The panelists talk about all aspects of freelancing: contracts, healthcare, life insurance, and more with Amos King.

Transcript

[Hosting and bandwidth provided by the Blue Box Group. Check them out at BlueBox.net.]  [You're fantastic at coding, but do you have an action plan to take it to the next level? The upcoming book, Next Level Freelance will help you optimize your freelance business for happiness. The book is packed with actionable steps to make more money, case studies, tips to find more clients and exercises for you to establish your desired lifestyle. Extras include nine interviews of freelancers who make great money while enjoying great work-life balance, videos on strategies to find quality subcontractors, and videos on making more free time by outsourcing your daily tasks. Check it out today, nextlevelfreelance.com.] [This episode is sponsored by Planscope. Planscope is a project management and collaboration app built for freelancers and the way they work with clients. It makes it easy to price up new estimates, and once you're underway, helps answer the question, “Will this get done on time and under budget?” I've been using Planscope to do my estimates and manage my projects, and I really, really like it. It makes it really easy to keep things in order and understand when things will get done. You can go check it out at planscope.io. ] CHUCK: Hey everybody, and welcome to episode 104 of the Freelancers' Show. This week on our panel we have Eric Davis. ERIC: Hey. CHUCK: Curtis McHale. CURTIS: Good day! CHUCK: Reuven Lerner. REUVEN: Hi, everyone! CHUCK: I'm Charles Max Wood from DevChat.tv and we have a special guest this week, and that is Amos King. AMOS: Good afternoon! CHUCK: So, since you haven't been on the show before, do you wanna introduce yourself? AMOS: Sure. Well you said my name’s Amos King; I freelance under Binary Noggin, is the name of the company, and have been bouncing around doing Agile development and Ruby rescue projects since August 24^th of last year. So relatively recently, I headed out on my own. CHUCK: Cool. Now the topic we have here is freelancing behind the scenes. Do you wanna talk about that a little bit? Were you freelancing before you actually went freelance? Were you moonlighting or something? AMOS: I did do some moonlighting, I would say very little. I think my biggest year of side work, I think I made $5000 and most of that wasn’t profit. It was turned back into buying a laptop in order to do that work. I did that for a little while and my big thing was I did not want to start a company by being in debt. I wanted to start out my freelancing career not working with somebody else without having debt over my head, so I spent a lot of time trying to get rid of that so that I could move forward and have a little more freedom with my time. CHUCK: Well that makes sense. Maybe you can just tell us a little bit about how you got started in freelancing then. AMOS: Originally, it was a friend in college called me up and he was working on some insurance software and needed a little help on the side. That’s how I first started heading out to work this way, and I always kinda wanted to start my own company and do my own thing. I'm pretty opinionated, and I don’t mind telling people my opinions, and I thing that I have a good way to develop software and I wanted to start – I was already doing consulting and I wanted to be able to choose my clients instead of somebody telling me who my clients were going to be. And then over the last couple of years I had, since 2006, I had been commuting 108 miles each way and was getting tired of that. I loved where I worked before, but I had to end it and I had gotten to a point where all of my debt from college and bad choices in the past had started to go away and was like, “Now it’s time to start branching out.” And an old customer, about the same time I was thinking about it, came and said, “Hey, I heard you left. I could really use your help.” It just couldn’t have come at a better time; it was the first day of going out completely on my own; it was my 32^nd birthday and I was just really happy and really excited, and as soon as I got ready to get started he said, “Oh yeah, and we need to get you some other people.” So now I have three subcontractors working with me, too. CHUCK: Cool! AMOS: I think the hardest part of getting started after – I felt like I had the financial thing underway was understanding contracting and getting a lawyer and accounting for the first time, and healthcare, because I never dealt with any of that. CHUCK: Why don’t we talk about some of that? How did you go about figuring that stuff out? I mean, did you talk to somebody who had already been doing it, or did you kinda model your way through it? AMOS: A little bit of both. I started modeling my way through contracts on my own and just trying to read a lot of contracts that people have graciously put out on the internet for others to use. And then I started talking to people in the community that I know that own businesses that deal with contracts – mostly engineers, structural engineers and things like that – there’s a lot of them around here because there's an engineering school right down the road. So I talked to some of those guys, and they actually pointed me to a lawyer, and so my first contract, I ended up taking to a lawyer and sitting down with him. But yeah, at first it was a lot of me back and forth, just negotiating the contract on my own before I ever took it to a lawyer and have them go look at it, and it was based on reading lots of stuff off the internet. CHUCK: Very nice. AMOS: Now, healthcare was kind of a through-the-loop with the Affordable Care Act starting out a lot of places where all the healthcare places that I called up and tried to talk to were very swamped with trying to figure out all the changes coming through, and myself, I felt very overwhelmed. At first I thought, “I'm just going to go do this healthcare; I'm just going to go buy some insurance and move on” and I found out exactly how much goes into insurance and I ended up getting a