging out in Starbucks, they also will have great internet, a quiet environment, and comfortable chairs and desks.

SIM cards

Installing a local SIM card in your phone and purchasing a local phone plan is cheaper than you think! You can find prepaid plans in most convenience stores in any country for $30 that offer several GB of high speed data.

NOTE: Your phone must be unlocked and/or an international version. The reason phone companies pay for your smartphone is because it’s locked to their network. If you leave their network, then you have to get a new phone. That’s how they keep you. We have iPhones simply because you can buy them unlocked directly from Apple and it’s the most compatible with SIM cards around the world. (I basically despise my iPhone otherwise)

Mobile hotspot device

In some countries you can purchase a personal internet device that’s basically a cell phone. It can’t make calls like a phone can, but it has WiFi that your devices can connect with. We’ve found these to be more expensive than a SIM card and payment plan, but it does have the advantage of freeing up your phone.

Phone plans

T-mobile is the BEST. No contest and no arguments. Free 2G data wherever you go, right off the plane. 2G data isn’t enough to load most webpages, but it’s enough to load email and your social apps. We’ve found it to work incredibly well across 20 countries in South America, Central America, Oceania, SEA, and Europe.

T-mobile also has high speed data packages you can buy for $50 for 500MB, but that’s too expensive and should only be used in a pinch. Call them up and they can enable it right away if you need it for that meeting in 5 minutes. Most of the time you should buy a local SIM and plan instead.

Internet is a necessity

Using the above, we met uninterrupted international deadlines and meetings for several years while traveling.

The only place in the world where we were cut off from a client call due to bad internet? When we got back to our home in Minnesota.

Why You Should Fib on Your Resume

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It wasn’t the best date in the world. Who talks about their jobs on a date? Me, apparently. I was fascinated how the hiring process worked, and she was in Human Resources. On a semi-related side-note, some guys really struggle with why they can’t get a girlfriend. At this time in my life my dating clothes could be best described as “business casual”. So hot. But thankfully I failed these dates so I could later meet my wonderful wife.

I’m going to try and convince you that you should fib on your resume and feel great about it. I’ve talked to several hiring people, worked at small companies where everyone is involved with the hiring process, and used these methods to get the interview on the vast majority of all applications I’ve submitted.

I never intended to be evil. It doesn’t feel great suggesting that you… fib. But the more I found out about the hiring process, the more disillusioned I became. Once I found out how to get the phone interview consistently and succeed in the in-person follow up 75% of the time, then I REALLY hated the hiring process. It’s completely rigged, and I’ll show you how to beat it.

Human Resources Girl confirmed what I already suspected: she simply matches the words on the application to words on the resume and passes along the resume if it matches those words. The manager you’ll be doing work for never sees your resume before HR does. Zero people actually read it. Word matching game.

Copy words from the job posting onto your resume get past HR and in front of a manager.

Most people try to use big words or spice up their resume. Don’t. Use the exact words and acronyms on the posting. Ctrl-C, Ctrl-V. If you don’t get called for interviews, it’s because you’ve failed this step. If you have all the words on your resume that they have on their job listing, there’s a huge chance for at least a phone interview with HR. Don’t worry about later steps in the in the process yet. No interview, no job. Work on getting the interview first.

What’s that? You’re saying that you have no experience in Blue Widget Systems like the company wants? Don’t worry, that doesn’t matter. Usually. Here’s why.

How a job listing gets made

Jamie has been working at a company for 5 years. Jamie decides to leave the company. The manager needs to replace Jamie, so they have Jamie list all the tools used on the job.

The manager gets the list of tools and programs and puts on the listing:

  • “Needs 5 years experience in the following:”

Why 5 years? Because Jamie was there for 5 years.

Did Jamie have 5 years experience all those things listed on the posting? Hell no, Jamie was hired as an intern out of college. But now everything that Jamie has ever touched needs 5 years of experience. It doesn’t matter that one program could be taught in 5 minutes because it’s rarely used. “5 years experience” is what you’ll see on the resume.

This leads to stupid situations like requiring 5 years of experience for technologies that are 2 years old. I have gotten these jobs easily because everyone else was too afraid to list the impossible. They got filtered out by HR in the word matching process. I didn’t.

So the job listing includes unreasonable experience on almost everything. Just to make sure he didn’t miss anything, the manager also includes the OLD job listing that has been floating around since the 1980’s. “Needs 5 years experience in Lotus Notes and Gopher“.

