Deciding whether to rent or buy is an age old question, and one that leaves many people confused and misguided.  Many people are ill prepared to deal with their emotions about the subject and make decisions with clarity. Financially, it is one of the biggest decisions you can possibly make, so making a purchase decision without some key bedrock financial understanding is akin to going into a gunfight with a water pistol.

When do I rent and when do I buy?

Many people hinge their success in life on owning a home. They are convinced that renting is just "flushing away money" and that home ownership is a right and a privilege that every American deserves. They leverage themselves to the limit, and end up with a 30 year mortgage that, even at today's low interest rates, will have them paying for that house twice over by the end of the term. In NYC, with its high property values, an average middle of the road home can easily go for a cool $1,000,000. By the end of the loan, at 5% interest (if you can even get a loan for that low a rate) you will end up having paid $1,932,588 for said home.

"But I'm building equity, right?" Actually, not as much as you think... Sure, you have the initial 20% down payment that you put into the property to secure the loan, in this case $200,000 (as banks typically want at least 20% plus excellent credit to consider a loan right now) but what happens if you need to sell and the market is down? You have effectively lost equity. Many people who bought at the top of the market in 2007 are now underwater on their loans, they effectively have negative equity. Even if they sell, they will still owe the bank, which leads many of them to be foreclosed upon, walking away from their homes and forfeiting not only their sunk capital but their credit rating. In fact, if you look at and play around with the amortization chart/schedule calculator here, a few things become clear. Firstly, most of the interest is paid in the first half of the loan schedule, in fact, you pay more interest than principle for each payment in the first 193 months of the life of the loan. That means that after paying diligently for more than 16 years you have only paid down about a third of the actual principle balance of the loan. The first year, your payments are comprised of about 83% interest, toward the last year they get as low as 3%.

Now lets look at a rental scenario for a comparable property. Since property values are so high in Manhattan, you can typically rent for about half of what a property would go for should you decide to buy... Using nice round numbers, a $1,000,000 carries a $5000/Month price tag (its actually usually more when you factor in maintenance, insurance, taxes, upkeep etc) when a similar apartment can usually be rented for about $2500 a month, where the landlord pays for maintenance, insurance and taxes. If your dishwasher breaks and you own the place, guess who foots the bill... exactly, it's you. Again, these are rough numbers, you can figure out a more precise scenario for your given situation, this is just to illustrate a point.

Now lets look at two people, Renter Randy and Buyer Betty. They have the same amount of cash and the same income, lets say they are equally qualified to purchase or rent the same properties. Buyer Betty puts down her $200,000 down payment on her $1MM property and pays $5000 a month plus all of the aforementioned extras for her 'owned' apartment, but builds very little equity in 15 years. In that same time, Renter Randy decides to take that $200,000, plus the extra $2500 a month ($30,000 a year) he saves and wait for dips in the market to buy index funds. Even passively purchasing equities at regular intervals, based on the performance history of the S&P 500 and adjusting for inflation, Renter Randy can expect an 8% per year return on his investment over time. We use a savings calculator to and an amortization schedule to figure out where each is at the end of this first 15 years.

Buyer Betty, who started out with a $200K down payment and paid diligently for 15 years, only has built about up to about $456,929 in equity, including her initial down payment, and still has another 180 months (15 years) of payments to go before she pays the remaining balance of the loan ($543,071). During this time, she has paid to maintain and fix up her home, as well as insurance and other extras that come with being a diligent homeowner. Not to mention that she is glued to one place... A renter can pick up and change scenery whenever they feel like. A home can take months if not years to sell, and you lose on commissions, lawyers, and all the hidden extras that come with a home sale.

Renter Randy, however, despite "flushing" his money away on rent, has diligently been investing his initial $200,000, plus the $30,000 per year he has saved by not buying, and spending the extra monies left over-- which were not spent on dishwashers, maintenance, insurance, taxes etc-- on vacations. His annual rate of return has been at least 8% after inflation, and he now has turned his initial $200,000 into a cool $1.3 Million. He can now use this money to buy a place outright, or if he is now in love with renting, as he should be, continue to rent and live off the interest. He now has options, which are much better than obligations.

Now I know what you are thinking, Betty not only built equity, but her property has probably appreciated some too in that same time frame. Perhaps, but as we have seen in the housing crash in 2008, you can't count on appreciation. Its a lazy and dangerous way to invest. A seasoned investor knows that cash flow is king... the only good investment, or true asset, is one that puts money in your pocket. Betting on appreciation is akin to gambling. The debt she secured is also a huge liability.

There are some scenarios when it does make sense to buy instead of rent, but typically home prices in major cities such as New York preclude this from happening. Luckily, after many years of keeping my ear to the ground on real estate as an agent and also an investor, I have learned a very easy rule to quickly determine not only whether it is better to rent or buy in a particular area or market, but whether or not an investment will potentially be cashflow positive, which is what a sophisticated investor should be interested in.

The 1% Rule... A home that you can rent monthly for at least 1% of the purchase price (at current interest rates) will typically be cash flow positive, assuming the maintenance is not extensive.

Now if you apply this to your $1MM home, there is nothing on the market that you can purchase for $1MM and rent for $10,000 per month. A $100,000 home going for $1,000 a month in rent is not unheard of, and in fact is a more common scenario around the country. If you would have to pay $1500 a month to rent a place that costs $100,000 to buy, you are actually saving money by purchasing the home, even when you take interest into account. If you are renting it out, the cash flow would typically be positive. This gives you options.