broker who shops around for me, and that was probably the best. I wish I had done that on day one, because I went a month with absolutely no insurance. CHUCK: Yeah, that’s pretty much what I did. The issue that I ran into, though, was that the insurance company was so backlogged that it took them two months to process my application. AMOS: Oh. Wow. CHUCK: So, I have insurance now, but I didn’t – well, technically it started February 1^st, but I didn’t actually have insurance cards or anything until about a week and a half ago. AMOS: Wow. Yeah, I think the nice thing is when you leave your job, you can – what is it called? Cobra? You don’t actually have to buy Cobra right away; you have up to 30 days to go purchase Cobra back to the beginning, so you can be out of work and just not go get insurance, but if something happens to you, you can then go get Cobra right before you go to the doctor pretty quickly. CHUCK: That’s what I did when I got laid off for my last job, but that was a long time ago. AMOS: One thing that I didn’t think about – I don’t know if you guys did – was life insurance. [Crosstalk] ERIC: We had life insurance back when I was employed and we were able to keep it. AMOS: Oh, that’s nice. I did not. CURTIS: I didn’t have it either so we just recently got [inaudible] two years ago without it, sort of running the business for two years at that point. REUVEN: I never had life insurance until about three or four years ago, maybe a little longer – yeah, it must have been longer, maybe five or six years ago. We decided it’s probably time for me to sign up for all sorts of – sort of the Israeli equivalent of I guess, an IRA and other sorts of things for retirement accounts. It works differently, obviously, but it’s the same sort of idea. So we went to the bank and talked to the person there, and he said, “We’ll give life insurance.” I said, “Oh, no” and he said – and he never said, “Well you really should get it in case you drop dead and your family needs the money” right? So he kept saying, “Well if the worst thing ever would happen, and if the worst thing ever would happen” – he kept repeating this phrase. Literally the next week, I walked past the bank and there was a death notice – the guy had dropped dead, the guy who we had spoken to. CHUCK: Oh wow. CURTIS: Oh my gosh. [Chuckling] ERIC: Did he have life insurance? REUVEN: I hope he had life insurance. We definitely signed up. CURTIS: I started out – from high school, I joined the military and was in the National Guard for 13 years. And at the same time that I was getting out of the National Guard was also when I moved over to freelancing, so I lost my work life insurance from National Guard, and my work life insurance from my employer at the same time. And I had never even thought about it. It was somebody else who came to me about the same time and said, “Hey, have you ever thought about life insurance?” I was like, “Well, I had some but I'm not that old, I'm okay.” And then like, “Well, what happens if you get hit by a bus tomorrow and you have three kids” and my wife, she used to be a high school English teacher and she decided she wanted to stay home – she’ll have to go back to work. I don’t know if you know much about high school teachers but salaries aren’t great. So I was like, “Oh, yeah I never thought about all that” and started looking into how much I should get. I tried to do ten years’ worth of what my salary had been before I went freelancing. CURTIS: Yeah, the way we worked it out is for my wife – she would get interest if we invested the money for about $40,000 a year, which would pay for day care for my kids and for me, we have enough that would replace my income at $70,000 a year so that she would not have to change anything necessarily. AMOS: I think that's kind of a good thing to go for. It’s nice to have that ability not to worry about what's going to happen to my kids and my house and my wife if something happens to me. REUVEN: Yeah, I don’t know if it’s an Israeli thing or if it’s a standard around the world, or maybe in the US, Canada – but when we bought our house, part of the condition for getting a mortgage was that we take our life insurance on it. So if something happens to one of us, it’ll pay for the house, and they’ll be paid back. CURTIS: It was not in Canada, but you could pay ridiculously high amounts to get an insurance on your mortgage which we did at that time then canceled now that our life insurance would cover it. ERIC: Yeah, I heard of mortgage companies requiring that if like you're self-employed, you have a small business, because if it’s all of the income in the house is resting on this risky business, they want extra coverage, and I've heard of that before. It’s like extra stipulation, but it’s in the US, too. CURTIS: They may have done that here, but when we got our mortgage we were both employed, so I was not running my business yet because [inaudible] the house for seven years, so. CHUCK: Yeah, my problem is that I have type II diabetes and I haven't been able to get my numbers all the way to where they want them in order to get term life insurance. So I've got a very poor whole life insurance policy because that’s all I could get, but yeah, it’s definitely something that I'm working on to get better coverage because like you guys are saying, I'd love to be able to get to the point where it’s like, “Look, there's 10 times my salary” or whatever “in there,” or “ten times what I make with my business.” So yeah, if something happens, my wife can just take care of things at least for quite a while. ERIC: Yeah, right after we got married, my father-in-law is actually like a financial services broker so he can do life insurance investments and all that. And so he sat down with us and basically figured out how much we’d need and set us up on an inexpensive plan and it kinda worked well with us [inaudible] 50-ish or something and the idea is at that point, you don’t need it anymore, but he kinda explained a lot of that to us, and that’s where I get a lot of my personal finances – from him, and books he had me