How to cut consulting costs by up to 30%

Those of you who know me also know that I've been a business application consultant for the past 16+ years. In that time, I've helped over 400 companies manage their business applications and have logged over 50,000 hours of billable time to clients. As much as I try to be a good steward of my client's project budget, I can't help them when they don't want to be helped. Over the years I have seen so much time go wasted and many projects go over budget, all of which could have been prevented by taking a few measures early on. I thought I would put together some points to help the people in charge avoid some of the pitfalls and take advantage of my years of experience seeing first-hand how projects can be wasteful.

I'm going to list these points in no particular order below:

1. Travel vs. Remote: Do you really need your consultants to be on site? Do you conceive that somehow there's a difference between him being in the same building or several hundred miles away? Travel is not only expensive from a hard cost perspective but also from a time perspective. The hard cost of travel for most of the guys I have managed over the years is around $2000/week. That's Over $100k per year per consultant. You can hire a fulltime employee for that much. Not only that, travel time eats into project time and cuts down on productivity tremendously. The average traveling consultant is on the road 12-16 hours per week (between booking, driving, airport time, air travel time, hotel...). That's 12-16 hours they could be spending on the project to get it done faster. That's over 800 hours per year just wasted. Not to mention they're now less happy to work for you because they're away from their family, their warm bed, their home, and have to spend several hours a week dealing with travel related stress. The true cost of a traveling consultant is several times the actual travel cost. So if you can help it, arrange for your consultants to work remotely.
2. VPN: Working via a remote connection has gotten so much easier over the past decade. Nowadays I can work on any customer's private network with a quick click. But there are several dozen flavors of VPN software and they all vary from place to place. Some make life easier and some make life miserable for your consultants resulting in several of hours of wasted time each week. Here are some of the common ones I have to use each week and how I feel about them:
1. VMware Horizon View Client - I absolutely love this method. I basically get a VM on the client's network that I can access with a click of an icon. From there I can jump to whatever machine I want and get my work done. What I love about it is it doesn't mess with my local internet connection at all and I can be logged into several different clients at once with this client.
2. Citrix Receiver - This is one of my least favorite things to use. Not only is it typically painfully slow, it's also very confusing and it requires several bits and pieces to be installed. And I'm sure you can set good user/password policies but most of the time it seems I have to reset my credentials way too often, resulting in support calls and several hours can be burned this way. I'm being generous with 2 stars. 
3. Cisco AnyConnect - I don't really like client VPNs in general but the Cisco AnyConnect VPN works really well. If set up correctly on the server side, it can be really solid and never drops off. Only problem with client VPN software like this is you can only log onto one client at a time which is pretty badly limiting when you have multiple accounts to maintain. 
4. GlobalProtect (by Palo Alto Networks) - This one seems to be okay but somewhat finicky. For some reason I can't connect to it using my Wi-Fi and I have to be hardwired to get it to work. Although I'm confident this is just an issue on my side, I haven't had that problem with others software so ... And again, having to install a local client prevents me from logging into other client's which is a negative.
5. SecureLink - This thing has wasted so much of my time over the years. I hate it for so many reasons. For one it's Java based and super confusing and picky. I can only get it to work from Internet Explorer and even then I can't seem to control the resolution of the RDP session or the login credentials leading to several issues. I give this one 2 of 5 stars. 
6. F5 Networks SSL VPN - This is a pretty good way to go and it seems to work well until it doesn't. But overall no issues. Really nice because there's nothing to install client side and it's SSL only which leaves me intact to work on other stuff. 
7. Juniper Networks SSL VPN - Another relatively nice VPN application that allows me to log in and get work done relatively quickly but the fact that it requires a local install and several versions makes it difficult to work with and get right. But overall it works well so I'm giving it 3 stars.