REO's (Real Estate Owned) are typically very cheap compared to the open market, and hard negotiations coupled with motivated sellers can produce amazingly cheap deals. REO's are simply homes that the bank owns but cannot collect on. They have foreclosed, put it up for auction, but still have no buyers. These homes are essentially toxic assets, they still have to pay for the taxes and other lawful obligations, but are usually not allowed to collect rent, as most places have laws that preclude banks from making money any other way than from lending. A bank does not want to be a landlord anyway, they want to make money by borrowing cheaply and lending money at higher interest rates.  What this means for an investor is that you can usually come in with a lowball offer and pick up these toxic assets cheaply, then fix them up and rent or sell them. 

If you choose to build a rental portfolio, which in my personal experience is more headache than its worth, you should always be sure that in almost every scenario that you are cash flow positive. You should be consistently clearing at least 8% cash on cash return, and building equity at a favorable rate. There is still a lot of friction in this business model, and high overhead. Bad tenants, bad property managers, maintenance, taxes, insurance, and lawsuits (some are just unavoidable, no matter how good a landlord you are) will all eat into your profit and cause undue stress. Buying established blue chip dividend stocks when they are on sale is my personal preference for excess cash. They are reasonably liquid, and if your timing is good, go on sale much more often than homes. Also, no maintenance, no headaches, and long term capital gains taxes are very low when compared to earned income. You simply have to have an eye for a bargain and keep tabs on your companies performance. Index funds are even less maintenance, you get inflation protection, dividends, and liquidity benefits. Or you can simply build low friction high yield cash flow businesses. Ask me for more info on this. 

I understand this is grossly simplified, but I hope this helps at least see the bigger picture. If you have any specific questions please feel free to drop me a note, or better yet, do some of the math and see for yourself. I used the Mortgage Calculator App from SVT software and CreditKarma.com for the mortgage calculations and amortization schedules respectively, and the SaveCalc App (pictured above) for the compound interest calculations.

Its easy to fall in love with an idea, but as but any serial entrepreneur will tell you, its all about the execution.

I had correspondence with a doctor from the Midwest this morning, who was asking for a few ideas to kick start his goal, to make income off of low maintenance business ideas. My response read like a blog post, so here goes.

An excerpt from the email I received:

"...Anyway, I came across your blog after looking up stuff about lifestyle design, which I became more interested in during my medical training while working 60-80 hours/week. I have been on a break for a few weeks between finishing my training and starting my practice, but still will probably end up working in the 50-60+ hours/week range as a practicing physician. All of this has recently inspired me to start a blog of my own and to make contact with some people that seem to have a good plan in terms of lifestyle design, and to learn what I can.

I was looking at your post 'Anatomy of a Perfect Week', and without being too nosy, I wanted to ask you what kind projects you work on in terms of 'passive income'? How much time per week do you think you currently spend on them, and how long did you spend setting them up?

Other than the books you mentioned in your most recent post (4 Hour Work Week--which I've read, and One Simple Idea--which I'll add to my eventually to read list), do you have anything else you have found to be a good guide (books, blogs, people, etc.)...."

My Response:

Greetings ,

Thank you for taking the time to reach out. I appreciate that you took the time to read my blog and am encouraged that you are looking for ways to work smarter and increase your passive income.

I have toyed with a lot of investing/cash flow business models over the years and I have found the most simple approach is two pronged. Ideas typically come cheap and easy, its really the execution that is key. Most people have an idea, which could even be a great idea, but without a hand-in-glove plan to implement it, they will never see a dollar from it.

I have extensive knowledge of the ins and outs of New York Real Estate, which is a muddy, convoluted system that intimidates people and costs them a lot of unnecessary money. While there are many who would like to rework the entire system, the issue is that a few massive landlords control much of the rental real estate, and thereby can skew business practices in their own favor. Most of my products, consulting DVD's, websites and the like, stem from this narrowly held body of knowledge that I have acquired over years of being an insider in the industry. I prefer to keep these sites and products separate from my personal blog, so that I can control my message--- my music, musings and life lessons are the priority on AnonymousExploits.com

Essentially it boils down to what you know. Once you have a product, which in your case could be medically related, like a book, a DVD, a widget, or perhaps a supplementation, exercise or diet program, that you know everything about, and people want to learn about, it's easy to implement a low friction framework to distribute that paid content via the internet or as a "muse" type business as outlined in Tim's book.

For other types of ideas, which are either too complicated, you don't have expertise in, hard to compete with, or simply improvements on a current product or service, this is where Stephen's book will come in handy.

Let another, more established company run with it and send you a check.

I basically go through these steps when evaluating a product or service:

Does it solve a problem that needs a solution?

Would I buy it? More importantly, is there a verifiable (see testing methods in 4HWW) market?

Does it fit into a pricing structure that makes sense, can I make my margins?

Is it shippable, outsource-able, and (most importantly) scalable?

Will it take up a lot of my time and energy?

Is there repeat business/cross selling opportunity?

Obviously, this isn't all that I look at when evaluating a venture, but if you can get positive outcomes from looking at all of this beforehand, then you can dive in headfirst. I think of ideas all day long. I just don't implement most of them. I can spend a couple of months to a year setting up a venture, but I plan for it to generate income for at least 5-10 years. By setting up, I mean getting it to the point where all the kinks are worked out with the structure and I can focus on marketing or just sit back and collect revenue. All of the excess cash I generate gets invested in other ventures, or put into low risk dividend heavy portfolios, with index funds and a few promising small caps. I choose not to invest in real estate myself, because despite the fact that I know quite a bit about it, it does not fit into the uber low maintenance lifestyle that I fight to maintain. The point is not to be lazy, I work very hard, but the less fires I have to put out, the better. I am writing posts on various ways to invest, more to come.