read. AMOS: That’s good. So, does everybody have term insurance? Term life? ERIC: Yeah. AMOS: Except for Charles? REUVEN: I have a life insurance policy because of the mortgage – that’s required – and then we have this other life insurance policy that’s separate, that I got, but I'm not sure what you would call it. CHUCK: If it just goes away after so many years, then it’s term. If they're trying to sell it to you as an investment vehicle, then it’s for life. That’s the difference. There's some other new [inaudible] I think, but –. REUVEN: I see. No, no, no, I'm going to be paying for a while forever, as far as I know. And I think you could take it out as an investment. I forgot at exactly what age, but you can either take it out as a lump sum at 60, 65, something like that, or you can get a monthly stipend, monthly payment from it forever. ERIC: Yeah, that’s whole. The basic idea is, term is, you pay money and it’s like car insurance – you hope you don’t die but if you do, they pay you money. And after so many years the policy expires because the ideal is by the time you're 50, 60 or whatever, you have your own savings retirement account, and if you die you have that money to pay for burial expenses and for your spouse or children. Whole is basically term plus a savings account/investment account, but at least from what I've read, you're better off just getting term than a savings account or CD. Whole life insurance can be pretty bad as far as investment returns. CURTIS: Well, most of the time, at least in the US, my understanding is that they keep any of the interest, right? You just get the money, you put [inaudible] earned necessarily. ERIC: Yeah, something like that. I mean it rules into it, so basically, instead of say, in term, maybe pay $100 a month; with whole you pay $100 a month, plus another $100, and that $100 goes into the savings portion. And then eventually that savings portion pave the $100 for the insurance portion, but there's so many fees and stuff –. I mean, the idea is like, “Oh, when you reach 60 you can cash out your whole life insurance and get your savings” but when you compare that to investing in stocks and [inaudible] over that time, it’s just like a penny versus $100,000. CHUCK: Yeah, it’s pretty abysmal. The only reason I have it is because I want something there in case something happens. CURTIS: Yeah, you may not qualify for term. AMOS: The nice thing about that is if you aren’t necessarily great at saving your own money, it kinda forces you to save it. ERIC: Yeah, I mean, [inaudible]. Like I said, my father-in-law kinda taught us and their company policy, they don’t sell whole at all. They have reams of documentation about how it’s bad for the consumer. But yeah, it is kinda [inaudible] for savings, but you can do that by sending up an automatic transfer from a savings account to a checking account. AMOS: Yeah, I went and got term too and ended up – they offered me 20 or 30-year. And I went ahead and took 30, because I started looking at rates when I turn – in 20 years I would be 52, so at rates whenever I turn 52 is so gigantically high that I thought I’ll just go ahead and get 30 now while I'm at this younger age. ERIC: Yeah, it’s statistics. You have x percent chance of dying at this age and it goes up over time. I mean, that’s how you do it. I actually looked at our policy I think last week, and the rate we pay, which is kind of how much risk, like very risk, is low, low, low. And I don’t remember at what year – the premium pretty much is doubles in a year’s time and it just goes skyrocketing form there and that’s when they said, around this time you'd pretty much should have savings and you kinda drop the insurance plan. REUVEN: Based on my brother-in-law’s advice, we found someone, we went to someone who is an expert in pension planning, insurance planning, all this stuff. And it’s still quite a blur for me; you guys have a whole lotta homework to do, but basically, my wife had a whole lot of different pension programs that she had been in from different places she had worked at. I don’t think it was insurance, but it’s all so wrapped up together in Israel – pension, insurance, and so forth – because the pension companies also do the insurance as part of the deal. And it’s just super complicated, I found that going to someone, who then, he said, “I’ll go on your behalf and call up the insurance companies, the pension companies, and negotiate lower rates, so that you're not just losing out on all the interests but you're actually getting something out of it as well. So we have to follow up with it, but I would definitely recommend if –. If people out there are like me and have no idea how this works, then going to someone who knows he can help you can save you a lot of money more than [inaudible] itself. AMOS: In time. REUVEN: Yes, in time. Not the lump sum, right. AMOS: I think that’s the biggest thing that I've learned since going freelancing is that sometimes it’s okay to go pay somebody else because it’s going to take a lot of your time to figure it out, and you have more important things to work on now that you might not have to deal with when you were an employee. CHUCK: Yeah. ERIC: And it’s also the case of – it’s also when you're doing freelance someone’s paying you x amount of dollars to do something. I mean, they might be able to do it and learn it themselves, but by paying you – you're the professional, you know what you're doing, you're going to do a better job, you're going to do it faster, all that – it’s the same thing. If you talk to someone who knows, and lives and breathes insurance, they're probably going to do a better job per hour of their time than you will. CHUCK: Yup. AMOS: And you don’t really pay them per hour, either, right? They get a kickback form the insurance company once you select an insurance policy. REUVEN: [Inaudible] The guy we went to actually, it’s not like that. We pay him, and it’s a flat fee, but I think most other – what do you call it? ERIC: Commissioner? REUVEN: No, no, no, they're pension consultants, and he found that he wasn’t allowed to