Since Jamie had the job as an intern, the starting wage is exceptionally low because that’s what Jamie got. So they expect to pay you like an intern but you must have 5 years experience in everything.

And finally come the nice-to-have’s that the manager just sticks on there. MBA. Foreign languages. Charity work.

The ultimate result is a job listing that not a single person on the planet is qualified for, not even the previous employee. This is why you shouldn’t feel bad about fibbing a little bit.

It’s all bullshit anyway because the manager is going to hire a “good culture fit”.

What the managers actually hire for: Will you make their lives easier?

I had gotten the suit from the Goodwill. I think I got two suits for $35 because I was broke as hell. They were tacky looking and the sleeves were way too short for my arms so I kept them hidden under the table. But as soon as I got into the interview, the hiring person sighed with relief and smiled: “THANK YOU for wearing a suit. I can tell you’ll be great, let’s get the details out of the way”. The HR person didn’t care about any credentials I had. All the other people applying for this job couldn’t even do the bare minimum and dress nicely. The HR person ranted about how the other candidates came dressed in T-shirts. But by even doing the slightest preparation, I set myself apart from the crowd. By being prepared, I made HR’s lives easier. That’s why they instantly approved me.

Next up, the manager.

Mangers generally don’t have a clue as to how you actually do the job you’ll be doing. This is why it doesn’t really matter that you don’t know the things you said on the resume. You have to know enough to pass their bullshit detectors and be at least somewhat useful when on the job, but you don’t have to be the rockstar you claimed to be.

Small talk is the most important interview skill you can have

Plenty of people have skills. But plenty of people are also insufferable assholes. Since your manager will be spending 40+ hours per week with you, they are far more concerned about your asshole tendencies than your work production. If your skill level is a C- but your attitude a B+, you’re hired. But probably not if it’s the other way around!

Have a sense of humor, smile, and try to make the interview fun and comfortable. Complaining of any kind = NOT FUN.

Meeting your future co-workers

This is going to be the hardest part of the process because some of those lies you told may come back to bite you. Or they might not. It’s hard to tell. Your future co-workers actually do the job, unlike the manager and HR person before them, so it’s harder to bullshit them. So between the time you submit your resume and get the interview, you need to study. Study a LOT. You have to be able to speak intelligently on the things you said you did. Read industry articles and current events so you can use them in conversation during the interview.

Fortunately, your future co-workers are just like your manager. The most important thing for them is to weed out assholes.

Learning how to tell funny or interesting stories about past projects is way better than trying to impress with knowledge

Prepare 3-5 stories beforehand to use in interviews. These stories shouldn’t have a “bad guy”. They should be filled with everyone trying to do the right thing but it just didn’t come out right. The stories should end with “In hindsight, I learned…”.

I like telling people about the things I learned when working on White Castle’s social network. It gets people laughing and sets me apart from other candidates.

Congratulations, you got the job

Remember all that stuff you said you knew? Yeah, now you have to actually do it. You have between a few weeks and a few months to actually learn how to do this at an acceptable level. Your co-workers and manager will forgive mistakes during this period and charge it to the transition. Fortunately, a few weeks/months is more than enough time at most jobs. If you can’t learn your job in a few weeks/months, you aimed too high.

Something went wrong

Maybe you bombed the interview. Maybe they fired you right away. Maybe you aimed too high and applied for brain surgeon. Perhaps you could have studied more. Don’t worry about embarrassing yourself in interviews: you need a job and embarrassment is part of the cost. I’ve had interviews stop immediately when I tripped their bullshit detectors. Oh well. Pick yourself up, dust yourself off, and try again.

The important thing is that this method worked far better than not. Because once you start gaining experience and adding new skills you become more valuable in general. This method is also a way to keep learning and stay current with industry trends. A lot of people just stop learning new things yet magically expect to get paid more. That’s not how it works.

I hope I’ve convinced you to lie like a dog on your resume

  • Is it fair to get rejected by an HR person just matching words? No.
  • Is it fair to get rejected because you don’t have 5 years experience in a 2 year old system? No.
  • Is it fair to get rejected because you don’t know Technology X when they are hiring on personality anyway? No.