I hope this helps get your creative juices flowing. It gets easier with practice. Just remember, execution is key. The Winkelvii might have had the idea that eventually became Facebook, but without proper execution, it would never have become what it is today.

I could mention a number of other blogs and books, but I wouldn't want you to fall into paralysis by analysis. Get started. If implemented properly, your plan shouldn't cost much, and you can correct course along the way. As long as you pay attention to materials we already discussed, you are well on your way. Plus, Paul McCartney once told me that I shouldn't drop names. ***

*** (Joking, though I'm sure he's lovely)

I think Yoga saved my life today. This isn't some melodramatic cry for help.

I remember many years ago, back in my college days, when I was struggling to figure out what elective looked like the most fun, but also would be co-ed. I had played Lacrosse and Football in High School (not spectacularly well I might add) and I was looking for a sport that didn't have all the BS male hierarchy, where I could focus on my main goals at the time: finding a reprieve from the voices in my head, and getting more comfortable around women. Yoga classes fit the bill nicely.

As for the voices, you know, the annoying ones that tell you that you aren't good enough or you don't deserve the best in life, I, and all the honest people I meet, battle them daily. The most successful people I have met don't seem to have less voices to contend with, just much better coping mechanisms. It all comes down to how well you treat yourself and what your core beliefs are. People will flock to you if you have a strong center, but without one you may as well be a homeless leper. Everyone will sense your gaping hole-- your validation seeking behavior-- and run away screaming.

As for women... I grew up an only child, raised by my dad, in a neighborhood full of skinhead idiots. Not a lot of girls found their way into my social group. My mother was in effect the head of the family and main breadwinner, because my dad was disabled, so she never got to act as a motherly influence. She had left my father and found someone new, so I didn't get to see her very often. She was also weary, the oldest of seven, and had spent her entire life raising kids. Hindsight being as clear as it is, it seems logical now that a lack of socialization with women at a young age had left me utterly lacking in skills that everyone else seemed to possess. Some of the neighborhood guys, like myself, ended up eventually having more than our fair share of success with women, and some of them are still girlfriend-less to this day. The funny part about it is, despite being a grown adult with tons of experience with the opposite sex, its not a given that on a particular day that I will be comfortable approaching a girl I like. Other times I am unstoppable. Its tough to talk about, most people don't really get it, and I don't blame them. It's not easy to rationalize. It's also extremely frustrating. It messes with your feeling of self worth and drains your energy. You feel like a failure every time you walk by a girl you fancy and don't talk to her. In NY, this happens every 5 seconds.

I have read that a man's fear of approaching an attractive woman harkens back to an evolutionary mechanism that has long ago outlived its usefulness. Seems likely enough, but has been covered to death elsewhere, so I will not rehash it here. Alcohol is most people's crutch and social lubricant of choice, but I don't want to use crutches anymore. This throws another spanner into the works, because now the voices, especially the "What if" scenarios which seem to never play out, are in full force. It's really easy to get in your own way.

What I am realizing is that being outgoing, gregarious, and comfortable in social situations, traits which I fought hard to attain my whole life and pride myself upon, aren't learned and then retained. Like high school Spanish, if you don't use it, you lose it. There is no magic formula. You could be the best guitar player in the world--- and I was damn good at one time--- but if you don't continue to practice diligently, you will not maintain your edge.

So back to the point of this post. I have resolved to get back to where I am comfortable in my own skin, as the past year has been one of loss, loneliness and hard lessons. My social comfort level had damn near bottomed out. My biggest fan, and the one person I could call anytime for advice or to vent, a man who raised me, who loved me and was proud of me unconditionally, was gone... and now I have to be my own biggest fan and learn to love myself first again. To treat myself like my own best friend. To be comfortable in my own skin and sharpen the skill sets to be a master of any situation that I find myself in. I will accept no less. I know this is an arduous, but worthwhile, pursuit. I know that the payoff is huge but will cost dearly-- many years of time and dedication to being the best version of myself possible.

I have had many successes that would make me seem invincible, but there are still cracks in the foundation. Instead of hastily patching them, I'm gutting and starting from scratch by laying a new one. Now, after a few less than successful attempts at getting out of my own way, I decided to check out of my mental spiral and get back to basics. That's where Yoga brought me back from the brink. It may be the only practice that completely silences the chatter for any extended period. It is something that I plan to master and keep as part of my routine. It may just put off the end of the world, at least for me. Thank you Yoga to the People on St. Marks. Namaste.

Do something physical, every single day.

Don't stick your head in the sand, at least not before you have considered all of the alternatives...

A friend of mine recently emailed me to ask for career advice. He was contemplating becoming a Real Estate agent in NYC, a subject which I am intimately familiar with, having been both a Real Estate agent and now having started my own company. So I set out to answer his questions and hopefully save him a lot of legwork, then promptly realized that it would probably be wise to make a blog post. So here goes.

