Exjackly

eBay is one of the best tools around for de-cluttering your life and padding your bank account.  All you need to be successful using it are things to sell.

Look around your home.  You can probably see a dozen things right now that you no longer (never did) need, but somebody else will pay money to get.  That is all you need to get started. Later, after you have sold a few things and are familiar with the site and the selling process, you can start buying things specifically to resell through eBay.

Here is a quick guide to getting started, some links to other resources to help, and a list of suggestions to help you get the most for your efforts.

First Steps

1. Buy Something.  This is important.  Not only does it let you get to experience how eBay works, but it also starts you towards getting some feedback.  Don’t forget to follow through promptly and leave feedback for the seller.
2. Build Positive Feedback.  So much of the eBay experience is built on trust - and is measured by your feedback rating. Since many sellers do not want to do business with people who have zero feedback, how many buyers do you expect to get if you have zero feedback too?  Build up your feedback, and you will become trusted, more buyers will bid on your auctions, and you will make more money.
3. Learn the written and unwritten rules.  Like any community, eBay has a number of unwritten rules. Most are common sense, some become clear later.  For example, the buyer is expected to leave their feedback first, then the seller is an unwritten rule.  Important written rules include what you are (and more important are not) allowed to list for sale.

Sell Something

Once you have bought some items, earned positive feedback (it is 100% positive, right?) and gotten comfortable with how to use the site, now is the time to look into selling your first item.  Here are some tips to help.

1. Choose the right category.  Listing your item for sale under the right category is critical, since people will not bid if they do not find your item.  Putting it under the right category will make it as easy as possible for people to find your item.
2. Write a Descriptive Title.  Use the full available title length to describe your item.  Yes, it will be better detailed in the description, but you have to get people to click into your auction for them to see the description.  The title is the best way to do that.  The more information in the title, the better people can tell if it interests them.
3. Include a picture.  Yes, adding a ‘Gallery‘ photo costs an extra 35 cents.  Listing with photos get more traffic and bids.  Depending on what you are selling, having a gallery photo can increase your sales price significantly, and in some cases be the difference between a sale and no sale.
4. Be Honest.  eBay buyers are not adverse to asking for a refund or adjustment after the sale if what they got does not exactly match the description. Worst case - especially when starting out - is they can be unhappy enough to leave you negative feedback.  If an item is used - even once - do not describe the item as new. Multiple photos can help here, especially if there is noticeable wear or damage on what you are selling.  At the same time, do not skimp on the good points of the item - you are selling it after all.  Just don’t hide the negatives.
5. Answer Questions.  Keep an eye out for questions from buyers and answer them promptly.  Usually, people will not bid until their question is answered, and due to how the auction format works, you want people bidding as early as possible so the price can be driven up.  On a side note, do not be alarmed if you get few or no bids until the last day or last hours of an auction.  Sniping (last second bids) is a tradition on eBay and few people put in their high bid early.
6. Accept Paypal.  It is important to accept Paypal payments (I think all new sellers must now agree to do so when signing up).  Many buyers will not even bid on an auction that will not accept Paypal.  This limits your pool of buyers.  Feel free to accept checks and money orders too, but be careful of scams.  Checks and money orders can be forged or bounced easily.  My suggestion though, is to accept them, but be up front that items paid for via check and money order will wait until they have cleared at the bank.
7. After the sale, be prompt and thorough.  When you have your payment, ship the item, packaged well.  Send it out promptly too and let the buyer know when it has shipped (include the tracking number if there is one).  When they leave you positive feedback, be prompt about leaving it for them too.

Successfully selling your first few items is this simple.  If you choose to expand and run an eBay business - even part time - you will quickly find that manually listing your items each time is a slow, laborious process that does not scale well.  Do not fear, there are tricks of the trade to help out.

