Since you’re reading this, I know I’m probably not the first person you’ve come to for retirement advice. There are a lot of so-called gurus around the web pitching one strategy or another to help you save or salvage your retirement.
Everybody has their angle, and Retirement Rehab’s is this: start an online business.
I know, the idea is easy to scoff at. Maybe even one of your other gurus recommended it before, and you brushed it off as ludicrous. You don’t have the capital, the tech skills, or the time to turn your retirement around by starting an online business, right?
Those other retirement “experts” might not have been able to convince and guide you through the process, but I have a very good reason why you should listen to me, even if you didn’t listen to them.
I used to set up the same road blocks for myself whenever I thought about owning an online business. I simply didn’t have the knowledge or resources. But then I learned more about it, and in just a few years, I made it happen. I succeeded at owning and running not one, but several online businesses, and really have turned my life around.
So I’m telling you to listen to me, not because I’m a financial or business advisor, although I am, but because I’m a guy who’s already succeeded at what you want to do. Here’s my story:
How I Saved My Retirement With an Online Business
Even this morning I woke up and thought it was all a dream. I rolled over, grabbed my iPad, and refreshed the dashboard for our big store. This is what I saw:
The dream continues. It’s breathtaking. And every month seems to get easier.
November ended our second full year selling physical goods online. Unlike 2017, in 2016 it was brutal. Almost every day it felt like we were failing.
I’ll be the first one to tell you that website investing isn’t a get rich quick scheme. There’s no easy path to success. My wife and I had many failures in the beginning. But by educating myself, leveraging my existing skills, and taking advantage of a few strokes of success, we did make it big. Hopefully learning more about my journey will make the road to success smoother for you.
At the end of 2012 I was lost. I had just received a very bad message from my boss. Although my business was growing at over 30% for the third straight year, my bonus was actually down from two years prior. It was obvious to me the financial services industry had changed and compensation would never reach pre-crisis levels again.
We had downsized once but it wasn’t enough. My income could not sustain our lifestyle, much less prepare for kids’ college expenses and my retirement.
While my credentials as a wealth management executive were impeccable, the truth is I was going broke.
I spent most of 2013 in a fog trying to figure out what to do. Tony Robbins and James Altucher spoke to me. So did Houston pastor Joel Osteen. Slowly I changed my mentality from victim to victor.
But getting your head back in the game can only go so far. You need to take massive and focused action and execute on something. And at 56 I had to get this right.
While I had hardened my resolve to survive, I didn’t know what I could do to change my fate.
As a voracious reader I had also developed an affinity for — maybe even an obsession with — listening to podcasts during long walks. Once I made the decision to look outside my industry, I sampled the business content that was currently trending.
What I learned was that technology is connecting the globe and empowering people in new ways. It was happening so fast that entire industries and professions just like mine were being made obsolete. While some people were losing their jobs, many were profiting in ways never imagined.
It became obvious to me this “New Economy” was my future. In a rare moment of optimism, it also struck me that I was fortunate to have a high paying job while I designed my plan.
Luck Strikes: My Move Across the World
As a career professional with some visibility in my industry, I often get pinged by headhunters trolling to see if I’m willing to make a move. One day in the Fall of 2013 a recruitment professional from a bank in the Middle East reached out to me directly. Some executives there had also spent time at Citibank like me and she thought she had an opportunity that would interest me.
Having also run international businesses for both Goldman Sachs and Credit Suisse, I traveled frequently abroad and always loved doing it. Twice in my career I was offered an opportunity to relocate overseas but family concerns held me back. This was no longer the case.
While I struggled to figure out how to take advantage of the New Economy in 2014, the recruiter kept calling. My eventual boss visited New York City and we hit it off great. I ended up traveling to the head office for an interview in June. The offer came in August and I decided I’d go ahead and relocate while my wife and our kids stayed behind.
While living alone in a foreign country and starting a new job, I had an enormous amount of free time. I could continue my New Economy education and find the right vehicle to carry me past my expected career ending.
I was 57 when I landed in the Middle East. I had a great mandate to build a business for my new employer, but I wasn’t foolish enough to believe this would last a lifetime. I had to give them my very best to lengthen my career runway.
I also needed to use my free time wisely and figure out what I’d do when the job and my career ended.