call himself a consultant in that because that would mean that he would get paid a percentage. So I think he calls himself like a pension architect, and that allows him to get out of that semantics. CHUCK: Well that’s [inaudible]. For the insurance here we just went to – there's a financial planner out here. Somebody mentioned Dave Ramsey before; it’s their ELP out here – I don’t even remember what that stands for, but –. ERIC: Endorsed Local Provider. CHUCK: There you go. AMOS: There you go. Are you guys all Dave Ramsey people? CURTIS: I am. CHUCK: I'm a fan. AMOS: That’s how I got to the I'm not running anything with debt and it’s been fantastic. CHUCK: Yup. CURTIS: Agreed. We did our debt payoff a couple of years back now; it’s been [inaudible]. CHUCK: [Inaudible] AMOS: I have one student loan and my house left, and the student loan will be paid off this month. CHUCK: Very nice. But anyway, so, I just went to them. One thing that you'll find is that some insurance agents, they only sell one company’s insurance. The local provider out here, they sell a couple of different companies, and so they were able to shop around and find us a deal on our health insurance, on our auto insurance, all kinds of stuff. They helped me roll over a 401K from a company I worked for into an IRA – I mean, they’ve done all kinds of stuff for me and that’s the kind of person that I would look for. And even just for insurance, find somebody that’s not stuck with just one insurance company, because what they're doing then is they're trying to sell whichever product makes them the most commission, instead of shopping around and figuring out what works maybe best for you. ERIC: It’s just like freelancing – if all you know is Ruby on Rails, that’s what you're going to provide as a solution. But if you now Rails, [inaudible], PHP, JavaScript – all of those – you might be able to say, “Well, we could do it in Rails but it might be better to do in PHP or something.” There's more tools in their toolkit. I don’t know if there's legalities around it, but typically, if you look for a broker – brokers are usually third parties and they usually have a larger net they can shop around in but there might be some where they are a broker but they only signed up with one person. CHUCK: Yup. So how did you find the people whom you're working for, Amos? AMOS: One of them is my brother-in-law and then one lives down the road from me. He was going to school for computer science and while he was going to school, he would just show up at my office every day and sit down and watch me work, or ask if he could pair with me for free, for long enough that I saw what he was doing in his code, so when I started going out on my own, he had already been working with me a little bit. One of them was a team member on a team that I managed at my previous employer. CHUCK: Ah, you poached somebody, huh? AMOS: Yeah. I had been away from the previous employer for six months, because there was another employer between whenever I first said, “I'm tired of driving 108 miles every day.” There was another guy who said, “Hey, I’ll hire you to work remotely.” So there was a six month period where I was working remote for this other company. CHUCK: Very nice. AMOS: And so I didn’t poach immediately. [Laughter] I tried to take the whole team that used to work with me, because they were pretty fantastic, but that didn’t work. I also do a podcast with my old CTO at that company, so I hope he doesn’t listen and yell at me for poaching his people. [Laughter] CHUCK: Which podcast is that? AMOS: “This Agile Life”? I think that you met one of our hosts out in Vegas? CHUCK: Yeah, I did. I met him at New Media Expo in January. AMOS: Yeah, John? CHUCK: Yup. AMOS: We’ve been doing that podcast – that’s how we started, because we all actually worked at the same company and then now we’re at different companies, but we still do a podcast every week. REUVEN: [Inaudible] I'm still curious to know how you managed these subcontractors. Not legally, like management-wise. Do you find that you're spending a lot of time doing management as opposed to development and is this what you wanted to do as a freelancer? AMOS: Part of me wants to do that kinda thing, because I would like to actually start more than just freelancing, maybe at some point, make a product and have a few people. But I love the code and I never wanna stop, so what worked out for me is I'm doing a lot of team augmentation right now so those subcontractors that are working on that team augmentation, I don’t really manage their day-to-day. The team lead for that company kinda manages what he needs them to do and tells them, “Hey, these are the things that I need done” and I just kinda continue to work on the things that I need done. And so I kinda have the best of both worlds – I have these guys working with me, but I don’t have to deal with them day in and day out, just every once in a while. The biggest thing is doing billing, like I bill for them and then pay them – that’s really the only overhead that I have. CURTIS: How are you normally billing? Hourly, or is it monthly, weekly? AMOS: I'm billing hourly. I would really like to go to a day. Like, you can have me for a day for this price, but it seems to be kinda hard to sell to people. I tried to point out to them that a lot of times, I work more than eight hours a day just because I absolutely love what I do, so in the long run it would be cheaper, but it allows me to – even if I have multiple clients – I can focus. You have me for this day, nobody else am I going to work on. Because when I get up in the morning and when I go to bed at night, I'm still thinking about your problem. I don’t think any thought-based job is really a 9 to 5 job, and so I would like to go to daily billing, personally. CHUCK: Interesting. We have a long discussion about weekly billing, which is also –. CURTIS: Which is how I bill and have for a while now. Love it, so. AMOS: So how do you get a customer to accept that? CURTIS: I tell them that’s how I bill, if they wanna work with me. There are no other options. I