Happy Henrys

How to Be Happy and Rich

What To Do With a Bonus

As a Henry you’re likely getting a yearly bonus, maybe some stock options added in for the mix. These can be a substantial part of your income, but I find where I work everyone is already spending them before they land in their bank account. The week before our bonus payment people were showing up with new clothes, looking at vacations, spending, spending, spending. They all pass up the great opportunity a bonus creates, to live on your normal salary and then use it for early retirement and of course a little treat. The problem is I think people should save 80-90% of their after tax bonus and just spend a little.

So where should you spend the money if you get a bonus:

  1. Pay off debt (including mortgage)
  2. Invest
  3. Treat yourself to something (10-20% after tax)

My recent bonus and long term incentives was sizeable at over 40% of my yearly salary. Where did it go? All to savings. First I filled up my registered savings, then my wife’s TFSA and finally put the remaining into unregistered savings. We may spend a bit on a new patio set out back, but we’ll keep the majority until our kids are in school and my wife’s back to work and then a large portion will go against the mortgage. It’s less efficient from an investment perspective, but it gives us a big safety net and allows us to reduce our stress and take a chance on other things, like a new job.

That’s right Happy Henry’s is taking on a new job. Stay tuned for more info.

-Happy Henry



Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel, Blake Masters

A great book on why you should try to start with a small market and build a monopoly. Peter raises some great questions to guide you in your search of what you should build and goes against the grain of test, fail, repeat.

Rating 8/10

How To Get Rich by Felix Dennis

This book should be read by anyone trying to start a business or running one. Felix Dennis is a brilliant writer who actually made a fortune. He tells you your crazy if you waste all your time trying to get rich, but lets you know how to do it if you can’t stop yourself from craving more comma’s in you bank statement. It’s rare someone truly wealthy actually writes their own book, tells great stories and has been in the publishing business long enough to do it right.

Rating 11/10


Great Business Ideas #1

I’m annoyed when I see lists from all these business sites that typically sound something like “50 great business you can start with no money.” So here’s a few business ideas I think are less generic than the typical “start a  food truck” “become a hair dresser.” Hopefully, they peak your interest and get you thinking of different ways you could increase your earning potential to become a Happy Henry if you’re not one already.

Whole Foods Store powered by Amazon

Whole Foods limits what can go into their store with a detailed list of 70+ ingredients that are not allowed. It’s essentially a filter for healthier eating. Walk into a Whole Foods and anything on the shelves is a lot less dangerous than the typical grocery store. But it’s expensive and amazon’s awesome.

Someone needs to start a “whole foods within amazon”, obviously called something else to avoid trouble. This is how I’d do it.

  1. Sign up for an amazon affiliate account which lets you make a % of every sale that you direct to amazon.
  2. Pull the names of every product sold at whole foods.
  3. Create a site that only has those items sold at whole foods that are sold by Amazon linking them through your affiliate account.
  4. Create an option to only show items that are shipped by prime.
  5. Then market the site by sending out press releases on which ingredients are excluded, etc.

This is a relatively easy idea to execute and would take almost no funding to start. I think it’s smart. If you’re looking for a part time idea or your first business, look into this one.

Transparent Vodka

As an alcohol vodka’s are very similar, but great effort is put into marketing them, whether it be million dollar ad campaigns, distinctive bottles or putting your clear brew into glass skulls. Years ago Everlane created an infographic to show that a designer shirt that retailed for $50 only cost $6.70 to make. The materials were inexpensive, it was the branding that cost you so much (and retailers mark up).

infographic everlane

There’s a chance for someone to start a transparent vodka. One that admits the 5th filtering is likely not necessary and issues an infographic showing the costs to create a great product and then the eventual cost to the consumer after all the marketing and profit margin. This would allow you to buy a cheaper product, but still feel like it’s a premium product. You’re getting a deal, not buying cheap. It would be the standard hard push to get distribution, but then hopefully when you’re allowed to ship online to the whole country (which will someday hopefully happen) you will have already started on the Warby Parker or Everlane of spirits and be ahead of the game.

Cameron Hughes for Beer

You may have seen Cameron Hughes wines, which are labelled in lots, at a wine store or Costco. His company deals with excess wine from vineyards. It helps the vineyards unload the wine they can’t sell easily, while retaining their high image profile by not discounting their own stock. This model’s popular in Europe and Cameron Hughes brought it over to great success in the US years ago.

