Wow. Ok. So, I launched this website and concurrently my passive income project about 150 days ago. The intention was to report regularly on my progress towards creating low-input income streams. Having a look around here it seems that so far I’ve pretty much sucked on both updates and generating income.

So what’s been going on? Well, the truth is that I have sucked on updates to the site, and I haven’t really been able to spend much time putting plans in place to generate new income streams. As it stands, the project has earned a whopping £1.60 from Adsense adverts on the How To pages found on the site and nothing else.

I’m certainly not complaining though. The last few months have been great fun as my girlfriend and I have been deep in the midst of planning our wedding. My regular work has also been very busy as we lost some members of our team and workloads have increased. Both of these things have meant that I haven’t been able to dedicate much time to passive income trials, however I’m going to re-focus and double efforts in the coming months.

My focus in the coming weeks

I haven’t lost my enthusiasm for the passive income project and the aspects of lifestyle design that it entails, so over the next few months I am going to be trying out, and posting results on, the following:

• Zopa, a UK based peer-to-peer lending venture has recently caught my eye, so I’m going to have a nose around and experiment
• iphone apps: I’ve had some good experiences using Elance in the past, so I’m going to look into getting some apps made up by some coding professionals found on Elance
• Going paperless:

Looking forward to getting these mini-projects up-and-running and reporting back to you all

As Pandora found when she was messing around with her box, sometimes you start things, they gain momentum and then woosh, they are beyond your control!

My Pandora’s box moment came after reading The Four Hour Work Week (affiliate link).

Now, many people better qualified than me can tell you about the ins-and-outs of the book, talk you through the more subtle points. Instead, what has stayed with me from the book, what I was amazed by, was how ready it was to take on the assumptions that underlie how we approach work today, and how easily it was able to show many of them to be outdated and irrelevant.

It is this challenging and questioning approach that has infected my thinking. This is the ‘Pandora-process’ that I can’t seen to control or stop. And I’m pleased about it.

Here’s an example of what I mean.

What’s wrong with earning a living?

Earning a living. Simple enough phrase really. 99.9% of the world’s working population go to work everyday and ‘earn a living’. But take a second to think about what the words really mean: Earn. A. Living.

What does the phrase say? More importantly, what is the underlying assumption it makes about work and life? If you think about it, you can see that the phrase implies that you have ‘do’ one thing (earn), in order to ‘have’ another (living). It implies that you have to work, before you are allowed to thrive; that you have to ‘earn’ before you can ‘live’.

Even if it is just a figure a speech (and even if it is, we mustn’t forget that the way we talk about things dramatically impacts our approach to them) I don’t like this assumption that we have to ‘earn a living’, for a number of reasons. Most of my reasons are focused on what it seems to imply about the deferring of one’s life to a later date in lieu of earning now. Life is NOW, not in the future, at some unspecified date. But I won’t go into that now. For the moment I’ll just ask:

What about earning WHILE living instead?

What about you?

Have you experienced a change to your thinking or approach to life?
What spurred that change?
What examples do you have of flawed thinking and bogus assumptions in our everyday approach to work and life?

1. Know your distances Each approach shot you face on the course is an exact distance to the pin. But ask the majority of weekend golfers how far they hit a certain club and the reply will inevitably be “roughly” this distance, or “about” that distance. Funny that. Golf is a game where people make the most minute adjustments to their swing, but are happy only knowing how far they hit a club to the nearest, say, 10 yards. Ok, so no one hits it exactly the same distance every time, but REALLY knowing the average distance you hit a club will help massively when you’re next stuck between clubs!.

   So, borrow or invest in a measuring wheel. Head to the practice ground, warm up, and then when you’re ready, hit between 30-50 shots with the same club. Wander out to where your shots have landed and find the rough centre of the group of balls. Measure the distance back to where you hit the shots from and note down the distance. Rinse and repeat with next club. You now know your distance. You might be very surprised by the results! (bonus tip: try and do this at least twice a year. Your distances will change in between summer and winter, so it is useful to keep on top them at different times of the year)

2. Long or short? When playing approach shots, look at your target and ask yourself whether the majority of the hazards are in front of the green, or behind the green. You will find that across almost ALL the golf courses you play, the majority of greenside hazards, bunkers, ditches, ponds and lakes will be placed in front of, or in front of and slightly to the side of the green. Often, there is much less punishment for being slightly long of the green than for being short. Now, obviously you are trying to get your approach as close to the pin as possible, but knowing whether you would rather miss the green long or short can inform your approach. You should club your shots accordingly. (and now you know your proper club distances from 1) above, this will be much easier!)