The job application process is broken. It’s so broken that lying is the way to go. You have a choice between unemployment, working a job you hate, or getting the jobs you want. I want you to live the life you wish for, and I think you do too.

A Home is not an Investment

home-sunset

I fell for it like an idiot. Stop throwing money away by renting and buy a home, they said. So I bought a home and found out that it was all a pack of lies. Houses are weapons of life destruction.

home-sunset
Don’t get me wrong, there’s some upsides to owning a home. This was the view from our dock.

I’m sure you don’t believe me. Everyone does it, how bad can it be? Your grandparents bought their house for like 4 bucks and sold it for their retirement. Sounds like a solid deal, right?

Nope. All lies.

Disclaimer: If you like owning your home, that’s great and wonderful. Keep doing things you enjoy! I’m taking issue with people talking about how much money people claim to make on their houses.

Disclaimer part two: I’m also not talking about rental property or “flipping” (buying dilapidated houses to fix up and sell at profit). Only personal homes.

Simple proof of how a home is not an investment

Over the life of your home loan, you will pay double the buying price of the home due to interest and taxes.

Here’s a mortgage calculator to show how you’re paying $400K to own $200K.

Let’s say your house cost $200K. You will pay $400K over that 30 year mortgage on interest and taxes. In what universe does paying $400K to get $200K become an “investment”? If I walk up to someone and tell them if they give me $10 then I’ll give them $5 back, they’d rightly punch me in the face.

“But this person bought their house for $30K and sold it for $400K decades later!”

That’s called “inflation“. When grandma talks about how everything in her day cost a nickel, she’s basically showing her ignorance on simple economics. The US government aims for 3-4% inflation every year. Basically that means that prices on everything will rise by 3-4% every year. If you kept $100 under your mattress for a year, that $100 would feel more like $96 because prices had gone up.

When adjusted for inflation, homes only gained 0.2% value each year for the past 100 years!

After adjusting for inflation, prices for homes has been essentially flat

Homes gain value at the rate of inflation. Is dropping six figures on a house better than stuffing it in your mattress? Absolutely. If you were to buy your house with cash, you’d “only” lose a ton of money instead of an insane amount of money, because…

Houses need constant maintenance

Every single home has a “Honey, do” list that is never completed. I bet even Michelle rides Barack about the mold in the bathroom.

Replacing the furnaces, AC units, roof, driveway, gutters, paint, etc, are all crap that needs to be done every 10 years or so. And on top of that, sometimes the basement floods or the pipes burst. Our neighbors wanted to renovate a room and found water damage. Goodbye front of their house, hello six figure second mortgage.

Your home is plotting to destroy you financially. It’s waiting until you’re cash strapped and then BAM! Ice dams wreck the roof. Sure your insurance covers it, but that $3K deductible sucks. And then your insurance goes up because you’re now high risk.

The tax breaks are pitiful

Anyone who claims tax breaks are the reason to own an home is delusional. You can only deduct the interest paid. So on a $200K home you’re paying ~$125K in interest over the life of that loan. So the tax breaks “save” you tens of thousands of dollars. That’s good until you realize that $125K you’re paying is just for the privilege of getting a loan. That’s what interest is: the price you pay to borrow money.

Hooray, tax breaks mean you paid $95K instead of $125K!

“But my renovations and improvements will drive up the value!”

Nope. Again, homes have only gained 0.2% over inflation over the past 100 years. Other people have updated their homes. The math doesn’t lie: you will not get that money back from the master bath you put in.

I’ve read a pile of books on rental property. The books all say that “curb appeal” is the biggest difference maker and is something people will pay for. I’ve found this to be correct. On our rental property, we did updates like replacing the windows with energy efficient models and put gutters on to control water flow. Did any of the renters or buyers care about the windows or gutters? Not a single one. But the new paint made it look far more appealing. It also cost nothing in comparison.

By the way: when in doubt, take advice only from people who have made money from their expertise and ignore everyone else (This includes me! See bottom for profit made.).

You can’t recoup that money anyway

Since you’ll always need somewhere to live, you’ll always have hundreds of thousands of dollars tied up in your house. Sure you can cash out that $$$ when you move into a retirement home, but what would you rather have: a million dollars at retirement when you’re feeble or a nice vacation every year for 40 years?

I have people bragging to me all the time about how much their house is worth. Yet these same people don’t have money to spend because it’s tied up in their house. If you can’t use the money, it doesn’t exist.