Turn eBay into a Business

There are tens of thousands of people who make a good income off of eBay.  Few are getting rich off it, but many are doing it full time and doing well.  Many others are happy augmenting their day jobs.  It depends on what items they can get to resell, what quantities, and how organized they are.  You can do it too, but you have to be organized about it.  Here are some suggestions that I have seen to be useful.

1. Get organized.  This one is critical.  If you are doing an eBay business, you are generally dealing in quantity and not high prices.  Even if you are only selling 10 items a day, with delays in payments and buyer questions you could have as many as 100 different sold items at once in various stages from sold, paid, shipped, delivered, feedback received and feedback left.  This does not count any auctions you have that are still open and not sold.  Organization is critical.
2. Get Turbolister.  Turbolister is an eBay tool that you can download off their site to help you create and manage your auctions.  It allows you to duplicate auctions, copy and edit them, change the format, relist auctions, and more. It is one of the more useful tools available, and it is free.
3. Expand.  To earn a few dollars, it is simply enough to list items when you can get them and process the sales regularly.  To turn it into a business, it is important to ensure that there are always plenty of items available to meet the income needs of the business.  At this point, volume is the key.  The best way to achieve volume is to have a variety of related items available.  If you are a crafter, this is not difficult as the variety of items you can make with a single set of craft skills is pretty large.  If you are a reseller, it means that you need to focus on a range of items that are available to you at a cost with sufficient margin for profits.

Good luck with eBay, whether it is for fun and a little bit of cash or if it is for a living and your regular income.

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These are not resolutions for the new year, or even grand plans for my entire life.  Instead, this is simply a public statement of what my current financial goals are for the short term (calendar year 2008).  This is an effort by my to do several things.

First, a goal is not a goal unless it is shared and preferably written down.  The process of writing down and sharing a goal forces it be a concrete idea, fully thought out.  Sharing it with others, provides a level of accountability higher than keeping it to myself.

Second, documenting it this way allows me to come back later and measure how difficult these goals were and how close to achieving them I got.

Finally, it is a way for me to share with you, my readers, a little bit of what is going on in my life so that hopefully you can get a little bit better understanding of me and how I think.

Goals

1. Build up a $1000 emergency fund.  Being unemployed for the last six months of 2007, my emergency savings were wiped out.
2. Pay off my $12,000 in existing credit card debt.  After going through my emergency fund, I fell back to credit during my job search.  Once I have a basic emergency fund, it will be time to pay my credit cards off.
3. Pay off my wife’s car loan.  This is one place we did not follow the experts advice.  We took out a $25,000 loan to buy a brand new car.  I was comfortable with it, since we will pay it off faster than required and since the car will be driven for at least 10 years before we sell it.  The rate was a good one, but due to other upcoming plans, it is time to free up the cash flow.
4. Build our new home.  The layout and room sizes for our custom home are finalized.  Once I get some more work done on the specifications, it will be time to get bids and choose a builder.  We want to be in the new house before Christmas 2008.  The brings up the final goal:
5. Sell our current house before moving into the new house.  While we could make dual mortgage payments, with the size of the anticipated mortgage on the new home, that would put a definite crimp in the cash flow.  Even if we have to get into a month-to-month apartment lease during construction, it will be worth it.  Fortunately, the housing market here is still healthy, even if less robust than a couple of years ago.

Total, it means that for 2008, it will be the addition of around $50,000 to our net worth excluding retirement accounts.  Contributions of around $20,000 or more to those will get us that much closer to the end of our ‘working years’ and give us a healthy savings rate.

There will be a significant bump in our mortgage debt, but it will be matched by a similar jump in home equity and home value.  Plus, we may even save some money with the change by going Energy Star (or better) in the home construction.  Proper home design, better building practices, extra insulation, and good choices for appliances could more than offset the larger home size and result in lower utility bills year in and year out.  The decrease in maintenance will also be appreciated.

Overall, if we can hit these financial goals for the year, it will be a great year for us.  The goals are SMART and match up with my values and life goals.  I’m looking forward to working to achieve them.