With over 3,000 breweries in the states I think there’s a market for a similar approach with beer. Most breweries expand capacity in large chunks as they grow and during these phases they have excess capacity for a period of time. The industry has also been growing quickly, but when it eventually slows there will be a systemic excess capacity across the industry by the nature of having 3,000+ operators.

I think you could approach this business in two ways.

First, you could operate as Cameron Hughes does, have your own line of beer “lots” where say you have IPA lot #1, then Stout lot #1, etc. This would enable you to build your own brand while selling others excess capacity. You could also send a portable canning truck to the brewery so you could control that process and add further value to the brewer. These are available for contract now.

Second, you could operate more as a marketing arm where you have IPA lot #1 with 6 different breweries inside. This would let people try a bunch of beers, which would be great, but be much more difficult to coordinate and likely less margin as you’re essentially repacking.

Either way I haven’t seen an equivalent to Cameron Hughes in the beer space and I think it’s due. It’s a giant market with excess capacity built into it’s structure with contract canning capacity available. It’s only a matter of time.

Online Travel Business Idea

Online travel is a very hard space to compete in. It’s run by the oligarch’s Priceline, Expedia, Trip Advisor and coming under pressure from new competitors all the time Kayak (bought by Priceline), Airbnb, etc. But it is a lucrative space to play in as Priceline or Airbnb’s valuation clearly show ($67 & ~$25 billion respectively).

In this space the booking and reviews are handled superbly and would be hard to compete against. But what about travel content… I think there’s a way you could use seekingalpha.com’s format for travel. Seeking Alpha is a finance site that allows users to post stock ideas online. They get paid ~$0.01/view and there’s bonus payments as well. It’s sorted by company and has top trending stories.

To translate this to a travel format I would organize by destination and then have bloggers post guest content. I would also pay for content at the start to build up a mass of content around a few popular areas. As the site grew I think more people would post, as they do on trip advisor, to share info and drive people to their blogs or businesses as well.

This would add value as instead of going to Disneyland in Trip Advisor and getting a whole bunch of reviews it would rank the best articles. Hotel walking distance times to Disneyland, best Disneyland restaurants, etc. All in one place and all vetted by a network.

Then you could make money the standard way by having ads and linking to flights/hotels through the big names. Needs a bit of critical mass to really move, but with some money for content and a push for guest content built around a few key places to start it could turn into something worthwhile.

Renting houses to owners

Lots of people want to invest in real estate. Real estate is becoming more expensive. The best renters are owners. I think all of these points lead to a unique opportunity. Essentially, investing in down payments to gain from a portion of the appreciation of the home. Instead of a young buyer putting up 5% of the house price as a down payment he would be matched with investor funds for an additional 5%. This would reduce the mortgage as well as the mortgage insurance. Then when the buyer goes to sell the house the investor receives half of the appreciation.

For example, someone buys a $500,000 house with 5% of their own money and 5% of the investors. Then the house appreciates at 2% per year for 10 years. The house is now worth $609,000. If it sold the appreciation of $109,000 would be split (ignoring fees right now) and the investor would receive the original $25,000 back for a total of $79,500. This would be a return of over 200% (54,500 appreciation over 25,000 investment), which over 10 years is ~12%.

Then if you assume that the fund doing the investing (the real business opportunity) is taking 2% of assets and 20% of profits the investor would still receive 9%+ per year on their invested funds and the fund is making 2% on assets and 20% of profits on an asset that is levered and typically over long period of times rises inline with inflation.

The home buyer would benefit from lower mortgage insurance payments on the front end and less money invested in the home. Obvious downside is less appreciation. For the investor, they don’t earn interest on their money invested (although this could be worked into the equation and taken on the back end), but they do get to invest in real estate beside an owner which leads to no upkeep and the ability to invest smaller amounts into more deals and gain an outsized portion of the appreciation.

I think this is an interesting thought experiment, but there’s lots of issues. The mortgage insurance company I used wouldn’t even allow down payment assistance linked to appreciation sharing, what happens if the value falls, liquidity is an issue if they never sell, etc. Let us know if you have any ideas on how to invest alongside owners in real estate.