3. Security - This is a touchy subject. Most companies these days would rather err on the side of caution and throw money into a proverbial furnace rather than open up security any wider than the minimum allowable to let you get your work done. That's all fine and good until it starts to be wasteful. Case in point, the ability to do ftp. One of the first things we typically have to do as a part of an install of Lawson is download a few GB of software. Well, most of the sites we download from use FTP as their transfer protocol. If the customer has the ftp port completely shut off then we have to download several GB into a local machine first, and then upload it to the server over a super slow VPN connection. What should take an hour can now take days to complete. This is just one example of security measures that don't make much sense. FTP on its face is no more unsecure than HTTP but security consultants are quick to recommend the port be blocked. Mind you, we're not talking about transferring sensitive information, this is just software downloads. In my experience, unnecessary security measures can hinder progress and efficiency by as much as 30-40% depending on the project and the restrictions. 
4. Project management and issue tracking software - I have spent a lot of time with every software and every methodology on the market. In the past 16+ years the best methodology for actually getting work done has turned out to be Agile Scrum. There are several dozen applications that can help with managing a project and they all work well if you use them well. But please use them well and hold everyone accountable. Invest in something like Pivotal Tracker, Asana, Trello or Jira and just stick to it and make sure everyone is using it correctly. There is no need to ask me for a status report when these tools are being used, That's a huge waste of time that no one ever reads. Keeping track of issues, features, and bugs any other way in today's world should be punishable by termination. We use a combination of JIRA and Trello at Nogalis depending on whether the project requires client interaction or not. We love both tools equally. 
5. A solid single point of contact - More than everything else I've mentioned above, this one has probably saved the most amount of time. When clients appoint someone to work as my single point of contact, things just move a lot faster. This is important when dealing with access issues, change control decisions, user testing, documentation, getting consensus from upper management. When there's a single point of contact we can interface with who knows the organization well, we don't have to email a group of people or get on the phone for hours trying to figure out how to get a 5-minute task done. So assign a competent single point of contact to work with your consultants and make sure he/she has a bit of autonomy to make easy decisions. The companion point here is about putting too many people in charge. If I have to answer to more than one person, then I have to explain everything to two people, and ask permission from two people, and get feedback from two people. That's double the time for half the productivity. 
6. Access - A lot of my time is wasted because I don't have access. I would easily sign whatever document you want me to sign and give you whatever guarantees you need that I won't do what I'm not supposed to. The way I see it, if you don't trust me, you shouldn't have hired me. When I don't have proper access, I have to come up with alternative ways to get things done. That means making calls, getting others involved, sending emails, and talking to your support line or just compromising and doing things the unintended way. Just give me the access I asked for to get the job done and then remove it when I'm done with the job. You'll save yourself a ton of money that way.
7. Tools of the trade - If you're dealing with consultants, chances are you're paying $100-$300/hour for the work being done. It may be a good idea to find out what tools they prefer to work with and purchase the tools ahead of time for them. I use a text editor called EditPlus. It's like $30. But it can save me easily two hours of work each day vs an editor I don't have experience with. You do the math. (Also, give me enough admin privileges to install it)
8. A clear SOW - Before starting any substantial project, your first goal should be to determine exactly what everyone is working on. Taking the time to define roles and responsibilities well ahead of time can save you tremendous amount of wasted time. I recall my first project as an independent consultant. I showed up at the client site in New Hampshire eager to work, but no one knew what I was supposed to work on for the first two weeks. So I just sat around and bugged people for a response. This was before Facebook ;). Some of the PM tools I mentioned above can ensure you never waste your resources this way and be prepared for them when then start.

