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Wednesday, August 13, 2014

When should you do it yourself instead of hiring a professional?

Over at the MMM forums, and among most demographics dedicated to frugality, the idea that you should be doing most if not all things yourself is almost a sacred cow of sorts.

While the fundamental idea that you shouldn't be paying for things is sound, I think it does a disservice to people to imply that everybody can do almost everything themselves, and if you pay for professional work you are just being a lazy "complainy pants".

It is true that people can do many more things themselves than they initially think, and thus save incredible amounts of money in the process. But you have to be honest with yourself on BOTH ends of the spectrum, and take certain factors into consideration, namely:

-Nature of the work
-Likelihood of future DIY jobs in the same arena
-Marginal Savings
-Cost of possible errors
-Fixed costs of DIY
-Marginal Time difference

Nature of the Work: 

There are two different things you are paying for when you hire somebody; their time, and their expertise. Most jobs require a combination of the two, but others are heavily weighted in either direction. If you are predominantly paying for somebody's time to do work that doesn't require much expertise, then you should consider doing the work your self. Other jobs require a level of mastery of a subject that would take you a long time to attain to get equal results. In those situations you should move forward with figuring out if hiring a specialist is cost effective.

Likelihood of future DIY jobs in the same arena

Even though an impending DIY job may require a fair amount of expertise, it can be worth it to learn if it is something that you may have to do more than once. If you own your own home learning to put on a new roof may not be worth it, as it will only come up every few decades. However if you own  12 rental properties you might be able to save a nice amount of money by doing such jobs for yourself over a 30 year period.

Marginal Savings

Obviously one important aspect to consider is how much you would save by doing it yourself. remember to include your time as a cost as well. Professionals and businesses often deal with economies of scale and other issues that make it cheaper for them to do the same job. So you will actually be paying MORE for parts, tools, rentals, etc. So they only thing you are really saving is a portion of the profit margin they add on top of their costs. Pull out your calculator and find out exactly how much you would really be saving. Sometimes it's not as much as you think. Other times you could save a shocking amount.

Cost of possible errors

It is a bad idea to go approach a job with the attitude that you can't do it and are going to mess the whole thing up. It is also a bad idea to assume it will go perfectly and there is no chance that you could make a mistake.

Make an honest assessment of the risks of doing a particular job, and what the costs could be if mistakes are made, or if other issues are uncovered once a job is started. Sure the professionals occasionally make mistakes too, but you don't have to pay for it when they do (as long as the company you hire is insured/bonded).

Fixed Costs of DIY

As I implied above, doing a project yourself may cause you to incur costs that the professionals don't have, or can amortize. Any needed tools and supplies must be purchased. Any specialty tools must be rented or borrowed. Do enough research to find out what you have to have ahead of time and factor it into your discussion.

Marginal Time Difference

Even if a DIY job passes all the other tests, if it is going to much much longer to complete a job then it might not be the best idea. Consider not only actual time spend working, but interruptions as well. It might only take you 6 hours to do a job, but if you only have 1 hour a day to work on this project, then it is going to be problematic. Especially if the job requires any setup, organization, or cleanup, etc. You will have to do all that each day you start working again.

With all that being said, I strongly suggest that everyone stretch the limits of their comfort zone when choosing if you can do something yourself. Be realistic about your abilities, but if the only thing stopping you is laziness or fear of messing up, then you should put some serious consideration into doing it yourself. Go through the points on this list and identify if there are any REAL reasons why you can't or shouldn't do it yourself.  Making the right decision will save you money, even when the right decision is paying somebody else to do it for you.

-The Money Monk

Wednesday, August 6, 2014

What did you do today to make more money online?

There are a lot of people out there who are trying to make money online, and a lot more who would like to. But when it comes down to it, what are they really doing to make it happen?

People see successful online money-earners and think that they just got lucky, or know some special secret. Now sure they probably do know a lot of stuff that you or I don't, but not because they were born with that knowledge. They know it because they have been living and breathing their craft for a long time. Learning about that stuff when other people are watching tv or playing Farmville.

There are a lot of different ways to make money online, and many of them can eventually get to a point of maintenance where you can get a decent amount of money without a lot of constant effort - EVENTUALLY. Nothing starts out that way except trust funds.

The money you will be making from your online ventures next month and next year is a result of the work you are doing NOW.

Everybody wants to make easy money from selling ebooks, but nobody wants to sit down and write one.

People may see the fact that I make $1000 or more a month from online ventures, but what they don't see is me getting home from work at 530 and then spending the next 3 or 4 hours listing eBay stuff, filming and editing videos, writing blog posts and website copy, writing an ebook, packing and shipping sold products, researching new ideas, etc.

Many of the things I am working on now I have yet to make any money from, like ebooks. Hopefully when they are finished I will. But that's the way it works. If this blog or one of my others is making $500 or $1000 a month in a few years people will think I have it easy, but they aren't the ones taking their lunch break to write when it only get's them $3.00 a month.

I really am not some paragon of discipline and hard work, as I actually hate working. Which is exactly why I am dedicated, more than ever, to developing alternate sources of income so I don't HAVE to work for somebody else. But I know that it isn't just going to happen for me automatically. 

And it's not going to happen for you when you get a better camera or a better computer, it's not going to happen when you figure out some special secret, or buy the right get-rich program, and it's not going to happen when your kids finally leave the house and you have more time.

It is going to happen exactly when it becomes very VERY important to you.

And this is coming from somebody who isn't there yet. I still have to work a normal job. I still have to choose to use my little free time to work on these things instead of doing things I find more enjoyable. But maybe in a couple years you will be looking at my stats with wonderment the same way I look at those of Pat Flynn at But if so, it will be because of what I am doing today. 

So again, what did you do TODAY?

-Double E