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In this world, we always have the opportunity to pause and reflect on ourselves, our lives, our goals and our values.  With the hubbub of daily life, we seldom do so unless there is an outside force that encourages it: New Year’s Day, a major life change, or a major change for a friend or family member.

I want to wish each of you the best in 2008.  If you have not reviewed how you are living your life recently and how it matches with your goals and values, please do so.  There is so much that each person is capable of if they choose to do so.

• Financial security is available to almost everybody, even though it will take more effort for some people than for others.
• Work satisfaction is as much about you as it is where you work, who you work with and what you do there.  If you are not happy, start taking baby steps at least towards what will make you happy.
• Do your goals still match what you truly want out of life?  Are you still making progress towards them? Update them as necessary and do not be afraid to tell other people what you want to accomplish.

There is so much to this life.  I hope you recognize it yourself and are making progress at making your life one you are happy with and proud to share with your friends and family.

God Bless, and may 2008 be the best year of your life yet.

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Just in time for Christmas, I’ve been given a verbal offer for the job that I have been trying to get for six months now. I am excited.

Having been unemployed since July, it has been a challenge to keep from being depressed. Growing up and for most of my adult life, I have been recognized as being very good at what I do, and fairly decent at most things I try (singing is one major exception). Success has usually been more about spending enough time working at something than anything else.

Being laid-off is different. It does not matter that my employer laid off more than 1200 other employees at the same time as I lost my job. It did not matter that they had announced a massive quarterly loss or projections for more. It hurt; more because it made me question my own abilities than because it upset my life.

The many months of job searching and rejections helped erode my confidence too. Despite realizing that success being elusive was not a reflection on my worth as a person, it was very hard to stay confident.  I was beginning to think about a career change or applying for more general, but lesser paying jobs that are more common.

I managed to publicly keep a good face out and find ways to privately get through it. The job offer - at a significant raise too - has dispelled the gloom I was feeling privately.

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Of the many financial concepts, leverage is less understood than most but can be as helpful to an investor as coumpound interest. It is somewhat understandable, as most people’s involvement with leverage is mostly limited to their home. We are not given a lot of reasons to spend time thinking about leverage and how it helps us or hurts us.

Definition

leverage - n. The multiplier for the percentage gains (or losses) of an invested dollar due to the use of debt, options, or other financial instruments over the straight purchase of the underlying asset.

Easy to understand right? No? Lets look at a common example then.

House and Home

Assuming you own a home, it was probably the largest purchase that you have ever made. Most likely, it cost enough that you could not pay for it all up front. Thus, you got a mortgage to cover the rest of the cost. That mortgage gave you leverage.  Here’s how.

1. Using a $200,000 house as an example.  A $40,000 down payment allows you to control the house for only 20% of the purchase price.  With other loan programs, you can do the same thing for as low as 3% of the purchase price, which provides even more leverage.
2. If the value of the home goes up 5% in the first year, to $210,000 your equity has increased from $40,000 to $50,000 for a 25% gain.  Yes, this gain is offset almost completely by the interest paid on the mortgage.  However, the tax benefits help reduce this cost and the cost of renting an apartment or other place to stay is going to be similar to the mortgage interest expense*.
3. For investing, this works out even better.  20% down on two properties multiplies the returns through increased leverage over 40% down on one property.  Assuming that the cash flow on the properties meets the costs of the property, 20% down results in twice the gain in appreciation.  Not to mention increased cash flows for the future.

Taxes, interest, maintenance, services and depreciation do add to the analysis and viability of a real estate deal.  They do not impact the basic impact of leverage on the overall level of returns.

*Home ownership is not for everybody.  The potential appreciation is not worth the added monthly costs and work over living in an apartment.  Other reasons to avoid purchasing can include frequent moves (the buying and selling costs are significant), highly variable income, families in flux and exorbitant local home prices .