There are probably dozens of other tips I could give you to help save thousands of dollars a year on your consulting costs but the above should be a good start. If you have other suggestions please feel free to leave them in the comment section below.

How to backup your Bluehost backups (or any other) to AWS and save on storage costs

Seems like no matter how much space you have, there is never enough for the giant backup files. On one of my VPS accounts I have this issue nearly ever week where I have to clean up. 
So without getting into too much detail this is basically what I did today:

1) I stopped all weekly backups from the WHM "Backup Configuration" page.
2) I deleted all weekly and monthly backup files from the server by SSHing in and going to the /backup/cpbackup/weekly directory ... And deleting the big tar file.
3) In the bottom of that same WHM "Backup Configuration" page I checked the "/scripts/postcpbackup" option and wrote the contents of that script. Which you'll find below:

#!/usr/bin/perl

$directory='/backup/cpbackup/daily/';
$filename='mybackup.tar';

$awsDir='/home4/myuser/phpbackupdir/';
$awsScriptPath='/home4/myuser/phpbackupdir/s3_backup.php';

chdir $directory;
`gzip -f $directory . $filename`;

chdir $awsDir;
`php5 $awsScriptPath`;

The above code basically compresses the file after it's been created. This alone will save you a huge amount of space.

Then it calls a php script that I downloaded from this site which uploads the resulting compressed file to Amazon S3. Admittedly I hacked that script a bit to comment out all the archiving since my bluehost account already does that for me. 

What I love about this is the postcpbackup script will automatically run after the backup is complete so I don't have to actually call that using a cron job.

I also added a mandrill bit to all this to send me an email when it's done. 

So what do I get with all this?

Well, I get to not only remove my monthly and weekly backups from the server saving me about 10GB, I also get to compress the daily file from about 5GB to 1.8GB which frees up another 3GB.

Not only that, I get to keep 30 days of backups on AWS (so like 60GB) and anytime I need to I can access that regardless of Bluehost being up or not.

What really surprised me was how fast the 1.8GB compressed file was transferred to AWS. I took about 2-3 minutes which is amazing speed. That must mean that Bluehost is basically hosted on AWS or they have a very big pipe for that transfer.

Either way, this 2 hour project is now going to save me $15/mo and provide me with 30 days of continuous full backups. 

You can figure out the hacks for yourself in the 33_backup.php script. If you need help, leave a comment below and I can help you figure it out.

The ridiculous cost of real estate transactions and a possible solution

Most people don't know this, but I have my real estate broker's license. About ten or so years ago I put in the time to get my license because I noticed that I was paying a 2-3% premium on everything I purchased or sold. I figured if I can save myself that 2-3% and perhaps my friends and family, then I would come out way ahead of the cost of maintaining the license. 

Since then I've done dozens of transactions for family and friends in addition to those that I've done for myself. It goes without saying that I contribute a good portion of my commission to their closing costs since they're friends. Lately though I've been noticing that with real estate costs as high as they are, my commission checks are disproportionately larger than the effort I have to put it. Don't get me wrong. I put in the necessary time for anyone I represent. I make sure I help them research the properties, I negotiate everything for them and help them avoid any costly mistakes associated with escrow, title, and lenders. I go above and beyond what anyone else would ever do for them because I want to make sure they're getting a good deal. But even then, even after all the hours, I still feel like the commission is disproportionately large compared to the effort. On rare occasions when the deal  becomes extremely complicated and requires several hundred hours of research, work, and negotiation, it might be somewhat feasible to get paid more than 1.5% of the total sales price, but otherwise ...

Here's an example of a typical deal in Southern California. A couple I recently work with had a purchase budget of $800,000. I spent a few hours talking to them to really understand what their needs were. I then did some research on the neighborhoods they were interested in and learned the streets where I thought they would want to live. I drove by a few properties, previewed all the good ones and worked out all the numbers for them. So far I was about 12 hours in. I then met with them on three separate occasions to look at homes. Having previewed everything and done all the numbers saves us all time so we only had to look at about 10 homes total. They went back to the same house over and over again and eventually we ended up making an offer well below asking price. After about 3 days of back and forth our offer was accepted and with about 25 total hours of work put in, my work was nearly done. Over the next 45 days I made sure that all the paperwork was getting signed by the right people and any inspections were getting done on time. We're talking maybe a total of 10 more hours for a total of 35 hours. 

The commission on this deal was 2.5% so I stood to make $20,000 for my 35 hours of work. That's $571/hour. I contributed a substantial portion of that towards my buyer's closing costs but even then I walked away with more than $10k. I know what most agents would say at this point: "What about all the hours you had to spent finding the customer and doing marketing and ...". To them I say: "That's true with every other business also".

A lot of agents/brokers earn their commission. They negotiate hard on behalf of their client and they look out for their best interests. But the majority of agents basically list a property on the MLS (about 8 hours of work including photos), then they sit back and wait for their commission check to arrive. That's total BS. It used to be they had to do a lot more work for the 2-3%. But with technology as good as it is, it's really a click-next wizard and you're done. How does that make sense that when you sell your hard earned asset through an agent, that somehow for less than 40 hours of work, he/she gets to keep 3% of your hard earned money?! It's ridiculous. Ridiculous considering that most agents won't even put a penny into advertising your place or even hold a proper open house for you.