With the economy the way it is, I have a theory. I don't believe we will see a return back to the established ways of working for a company, where you are employed, have benefits and a salary, perhaps some stock options and a 401K, and on our merry way we go. Under the old regime, showing up, punching a clock and being told what to do was the accepted norm. Realistically, those cushy jobs of yesteryear will most likely be replaced (although not overnight) with self employment and freelancing work. People will be expected to think and act more like entrepreneurs. This simply means that they move their resources from areas of low yield into areas of high yield... that they create jobs for themselves by finding and exploiting a particular niche, either with a product or a service. Its no longer the strongest resume that will survive, its the person who is willing to think and act outside their comfort zone, to be most adaptable to change. Each person will, in effect, become their own corporation.

For some of us this is a no brainer, but for the other poor tormented souls that have either never thought of an alternative to 9-5 drudgery, or the others who perhaps are too afraid, I understand. Here's some required reading to get your juices flowing.

"The Four Hour Workweek"-- Tim Ferriss. Tim was the one most directly responsible for showing me the door to freedom from the accepted path. His message is not to be mistaken, however, while you can make a lot of money doing very little "work", the key is not to be idle. Tim is in fact one of the hardest working people I have ever met, and an inspiration. If you are ready to see how deep the rabbit hole goes, pick this book up. Just get ready to have every notion of hard work you have had instilled in you purged forever. Don't say I didn't warn you.

"One Simple Idea"-- Stephen Key. I rave about this book because it gives you an alternative to the all or nothing approach that most entrepreneurs feel they need to have when thinking of ideas. Stephen's step by step, formulaic approach will allow you to position yourself and your ideas to make you money while you sleep, leveraging giant companies-- with huge brands and marketing ammo galore--to do your bidding and send you checks. It doesn't need to change the world, but if you can turn a good idea into steady cash-flow that will free your time to do the truly important things in life. At the end of the day, time is the most valuable commodity we have, and the less we spend on generating income, the better.

I could go on and on, but this is a solid foundation to get you started. Once you have the income thing sorted out, the real fun begins. Trying to figure out what to do with your life. This is more insidious than it looks in 12 point font. It will consume you and possibly destroy you, at least for a time. It is necessary for growth however and living the life of your dreams is well worth the pain you will have to endure to get there.

But I digress, here is the advice I gave to my friend, and it is helpful for anyone looking to break the shackles of traditional employment.

When you are self employed/ an independent contractor/ freelance worker:

1) You receive pre tax income and are expected to pay your taxes based on your estimated income every quarter. I would recommend keeping a separate, high yield savings account to keep the money in in the interim and hiring a great accountant who is familiar with business and preferably real estate (or whatever business you are in) accounting. You don't want to deal with paying penalties or being audited by the IRS. A great accountant is key here, and they are cheaper than you think.

2) You are responsible for keeping your personal finances separate from your business expenses. I accomplished this through forming an LLC (Limited Liability Corporation), which also, as the name implies, limits my liability in transactions. I have carried this company over to my current business, and have set up separate accounts, credit and debit cards, with automated checking, for my business. This effectively shields my assets. If, god forbid, I was to be sued, they could only sue for what the business owns, and not what I own personally. This is key. If you are in business long enough, no matter how good your intentions, you will go to court at some point. An ounce of prevention is worth a pound of cure. You don't want to lose everything due to some ridiculous circumstance beyond your control.

3) Health insurance, while you may be able to negotiate a bulk rate through a company you are working with, or a freelance union, is primarily the responsibility of the independent contractor to provide for himself. I did extensive research and weighed all the potential issues accordingly, and found the best option for me to be to get what is called a hospital plan, which covers me in case of catastrophic emergency, and costs about $180 per month through Empire, which is a NY based carrier. I still pay out-of-pocket for doctor visits and medication, but all of this is deductable through my business (check your local laws, don't take my word for it). I hedge against this by keeping in shape, supplementing and dieting to stay healthy and avoid trips to the doctor, I haven't been sick to the point of needing to go to a doctor more than once in the last year. (Edit, went to the hospital after returning from Kenya with a nasty bug, but only needed fluids, and everything was covered by my plan) Conversely, having full boat coverage health insurance (medical, hospital, dental, eyes etc) costs easily $700 or more per month and you still end up paying copays and specialists anyway. I see the extra savings of $6000 minus a few out of pocket expenses as well worth it. If I were to be hospitalized, however, the typical stay in the US can run up to $7000 a day, which if you're keeping up with the math is over three years of premiums. This way if I have an accident or serious illness I don't get cleaned out (medical bankruptcy is very common in the US) and I still save money. Last year, with all things considered, I paid less than $3000 in medical care/blood tests/insurance and used the money I saved to get PRK and have laser enhanced jet fighter pilot vision. Most of these expenses were tax deductible, unless it was an elective procedure, like the PRK. That I paid from my personal accounts. Ask your accountant for specific advice on specific purchases.

I hope this helps if anyone is trying to break free and work for themselves. The worst part is having to figure out all the little things all over again, all the little ins and outs and nuances that used to just be taken care of when working for a company or living with your parents or going to school. The end result, however, is much more satisfying, and saves you money. Income is (at least in theory) unlimited, and corporations pay the least in tax.

I recently heard that the top 400 highest grossing personal tax returns in the US in 2010 paid an average of 16% in taxes. The rich hire people who know how to exploit every loophole, and you can do it too for less than you think. I have no problem with paying taxes. I am patriotic and I like having most services that they pay for, but the more money I get to keep the better. Again, don't assume anything. Get a competent accountant (and lawyer if your situation affords it) and make absolutely sure you are doing the best you can without being a cheat. Paying taxes is a good thing, it means you are making more than you are spending. See it as an accomplishment and a civic duty, and work on using your extra money for something charitable. I am definitely in the "teach a man to fish" camp, as I would much rather give people skills to provide their own livelihood than just throw "lazy money" at a problem, but that is a topic for another post.