guess that works. [Chuckling] Honestly, that was the biggest transition that I made is to switch to that type of billing. I think Eric, months and months ago at this point, said, “So how did you present it?” I said, “Hey, you can do this, or you can do this, or you can do this” and he said, “Why?” Great question. I adjusted the estimate that went up that day and that was the end of it, so. AMOS: Nice. ERIC: It sounds pretty straightforward, but I have talked to a few people that have been making transitions to weekly or hourly, oh sorry, daily or weekly, and that’s, “How did you do it?” “There's no option. That’s they option.” And they said, “Oh, okay.” And a few people have been able transition by just not offering options. AMOS: I did have kind of a similar thing with fixed bit. I have an electric company locally that needs some monitoring software down to monitor their power stations, and they wanted me to come up with a big fixed bid estimate. I mean, I just said that I do an Agile podcast – I was like, “No, I'm not doing that.” That didn’t work. I just never even applied that further to changing how I bill to be weekly or daily or whatever. CURTIS: Yeah, and weekly is just one-week sprintsessentially, right? That’s how I think of it typically. AMOS: So do you have multiple clients at the same time where you work for one one week and the other for the next week, or is it usually a longer-term thing? CURTIS: Most of my clients are three-week projects – that’s my average. ERIC: And in the past I've done where I've had two or three clients and they would be staggering out for like a year or so. So each month, a client gets a week, and that kinda give them a week of intense action, and then a couple of weeks to kinda recover from it. CHUCK: Man, you make it sound rough. ERIC: I mean [inaudible]. Before I start working I wanna make sure the client has everything they need for me, so if they have to get me designs or think through stuff, that has to be done before the week starts. And it’s like Monday and Friday I have an hour, maybe two hours or longer, meetings of what happened the last time, or if we’re ready to launch, we’ve launched it, here’s what's done – you know, the big retrospective stuff. They have to kinda put stuff aside and it’s like full-on with me for that week, but they also get a ton of results in that time and so they can kinda focus work with me and then kinda ignore me for the rest of the month. CHUCK: Right, that makes sense especially in the sense that if you're working on something like Redmine or something they could integrate the changes and get used to them and then figure out what they wanted changed next. ERIC: Yeah. A lot of times they would – like I'd finish features in a week and they would spend the next few weeks to kinda try it out in a semi-live environment, see if it works for them, and in the next month they'd come back and say, “Okay, it worked for us except for this tiny bits” and they have made tweaks. It’s almost like this big release and then you kinda have a little bit of cleanup work afterwards. CURTIS: And the biggest thing for me with getting to the weeks is no contact switching, because I am terrible at contact switching between multiple clients in a day – I just can’t even do it, so I don’t. CHUCK: Yeah, in a day it’s hard. I think during the week, if you wake up the next day, I know you're going to be working on the next client’s stuff. That’s a little bit easier on you. CURTIS: Yeah, maybe for you. I hate it, that’s why I just do weekly. AMOS: Yeah, I don’t think I could do multiple clients in a single day. My brain would just be mush. CHUCK: Yup. I have another question. I don’t know if we talked about this other podcast, but you mentioned that you rented an office? AMOS: Yes. CHUCK: How does that work? That’s something that I looked at doing. I like working from home, but it’d be nice to have someplace where it’s just like, “I'm going to the office.” [Inaudible] hear it anymore. AMOS: There's a building here that I'm in that has an accountant, some guys that sell some plumbing equipment, there's a civil engineer, a newspaper and a chiropractor. The fantastic thing about it is it’s semi, like a co-working space that you would find in the city, except where everybody has a private office. So I pay a lot less for the office – it includes internet and I have this whole group of people out here that are mostly small businesses and I can go talk to them and say, “Hey, that’s how I dealt with my accounting this year.” I didn’t really know what to do and I went over to the chiropractor and said, “Hey, guys. How do you deal with your accounting stuff?” and so it’s like a little support group in an office. And it’s three miles from my house, which – that helps me with I guess the context switch. Like I said, I love my job; when my wife is busy and my kids are asleep, I start programming again. And so for me, to be able to separate my work life from my home life is really, really important. CHUCK: Yeah, I kinda wonder if I would get more done if I did that. I mean, it seems like I'm getting more and more distracted with the stuff at home and I think my wife would cry if I worked in an office, so. AMOS: The kitchen is way too close for me when I'm sitting at home. If it snows really bad and I can’t make it to the office – it’s happened a few times – I will work from home, but I am way less productive. I don’t even charge for my full time. I may work eight hours and charge for six that day because I know that there was a little time that I'm might have been distracted, and I would rather undercharge than overcharge. But yeah, I would get up and go get a drink of water, and then when I'm in there, I'm talking to my wife for a minute, so yeah, it just didn’t work out for me. CHUCK: Yeah, I can understand that. CURTIS: The benefit for me has always been my wife yelling up, “Hey, our daughter is just starting to walk! Come see it!” so I did not miss the first steps, really, for our first daughter and hopefully I won’t miss them for a second out here either. AMOS: That’s pretty