June 2018 - Smart Money Seed

6/29/18

Oh, the places I can go. . . (with my companion!)

6/29/2018
I don't normally brag, but if bragging means I might be able to motivate you to go out and get a companion pass, then I'm going to brag! I've already shared how I went about earning the pass, but now I'm going to show you how I plan on using it!

The Investment

First things first, let's talk about the initial investment. Earning the companion pass isn't free, so I want to be fair and recap the costs I've incurred.

  • Card fees - both the Southwest Plus card and the Southwest Business card come with annual fees ($69 and $99) that can't be avoided. The natural instinct is to avoid credit cards with annual fees, but I think you'll soon see the value that these cards bring.
  • Gift card fees - each gift card used for the manufactured spending comes with $4.95 activation fee. I ended up needing 10 cards (4 @ $500 for the Plus card and 6 @ $500 for the Business card), so the total fees tally up to $49.50.
  • Money order fees - I purchased my money orders at Giant Eagle for $0.79 each, totaling $7.90.
This brings me to a grand total of a $225.40 investment - certainly a little bit of cash to spend! But don't worry, you can get a pretty nice ROI on this investment.

The Reward

Let's recap what this $225.40 investment got me.

  • Southwest Points - Meeting the minimum spend gave me bonus' of 50,000 and 60,000 points, plus I earned 1 point for every dollar spent. For simplicities sake lets call it 115,000 (the bonus' plus the $5,000 I spent on gift cards).
  • The Companion Pass - by now we all know what this is. It's a pass that allows me to take a designated companion on any flight I take for free!

The ROI

Now comes the fun part. Let's talk about how I plan on utilizing this perk see how it stacks up versus the investment.

What happens in Vegas, stays in Vegas. . . including all of Fields' money!

Vegas
As I shared last week the first trip I'm taking is to Las Vegas. I'm headed out for a friends bachelor party, but I decided to go a couple days earlier and fly my friend Jordan out with me. I purchased my roundtrip tickets by using a little over 20,000 of my Southwest points and a whopping $11.20 ($5.60 each way) for a security fee that cannot be waived. I added Fields as my companion for the trip out for another $5.60. Current flights from Columbus are about $220 each way, and since I got 3 flights (roundtrip for me and one way for Fields), that's a $660 value. It doesn't take a financial analyst to see that the investment is quickly paying for itself!

Note: SMS is not factoring any money that I lose in Vegas into this equation!


I'm ready for some drinks on the beach!

Aruba
We don't have it set in stone, but Rosie and I are seriously considering Aruba as potential honeymoon destination. We only have two main criteria that need to be met:

1. Nice beaches for lounging
2. A place we haven't been before

I think Aruba definitely checks the box for both of those! A roundtrip flight will be somewhere in the ballpark of 50,000 Southwest Points and will have about $90 in fees per person. Yes, that means we can get roundtrip flights for only $180 out of pocket! Typically roundtrip flights from Columbus are $500-800 (depending on seasonality) per person. That's a lot of cash.

Let's recap where we're at after those trips. I'm getting somewhere near a $1,660 value ($660 for Vegas, $500x2 for Aruba) and only spending $400-500! And oh by the way, I'll still have roughly 45,000 Southwest points to use.

Oh, the places I can go. . .

Let's Talk Travel

So now I now I need your help! Where else should I go with my Companion Pass? Should Rosie and I go to Aruba for our honeymoon? What other honeymoon destinations should we consider? Let me know what the Smart Money Squad thinks!




6/26/18

The Current State of Cryptocurrency

6/26/2018

How’s everybody doing, Smart Money Squad? It’s been a while since I last checked in on the world of cryptocurrency, so I figured I’d give you all my thoughts on where the market currently sits. When we last gave you guys the SMS Ultimate Guide to Bitcoin, this is where bitcoin (the biggest cryptocurrency) was trending:



HOLY CRAP, that was fun, wasn’t it? I could sit on my high horse and talk about my crypto gains, why I entered the bitcoin market at $800 and why I thought we were heading for the moon. As many of you know, though, cryptocurrency & bitcoin has taken a tumble since this day (12/13/17).
Here’s bitcoin’s current value, as of 6/25/2018:



