PF Hour: Episode 19 – Jim and JD Hang Out with Flexo

by brian on September 11th, 2009

This week’s episode of the Personal Finance Hour featured Jim and JD talking to Flexo of Consumerism Commentary. They discussed the financial and emotional considerations as well as the preparation required when someone is thinking of pursuing an entrepreneurial adventure (something that Flexo is currently considering).

Flexo’s Story

Flexo’s site is Consumerism Commentary. The site started as a way for Flexo to hold himself accountable for his personal finances. He wanted to track his net worth back in 2003 and planned on posting updates once a month with the occasional article thrown in. Flexo was one of the first personal finance bloggers before the large online personal finance community was formed.

Flexo is one of the most transparent financial bloggers with regards to how much he earns. His personal balance sheet is out in the open and really does hold him accountable to his audience.

A couple of years ago he had started to bring in enough money from his blog, more so than he makes at his 9-5, where he could consider making the jump to blogging full time. He relayed the story as to why his decision became delayed. At one point in 2008, his site fell off of Google’s radar. This drastically altered his revenue and he lost a lot of his adsense revenue and with reduced traffic, he didn’t receive as many advertising offers.

JD asked Flexo about his situation and stated that an experience like his with Google is the reason to diversify your income. Flexo agreed and stated that he is finding new ways to make income via the web (new projects, new websites, etc.) so he doesn’t solely rely on advertising from Consumerism Commentary.

Jim had a similar situation for a few days that spooked him along the way at Bargaineering. However, he wasn’t deterred to pursue his desire to run the blog fulltime. He stated that with any business online, there is always going to be something that could drastically reduce your income. However, he felt that making the fulltime commitment might actually be able to prevent situations like this from happening.

Callers and Chatters

Baker from Man vs. Debt called in to the show to ask the three gentleman about the positives and negatives of working from home (bloggers and entrepreneurs alike). Baker always suggests that you don’t necessarily have to start from home. JD agreed and cited his wife that receives a lot of joy, intellectual stimulation and interaction at her job that may be lacking if you are a professional blogger. Flexo stated that a few years ago at a previous job within the same company he would have left his job in an instant to pursue blogging fulltime. However, he currently enjoys his job, and doesn’t feel the need to leave his position to become a fulltime blogger.

Baker also added about the stresses of creating a routine while being a stay-at-home dad. JD stated that he is bad at routines and that it took him 15 months of blogging fulltime before he got settled into a routine. That routine required him to have an office outside of his house to help create structure. Jim’s routine isn’t as structured, but he wakes up in the morning and prepares himself as if he was going to work and then sits at his computer. His dog is his stimulation that helps break up the workday and gets him out of the house sporadically.

Donna Freedman (Columnist with MSN and Co-Host of MSN’s Smart Spending Blog) called in wondering if each JD, Jim and Flexo had a spouse with a job that has made or is making their decision easier or more difficult. Does it make the decision scarier when you aren’t supporting only yourself? JD felt that it would be easier to make the leap fulltime if he wasn’t married. His wife’s income made him more comfortable taking the risk, however if he was the sole provider for his family, he may not have left his fulltime job. Jim’s wife doesn’t work fulltime as she is currently pursuing her PHD, but at the time he made the decision to blog fulltime she was employed and providing income to their family. A lot of people that are encouraging Flexo to make the leap often cite that he is still young and that he doesn’t yet have the responsibilities of a home and a family.

Making the Leap to Full Time Blogger

JD’s experience took a lot of guts, as he was comfortable in his job at the box factory, and leaving his job to start blogging full-time was a risk. He said he had at least 3-4 months of expenses built up and saved in case everything went to “heck” and his blog dropped off the map. This gave him the comfort of knowing he had time to find another job if the situation called for it.

One of the reasons Flexo hasn’t made the leap yet to being a full-time blogger is because he doesn’t consider himself to be a good writer. Both JD and Jim disagreed, and JD went as far to cite Flexo’s guest post on Get Rich Slowly about how to be the CFO of your own life, which has had a tremendous response.

Flexo does plan to take the leap to leave the job and run consumerism commentary fulltime. He is going to develop a six-month business plan to help him transition out of his job into the blog. Part of this decision is based on the revenue he has made via the blog that doesn’t seem to be dwindling and appears to be a steady source of income. He also stated that if things don’t work out he is likely able to get a job in his field without too much difficulty.

Flexo Grills the Guys for Answers

Flexo asked both JD and Jim about their opinions of creating information products like ebooks, presentations and seminars. Specifically he asked if they had any plans to create products of that nature. Jim immediately said no, however JD is currently thinking about several projects that would fit in this realm. JD further mentioned that people like Chris Guillebeau from The Art of Nonconformity who have created a business model where their site doesn’t sell advertising, however he sells products in the form of ebooks, podcasts and even one on one consultation.

Diversifying your income online is a challenge. JD referenced Ramit who used his blog to help set up speaking gigs and to help sell his book. Jim said he doesn’t diversify as he feels his model is very sustainable and doesn’t feel like its necessary to branch out beyond advertising. Jim stated that internet advertising doesn’t require the same diversification that something as unpredictable as the stock market would require.

Flexo is also going through an internal debate that he deferred to both Jim and JD about possibly getting rid of the “Flexo” name and start using a pen name or his real name to his site. Both Jim and JD suggested that if he is really considering changing his name, there is no added benefit to putting his real name out there as opposed to a false name, especially considering his net worth is out on the Internet. Jim did state that he is almost certain he has lost readers because he has the name Flexo and an avatar of a television cartoon. However, that very well could be a small percentage.

All in all, this was a great show and it definitely should add some fresh perspective for those individuals who are considering making the leap into fulltime blogging or any other entrepreneurial opportunity.

Next week Greg Karp will join the show. Greg is the author of The 1-2-3 Money Plan.

(Some book recommendations from this week’s episode: Escape from Cubicle Nation & New Job, New You)

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