I know I'm going to get attacked by a lot of agents for this. But it's time for reform. Everyone should have to earn what they keep. In a perfect world, you'd pay an agent a fixed fee regardless of the price of sale and a commission for every dollar over a certain threshold. For example, if your house comps for $800k, your agents would get $4k upon sale, and 10% of every dollar over $750k. That way, if your property sold for $740, you would only pay the agent $4k. But if it sold for $800, then you'd pay him $9k. Or some sliding scale like that.

Personally, I'm not in this business to make my living. I just do it to help friends and family. And I do believe in each agent's right to make a good living if they're willing to work hard for their clients. But in an environment like Irvine where the average house sells for over $1M, and the seller has to fork over $50K in commissions (2.5% to each agent), I think there is room for a disruption and the time has come. 

How to encrypt an existing MySql database

One thing I want you to keep in mind as you're reading this, is that this is a very basic guide to quickly get some encryption on your data. It is by no means a failsafe enterprise-level chinese-hacker-proof way of encrypting your data. Furthermore, aside from just encrypting some of your data I recommend at least the following:

• Encrypt the entire disk volume that your database resides on
• Encrypt the entire database instance
• Create firewalls at every levels of your infrastructure
• Use the highest level of encryption that fits the limits of your performance window
• Get a chastity belt and a few Assa Abloy padlocks to protect your server

Now with that said, here's a super simple way of encrypting your stuff.

Let's say you have a table called user that looks like this:

As you can see, nothing in this table is encrypted, because you can obviously read it. Don't worry this is all fake data ;)

Anyway, you probably want to encrypt that email column so if someone gets into your db they can't just steal all your email addresses. Here's the quick and easy way:

UPDATE user SET EMAIL = AES_ENCRYPT(EMAIL, 'password');

The 'password' should probably be a nice long string that you're going to guard with your life going forward. What this does is it encrypts the EMAIL field with the key 'password' and updates it in the database. So now what your result set looks like is this:

Hard to guess what those emails are now.

By now you're probably a bit impressed, but asking yourself, okay great, but how the heck do I use data that looks like this in my own application? Well, I'm glad you asked. Here's how:

SELECT FIRST,LAST,CAST(AES_DECRYPT(EMAIL,'password') AS CHAR) AS EMAIL, WHEN_CREATED FROM user

Hint: If you don't user the CAST( ... AS CHAR), you'll get a blob returned in MySQL which is probably not what you want. MySql needs to know how to interpret the encrypted data once it has decrypted it. Also, If you don't say "AS EMAIL" after the casting, you'll get the whole formula as your column name and it will be pretty nasty, so this is cleaner.

Some more very important stuff to consider:

1. You should consider changing your data type to binary since this is no longer being stored as a varchar
2. You should definitely consider increasing the size of the encrypted (now binary) column because it now takes up more room and you don't want crazy errors you can't debug later.
3. Storing the key in a safe place goes without saying, but try to come up with a pretty cryptic string like 'HDIEdygygde783juinifiaaoeygyqyegyYYHGEYD' and just use that within your application to decrypt. The downside of doing this is that if you lose this key, then you are essentially screwed.

Happy encrypting

How to upgrade your old laptop cheap and in less than an hour

Let me start by saying that my laptop is my entire business. Without it I'm basically out of work. My biggest problem is that buying a new laptop is a huge time investment. I have nearly 100 programs installed on my current laptop and I love the way it's setup. I don't even have the original install files for these programs and even if I did, it would take days or maybe weeks to configure everything and install every component just so I could get my work done right. Not to mention the 40+ VPN connections I have setup for my clients that I would need to figure out again. We're talking weeks and weeks on work. Which is exactly why, my new Lenovo T430 is still in the box two years after purchase and I never stopped using my T420 which I bought nearly 5 or 6 years ago.

When I bought my T420, it was the best money could buy. It had the latest i5 processor, 8GB of Ram and a 128GB SSD (Solid State Drive). I absolutely love my T420. It's still extremely fast; the 9-cell battery lasts about 8 hours of continuous use, and combined with the docking station, gives me exactly what I need in a professional machine. I should add that I also have a 500GB SATA drive in the bay for files, so my 128GB drive is for program installs and the OS only.