Life Expectancy Clock – app idea for the Apple Watch

This would be a health app that counts down your years and days left on this earth. You would first input your key life expectancy parameters – gender, country, age, smoker, height, weight, etc. Then for free it would provide a life expectancy ex. 45.5 years and count this down with an analog clock going in reverse to remind you to seize the day.

Then for a fee it would track your health inputs (steps, sleeping, etc) and adjust your standard life expectancy with a daily and weekly summary – You’ve added 5 days to  your life expectancy. This would all be based on the research around fitness, sleep, etc. that impact your life expectancy.

I think this freemium model would work and with less watch apps than phone apps there would be a better chance on being featured in the app store.

Create a Society for Wine Lovers

In 1874 the Wine Society was started in the UK as a co-operative company to buy good quality wines and sell them to members. It’s still owned by the members, carries ~1,500 wines with over 200 priced below £7.95 a bottle. It costs £40 to join, but there is no recurring fee. You pay once and then you get access to joint buying power and a community. They also have nine buyers who travel the world and only buy wines based on what they love.

This could be a great model for a lifestyle business. You could even introduce a yearly fee to help cover the costs of running the business (including your salary). You would have to start small and ideally have a niche where you could get noticed and source wines for a group that would be willing to pay a small fee to access these wines. As the business grew you could increase your buying power and ideally become a direct buy for wine. This could be a challenge though as Costco is a fierce competitor.

It could be smarter to pick a niche and source wines that are not available in your typical store, or provide tasting guide, or other services that aren’t typically encountered. It would be great to even do an online live tasting where you ship out a package of 3 wines that you’ll be tasting and then people can participate live or watch the recording later while you give reviews and guidance.

Better yet… What other product are people passionate about that you could create a society for and base it on shared savings and passing along great service. Where the company is owned by the members, but it provides a great lifestyle and salary for you?

Daily Paycheck – Changing How Finance Works

I think people would have a much clearer picture of their finances if a finance start up changed everything to a daily amount. Instead of your bank showing a paycheck twice a month and the mortgage or rent coming out once a month it would be daily. You’d see your daily salary of $100 come in and $25 per day come out for your rent. Then you’d have your cable, internet, car payment and anything else that’s relatively fixed come out and shown clearly. This would change how people think about money. It would be a clear link to in and out and then the discretionary items on top of that would be made with more info.

No longer would it be “I have $300 in my account I can afford that” but “I only have $20 a day to spend over everything else so those pants are 5 days of disposable income.”

I think this would be a great way to enlighten people. It could be designed a few ways as a business.

  1. As a finance add on app – Think mint, but simpler and focused on daily ins/outs. Then you’d make revenue by showing them products that would benefit them like mint does (better loans, etc). Or you could link to a savings account and start investing like wealth front, betterment, etc.
  2. A bank where everything is handled on a daily basis. That be crazy.

A Few Thoughts on Business Ideas and Testing them

Why Business Ideas Matter

Ideas are often said to be worthless and only execution matters. And I would agree if the context was one person. If you’re a person who just has ideas and doesn’t execute then yes they are worthless. But if you expand the reach of your ideas then someone could execute on them and they become valuable. Just not to the thinker, but the entrepreneur and hopefully society.

In general I think of ideas as a multiplier, which was not my idea, but one which Derek Sivers clearly covers in this post. Given Derek’s equation you need to take your idea x your ability to execute. Assuming you’re great at executing, which Derek thinks can create a $1 million business then the goal of this site is to help you maximize your leverage with an idea. Going from a weak idea with a multiplier of 1x to a good idea at 10x, or a great idea with 20x has a significant impact.

And an idea paired with execution can have secondary effects that are multipliers. Elon Musk had an idea. Create an electric sports car, then a luxury electric car and finally an every person electric car. Then he built it. But the real value will be what the industry does around him as they adopt electric cars, safer cars and better designed cars. That secondary effect is the multiplier of his idea and execution.

So that’s what we’re trying to do here. We’re trying to help people come up with brilliant ideas or at least ideas that they can build into their existing models. We’re trying to take a 1x idea to 10x and a 10x idea to 20x.