awesome. REUVEN: Why, that’s definitely the upside of being at home, that you can take those [inaudible] or be involved with your kids’ lives, or just have family-life, and the downside is, well, you're distracted by your family life and the things that are there. “It’ll just take a few minutes to do the dishes” “It’ll just take a few minutes and look through the newspaper” and pretty soon the day is gone, or it can be if you're not disciplined. CHUCK: I think my biggest issue comes down to the fact that my wife is used to me being here, and so she’ll come in – she comes in [inaudible] three or four times a day. AMOS: Well because my office is only three or four miles away, my wife has no problem coming in and talking to me or asking me to go do something. So I try to get an office that was close for that reason; not that my town is big enough to even make a difference. I can be all the way on the other side of town and it would still take ten minutes to get there. Having that separation, I think, was really important from going to where I was gone 12 hours a day with eight hours of work and four hours of commune, to I only have a 3-mile commune and I control my time a little more, so my wife is like, “Oh, can you run to the grocery store? Can you do this?” and I think that it would be even worse if I had stayed at home. REUVEN: Have any of you guys ever considered a co-working space? Or are there such things where you are? Because there's one that opened relatively near me, but it’s like, I don’t know – about a 10 to 15-minute drive and we only have one car. So I typically – I wouldn’t have the car if my wife was working that day outside the house, so it’d be a pain to get to and also I'm just not convinced it’s worth the money, because no one’s at home during the day until my kids get back then I might as well just work on my own. CURTIS: I had one for a while; it was the next town over so it was like a 40-km trip for me. I went there a few times; the biggest thing that I found there is that, like I put my headphones on and be working and one person specifically would still come up and monopolize all my time. And so I’d look at the end of the day, I did nothing all day. But I helped him build his stuff, which is great. CHUCK: [Laughs] I could see that. I considered starting one out here, but I have some other things going on that I would use the space for as well. REUVEN: What you described is where you helped this other guy, my impression is that the upside of this co-working space is that you're with other techie types and so you can exchange information and ideas and help each other. If you're just trying to put your head down and get a lot of work done, it’s not necessarily that useful. CURTIS: I talked to my wife about starting one here  in the town over from us; there isn’t one, but there's a college and there's a couple of small programming – I wouldn’t say satellite locations from the cities that they have [inaudible] college, where they hire a lot of college students – and I thought that a co-working space would be nice. But I think I would want one that still had, like you had a private room that you and maybe enough room for a couple other people for like your team could go and work so that nobody could bug you. Even if you had your headphones on; you could just shut the door. But have that open space where you can go out and be with people who are going through the same struggles as you whenever you need a break so that you could go and talk to them about it. CHUCK: Yeah, that’s kind of the idea that I've had where you have a big, open space that’s kinda the general purpose – everybody can go use that space – and then the folks that really want it, they can just go pay for a private office and then they can basically do whatever they want to in there, and then just have a few other facilities like a conference room, maybe a separate training room or something. AMOS: I just want a barista. [Laughter] REUVEN: I think it was about two weeks ago, I needed to get some things done, and it was morning and my work was going to [inaudible] you know, I just needed to really concentrate. I went to our local public library which was about a five-minute walk from my house, and there was a room in there, and they have Wi-Fi there, and there was a room with other people working on computers – I actually felt incredibly effective because basically everyone’s there working at their computers, it’s incredibly quiet, and so I wasn’t distracted by things in the house and I felt this sort of subtle, quiet, peer pressure, “Ooh, I better be efficient. I better actually get work done.” And so that’s sort of a free version of that, I guess. CURTIS: I go to Starbucks twice a week at 6am and work till lunch, basically. Usually I'm focused enough in that time, twice a week, but I do like a whole day’s worth of typical work, a whole day’s worth of billable hours before lunch and I clean up a few things after lunch, and I cut my day at like two o’clock in the afternoon or three. CHUCK: There's a restaurant over here that has Wi-Fi and booths, plenty of room, they're almost never full, and so I’ll just go park there for a few hours. CURTIS: I actually budget for it like my rent so I top up a Starbucks card every month with essentially my rent to go to Starbucks for work stuff. CHUCK: That’s an idea. AMOS: Oh, I'm doing this. REUVEN: Is it still cheaper though, to go to Starbucks for that many hours and know how much you buy there? CURTIS: I spend $75 a month for Starbucks – max. REUVEN: Okay [inaudible]. CURTIS: [inaudible] I camp out in one corner and it’s fine. It’s kind of off to the side a bit and I have my back to everyone and looking out to the window so I can see the road and I have a good set of headphones that block out a lot of noise. AMOS: One of my subcontractors actually splits office rent with me now because he lives so close to me. He’s like, “Hey, can I just come and work with you so that I can get out of the house once in a while too?” and so when he’s not here, I don’t know if I could handle the library; it’s too silent