So last week, as the used capacity of my 128GB drive was coming to the 95% mark, I ordered a new, bigger SSD drive ($84) and a drive cloning device ($40)

Kingston Digital 240GB SSDNow V300 SATA 3 2.5-Inch Solid State Drive with Adapter (SV300S37A/240G)

Sabrent USB 3.0 to SATA Dual Bay External Hard Drive Docking Station for 2.5 or 3.5in HDD, SSD with Hard Drive Duplicator/Cloner Function [4TB Support] (EC-HDD2)

I simply cloned my smaller 128GB drive into the new 240GB drive using this drive copier in less than 15 minutes. But to my surprise, the new drive is 3.5 times faster than my old drive. The fact that it's also double the capacity for just about $90 is a really great bargain. Especially since this exact byte for byte clone functions exactly as my old drive with all my old programs and settings intact. While I was at it, I upgraded to 12GB of RAM and now my old T420 is screaming fast again with a new lease on life and double the drive space. The cloning device was only $40 and I can use it to make backups of my entire drive each month so I am never at risk of losing my business again. Keep in mind, having backups of my data is not really as relevant for me as having backups of my installed programs and VPN connections so a simple backup drive solution wouldn't work well for me. 

The entire project took me less than 1 hour (after the parts arrived) and cost me about $160 total, $40 of which is the copier device that I can continue to use for backups. Sure beats having to buy a new laptop for $1500+ and spending weeks getting it up to snuff. 

It's worth mentioning that I ran into some issues with partitioning the new drive which I was able to fix with AOMEI Partition Assistant:

http://download.cnet.com/AOMEI-Partition-Assistant-Standard-Edition/3000-2248_4-75118871.html

Also, when I plugged the drive into the old PC alongside the same drive (so both clones were on the same machine) I got a conflict which I resolved by following this video:

https://www.youtube.com/watch?v=-1mQIJJp-bE

The single most important quality of a successful entrepreneur

Some of us are good at playing music, other at sports, or math, or cooking, or ... the list goes on. There's something about us that makes us very good at one or two things in life. It's quite obvious to me that regardless of how much I practice every day, I won't be able to compete against Usain Bolt in the 100 meter dash. He's just naturally better at running fast than I am, and that's a fact. But somehow when it comes to entrepreneurship, we don't think of one person being inherently better at it than another. Perhaps because we have seen successful entrepreneurs from all walks of life. Some short, some tall, some fat, some skinny, some with crazy wavy hair, some bald, some extroverts, some shy and introverted. But what do they all have in common? 

Running a business is a constantly evolving game and as an entrepreneur you have to act, and react faster than your competitors in order to survive. For every successful business there are hundreds of failures. Ask any entrepreneur how they feel about running a business and they are likely to not have a pleasant portrait of what it takes. Elon Musk has said numerous times that (and I paraphrase) entrepreneurship is like staring into the abyss and eating glass. I know exactly how it feels. My analogy for years had been that it's like climbing a mountain with a maze on it's surface. In recent years I have realized that it's more like climbing a mountain with a maze on it's surface while pushing a stone block. You get good at it, but it never gets easy. So what is it that makes one entrepreneur better than another? In the case of Usain it's his incredible physique, and his mental control over his facilities. I believe I have found the one factor that sets one entrepreneur apart from the rest. What makes Bill Gates, Elon Musk, Donald Trump, Steve Jobs, Larry Ellison, Richard Branson, Mark Zuckerberg, Jack Ma, Jeff Bezos, Ted Turner, Warren Buffett, and countless other successful multi-billionaires so different?


What single quality could be responsible for their incredible rise to the top? Ready? 

It's the ability to decide what to tackle next. 

Let me explain.

As a business owner, your mind is overflowing with thousands of great ideas of what to do for your business. There are countless decisions to be made and an enormous list of todos. What sets the super-star entrepreneur apart is knowing which of these thousands of things to tackle first. Execution of the task at hand is obviously important too but being able to prioritize the endless list of todos and picking the most strategic one is by far what sets the winners apart from the rest. Imagine the todo list on Elon's planner as he started SpaceX. What do you do first? Ask yourself that question. What would you do FIRST (not top ten, first) if you wanted to start your own commercial space craft company? See what I mean? It's probably akin to rocket science itself. How in the world do you decide which is the thing to do next when there are countless things to do? It's those early decisions we make as entrepreneurs that set the wheels in motion. It's the methodical way about climbing the maze to the top that sets them apart from the rest who are trying every avenue in hopes of finding the right path by accident.