Testing a Business Idea

I’ve started a few businesses and at the start you’re always optimistic. And of course why would you start a business if you didn’t think it would work. In the last few years there’s been lots of coverage on the lean startup method, pushed forward by Eric Ries who wrote the book (link). It focuses on testing an idea with your minimum viable product, iterating and adapting until you find something that works. In the opposite corner is Peter Thiel who thinks you need to think through a business and build it with intelligent design (link).

I think you should do both, but focus on cheap intelligent design and test early. Some of my friends started a sock brand years ago, which they’ve since sold. They had a high quality product in funky colors, great branding and they thought it was a slam dunk. They were about to order their first order, which came out to ~$12,000 and then one of them asked “What do we do if it doesn’t work?” They didn’t have enough money to do another run (or the courage to throw that amount of money after the first test if it didn’t work out). So they went back to the drawing board, started looking for manufacturers with lower minimums and went from there. End result, their first order was ~$2,000, which let them test the market.

So focus on the design of the business. How it looks, feels, the economics, where it could go. But when it comes down to spending dollars, think small, think iterative. Pay more for less quantity, buy existing products to see if they would work. Don’t spend all the time doing the code, manually run the work in the back ground until people show interest. Think big, think long, spend small, iterate.

-Happy Henry


Running out of Registered Investment Space

I’m fortunate enough to have run out of room in my registered retirement accounts (RRSP/TFSA in Canada or 401K/IRA in US) but I’m finding investing in equities outside of a tax protected account as a mental hurdle. I can’t imagine paying tax on all the dividends and capital gains just because I can’t squeeze any more into my registered retirement accounts.

This mental hurdle got me thinking, after all it’s better to have a ton of money invested and saved regardless of whether you’re paying tax on it or not, you have to optimize, but to retire early you have to have lots of money and it’s not all going to fit into tax protected accounts. So if that’s the right decision then why do I have this mental hurdle stopping me from putting even more into equities? I think it’s because there’s an artificial limit that creates an anchor.

Let me explain, there was a study years ago that showed if credit card companies put that minimum payment amount on your statement you are less likely to pay more. That’s right less likely. It creates an anchor and now if you owe $1,000 and were going to pay off as much as you could say $400 but then you see the minimum payment is $20 it seems okay to pay less. It’s permissive. It says “don’t worry you don’t have to pay everything you could, you’re already doing more than the minimum, go ahead put $100 down, that’s way more than the minimum.” And bam, interest keeps accruing to the credit card companies. Brilliant for business, great for the people who use credit cards for points and pay them off every month, horrible for people in paycheck to paycheck hell.

I think the same mechanics are working in my head when I’m investing. I’ve already maxed out everything, I’m doing way better than the average, I’m okay. The government has created an anchor on the high side of my investing and I need to break through it. After all your investment allocation shouldn’t be determined by your registered retirement savings limit, but by the maximum you can invest after you reach a simple lifestyle (that you enjoy if you can afford it, after all we’re Henry’s here).

-Happy Henry


Why You Should Invest in Index Funds

Now a ton has been written on why you should invest in ETF index funds instead of individual stocks or actively traded mutual funds. But I’d like to add a point that I don’t think is typically given. You should invest in index funds to reduce your cognitive load and background stress.

When I invest in individual stocks it’s exciting, especially if it starts going up. But here’s the rub, even if it’s going up you have to ask yourself:

  1. Is it going up faster than the market?
  2. Would you still invest in the company at this price?

Now I’m all about keeping investments forever if you have Warren Buffett’s skill, but the majority of us make a wrong bet every now and again. So what do you do? Keep the stock? Sell it and worry that you’ve missed out on more upside? All this eats up precious thinking time and creates stress.

The opposite is true when a stock goes down.

  1. Is it going down faster than the market?
  2. Is it more sensitive to downturns? Or has it been oversold?
  3. Should I buy more and average down?

These questions contrast greatly to when anything happens if you’re properly diversified in index funds. If the index goes up or down all I ask is:

  1. Is my allocation right?
  2. Do I still believe in capitalism?

That’s it. If you invest in index funds, think capitalism is the best system we’ve invented so far then you just rebalance when you need to and leave everything else alone. You don’t have to worry about losing everything, you don’t have to try and be smart. You just have to believe that people are going to start companies, hire people and people will buy things from those companies.

-Happy Henry


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