Changes in Longitudes
While the Middle East and the entire world watches what goes on in the US and the West, we also look east. Gulf airports connect Western Europe to India and Asia. Entrepreneurs travel through here and talk about how they connect demand and supply in the wildest opportunities. Most Americans rarely visit India and Asia because of the travel time and the ubiquitous two-week corporate vacation.
Living here you experience demographic growth not seen in the West. You also see opportunities in Asian economies on a daily basis.
Through my podcast addiction I became aware of Americans living in Thailand (Johnny FD) and Vietnam that were bootstrapping businesses while living on the cheap. They leverage technology and a global talent pool to do things for a fraction of the cost of back home.
To them, failing in a business venture became an education on how to succeed in the next one.
Everybody believed they were just one deal away from a big score. It was this infectious attitude that empowered me to believe I could succeed in ecommerce.
Moving Beyond the Bootstrapper Mentality
While bootstrapping a business sounded exotic, I didn’t have time to experience the inevitable failures. But I became aware that these same bootstrapping entrepreneurs often sold their businesses well before they had matured.
Living in Thailand has its allure and doesn’t cost much. Most bootstrappers had this lifestyle orientation and limited skills to scale up a business using processes and systems. They saw a different future than I did for their businesses.
As an executive who has built wealth management platforms on four continents, I also look at all investable strategies appropriate for the families I advise. It’s fair to say I’m an expert in investing strategies and the managers that offer them.
One of the skills you develop interviewing investment managers who are pitching their services is the ability to quickly discern the vulnerabilities in the strategy and its implementation. The other skill you develop is the ability to read a prospectus. Numbers jump off the page to me that may take others much longer to identify as needing an explanation.
It was the marriage of robust New Economy deal flow and the lack of ready investors that presented me the opportunity to analyze deals with my unique perspective.
Suddenly I had found a special way to create value for me and my family—buy younger but established and profitable websites and apply my business skills to operating and scaling them.
Building the Foundation for Success
I’ve had brilliant ideas before that didn’t play out exactly as I anticipated. I have been a stock market investor for over three decades. You can lose money even when you’re certain you’re right.
One very important lesson I learned is that managing risk is critical to survive and experience the spoils of victory. Make small bets that increase with your confidence and knowledge.
This is exactly what great venture capital investors do when they seed promising technologies.
Another prerequisite to success is understanding the value creation process like you’re building when you are actually buying. While you may have money to invest, you need first to invest the time to be confident of your hypothesis.
You need to connect each activity in the value chain to see where you may have a vulnerability or opportunity.
You also need to know when to make your move. Fear leads to inaction, so it’s critical to accept the likelihood of a loss of money. You need to minimize this expectation while you build your knowledge.
The key is to take action. In my case I planned so could afford a total loss (unlikely) and try again.
Everyone has a different risk tolerance, but you have to get in the game to succeed.
Picking My Business Model
The biggest commercial market being disrupted by New Economy capabilities is the sales of physical goods. This market is simply many multiple times as big as information products, services, or anything else. Brick and mortar retailers are too entrenched in their mindset to fully commit to operating online.
Coupled with America’s consumerism, the rapid adoption of technology makes this the biggest opportunity online.
From now until 2020, online retail sales are expected to grow at over 20% annually, but still only make up 15% of all retail sales. With physical stores’ sales struggling, online sales are growing rapidly.
To me, selling physical goods is also far more intuitive than other forms of ecommerce. It’s sort of like real estate in that way. Many people have sold some household items on eBay like my wife has done many times.
The other huge benefit is that the skills you develop in selling physical goods can easily be used in other online monetization strategies. Selling physical goods can easily be the gateway to other forms of ecommerce.
The two primary methods of physical goods ecommerce are drop shipping and Fulfillment by Amazon (FBA for short). In the case of FBA, the products sold are relatively few, they are cheap, and you usually need to source them in China. Drop shippers sell products from others and arrange to have them shipped to the suppliers. In FBA you need inventory and in drop shipping you don’t.
After a lot of analysis, I chose drop shipping as my model to enter the New Economy.
Developing a Strategy
The 4 pillars of the strategy I developed are:
1. Enroll in the best drop shipping course and learn how value is created
2. Master the tech basics and overcome this fear
3. Learn the landscape of website brokers and analyze their deals
4. Develop the risk framework for my investment strategy
Anton Kraly’s Drop Ship Lifestyle is the gold standard for courses to learn how to build and operate a drop shipping store. Something like 8000 people have gone through the course. The community is vibrant and has both a private forum (the “Fast Business Forum”) and a private Facebook group. I looked at a lot of options but this fit all of my needs for education and a community to be involved in.