So can this trait be learned? I can't be sure. How do you go about learning how to make the best next move consistently? I'm not saying all of these people make the best next decision every time, but they have a great track record for doing so. Failing quickly is a big key. If you are going down the wrong path, knowing when to stop and start over is definitely a big part of making good next decisions. I have found though that the majority of entrepreneurs I meet are very impulsive. They run with the first idea without enough pause to let the organic deduction process guide them. This is sometimes a good trait because that do-first, ask questions later attitude is also a big part of the risk-taking nature of good entrepreneurs. As with everything, practice might help. Perhaps taking 30 minutes to think things through before making final decisions is the best way to start. As simple as that proposition sounds, most entrepreneurs I've met would struggle with a 30 minute delay to taking action. I am convinced however that although practice may help, this innate ability to pick the next best move is rooted deep in the DNA of the super-star entrepreneur. Do you have it? Only one way to find out.

Things I take for granted part 2 : Washing machines

It's Saturday. You roll up your sleeves, gather all the sheets, clothes, rags and towels and bundle them up in a big batch. You mount the bundle on top of your head, grab your washboard, your

pack of lye, your bristle brush and prepare for the 6 mile walk to the river bed to put in a good 8 hour day of work washing it all. In much of the world that's still the way housewives clean the family's garb each week. It's back-breaking labor and almost none of us in the modern world have ever experienced it. 

I even left out the wringer used to wring out the water, and then having to carry all the wet clothes back home to hang on lines and waiting for a good day of sunlight so they can dry. Not to mention that if it rains or snows you have to start the process over again. It's quite ridiculous to a westerner that this is even a reality anywhere in the world. What's funny is that it's likely that your parents or perhaps grandparents can remember a time where they had to do something similar. Most likely though they had plumbing inside the house and they filled up a few tubs with warm water and saved themselves the walk to the river. 

Knowing this, it's incredible that we complain about having to do laundry. I literally have to walk about 8 feet and dump everything into the machine, hit a couple of buttons, and then watch 30 minutes of TV while millions of scrubbing bubbles magically and gently wash the grime out of my clothes and magically soften the fabric.

So next time you have to do laundry, pour your self a glass of wine and give a big hug to that massive white box that does all the work. And for the love of god, stop bitching about having to do your laundry.

The minimum wage debate and why it's ridiculous

I have so little time to write these days and in fact I'm writing this on my only break of the week. I writing because apparently, according to the numbers, most of you reading the article think the minimum wage should be at $15 instead of whatever it is in your area. Supposedly because you don't think there is any harm in increasing the minimum wage. Well follow me down this rabbit hole for just a few minutes and if you still think the minimum wage should be set by the government and imposed on all employers then you will probably always make the minimum wage. Here are a few things to consider:

1) The minimum wage doesn't just affect the people making minimum wage. If you're currently making $15/hour, you're likely not in an entry-level position at your company. The problem is, if the new minimum wage is $15, then your wage will have to increase to at least $20 to keep you at your current job. So the wage increases affect your employer's entire payroll, not just the people they're paying minimum wage to. 

2) The reason minimum wage jobs exist is to allow for entry level jobs from which you can pull yourself up with your own bootstraps. They are not meant for you to stay in for life. If you're making minimum wage right now and you don't have a solid plan for how to work your way out of that position and into a higher paying position then what is lacking is ambition, not regulatory policy. If we were to increase the minimum wage to meet living standards of a city like Los Angeles then there would literally be no reason for anyone at the minimum wage to ever excel in life. All the people with no drive in their life would basically stay put in their position and make a living. 