3. Get to the hole to go in the hole This is an obvious one, but it helps to have it pointed out every now and then. Your putts will not drop if they have not got enough gas to get to the hole. Although lagging the odd putt has its place in match-play and on lightening fast downhill putts it must be remembered that the aim of the game is to get the ball in the hole! In your next practice round purposely hit your putts slightly harder that you would do normally. If you do this you will have a few ‘testy’ return putts that you might not normally have, but in all likelihood you will hole a few longer ones that you would not expect to normally.

4. Pre-shot routine. I cannot stress enough the usefulness of a repeatable pre-shot routine. This is especially true when you are coming down the stretch in a good round and you want to be as focused as possible. Golf is a game of momentum and repetition. A good pre-shot routine allows you to keep your momentum and it repeats again and again without conscious thought and letting you drop into the ‘zone’. It will vary individual to individual, but if you try to encompass target selection, approaching the ball, aiming and addressing into your routine, you will eventually free yourself to concentrate solely on the swing you are about to make.

5. Get fitted Still playing with those clubs you picked up at the local sports shop 15 years ago? Seriously? This is not going to be a popular tip, because it will involve spending money, but the fact of the matter is that if you are serious about improving your golf game you need to get clubs that have been fitted to YOU. The problem with off-the-shelf golf clubs is two-fold. First-up, as golfers we come in all shapes and sizes, but off-the-shelf clubs are put together for the ‘average’ build. Odds on you are not the average build! Second, although usually well constructed, off-the-shelf clubs are not assembled CONSISTENTLY: shafts are not aligned the same across a set; progression of lofts and lies are different club to club, grips are mis-aligned, this list goes on. By getting your clubs fitted (or even better, getting a set constructed for you) you ensure that clubs fit your build, strength and swing speed. In addition, you will have a consistency across your set that allows you to ‘trust’ each club in the set the same amount. The improvement in your golf game will be large and noticeable. Primarily, the dispersion of your shots will narrow, your ‘bad’ shots will be less bad, the distance between your iron shots will become consistent and the clubs will all ‘feel’ similar, promoting trust in your game.

Please let me know what you think of this ‘how-to’, using the comment form below, or via my contact page.

Today I’ve had to draw a line.

I’ve drawn a line under a highly productive behaviour that’s been helping me get some useful things done. Why would I do this? The answer is because I have fallen into a nasty behaviour-trap I’m going to call ‘productive’ procrastination.

Getting loads done whilst getting nothing done

It is 15 days since I launched this blog. In that time I have added just two posts to the site (1,2). Now, I recognise that, in general, my output is going to be low. I am writing in my spare time around work, so time is limited. But I still feel that just two posts is really poor. To rub salt into the wound, I have been spending every spare-time minute ‘working’ on the blog. So, given I’ve been putting the effort in, what has been preventing me from writing more content? Well, to be honest, I have.

Thinking back over it now I can see that each time I’ve sat down to work on the blog, I’ve put up little ‘to-do-list’ barriers that have prevented me from actually concentrating on producing good content. I would convince myself there were lots of ‘things’ that needed to ‘get done’ before I could happily concentrate on articles and posts. Whether it was changing the column layout, tweaking my header design or adding a contact page I’ve found all sorts of ways to place little jobs in my way that I felt I just had to complete before I could begin writing.

The interesting question here is why I have carried on like this if writing content is actually what I have wanted to be doing? The answer lies in the ‘productive’ nature of this particular procrastination – productive procrastination. This is where you cannot see that you are procrastinating on a certain task because it is masked by the fact that you are being productive in other directions.

For me, the procrastinating I was doing on writing content was hidden by the productive nature of the other blog-related tasks I was ticking off the list. This is why productive procrastination is particularly insidious. We’re taught from an early age that being productive is a good thing, but in this case it is actually blocking the real aim.

‘Productive procrastination’- you are getting stuff done, just not the stuff that you should be doing.

Re-focus on the necessary

So it occurred to me: what’s important when you are trying to build out a decent blog, with a solid community of readers? What’s gonna drive people to my site? Killer content, that’s what. Not the color of my header, not the layout of my columns. You cannot search based on the ‘dope-ness’ of a site’s layout. Content is king, and that is precisely the thing my productive procrastination has been preventing me from producing. No more! Now I recognise the issue, I’m going to take the great advice I read here, live with the imperfect and, well, just get things out there. Here we go!

What about you?

Have you noticed yourself being really ‘busy’ but not getting important things done?
Do you have tips for breaking through periods of procrastination?
What other damaging habits have you had to overcome to be more productive?

Please feel free to leave a comment, I’d love to hear form you.

And with a press of my mouse button…….we are launched on our passive income journey! It will be a long, long road, but I hope you will pop by every now and then to check on my progress, and maybe leave the odd comment (of encouragement!).

Let’s clear up an important point early on

On the front page of this website I make a lot of noise about something called “passive income” and how the concept can be used to generate money whilst at the same time freeing you up to have more leisure time. But what exactly do I mean by passive income? A tight economic definition might be something like this

Passive income is a rent received on a regular basis, with little effort required to maintain it.