Not ideal. Time to eat some crow-even though my initial investment is still worth more than my initial investment (nearly 8x profit), I’ve given back $11,000 worth of value/bitcoin in the span of six months. That’s not an insignificant amount of money by any means & a number that certainly jumps off the page. Although my losses over the last six months may sting at the moment, I wanted to write this post to clearly state one thing: Cryptocurrency/Bitcoin is a LONG-TERM INVESTMENT, not a get-rich-quick scheme.
Be a Smart Investor, Not A Gambler
When I first got involved in the world of cryptocurrency, I made the decision that I wasn’t going to sell for 5 years, regardless of the market action. I’ve seen bitcoin rise from $800 all the way to $20,000 & back, with peaks and valleys along the way. I’m an early adopter of Litecoin (first coin purchased at $12-hit $387 this year). Regardless of how much money I’ve made or lost over my cryptocurrency investments, one thing remains constant: I hold & don’t sell.
Those that know me know that I enjoy to gamble from time to time (side note: currently counting down the days until my Vegas bachelor party!). And while you may find me betting on 12-year-olds over/under on pitch speed at a Cleveland Indians game, you won’t find me treating investments as a bet. If I told you that your 401k was down 20% this year, would you immediately be tempted to take all your money out? NO WAY (if you are a loyal SMS reader)-and that’s because it’s a long-term investment. Treat cryptocurrency not as an immediate cash cow but as an investment in the currency of tomorrow.
As long as you don’t have an itchy trigger finger, I believe that cryptocurrency will bounce back even stronger than where it sat in December 2017. I’ve been fortunate enough to go through many of these “catastrophic” drops over the course of my investment, and if there’s one thing I know, it’s this: CRYPTOCURRENCY IS VOLATILE. One Donald Trump tweet can affect the value of Bitcoin by $600.

 Is that fair? No.  But as I look at a 10 years chart and see steady upward growth akin to that of the DOW & NASDAQ, I’m comforted. Be a smart investor, not a gambler; the future you will thank you immensely.
Real-Life Use of My Cryptocurrency
I also wanted to write this post to explain some of the ways I’ve been utilizing cryptocurrency to pay for some personal expenses. For those that don’t know, Kayleigh & I are new homeowners as of this month! Obviously, buying a house comes with 10,000 signatures & plenty of costs along the way. With my initial investment in Litecoin, I was able to pay our closing costs on the house & still hold over 50% of my initial investment. While I’m still very committed to holding the cryptocurrency I do have, I was excited to realize some gains I’ve made and ultimately was able to pay for one of life’s biggest purchases with a cryptocurrency investment. Pretty neat!
When I decided to withdraw Litecoin, the process was extremely smooth. I transferred Litecoin to GDAX (an online exchange) and traded Litecoin-USD at a $124 rate. From there, I simply withdrew to my bank account & I had the money same-day, faster than a bank-to-bank transfer would take 99% of the time. Needless to say, I was thrilled with the process.
Another cool purchase I got to make with cryptocurrency was one of my newfound vices: bourbon! I’ve committed to try more bourbon in 2018 but the selection around central Ohio is not great. Luckily for me, a Reddit post alerted me to an awesome new online liquor store called Blockchain Bottle. The owner of the site, James, also runs a liquor store in New Jersey & saw the opportunity to take cryptocurrency as a payment option online. He also had bottles that I have trouble finding anywhere in Central Ohio, including my personal favorite, Blanton’s! 

I splurged a little & bought 5 bottles of bourbon, using one of them as an excuse to get my dad a kick-ass Father’s Day gift. This was the first time I was able to buy product with cryptocurrency & it was a breeze. You could pay with Bitcoin, Ethereum or Litecoin (I chose Litecoin) and the payment went through immediately.  It was nearly identical to paying with a credit card & the owner of the store quickly confirmed my order through email. Here’s a quick picture of my haul:


He’ll have a repeat customer in me, that’s for sure.
Final Thoughts
In the world of cryptocurrency, you have to be prepared for peaks and valleys. Although we are in a valley right now, I’m confident the market will bounce back better than ever. This latest valley was yet another reminder that cryptocurrency is volatile & should be treated as such-don’t put any money you can’t afford to lose in an investment!
I’m going to relax on HODL (hold on for dear life) island & hopefully get to deliver a glowing update on cryptocurrency in a few months. Until then, be well, Smart Money Squad!
-Ty

6/22/18

Companion Pass Status = Earned!

6/22/2018
What's up Smart Money Squad? It's been a while since I've posted, and I wanted to give you guys an update on how I earned the Southwest Companion Pass.

ICYMI - here is link to the first two articles!

Part 1
Part 2

What has happened since we last talked?