Other Sources of Leverage

Homes are not the only source of financial leverage in our lives.  They just happen to be the main one that is an asset.  Since a home is an asset, it can also be a positive form of leverage where you come out ahead at some point in the future.  Done wrong, like many homeowners in the sub-prime meltdown are finding out, the leverage can backfire and wipe you out financially.

Other forms of leverage have much less upside.  Leasing or getting a loan for a nice car is an example.  You pay a little now - much less than the car is worth - to control a nice and expensive vehicle.  At the end, a lot of money has been paid out for either nothing (with a lease) to keep or for a vehicle which is worth much less than when you acquired it.

Using credit cards for vacations and other wants is an even worse example.  For little or no money up front, the trip of a lifetime can happen. Then, when all of the benefits of the trip are gone, the payments for the trip continue.

Summary

Leverage is using a little bit of money to gain control over something that is worth more than the initial investment.  This can happen because somebody else takes responsibility for the rest of the money needed and the first person agrees to a cost for them doing so.  Done right, the first investor multiplies his returns from the leveraged investment.  Done wrong, the first investor may wind up owing more money than he initially risked.

Leverage is a large topic.  In the financial markets, fortunes are made and lost rapidly using leverage.  What we have discussed here barely scratches the surface of what individual investors can do with leverage.  Like all tools however, it has its own risks and rewards.  Due to the nature of leverage, it is something t be taken on very carefully, lest it wipe out an investor’s entire net worth or more.

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Julie Rains, over at Wise Bread has a recent post up called Business Advice From a Billionaire.  In it, she talks about her personal experience interacting with a billionaire as a high school student.

She follows it up with information she took from a Harvard Business School Entrepreneurs interview with that same billionaire.  The 12 points of business advice gleaned is all useful.  There are a lot of senior executives - from home based businesses to Fortune 500 companies - that would do well to ensure that they are also following that advice.

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Most of the personal finance blogs that I read are fairly similar.  Some focus on ways to be frugal and reduce expenses, in order to allow us to save more.  Others focus on ways to invest and the myriad of choices available to us.  The third group focuses on debt of all types and encourages us to get rid of it as quickly as possible.

The fourth group would be the blogs that do a good job of advocating a balance between all three categories.

One that I recently came across adds another layer.  Without downplaying the importance of reducing debt, limiting expenses, and investing the savings, On Moneymaking wants us to make more money.  Jon figures that if we can make more money for ourselves, that it will help us reach our goals much faster.

I really enjoy his writing and ideas.  Already, I am working on using some of those ideas in my own life in an effort to increase my earning ability and to help me reach more of my goals quicker.

After you subscribe to his blog, take a look at his About Jon page.  It may surprise you, but the determination and optimism are attributes I can admire.  I wish him success.

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It used to be that a young adult out of college, possibly even just out of high school, could count on having one employer for his entire career. Pensions were common, and it was easy to map out your life to the American dream.

That isn’t the case anymore. Few non-union companies offer pensions, and even union controlled workforces are seeing pressure to eliminate the remaining guaranteed pensions. Plus, both men and women are much more likely to have full careers. Finally, few of those careers will be at a single employer. Some estimates say that new grads will have more than 14 jobs before claiming social security [if it lasts that long]

While the frequent job changes can be positive, leading to more enjoyable work, better paying jobs, and the ability for many people to live where they want to, there is a significant downside. Lack of employee-employer loyalty - which goes both ways - means that it is very likely our new graduate is going to be unemployed at some point.

This may be for a few days or weeks while relocating and preparing to start a new job. It could also be for a few months or years during a career change or economic downturn. Planning for unemployment is an important part of being financially healthy. This planning is also more than building up an emergency fund too.

This post was inspired by The Dough Roller’s post I Just Got Laid Off Survival Kit.

Unemployment Starter Kit

I want to emphasize that you need to start planning how you will handle unemployment prior to finding yourself in that situation. Some of these steps will take months to complete, while others need to be reviewed regularly.