Buying a house is almost exactly like signing a 30 year lease. Except with a house you have to pay taxes, fix it up, buy insurance, maintain it, and carry a large financial burden that destroys your life if you miss payments. So it’s a lot worse than signing a 30 year lease. Never mind.

“But you always need some place to live, so why not gain SOME equity instead of none?”

Because renting is significantly cheaper: no insurance, no maintenance, no taxes. Instead of getting that equity 30 years down the road, you can save ~30% each month by renting. And invest your down payment, letting it make you money.

 

30 years is a long damn time

Who will you be in 30 years? Where will you be? What will you be doing? I can’t even answer these questions for myself. Props to you if you can see the future.

If you bought your house in your 20’s or 30’s, then over 30 years you: were born, learned to talk, went through puberty, school, became an adult, lost your virginity 1-3 steps ago, got a job, etc, etc, etc. All that shit happened and you think you can see the future? You think your family and job will always be conveniently located within spitting distance of your house for 30 years? You didn’t even EXIST 30 years ago as the person you are now. You were probably still shitting on yourself.

It’s nonsense to think you can plan that far ahead, and here’s why that matters. Every time you buy or sell a house, you pay a gigantic sum in fees. Closing costs, realtor fees, loan origination fees, etc. And the loans are always front-loaded, which means the first 10 years of payments are almost entirely interest and not principle. So that means you’re not gaining [much] equity if you sell your house before the 10 year point. If you sell your home before 10 years, renting was far and away the better option financially.

What will happen to the surrounding community in those 30 years? Detroit became a ghost-town within 10 years after the car manufacturers left. Flint, MI developed lead problems with the water, making it not only dangerous to live there but also destroying home values so people can’t leave. Hurricane Katrina wiped out Louisiana so badly that insurance companies instantly declared bankruptcy. Those people lost their homes with nothing to show for it. Chicago became the murder capital of the country. Even the *good* can be bad: San Francisco is now so expensive that it priced people out of the city.

Commuting is a cost too

Alicia and I have changed jobs and careers every 2-3 years for the past 10 years now. So will most people. Alicia’s commute went from 20 minutes to 45 minutes after a job change and her happiness went way down accordingly. So we moved closer to her work and she got much happier. But if you own a home, that’s rarely an option because of the cost.

Ditching your commute is worth $40,000/year in happiness.

Your commute costs you real dollars too.

Stock Market vs Home Owning

Investing in an index fund has a rate of return of ~11% annually over the past 100 years. And it’s effort-free: buy stock, wait, cash out. You can start with a few hundred dollars and cash out any time.

Investing in a home has a rate of return of ~4% annually over the past 100 years. But you have to maintain it. Upgrade it. Pay taxes. Insurance. You have to start with tens of thousands of dollars on a 30 year commitment.

For those of you who want to point out that the stock market can turn downward, so can home prices. Talk to all the people with “underwater” mortgages. Look at graphs of home prices to see home values swing just as wildly.

“But I OWN it!”

If you have a mortgage, the bank owns it. You’re renting it on a 30 year lease.

“You’re just mad because you lost money on your home!”

We owned our home for four years. Bought it for $540K and sold it for $640K. Lived in it for two years, rented it out for two years.

$100K profit sounds good, right? No, it’s trash.

  • $40K of that “profit” will go to realtor fees and closing costs
  • $10K was spent on painting and other repairs to sell it
  • $70K was spent on mortgage payments for two years (which went to interest we we won’t get back)
    • The renter paid for the other two years

So even though we sold our house for considerably more than we bought it for, we still lost $20K. If we would have lived in it all four years we would have lost $90K on it. To sell our home and make a legitimate profit, we would have had to buy it for $540K and sell it for $740K in those four years.

“So I shouldn’t buy a home?”

If it makes you happy, buy it. Increasing your long-term happiness is always a good life investment. It is possible to trade money for happiness and I encourage you to do so whenever you can.

But realize that you’re paying a premium and limiting your financial flexibility when you buy a home. A home is a large obligation that can be hard to get rid of and can make you less happy.

If you want to be rich or live free, hold off on that house for awhile.

Simple SEO

Simple SEO with the stats to prove

The simple SEO guide here will get you farther and for less effort than other guides. In this day and age, everyone should have a basic understanding of online marketing. I think it’s important because the new economy is more about personal branding than ever before.