3) I don't pay people minimum wage, because I know that as a business owner, if I want quality people to work for me, I'll have to pay them what they're worth. Most of the consultants who work for me make over $100/hour. That's how the free market economy works. So why do I care about the minimum wage? Here's why: Let's talk about Costco. Costco is known for limiting markups on items to 14%. In the quarter ending 8/31/14 Costco had $35B in revenue with $34B in operating expenses. They don't really report what percentage of that is labor but they do report that $3.4B is from "Selling/General/Admin. Expenses". Which includes labor. The rest is likely just the cost of product. So that $3.4B comes right out of that $14% mark up. Now if we increase minimum wage $9 to $15, that's a 66% increase in the minimum wage which is likely to eat right into that 14%. Costco doesn't pay anyone the minimum wage, in fact their average is $19 per hour, but remember, raising the minimum wage increases all wages (see #1). So now what? Well, no problem, Costco will just increase their markup from 14% to say 20% to make up the difference because if they report any less they will lose all their investors. So that increase is going to come directly out of the pockets of all the people who buy from Costco, including those who make the new $15/hour minimum wage. And their landlords, and the people who provide them services. Everyone's costs will go up tremendously which will inevitably increase all prices of all goods and services. Much like the increase in the price of gasoline (another basic business expense) has raised prices over the years across the board. At this point you might say, well who cares? Everyone gets paid more and everything costs a little more, so who are we hurting by increasing the minimum wage? We're hurtin the dollar. Because as you noticed from above, it lost value almost instantly. The other problem is that the wages don't increase by the same amount in China, India, Europe, Brazil and the rest of the world and the dollar loses a lot of ground in the world market. 
Don't believe me? Check out this graph that the pro-minimum-wage-hike side has put together to demonstrate the plight of the lower working class. To me though this represents the fact that the value of the dollar is directly affected by changes in the minimum wage.

4) The small business owner will have to find new ways to eliminate labor as the cost of labor begins to match the cost of technology that will replace those workers. (See local grocery store check out line robots.) Business who can't cut labor costs have two options: 1) Go out of business 2) Increase prices and risk losing customers. And many times those lost customers are not just going to the competitor, they're going away for ever. When the price of a pizza goes from $19.99 to $26.99, the consumer doesn't just go to a different pizza place, he stops ordering pizza and makes a sandwich at home. The pizza place dies and so do the dozens of jobs it was creating. Including the jobs it was creating indirectly, like jobs at suppliers and service providers to whom the pizza place was a customer.

5) You might say that a rising tide lifts all boats. True that! The minimum wage goes up, so all wages go up, so prices go up, so rents go up, so the living expenses will not be met by the minimum wage, so the minimum wage goes up, so all wages go up and on and on and on. 

In short, increasing the minimum wage is like saying that there are people drowning in the pool. But instead of teaching them how to swim and get out of the pool, you move the pool to the 2nd floor of the building. Guess what?! The same people will still drown. 

So to those of you who now hate me because you make minimum wage, or close to it. I will leave you with this. I worked at a restaurant while I put myself through college. I got paid minimum wage at $4.25/hour while the average rent in the city I lived in was $1200/mo for a two bedroom. The average rent is now $2400 while the minimum wage is $9. Same same. But the only thing different is the dollar is now worth half as much. I worked hard at that restaurant and the wages were a joke. But I knew that I had to find a way to change my station in life. It never even occurred to me that the fix would be to bitch about the minimum wage. I knew that if I worked harder, and pushed my way through life I would eventually do better. 

Low paying jobs are an incredibly important part of the economy. They are absolutely vital because to employ the very beginner work-force, a very low wage is required. The investment a business has to make in a entry-level employee who is not generating revenue is tremendously high and it must be offset by a very low wage. Once you have gotten that training and experience it's up to you to move to another job. The employers know this and it's figured into the low wage. That's why the wage is low. So you get yourself out of it and make room for the next guy who is going to work his way up. Instead, we raise the minimum wage, which keeps people in those jobs and doesn't allow for the entry-level work force to enter the market because the minimum-wagers are hogging all the jobs.

The minimum wage is NOT meant to be a living wage and it should NOT be! It should instead inspire you to learn new skills, make new connections, and lift yourself out of poverty. A low wage job is what makes America a land of opportunity, because anyone who wants to work, can find a legal job to do. It might be at a low wage, but that's how you start, it doesn't have to be how you always live.

Put all your love or hate in the comments below.

5 things you should stop complaining about right now

All I hear lately is complaints. From people right here in the US. The most comfortable, abundant country in the world. Most days, your biggest problem is: "Dude! I ate too much, I feel sick." Or, "Man, I am so hung over, we drank way too much this weekend." Here is a list of 5 things you so called "intellectuals" complain about every day and why you should just stop.  