My personal definition (which, I guess, reflects my current limited understanding of the topic) would be something more like this

Continuing residual income earned from endeavors which, although they may take large amounts of effort to set-up, require minimal ongoing maintenance.

It’s a bit wordy but I prefer this one for two reasons. First, it captures the notion that nothing worthwhile comes for free, and second, it alludes to the idea that correct construction of a passive income stream will allow for minimal maintenance.

Why am I pursuing passive income and writing this blog?

Short-term: curiosity. Generating income is a challenge, and challenges are fun, right? I’m curious to see if this is possible, if creating passive income from nothing is feasible in practice. Building the blog, and learning some new technical skills have also been engaging, fun, processes.

Medium-term: income diversification. Being reliant on a single source of income (i.e. a regular job) can leave you exposed if things take a turn for the worse. Constructing a series of income streams would alleviate this over-reliance through diversification.

Long-term: who knows?!? Blissful retirement and bountiful free time?

I hope that by posting candidly about all the results and the problems I encounter along the way I can create some discussion around the topics by readers of the blog who are also interested in the topic.

How am I goign to go about this?

My initial approach is going to have two strands. First-up I’m going to write a series of ‘how-tos’ on topics I know well and publish them on this site. The hope is that they will generate enough trafiic to try and monetise them with adverts. This is a mirror to the ehow phenomenon in the US, which monetises contributor content and passes them a percentage of the ad revenue. Why host on my own site as opposed to using ehow, I hear you ask? Because, at present, ehow does not revenue share with UK contributors.

The second strand of my current strategy is t-shirt design, as can be found here. Please don’t laugh. I figure if I can produce one or two designs a month, it cant hurt to pop them up on the site and see if anyone takes a fancy to them.

Now, I’m the first to admit that these aren’t the best or most original strategies, but they are a start. I think part of the fun of the overall project will be to look back across the months and see how the various sub-strategies develop and suceed (fail). To be able to do that I need to start somewhere; ‘how-tos’ and t-shirts are where I stick my flag in the ground!

What do you think?

I’d love to hear what you think of this project. Am I mad and dellusional? Should I be starting off with other ideas? What are your experiences in trying to generate passive income? What successes and failures have you encountered?

Please leave any comments or thoughts using the form below. Cheers, Tim.

1. Get educated: general education. Gone are the days when the plucky clerk could fight her way from the backroom to being head of a trading desk in just a few years through street smarts alone. Nowadays, you are going to need some major educational attributes just to get your foot in the door for interview at the big firms. A good school, a good university and good grades will help you over the first hurdle. Demonstrating rounded knowledge on a broad range of subjects and being informed on current affairs is just as crucial; it’s no good being incredibly good at science if you can’t offer an opinion on the latest economic news story.

2. Get educated: Finance. The pricing and valuation of options and futures is based on a lot of theory, much of which may seem very alien at first. To help with this, if you are still at school get yourself on any statistics and calculus courses available. Learn about probability distributions, they will be the day-to-day tool you use to value options. If you haven’t covered option theory before, I encourage you to pick up a copy of Natenberg’s “Option Volatility & Pricing”. It makes the basics of option valuation very accessible.

   Once you’ve taken all you can from Natenberg move onto Hull’s “Options, Futures, and Other Derivatives”. This is the derivative bible. The theories presented within its pages still form the basis for 90% of the discussions that will occur on a trading desk on any given day.

3. Get ‘option smart’. You’ve learnt all the theory, now forget it all! Or at least cast it aside for a while. The models that are used to price and hedge derivatives are exactly that, models. Whilst they are incredibly useful tools, you must always remember that they are based on sets of assumptions and, as such, come with certain limitations. The best way to help marry your burgeoning theoretical understanding with the practical realities is to manage a virtual option portfolio. The CBOE offer an excellent ‘paper trading’ tool on their website which allows such an opportunity. Begin here before you consider moving on to open an online option trading account where you will put real money at risk.

4. Get experience. If you are still at school or university fill your summers with internships and work experience in firms associated with the futures and options business. Brokerages, sommodity options trading, index futures, stock options, anything that gets you exposure and increases your knowledge. This will help you stand out from the crowd when it comes to interview time.

5. Get stubborn. You’ve got the education, you’ve got the theory, you’ve got the option smarts and you’ve got the experience. Now all you need is the trading desk job. As the rewards of working on a Wall Street trading desk can be large, the competition for such jobs is fierce. Develop a thick skin and a stubborn determination – you’ve prepared yourself well for this dream role, so don’t be put off at this stage. You WILL face multiple rounds of interviews and you WILL get rejections. Do not take a rejection personally – get feedback and improve for next time. Eventually you will land the job you desire.

Please let me know what you think of this ‘how-to’, using the comment form below, or via my contact page.