Here’s how I built a site that went from 0 visits to 100K visits per month in 7-8 months while giving SEO very little thought and I didn’t pay for advertising.

Results and niche

The site in question was rocketbrainsurgeon.com, a strategy website around a game called World of Tanks. Articles were 700+ words long and included at least 2 images. Often there was an associated video that was hosted on YouTube. Content was released every weekday for 7 months.

Simple SEO with the stats to prove

According to Google Analytics, 41% of my traffic came from Organic Search. And I did very little to earn that traffic.

Understand how organic search works

“Where do you hide a dead body? On the second page of Google’s search results” – Funny joke, but true. 97% of searches don’t get to the second page. If your average position is over 10, it might as well not be ranked at all. Page one or bust.

Rank 1 in Google still means you’re not shown on the screen for some search results – Google didn’t get to be the gigantic company that it is by giving away things for free. Ads fill the screen for most searches. Realize that all the hard work you do on SEO can still mean that you don’t even show up without scrolling!

Users click on a search result within 3 seconds – There’s 1,000+ words on the page, how to users make a choice? By skimming. Google highlights the words the user typed into the search box and people click on the results that have the most highlighted words.

Content is devalued over time because people want recent search results and not something from 2003. So all that effort you put into getting Rank 1 for your keyword needs to be maintained. Forever. The second you stop is the second your results drop.

Personalization and Localization is huge – Search engines tailor results based on things you’ve searched before and where you are located. So two people doing the exact same search will get different results. Don’t be afraid to go niche, because there are lots of people out there who want very specific content just for them.

SEO is slow, subject to the whims of the search engines, and incredibly time intensive. This article exists so we can get the biggest impact for the least effort… which still equates to a ton of effort because that’s the reality of SEO.

Basics

SEO consists of three main ideas: finding keywords, content, and on-page optimization. People more familiar with the process will notice I omitted linkbuilding, which I’ll talk about later.

Finding keywords

Reduce your broad keyword to a niche. For example, “GoPro camera” is pretty broad. The search results page will be filled. But “GoPro travel camera” will be less competitive. And phrasing it as a question, “Is the GoPro camera good for travel?” will be even less occupied. Go small. You’ll rank better and get more clicks than trying to go broad. Using the above method got me 114 clicks and 3 affiliate conversions for half an hour of effort of writing the article. And counting.

Tips to find a good keyword:

Do a Google search, and then look at the results page.

  • Few to no ads (good)
  • The exact search phrase doesn’t appear in bold 50+ times (better)
  • The exact search phrase doesn’t appear often at all (best)

If you don’t see the exact phrase you typed in very much on the page, that’s a good keyword. Don’t stress out about how much volume this keyword gets. If the keyword is relevant to your business and you have exactly what they are looking for, there will be traffic.

But also don’t bend over backwards to get some weird phrase that no one uses. Think of normal, yet specific phrases relevant to your business.

Use the words your customers use!

Search engines are basically word-matching. If you don’t have the exact words your customers are using, you won’t show up! Don’t use business language.

Here’s how the business thinks vs a customer:

  • Business: “We offer the best in outdoor simulated driving experiences!”
  • Customer: “go-karts near me”

The business will never rank because when Google looks at your site for “go-karts”, it finds “simulated driving experience” instead.

On-Page optimization

Now that you have a keyword, you need to structure your page properly to make sure the search engines can see it.

General rules:

  • One page, one idea – don’t try to make one page do everything
  • Keyword goes at or near the start
  • Keyword remains the same in every element
  • Keyword is spelled correctly and in the same order each time
  • Textual content starts as high on the page as you can get it: NO BIG IMAGES PUSHING CONTENT DOWN

Place your keyword in the URL, title, meta description, hero image alt text, H1, and content of the page. That’s it!

Using this page as an example: “simple-seo” is in the URL, “Simple SEO” is the title, “simple SEO” is in the meta description, “simple SEO” is in the alt text of the image, “simple SEO” is in the H1, and in the first sentence of the content. There’s no huge image taking up the screen.

Linkbuilding

Linkbuilding is the practice of pointing links towards your site to give more credibility to search engines and thus getting a higher position in the search results. These are called “backlinks”. Backlinks are so important that people even go so far as to build fake websites specifically for the purpose of gaming this system.