I put my latest EP- Dreams - up on iTunes, Amazon and more!

Check it out, and don't forget to rate and leave a review. This is the culmination of a lot of hard work and I hope you enjoy the music.

Here is the link to iTunes

Here is the link to Amazon, in case you want a physical copy

Thank you everyone for all of your support and kind words! :~)

I have been dormant for quite a while. I feel that the best writing comes when you have something experiential to write about. Doesn't make sense to force it. It will come out when it is good and ready.

I spent some time traveling, meeting and interacting with some people I admire. I have learned a lot and hopefully opened some doors. As it would be imprudent to drop names, I will simply share what I have learned from them in no particular order. I feel the lessons are important, and maybe someday when it is no longer taboo, I can fill in the blanks.

Don't take advice from people who wouldn't follow it themselves. This also goes for people who don't do anything to better themselves in general. It's very easy to prescribe advice but hard to take your own medicine.

I got invited to visit North Korea. At first I was excited. I thought, how many people (especially Americans) get to visit this place? Imagine all the things that I could learn? The stories I could tell when I returned? My head was spinning from the possibilities. In reality, N. Korea is a dangerous place run by an insane dictator. I have heard that Kim Jong Il is a movie buff, he collects every American action movie that he can get his hands on, despite the fact that his people are forbidden to watch them. The interesting part is, he thinks that American action movies are all based on true stories. In his mind, Rambo was a real guy running around gutting entire battalions in the jungles of Southeast Asia. Maybe this is the reason he won't try and start World War 3, he's afraid of our imaginary super soldiers. I guess that's not a bad thing, in and of itself, but do I really want to be at the whim of such a delusional man who would be completely in control of whether I got to ever leave his country again? I don't think its worth the risk. Last time I checked, we don't negotiate with hostage takers, so if things went south, I doubt I would be getting a SEAL rescue.

You shouldn't ever eat alone, whenever possible. This is good for your networking efforts as well as your sanity. You don't want to spend too much time up in your own head, things get lonely and warped in there after a while.

Ask yourself: "Has this place taught me everything it needs to?" If the answer has been "Yes" for too long, it's time for a change.

I learned some Swahili while traveling through Kenya. Though one of my travel partners put me to shame, he was like a sponge. I was thoroughly impressed with his skill at deciphering, pronouncing and recalling a new language so quickly and painlessly. I will work on this.

Don't be afraid to ask tough questions, in private if necessary. Call the person aside and ask them what you really want to know. Only, be sure that you could answer the question yourself if it were posed to you.

You can have it all, but you can't have it all at once.

Treat yourself no worse than you would treat your best friend.

Read often, and don't waste time. Fill every day with meaningful activity to keep the brain active and nip boredom in the bud.

Do something physical every single day. It could be a workout, a sprint, a dance class, fighting, or even just a long walk or some good old fashioned manual labor. Your body and mind will operate at a much higher efficiency. You will sleep better and your moods will be more predictable and stable, with less swings.

Evidence suggests that we may be able to cure certain mental chemical imbalances through good diet and avoidance of sugar, high glycemic index carbohydrates, alcohol and caffeine. Interesting. I have cut down dramatically on all of the above, and I must say I am in the best shape of my life. I won't claim to be superman, I still have my ups and downs, but I feel better than I have in a long time. I am dubbing this the CASE protocol: Limit Caffeine Alcohol Sugar and make sure to Exercise.

Content is a form of prestige in modern society, and can be used to incentivize altruism. It will keep our civilization moving in the right direction, avoiding the inherent pitfalls of the information age.

That's all for now, big things in the works. Stay tuned.

B

Too often these days are we set against a rising tide of distraction. The news, social networking, email, the stock market, work, errands, bills and endless other mindlessly-distracting-time-sucks take up all of what little attention we have. Due to recent information overload in my own life, and the decline in quality of life that it causes, I am instituting a more balanced week. This change is necessary for my own sanity, and because I truly believe that it will allow me to be more productive than my current method... endlessly banging my head against a wall of information I can never fully process.

I will not go crazy trying to stick to a schedule, as we all know that life is what happens when you make plans. I will instead try to institute a few guidelines, and section off days in the week for different tasks, reminding myself to not devote too much time to any one, as they are all important for different reasons.

Mondays

Everyone has it out for Mondays. Since I have never had a regular 9-5 schedule in all but one of the jobs I've worked at, and seeing as I now work for myself, they haven't really stung my psyche or been a source of dread since grade school. Just another day. Instead, I use Mondays as an opportunity to get my week off to the right start.

Mondays are my Mail and Money days.

I check the PO box, pay my bills, do my banking, and check on my portfolio on Mondays, and only on Mondays. If I let myself worry about money on any other day, whether it be on how to make more, how to invest, articles on finance, or just how to save money around the house, it becomes an uncomfortable source of worry and a never-ending time suck throughout the rest of the week. Quality over quantity. I just keep asking myself, do I really need to do more? No. Just stick to the plan and life will provide. Monday is the one day where I can plan and conquer the world. The one day where my machinations are given credence. Other days I just stick to the plan. I also try to knock out my laundry, house cleaning and food shopping on Monday.