for me. I actually go to a website called Coffitivity that just sounds like a coffee shop in the background. CHUCK: Awesome! AMOS: And I would turn that on if I'm here by myself. Or if there is a coffee shop in the next town that I would go to every once in a while, but I am writing down that I need to get a card that I just refill every month because I'm always afraid to go there, because I'm afraid I’ll just spend and spend and spend money on coffee. CURTIS: All that stuff [inaudible] business expenses too, right, and I’ll keep every receipt I just spend off for the business off this one card and anytime I go outside I go I just pay with my own cash for something. AMOS: So you just have one receipt for that card, right? CURTIS: Yup! One receipt a month, for $75. Sometimes I've got to the end of the month, so last month through January when we had our new baby, I got to the end of January and I was like, I got $65 because I was doing baby stuff, not working all the time. REUVEN: [Inaudible] coffee. CURTIS: Yeah, one $65 coffee – just, I don’t know, put gold flakes in it for me. [Laughter] AMOS: Yeah, I think that that has been kind of a pain for me too is remembering –. Receipts are too horrible because I just jam them in my pocket till later, but remembering whenever I'm traveling in my car for business to track my mileage and things like that – I forget all the time and I don’t know how much money I'm leaving behind by doing that. CURTIS: Because I ride my bike so much instead of the car, I can track my bike mileage and write off a portion of my bicycle every year. AMOS: Oh, nice. CURTIS: I use it for work, right? Just like I would a car to travel to places for work. CHUCK: So are there any other things that you struggled with when you were getting started? AMOS: I think that I mentioned accounting and talking to the people across the hall. I think it’s important whenever you're starting up to find like-minded people. They don’t necessarily have to be developers, but just small business people who have been through some of the startles of small business are great to have around and they pointed me in the right directions with accounting about –. I don’t know how you guys deal with it, I kind of put myself on almost a salary and I keep some of the money in the business, and I pay myself, and then every time I pay myself I take money, more money, and place it into a savings account for taxes, based on how much I pull out to pay myself. And that has dramatically helped me because that was the big thing was the first day that I went in and talked to an accountant – I had been paranoid about taxes anyway, so I wasn’t spending anything, and when they told me how much that check was, that first check I had to write, I said, “Whoa, wait a minute! How much? I need to start saving for this next year.” CHUCK: Yeah. CURTIS: Yeah, [inaudible] not saving for taxes. Now I save 30% of every invoice that comes through and I just normalize it by paying myself a salary monthly. AMOS: Yeah, that’s what I did. Do you find that that 30% is too much or too little? Because I went with 25% - that’s what my accountant suggested, but I don’t know. CURTIS: 25% should be enough for me in Canada, but 5% is cushion, so say you jump a tax bracket, just say, “It doesn’t matter because I've got extra 5% for the last two years running, just sitting in an account” right? [Inaudible] happens it’s like extra cushion, so I just save 30% all the time and round up. So if it’s $775, I just save 800. ERIC: I do 35% and we used to have extra cash in there and that would be an end-of-the-year bonus, because you can get tax reductions based on how you did it, but this year 35% wasn’t enough so I might actually crank it up to 40% or more. I think it’s – stuff in the US is changing tax-wise and there's a couple, like self-employment tax, I think there's a tax break going on for a few years, and so basically from that I've jumped up 2% automatically for everyone self-employed as of I think last year. CURTIS: Yeah, in Canada, I’ll incorporate this year, which will drop my tax rate to 19% on all business money, and then anything I’d pay, I'd still pay 25%. But I’ll be the employee of my own business at that point. ERIC: Would you get double taxed? CURTIS: I don’t believe so, but I have to confirm with my accountant. I talked to two accountants; they both said that’s the right way to do it, so. ERIC: Yeah, because in the US, that’s the problem we have. If you have an actual corporation, you might pay corporate tax on stuff and be required to take all the money out and then you pay personal tax, because it’s an income, it’s a salary as an employee. So yeah, I mean, taxes are hard, but I think 30-35% of your gross revenue, like what you bring on an invoice is kind of a good cushion, but I have in combination with the large emergency fund which we’re going to be using for last year because it was such a big hit. REUVEN: I definitely have that issue where I have a company, I incorporated a business, and so the business pays taxes and then I pay myself as well and I pay taxes on that, and we try to keep the company’s profits low so that the taxes are low each year. And last year, actually, the company was fairly profitable so what we did was, [inaudible] trying to hurry up the tax report for last year so I ended up paying a fair amount and I don’t know what it’s like elsewhere, but in Israel it would be like, it is where you can spread the payments out, so I gave the government 10 checks, post-dated checks, so they can take that in my account every month. And basically we’re going to try in the next few weeks to do my taxes for 2013, and then that'll reduce those checks by a lot, and I’ll just write the new, smaller checks. CURTIS: Yeah, this year I had to pay quarterly, so I've already paid double, triple of what I paid last year in taxes, and then I’ll see what comes out. It’d be probably a little of what I owe, still, when we do our taxes next month. ERIC: Yeah, and this goes back to the advice, find a good accountant, because my first year [inaudible] and just pay