Going through the course modules is like learning a new language. The philosophy and process of building a store is explained in great detail. This is a foundational understanding you need when shopping for websites to buy. The forums serve as places where you can ask questions, swap strategies, and build friendships.
It’s also the first place someone wishing to sell a younger site will offer it.
One of the strengths of DSL is it focuses on the technology part of drop shipping. The course contains an enormous amount of information that you need to upload products, create advertising campaigns, and manage the ‘back end’ of your Shopify store. Outsourcing these tasks is also covered, which has always been my default preferred solution.
As a buyer of websites I was able to observe folks on the DSL forum launch their stores. I looked over their shoulders as they dealt with the nuts and bolts issues I knew I would face. I experienced the success they had vicariously by seeing the screenshots of their sales.
I knew if I bought a store I could tap into this community for technical help or an outsourcing suggestion. This may have been my single biggest fear when I started my ecommerce journey. Tech problem solved.
There are many website brokers to choose from but sites often trade privately too. The best way to get into this flow is to subscribe to the email lists of some good website brokers and join some drop shipping or ecommerce forums. I have found the brokers to be very responsive to questions if they aren’t already answered in the FAQ sections of the write ups.
I naturally gravitated to Empire Flippers as they have informative podcasts, a great blog, and a sterling reputation amongst the bootstrappers. They are also based out of Asia and are very visible at events in the region.
Finally, I decided on a strategy of buying a small site (less than $20,000) and getting comfortable with operating as my first step in implementing my risk strategy. This would serve as my university education of sorts.
In October of 2015 we bought our first site for $17,500. It went so well we bought our second site a month later. We bought both through Empire Flippers.
Dealing with the Grind
Follow enough people on Facebook or listen to enough podcasts, and you will come to the conclusion that succeeding in ecommerce is easy. It seems like everyone is “crushing it” or “living the life.”
My wife and I didn’t have that experience at all. We struggled.
My wife runs the operations of our stores. She deals with the customers who place the orders and suppliers who fulfill them, and all the details in-between.
At the beginning, this wasn’t too difficult as the technology piece is intuitive. We got help on anything she couldn’t understand. We also didn’t have too many orders to make it overwhelming.
Our first store sells relatively small ticket ($100) items that ship by UPS. There’s not much to go wrong. But our second store sells $1000 items often weighing 300-400 pounds and damages are frequent.
So are the vitriolic responses from the American consumers spoiled by Amazon’s shopping and delivery experience.
As the business grew we hired a full-time virtual assistant (VA) in the Philippines and trained her, but she could never understand the complexities of our second store. Sadly, she was cheating on us and working for someone else too, so we had to let her go.
This left my wife processing 120 transactions from the two stores in the busy summer months. As we live 9 time zones ahead of America, she spent many late nights personally dealing with the issues of our expanding empire.
We were definitely not crushing it and we needed to make some radical changes.
Systems Run the Business
Once you train your first VA you really learn your business. The process makes you a teacher and you acquire a greater understanding of things you would do naturally. After our first VA left we had to train a second and we realized this was something we should have memorialized.
My wife quickly began to record every detail of our business in screen recording software that creates standard operating procedures (SOPs). Every keystroke made related to customer service, order entry, and internal operations was catalogued and correspondence templates were created. Never again would we spend time on something that was a routine.
This painful and time consuming process, done during our day while America was sleeping, added to the current workload and frustration. We (my wife) persevered knowing two things:
1. She would never do one-on-one training of routines again, and
2. Anyone who couldn’t grasp the procedures would self-select out of our employment.
She found the guinea pig for her new program after posting on the popular freelancing site Upwork.com. Martin had worked for several big name American companies in customer service on-site at their offices in the Philippines. With a young family, Martin wanted to work from home and ditch the 60 minute one-way commute while working his nights to serve Americans during their days.
At the end of 2016, we put in place the right operations protocols and my wife was able to begin working “on” the business instead of being trapped “in’ the business. We had taken a site purchased only a year earlier that was making $1250 per month and grown that 3-4X, but we knew there was much more potential given the size of the niche we operated in.