Tuesday-Friday

...are my anything goes days. I can work on projects as planned on Monday, take my time with things, write music, plan trips, work out, or whatsoever else I choose. Some weeks are very productive workwise, others are not, but I don't get myself bent out of shape. I just listen to my stream of consciousness for the next great idea. Keep a notepad handy and jot down the cream. Properly executing the best 5-10 ideas in your life will get you much further than wasting energy on the hundreds or thousands of mediocre ones.

Read books. Learning never stops. Take a walk. Listen to a new playlist on Pandora and find your new favorite artist. Write a song. Make love. Life is too short to fill every moment with a fidget so that you can feel productive. Anything you really need to work out can wait til Monday. If you're bored, you're not using your imagination. Take a class. Do some manual labor. Take a run. Ride a bike. Drink a new wine. Try a new restaurant. Meet someone new randomly out in the world. Write a blog post.

Why the hell not?

Saturday-- I keep a pretty strict diet during the week, so Saturday is the day when I go through my cheat list—the list of foods that are off my diet which I was craving during the week. Eat them. Go out. Spend time with your weekend warrior friends. Have a blast. Drink lots of water.

Sunday--- Recovery... Saturday has been known to beat the piss out of me from time to time. So I try to get a late sleep in, do some yoga, and schedule a massage for late in the day. A nice swim is great if the circumstances allow. The point of Sunday is to detoxify and restore your body for the next week ahead. Beginning with Monday, which is the day we get to conquer the world again.

Obviously this schedule lends itself to criticism. I'll take this opportunity to remind you-- I write for me, based on my circumstances. This post will remind me of what I really want to achieve. You are capable of building any life you want. It's a choice really. Additionally, you are allowed to change your mind at any time. Decide what you want, make a plan, and get started. The first step should be taken immediately. Stick to 1-3 major goals at a time. It's really hard to give your all to more than that amount of things at once anyway.

My goals: For the entire internet to see:

Consistent 10K+ a month in passive income.

175 Lbs. At 10% bodyfat.

Build more stable, loving, mutually beneficial relationships.

What will I do when all these goals become a reality? Come up with a few more. Life is not a zero sum game, or something that we can 'win'. The point is to do the most good with the time you have, and try to squeeze as much happiness and excitement out of each day as possible. Everything else-- all the other headaches, are just noise.

I recently escaped the backward logic of New York's health care legislation and made my way across the sound to have my first Spectracell test. I received the results yesterday and have been eagerly reading them-- as well as researching and digesting the information. It turns out it was not a moment too soon.

Seems that I am deficeint in many key nutrients. This has everything to do with my overall well being and weight loss issues. Here are the key statistics (My numbers on the left, baseline on the right)

Vitamin D 53% Vs 50%

I had already suspected a deficiency, so I had been supplementing, turns out I was barely in range after all of those weeks of 5000 IU a day and two sunny vacations. Scary.

Zinc 31% Vs 37%

Zinc is a very important one, it accounts for so many problems with immunity, general well being, over 200 enzymes are reliant on it, lipid metabolism, even those white spots on your fingernails are caused by Zn deficiency, I will be upping my dose and eating more oysters.

Chromium 32% Vs 40%

Another big one, according to the supplemental info included with the test, chromium is huge for insulin and metabolism. I will be supplementing as well.

The tests also documented a big Gluathione Deficiency 34% Vs 42%, which could adversely effect the way red blood cells' membranes hold up and can be considered the foremost antioxidant. In fact my entire antioxidant panel is out of whack. I started taking a comprehensive green drink to supplement this and I will be taking buttloads of N-Acetyl-L-Cysteine (a precursor, the body makes its own Gluathinone) to get my Antioxidant panel back into the green.

The tests also indicated (which is not really a surprise to me) that my body is abnormally averse to fructose, which I have recently cut out considerably, so that should help. I plan to get another test in about 6 months to see what progress I am making. I am already feeling a lot better, because once these deficiencies are accounted for, I should begin to see relief from some of the symptoms I have been having. One thing that the test didn't account for, which surprised me, was Iron. I may want to get this level checked separately at a later date.

So heres what I've learned:

Don't take it for granted that you are getting enough nutrients in your diet. Your life depends on it.

Get the hell out of New York if you don't want to pay through the nose for simple blood work. Directlabs.com is the way to go, I will end up saving about 65-70% over going to the doctor and paying out of pocket for lab work, and I don't have to have a doctor's reference.

Chromium, Zinc, and Vitamin D are HUGE for your health, and you probably don't get enough of them, especially if you like to drink and stay inside, or eat processed food.

Update on the hippo destruction plan: as of Saturday the 5th, I am at 185 on the nose, that's 8 Lbs lost!

I am also feeling and looking better, must have been those deficiencies. I must say, losing half a pound a day for an entire week was an awesome feeling. Only 10 more lbs to go!

In my recent first trip to Vegas I had set a $100/day gambling limit. It was part of the experience, and well within my entertainment budget. I had no expectation to win, and I had resigned myself happily to losing all of it. Perhaps I would win, but the city wasn't built on winners, right?