1. Emergency Fund. Fill this one up with 3 to 6 months worth of living expenses (not take-home pay). Depending on the situation that puts you out of a job, you may not get a severance package at all. Just a final check and a chance to bring your office belongings home. The saving grace here is that you do not have to fund it immediately. Building it up over time, especially if you have other financial concerns, is a time honored tradition. Plus, even if it is not fully funded before you need it, every dollar in there will still be helpful.
2. Budget. If you already live by a budget, congratulations. If not, at least track your expenses so you know how much money you do spend and on what. If you suddenly have no income, knowing this information enables you to trim your expenses as effectively as possible. It also allows you to work in the costs related to your job search.
3. Career Goals. Keep these written down and updated regularly. Compare how your current job fits on that list of goals. Ask yourself if you are still moving forward toward those goals. Evaluate if it is time to find a new opportunity that will continue to advance your career the way you want it to go. Doing this can help keep you away from the unexpected unemployment situation.
4. Resume. Keep this updated. Even if it is just revising a word or two to keep your current position description accurate, you should be working on this every 3 to 6 months at a minimum. Not necessarily sending it out, although regularly looking for better positions discreetly is often a good idea. Review this when you review your career goals, since they should somewhat overlap.
5. Networking. This is not schmoozing. Instead, think of it as a way to keep in touch with old friends. A quick phone call to people you know to ask if there is anything you can do for them is very helpful. Do not ask if you are not sincere about following through. Even if it is just a recommendation or looking up potential employers or employees in your area for your friend, offering to help and not following through is worse than not staying in touch. If you have helped a number of friends in the past, when it comes time to ask them for help in turn, they will be much happier to follow through and put in a lot more effort on your behalf.
6. Training. Especially if you are in an engineering, medical, accounting, or technology career, training is critical to staying current, much less getting ahead. Stay up to date on your current skills. That means current versions of the tools you are using, knowledge about where the profession is headed in the next couple of years, and learning about related professions. For example, a software engineer should know the current version of the language they use most, the trends in outsourcing/consulting for their area of expertise, and be expanding their knowledge of project management.
7. Where to live. Different professions have hot markets in different parts of the country. Health care all over, but even hotter in the Sun Belt. Acting has the most opportunities on the coasts. Technology has been better in the Bay Area, Denver, Chicago, Dallas, and Atlanta among other cities. Not all of those places are going to have the same appeal to a job seeker. Knowing where you want to live and what the employment market for your career is like in those locations will give you a better chance to tailor your search for the best results.

Following these steps will give you the best chances of avoiding unemployment and being prepared if it should still happen to you.

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As part of my efforts to become financially independent, I am looking to diversify my investments. Part of the goal is to be able to generate regular, recurring income. The other part is to ensure that my portfolio covers a wide range of assets so I am not at risk if a single asset class does poorly.

Since most of my portfolio is in stocks and bonds right now, adding real estate is something I am looking into. I have been studying materials and trying to learn about the industry before I jump in. Part of my learning process has been looking at online materials, including blogs, about real estate.

One of those, Real Estate Investing for Real, has an interesting post on one of the homes they looked at. They titled it A Fishy Abandoned House Tale. This is not a typical tale, otherwise real estate investing would be a poor choice of careers.

That kind of story is why I am not rushing in to real estate. Still, I am convinced that real estate is an important asset class to add, especially since the real estate cycles are different than they are for other assets I follow.

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It has been many years - something around a decade - since the last time I’ve been to the eye doctor. I’m going in tomorrow, and expect that he will want to put me in glasses or contacts. It isn’t because I am having trouble seeing. Instead,it is more that I feel like I am not seeing quite as well as I used to.

I know that to be frugal and responsible is to know what you want from the eye doctor, ask your questions, and avoid unnecessary extra visits. Knowing what is covered by the insurance plan also helps.

What I do not know is how to be frugal about prescription glasses and contacts. Anybody have any suggestions for me, assuming my concerns are realized?

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