Luck Strikes Again
At the same time my inbox continued to fill up with deal summaries from website brokers. After over 3 decades reviewing deals in my day job, it has always been part of what I love about my work. Dutifully I examined 100’s of deals and I often sent questions to the brokers representing them.
Then one day I saw something I couldn’t believe: A much smaller store for sale in our exact niche that also had our second largest supplier. But it was earning 50% more than we were and growing sequentially every month. This store had a nearly 3 year record of consistent month-on-month growth, very unlike what we were experiencing.
The secret was they didn’t sell anything on their own website. Rather, all of their sales came from a new and growing platform for household goods called Houzz.
A Life Changing Event
The revelation of another store selling only on Houzz, maybe half our size and 50% more profitable, was shocking to me. They didn’t even offer our top selling brand. It was obvious it was all due to the dynamics of Houzz.
When we purchased our store we had an account on Houzz. But Houzz is notoriously finicky about customer experience and they disallowed 900 products requiring us to make product listing changes. I became frustrated, but my wife continued engage with Houzz. In late 2016, we were united in our enthusiasm.
In January of 2017 we made 9 sales on Houzz. In February it was 56. Then March exploded with over $200,000 in sales and 213 orders. We quickly began a major ramp up of customer service by hiring an additional 3 VAs in 3 months.
I also looked at other stores being sold based on web-only sales through a different lens. We quickly acquired another 6 starter stores that had suppliers amenable to us listing their products on Houzz and began uploading their products with new developers.
Our team had grown from 1 VA and 1 developer to as many as 10 in total. My wife’s processes became our backbone to scale the business and address both the increased demand and opportunities we saw.
Our Future is Secure
I began my soul searching in 2013 when I saw my corporate career ending well before I could save enough to take care of my family in retirement. During this process, I floundered and took too long to get my mindset right. We also made many mistakes I haven’t mentioned operating our stores.
This education was painful and caused us to question ourselves daily. But we persisted.
Today it’s different. We feel a sense of calm. We sense we are at the beginning of an exciting global trend and we’re on the inside. For sure there will be challenges, but we know we’ll figure them out.
We now comfortably earn 5 figures a month from our biggest store. This has made our retirement a reality again, and will be the financial foundation for our future. We also acquired a huge knowledge foundation to leverage in our future.
But those aren’t the only benefits of our success. Non-financial aspects of our life are now very different.
For example, my wife always says there’s an entirely different benefit I will never understand. She tells me of the struggles that spouses of professionals have in contributing financially while raising children. She tells me about how she and her friends never feel like they can do both well enough and it’s a constant source of disappointment.
Now she works around our kids’ schedules, often using her laptop from a soccer field or ice rink. She gave up a corporate career to relocate and now has a formerly unimaginable ability to always be there for our kids while earning more than ever before.
Most important for me is the sense that I’m not reliant on the view of my boss to keep my job. I can also see the day when I won’t trade my time for a paycheck. After wearing a suit to an office every day since 1980, I won’t have to do this ever again.
We have run our business efficiently from hotels while on vacation. This is obviously a new work paradigm for me.
Uniquely, our kids see us working together and enjoying each other more. We challenge them to spot nontraditional opportunities they would like to explore, especially ones that use the internet. We have also travelled more as a family and life becomes more fun as we gain more confidence.
When I think about retirement, I realize the business model we chose is well suited for that as well. Whether we want to travel during retirement, relocate to another country, or simply stay at home living a quiet life, we can do that, all while still earning income from an online business. Once you get the wheels turning the right way, you’ll have more opportunities to automate your business and outsource tasks. I for one plan to keep running businesses well into retirement, knowing it won’t be a huge time investment because I already did the grunt work.
People often ask me how they can replicate what we did.
I tell them to commit to learning the basics. I tell them to be ready for gut wrenching setbacks. I tell them to persist and make a little progress every day.
I also tell them they are “just one deal away” from securing their own future like we did.
While most people just smile and never commit, it’s truly exciting to engage with the ones that do. It’s fun and rewarding to see them understand this could be their reality too.
I know so many Baby Boomers and others nearing retirement are in the same boat I was just a few years ago: dwindling income, potential job insecurity, and facing the reality that they have a lifestyle they can’t financially sustain.
But it’s possible to eliminate debt and build a financial safety net for retirement if you just take the opportunities before you and follow the right steps.
My goal at MY RETIREMENT REHAB is to help people understand they aren’t that far behind us and can achieve exactly what we did.