While staying at the Stratosphere (that big space needle looking thingy in the middle of the strip) we happened upon the roulette table. My cousin, our mutual friend and I sat down and started to gamble, and win. Big. I never really gave much thought to a strategy, but had apparently read some books about Roulette, because he seemed to have it all figured out. He was betting with all types of strategies, one of which stood out to me for some reason. When I asked him about it later, he said it just seemed like a good idea, to hedge his bets and protect his downside. The strategy looked like this:

1) Bet a certain amount on Red or Black, Odd or Even (each of which has a 47.4% chance of winning, lets call it 50% for the sake of simplicity) --obviously meeting the table minimum.

2) Take double that amount, separately, divide it by ten and put an equal amount on 10 out of the 38 numbers (chance of winning 26.3%, lets call it 25%)

So an example bet would be $10 on black and $2 on each number straight up between 27 and 36--for a total of $30

Since there is about a 50% chance of hitting black and a 25% chance of hitting a number, you have about a 50/50 shot of doubling up on your outside bet, which we will call the hedge bet, and a about a 1 in 4 shot of hitting your number for a 35 to 1 payout, or in this case $70. Lets look at some possible scenarios.

Eight Random Draws, each betting $30, as stipulated above. See the roulette table diagram here if you are unfamilar.

18 Lose $30
00 Lose $30
36 Win $62 (Lost the bet on black, but won 35 to 1, retain the $2 bet on the number)
1 Lose $30
17 Lose $10
26 Lose $10
11 Lose $10
29 Win $82 (double up on black, win 35 to 1, retain $2 bet on number)

Which means that you will be up $24 on sheer odds, which when you take into account that in 8 turns you made 10% of your $240 wagered on straight up odds alone. Overall, taking into account the house advantage, you have around a 5% probable swing toward winning, as long as you can follow some simple rules to minimize your chances of getting cheated.

Thats right, you can be cheated. It's almost impossible right? The game is completely random, right? Wrong. Consider this:

We were winning with this system, by consistently betting on the exact same numbers (though it shouldn't matter) and as long as we were betting at crowded tables in newer casinos, we were winning...

Right up until I sat down against the best roulette dealer at Binion's. She was a Cambodian lady who I found out later was the employee of the year--for making the casino more money than anyone else employed there. Now if you know how Roulette is advertised, there shouldn't be any one Croupier that stands out above the rest, right? Isn't this a game of odds and random probability? Unfortunately, no.

It seems that they can influence the spin, whether with skill in the release of the ball, or straight up cheating with magnets. It wouldn't be so farfetched to believe that the Nevada gaming commission could be bought off, especially in old Vegas where the corruption runs deep and long into history. Would be damn tough to prove, but how is it possible that I got cleaned out when, all things being equal, there was such a small chance of that happening?

Lets have a look at the math:

For simplicity, there are four possible outcomes under our system. Here they are, along with their relative likelihood:

Win $82 13.15%
Win $62 13.15%
Lose $10 36.8%
Lose $30 36.8%

So cancelling out the percentages, and averaging out the winnings and losings, you get this:

On any given turn, you have a 26% chance of winning an average of $72 and a 74% chance of losing an average of $20.

So, contracting this down to four averaged-out scenarios, this would be what you would expect happen.

Win $72

Lose $20

Lose $20

Lose $20

Which would net you $12, all things being equal.

The odds to lose $30 (not hit a 50/50 (47.4%) or a number (26.3%)) means you would land on a number that is not a black, and not one of our numbers (27-36), is 36.8%, as there are only 14 out of 38 ways for this to happen.

The chances of it happening ten times in a row are 4.55e-5, or a 0.0000455 chance odds of roughly 1 in 22,000. And it happened. To both of us, my cousin and I. The odds of that you can figure out on your own... they are infinitesimally small. Yet it happened... on the same night, in different casinos. While we can't prove it, the odds against it happening call Occam's razor into play. We were cheated. Otherwise, I should be careful that if I get hit by lightning, I don't stand it the same place, because obviously I'm about to get hit again. I don't believe in coincidences, so something smells fishy.

So lets say that we were cheated using a rigged spin, or perhaps a magnetized ball? How could we counteract this?

Well, first of all, the ball has to land somewhere. If they had a way to cheat, they would want it to do the least damage based on the bets placed, to win the house the most money. Often, the entire board is covered with chips at a crowded table, and bets are placed on every number on the board. There is no way for someone not to win. Thereby, betting unpredictably, on a crowded table, would help you maintain your statistical advantage. This would also thwart anyone's attempts at picking numbers that you hadn't bet on, assuming that they had a system in place that could do such a thing.

As long as you walk away when you are up (about 40-50% is a good benchmark), this should work. Chaos theory can still play against you, and while the odds are in your favor, there is always a chance of getting a string of the wrong numbers. For this reason I also recommend changing tables and/or casinos if you are down 40-50%. Either something is up, or its just not your night.

Perhaps newer casinos are checked for unfair house advantages more often? Is it possible that, because they are more corporate, they are therefore less likely to get away with cheating? Obviously, a number of employees would have to be in on the scheme for it to work, and if you've ever worked at a corporation, you know its hard to get people to keep their mouth shut. On the other hand, the gangster casinos would have an easier time using the threat of violence, whether actual or perceived, to keep people in line.

I understand that the city wasn't built on winners, but I also want to have the best advantage possible. It's not cheating, its just playing the odds in your favor. It also won't make you rich, but it is fun to win, even if its only a bit of money. I was up about $400 playing roulette in this manner over two days, each time walking away after I was up about 40-50%. Then I got cleaned out on a $300 stake at Binion's against all likely probability, and decided to take that as a cue that something or someone was working against me. I am not superstitious, but I also don't chase good money after bad. It's only a theory, and I'm not a math genius, after all. I still left while I was up, and I had also won a little at slots, so I did better than most people who come to Vegas.