Lack of jobs

If you spent the time you have spent complaining about and analyzing the job market in the US on learning some 21st century skills like social marketing or software development you would probably have a new lucrative career by now. But no, you'd much rather bitch about how Mexicans are taking our jobs and waa waa India, waa waa China, waa waa Phillipines. They moved your cheese, get over it, find new cheese already. For god's sake, it's never been easier to make a bit above minimum wage. If you own a car you can be an Uber/lyft/sidecar driver in in less than a week. You can do any of nearly 10,000 tasks for $5 on Fiverr and make a living. You can sell stuff on eBay, Amazon, Etc, etc...
So please, stop complaining about the job market and change your state in life. It may never be as good as your mortgage days, but you can earn a good living and have a roof over your head and food on your table if you are willing to, umm, you know, work. 

Global warming

All your environmentalists make me sick. You think you're saving the planet with your Prius or Tesla or whatever and scoff at the likes of myself who drive a 20 mpg vehicle. Well, lets get one thing straight. If you even take a single commercial flight each year, your carbon footprint is increased by 10,000 times what you "saved" with your electic "car". The earth is not dying because everyone isn't as smug as you. The earth is dying because you don't understand the impact of the things you do. Blaming global warming on cars is like blaming your obesity on, ummm, Chicken. Yeah, sure, chicken has calories, and you can get fat from it, but you should look into that after you cut out pizza, doughnuts, ice cream, pasta, garlic toast, chili fries, and fried rice. 

GMO products
Do you know where you would be without GMO products? Not alive. And I don't mean that you would have died by now. I mean that you would likely never have been born. The world's food supply depends largely on mass-farmed products. It has to because there is now just way too damned many of us, and we love to eat so goddamn much of everything at our favorite time, not only when they are in season. Well, guess what, melons, lettuce, apples, and tomatoes don't just grow all year long. So unless you wanna stop eating those things 6 months out of the year, I suggest you educate yourself about GMO foods and direct your opposition to the subset of them that hurt us rather than the 90% of them that help us survive. True, GMO foods are engineered for the wrong reasons and more commonly than we would like, but if you don't understand GMO, and just run your mouth about it ignorantly, all you are doing is hurting your own cause. 

High gas prices

This is my favorite one. At the time of this writing Current price of Petrol (Gas) in the UK is £1.34 (and higher) per litre. 1 US gallon = 3.78541178 litres so the true price of a gallon of gas in the UK in American dollars is about $10. That's more than twice what I paid at the pump today for 91 Octane ($4.10). In fact its 2.4x the price. And the UK is not even the highest prices. According to Bloomberg, UK is #13 on the list with Norway, Netherlands, and Italy rounding out the top 3. The US is actually number 51 of their list of 61 countries. With Venezuela paying only $0.04 per gallon of gas, followed by Saudi Arabia and Kuwait at $0.45 and $0.81 respectively. But get this through your head, if you are NOT okay with us getting involved with wars in the middle east and you don't want our troops to be all up in that bitch, then you CANNOT at the same time complain about high gas prices. So to recap, our gas prices are actually quite low compared to nearly every other civilized nation (Although we do spent a disproportionate amount of our income on gas at nearly 3%). And, you can't have it both ways, we're either the a'hole super power causing sh*t in the middle east to get our foothold on where the black gold is, or we end up paying as much as all other European countries. 

China is stealing our products

This one sucks. I agree. But have you ever read Sun Tzu's Art of War? You really should. This is just textbook stuff to the Chinese. In a war, and the economic war is a war, every thing you do is fair. There is no honor in losing because you were fair. In fact, the sneakier you are, the higher the praise. So if you found a way to cheat and get your way against the enemy, then good for you. If you lost, because you didn't take advantage of obvious things like infringing on patents and copyrights, then you have dishonored your troops and country by being a bad general. Win at all costs. So knowing that mentality (and obvious cultural difference), you can sit there and whine and bitch about how China is stealing your junk, or you can develop better customer service, refine your product, and win the heart of your customer with good marketing. And With all the time you'll save not crying, maybe you can find a way to screw the Chinese out of a couple of bucks while you're at it. 

Waaaaa

I HaZ Bitcoin

Many of you have asked me what the heck Bitcoins are. Well, I spent 3+ hours today trying to get this video right in one shot. Every time I went on a huge tangent about currencies so I had to start over and tried really hard to keep it simple. But it's just not a very simple discussion. 

Challenge: If you're part of the first 100 people to subscribe to my blog and put  your public wallet address in the comments, I will deposit a small fraction of a bitcoin into your wallet. It won't be much, but it will get you started. Offer ends 1/1/2014 :)

Cheers