taxes at the end of the year and have an accountant help me with that, and because I didn’t do quarterly I got hit with tax penalty payments, fees, a whole bunch of stuff, because I didn’t know you're supposed to send checks. In the US there's a pretty complex schedule; you have to send this much in so you don’t get a fee at the end of the year. AMOS: Yeah, I got hit with a little one because I didn’t do itin time. So in the US, one of the quarterly payments is September 15^th, and that’s for August, and I started August 24^th, so I actually got paid in August and didn’t think that I was going to need to actually pay quarterly taxes on that and then the government complained. It wasn’t much; it was very little, but I’ll pay the IRS an awful lot of money just to leave me alone. CHUCK: Alright, well is there anything else that we should talk about before we start wrapping up the show? REUVEN: I'm curious, Amos, it sounds like you had a great thing going with you and your subcontractors and your current client – are you thinking ahead it all and looking at, talking to potential other clients, or are you sort of figuring when this gig ends, you'll just look around and find something else and if it takes a while, then that’s okay? AMOS: I had been talking to other clients; most of them are not as big as this client. I think I mentioned earlier that I'm talking to an electric company. I have not finalized the contract with them, but I was able to push back on the “I'm not doing fixed bid for this” but that'll be one day a week and probably a pretty short contract. I imagine that it’ll probably be like a month of a day a week, just because what they need is so tiny. But yeah, I am starting to look around and that's also why I told my client that I could only do 32 hours is because I knew going into this that I would need overhead of time to look for other contracts and just build who I am out in the world so that people know to look for me. One thing that I haven't done yet is build a website for myself, because I find that the word-of-mouth stuff has been going around well enough that I don’t need to. But yeah, I am looking around. [Inaudible] part of running a business with no debt is that hopefully I do have a little more time that I could spend between clients, if I feel like being picky. CHUCK: Makes sense. Alright, well let’s go ahead and do the picks. Reuven, you wanna start us off with the picks? REUVEN: Sure. This week has been a lot of digging in – I know you'd all be surprised here – there's a lot of digging on dissertation, writing, writing, writing, and a lot of editing, and so two of the tools that I've been using a lot –. I know that I have – yes, yes, yes, you guys can all be sarcastic at the back channel [inaudible] once again. I am actually going to pick something again, which is Postgre, just because I have been using it so much for m y data analysis and it’s such a pleasure to be able to pull my data out in all sorts of ways. And I've also been using – I don’t think I've picked it before – R. R is just great language for statistical analysis. It’s super easy to use especially if you don’t know a lot about statistics. Like me, I've only taken about two quarters of it, but great language, enormous number of packages, great graphics, definitely makes life easy for any needing to pull stuff out. And you can even combine the two – R is one of the languages that you can stick inside a Postgre, so if you wanna do a statistical analysis of information you’ve got in tables, you can do that as well. Anyway, that’s it for this week. CHUCK: Awesome. Curtis, what are your picks? CURTIS: Got one. A friend of mine has started writing a site called 40 Mantras. It’s the 40 Mantras that he operates by as he’s run software [inaudible] teams for the last, it’s like 15 or 20 years now. Everything from [inaudible] clients, old [inaudible] plans and stuff, software for those to more I guess traditional software like we develop now. Quite interesting, short posts. CHUCK: Awesome. Eric, what are your picks? ERIC: Alright, so I got one pick today. It’s a blog post called What's Controlling You? It’s interesting because it’s about technology in the modern life and how we’re basically on our smart phones almost all the time. So it’s a pretty interesting thing to think about especially if you have a smart phone addiction like I do. CHUCK: Cool. Alright, I've got a pick. I just finished reading So Good They Can’t Ignore You. It’s a book by Cal Newport and it basically outlines his study into people who have jobs that they're passionate about, that they love doing. It was really interesting because he really debunks the passion hypothesis for finding a job – you know, go to where your passion is, and instead talks about what kinds of things people do in order to wind up in positions they can enjoy. So it was really interesting. At first, I listened to it on Audible and at first, when I was listening to it, I was really kinda down on the book because I really kinda subscribed to the passion hypothesis, but as he continued to explain where he was coming from and where different people come from in order to be in the place where they love their job, it really kinda mirrored my path into programming and how I wound up doing something that I really enjoy. So I'm going to pick that book. Amos, what are your picks? AMOS: I just have one. I haven't read the whole book, but I'm reading The Psychology of Computer Programming by Gerald Weinberg, and it’s just been fantastic. It was written – I don’t remember what year – sometime in ’71 I believe, and is still being printed today. I got it on my Kindle, and it’s about people and programming, and I think that we often forget that our jobs are more about people than they are about technology, sometimes. He has just some really good, insightful things in there and I think that it’s worth looking into. CHUCK: Awesome! Well, thanks for coming, Amos. AMOS: Thank you! CHUCK: I really appreciate you taking the time. I don’t think we have any announcements, so we’ll wrap up and we’ll catch you all next week!