So how do you do it? Simple. You don’t. The only links you are interested in are ones real humans actually follow. Instead of scouring the internet looking for some obscure directory with a high PageRank (Google’s “power” rating) and begging them for a link to your site, let your audience build backlinks for you.

If your content is good, it WILL be shared. It WILL be linked.

Share your content with your Facebook friends. Share it on social media. Share it on forums. Share it on Reddit. Share it on StumbleUpon. But only put links where it adds something to the conversation. Don’t spam.

“Content is king. Context is God.” – Gary Vaynerchuck

If no one shares your content, that means it sucks. No amount of spammy backlinks would have helped you anyway because once they got to your site, they’d just leave. That’s the most important point. If your content can’t convert people, it doesn’t matter one bit that you’re Rank 1 for that keyword. If you have good content, it converts. It builds backlinks on its’ own.

According to Google Analytics, referrals and social media shares made up 36% of my traffic. I put out only one link per day, in front of people who would be interested in what I had to say.

Linkbuilding: not even once. To back up my point on this, Google will declare that links bring little to no benefit to ranking. For them to come out and acknowledge this publicly means that links have been of low to zero value for some time before this.

Common misconceptions about search

“I can get you Rank 1 in Google!” – If an agency or product says this to you, RUN AWAY AS FAST AS YOU CAN. The top ranking in the search engines doesn’t matter, you want quality traffic that converts.

How to get Rank 1 in Google:

  • Optimize for gibberish or an obscure phrase. Examples: “dfuaiopr3ewjdklafd878cc” or “Pinky rings enhance pickles while playing Call of Wartoads”
  • Wait
  • Boom: rank 1 on Google for a phrase no one is searching for

Or, pay for AdWords advertising to get Rank 1 in Google in less than an hour.

“Organic search is free” – nothing is further from the truth. Organic search takes a lot of time and effort. An article that took 8 hours to write may only gather 10 clicks a month, and one conversion per year. And that’s after waiting two months for it to get indexed and ranked.

Instead, in that 8 hours that took you to write it, you could have worked at McDonald’s for $10/hour, made $80, and gotten 160 clicks and 2 orders in a few hours from Facebook advertising. Then you could have put that profit towards more advertising and built your business from there.

Oh, and that was one article we were talking about. To get good at organic search, you’re going to need several pieces of content every week. Organic traffic is one of the most expensive ways you can possibly advertise because of the overwhelming amount of time it takes.

“I never click on ads” – HAHAHAHAHAHAHAHAHAHAHAHAAHAHAHAHAH. People say this to me all the time, and it’s just not true. Even if you have ad blockers, you still click on ads. I click on ads. Advertising has changed, and what an “ad” can be is very fluid. The top organic results for Google might not have advertising on them directly (ie, clicking on them doesn’t give Google money for that click), but I guarantee you there’s a pile of money and effort behind that #1-3 ranking for a competitive keyword.

“Every page needs SEO” – Nope. While this page has basic SEO done to it (because it’s so easy), it’s not intended to gain traffic through organic search. It’s intended to be shared. Companies waste a lot of time SEO’ing pages that are never meant to generate traffic.

Most common failures

Poor keyword selection

Most people optimize for keywords where they have no chance, like “real estate agent”. Instead, get more specific. “real estate agent in Minneapolis” is better, but not perfect. “real estate agent in Minneapolis for single family homes” is what we’re looking for. Will something like that get a lot of traffic? No, but the traffic it does get has a high chance of conversion because it’s exactly what they are looking for. Getting 100 clicks and no conversions for the month is a failure, but getting 10 clicks and one conversion instead is a success.

Think small. Specific.

Very little content

The vast majority of businesses throw up a few pages and then never touch their site for a few years. And then they wonder why they aren’t getting traffic. You absolutely have to keep producing content if you want to rank well. Organic search is very time intensive if you want to compete for high volume keywords. Most companies discover very early that this isn’t what they signed up for and that they’d rather pay for traffic than earn traffic.

Short or copied content

An article must be 700 words or longer to rank effectively. It also must be unique. You can’t just copy from somewhere else, you have to sit down and write it. Don’t believe the people that say programs can write unique content that will evade search engines.

Summary

SEO is much easier than most people make it out to be. Yes there are things you can and should do to help search engines find your content. But it doesn’t replace great content. Spend your time creating content people love, and everything will grow from there.