So there you have it. Feel free to try, but please let me know how it goes and what you learn. I would be very interested to learn more from others' experience, though I doubt I will be going back to Las Vegas for a while. It wears on you quickly.

Again, this must be stressed. I would recommend that you do not get greedy, if you are up 40-50%, walk away. Cash out and find a new table in a new casino. Likewise, if you are down that much, take your lumps and walk away. Find a more crowded table in a newer casino. Odds are that something is fishy if you lose half your stake, provided that you started yourself out with at least 8-12 bets. You could also bet more or less on each hand with this system, but the ratio must stay the same. If you change the ratio, the odds are no longer in your favor.

Please don't forget to leave comments below, especially if I missed something, or calculated something wrong. Anyone who can add insight, or knows of a more effective strategy, is welcome to offer it. Thanks for reading, and good luck!

So. The moment we've all been waiting for.

I've been using the principles in the 4 Hour Body to try and shed some weight. At the end of this first 31 day period, I still haven't lost much weight. I'm thoroughly perplexed... I have been pretty diligent, but obviously I have to go back through and look for what went wrong. I have been following threads on Twitter and reading accounts from others, and it seems as though everyone who is keeping on this diet has shed weight. While I have lost about an inch in my waist, I have only lost about a pound of actual bodyweight. Granted, I have been eating like a starving dog on cheat days, but that should be allowed.

I recently started being more strict about the 30g in 30 mins rule, but I was never waiting more than an hour --at most--to eat the whole time. Does lying in bed for a few minutes before actually getting up count? I don't know about you guys, but I hardly ever spring out of bed like I have a rocket strapped to my ass. Then there is the food prep time and showering, which I recently cut down considerably, but its really hard to jam that much protein in your gullet that early in the morning. I was doing it with chicken breasts but it was not making for a happy Brad. That much chewing is a pain in the ass.

I picked up Jay Robb's Egg White Protein to help with this, as it contains only Stevia to sweeten and no Lactose or other crap I'm attempting to avoid. It's not cheap, but it works out to about $2 a shake for 24g of protein, so not crazy either. I priced protein (without additives) for a product I was going to start selling and this shit is not cheap to manufacture--unless you use artificial everything. I don't mind paying more for quality and peace of mind. I ended up ditching the product I was intent on selling because I would have had to sell it for something like $25 a pound to make it worthwhile... what a racket.

I also nixed the remainder of my dairy, the cottage cheese I was eating. Perhaps that was the culprit. At this point I am a little disillusioned, but my mother has been using the same diet and losing weight very quickly. It may also have to do with the fact that I was never all that overweight to begin with, only 15 pounds or so, and my diet was pretty clean to start with. It may take a bit more time and patience on my part to see results.

Now for the good news. I feel incredible. I really do. That alone has been worth the sacrifices. I also feel a bit slimmer, and a friend who hadn't seen me in a month remarked that I looked thinner, so there's that. I have been working out this whole time, so I may have gained a bit of muscle, perhaps lost some visceral fat (around the organs) to compensate. Muscle density is about 18% more than that of fat. From what I could find, it seems that the volume of muscle is only about half that of fat, so thereby one would assume that a pound of muscle would take up only half the space of a pound of fat. If anyone can help clarify this point with more raw data or an infographic, by all means contact me.

So in summary, some factors that may be working against me/skewing my results, along with how I plan to test and eliminate them:

1) Dairy-- Nixed all of it, except for cheat days.

2) 30g in 30 Mins. -- Aforementioned shake, along with two whole hard boiled eggs and spinach in the morning, is easier to stomach and gets me well past the 30g protein threshold. Going to also focus on not laying in bed for too long when I wake up.

3) Checking for deficiencies, imbalances and physical disadvantages--- I have been working on this in the mean time, but the laws in NY and cost factors are not making it easy to get the testing done. I will follow up on this in another post when I have more to report.

4) While it pains me to have to say this, I have been eating Ribeyes like its my job, and I usually cook them in a frying pan with butter. I should probably cut these back a bit and see what happens. Chicken gets so boring though. Sigh. I have also opted to eat refried beans more than I probably should, going to sub in lentils more often.

5) Getting lax with the cold showers. I'm gonna try and stick to this more, though it sucks in the middle of winter. I can imagine its not so bad if you live in a more gentle climate, but something about showering in 40F water while the temperature outside is 16F is a little hard to keep up with. I'll try harder.

6) Wine: I could nix this, but I really enjoy my 1-2 glasses a day. It's a nice treat to look forward to and a great way to unwind, so I'm keeping it. I'm not a robot, dammit.

7) I will stop eating so crazy on binge days. I will still eat whatever I want, but I no longer feel the urge to gorge myself until I feel ill. This may help. I went through my caloric intake on cheat days just for giggles, and realized it may be up in the 10,000 KCal range. I don't care what Tim says about calories in, calories out, this has to account for something. I refuse to believe that I can magically eat as much in one day as I do in four normal days and nothing bad will happen.

Here are some pics that I uploaded to Flickr to show the change. I feel it is noticable, but not really conclusive. I will let you be the judge. I am going to implement the changes I discussed for month two and see what happens. Let me know if anyone else is having issues with the things I've mentioned and how they might have corrected course. I am not happy with results thusfar and am really looking to step up my game for month two. Stay tuned.