I decided to start my travel hacking journey by earning the coveted Companion Pass. To do this I applied for the Southwest Rapid Rewards Plus card and the Southwest Rapid Rewards Business card. To earn the 110k of points needed, I had to meet some minimum spend goals by using a manufactured spending technique. The process is really as easy as it sounds; buy gift cards, get money orders with the gift cards, deposit the money orders into your checking/savings account. BOOM. Spending goals met!

Once I met the minimum spend on my personal card and my statement posted, I had 50k points transferred to my Southwest account; that's when I knew this was for real. When my business card statement posted, however, I didn't see the 60k bonus I expected. Uh oh. . .  Of course a panic mode ensued.


Rookie Mistake


I promptly contacted Chase and realized I made a rookie mistake. I was still under the minimum spend on that card by $1,000! The personal card had a $2,000 threshold, but the business card was $3,000. Luckily I still had 2 months to complete the extra spending, and it was nothing a few more gift cards couldn't fix.

A couple of lessons learned:

1. Keep track of the minimum spend requirements for bonuses as they are going to vary from card to card.

2. Keep track of the time frame in which you need to meet the minimum spend. The last thing you want to happen is find out that you need to spend a little more and not have the time to do so.

3. If you think something might be wrong, don't hesitate to contact your financial institution and ask! In my experience they were very helpful.

I was trying to do #1 and #2 all in my head and clearly I failed. Everyone has busy lives, and keeping track of points and miles perks isn't easy to do off of memory - especially when you're trying to earn multiple bonuses at once!

Luckily our resident points and miles guru (aka Ty) has developed a tool that he is ready to share with the squad: The SMS Travel Hacking Tracker.

Want to be one of the first to get your hands on it? Sign up for our email list and we'll give you all the details soon!

Where am I now?

Once I completed the minimum spend on the business card and my statement posted, another 60k points were transferred to my Southwest account, and I earned the Companion Pass.



So, now that I have the coveted pass, who is my first companion? No one other than my good friend Fields. We have a trip to Vegas in a few weeks and we're paying a whopping $12 (combined) for our flights out. That's how powerful this perk really is.

Don't worry Rosie, I won't let Jordan steal the companion status for too long.

What's next?


I'm definitely going to be utilizing my Southwest points and Companion Pass for my travels over the next year and a half, and I really can't wait to use it for my honeymoon trip. In the next post I am going to dive into how exactly to use the Companion Pass, and I'll show you guys some of the trips I'm planning for next to nothing in airfare.

For now it's time to get back to the weekend. As many of the points and miles enthusiasts say. . .

Happy travels!


6/18/18

Entrepreneurship Conversation 4: The Fitness Warehouse's Wes Kochheiser

6/18/2018
Wes has a team of superstar trainers at TFW he couldn't be more appreciative of.


What makes you tick? What drives you to get out of bed every day and give your all for this life you're so blessed to have? For Wes Kochheiser, the answer is simple. Wes eats, sleeps, and breathes fitness, the impact fitness has on people's lives, and the camaraderie with clients, members, and trainers that comes along with owning a gym.

From Gearhead to Fitness Fanatic

Fitness has always played an enormous role in Wes Kochheiser's life. From being a standout swimmer in high school and time with the U.S. Masters, to working as a personal trainer, and to opening his own gym, fitness has been at the center of nearly everything Wes has done in his entire life.

Wes's inspiration for working in the fitness space isn't just a desire to look like Larry the Lobster to my Spongebob (although I talk a big game, Wes could whoop my ass in a second). When asked about his inspiration for pursuing this career, Wes is quick to explain his passion lies "definitely in making an impact in other people's lives. That's what drove it through the roof. . . It's not work. You're helping someone."

Wes initially had a passion to work in powersports which stemmed from his time spent at car shows as a child, saying it's "in my blood. My dad's a gearhead." He studied in the Power Equipment Mechanics program at Pioneer under Rick Harvey in high school and went on to the Power Sport Institute in Cleveland to make his dream of working in the field a reality.

During his time studying powersports, Wes discovered his love for fitness and weightlifting. So he did what every college-aged person should do with their time and interests, and he tested the waters. But Wes isn't the type of person to dip his toe in the water -- he did a 360 double gainer into the deep end.

"I worked at Flex Fitness in Bucyrus for quite some time. I worked at YMCAs throughout the years. And it dawned on me one day, you know, I was like 'I want to do this for myself.' I want to make an impact, and I want to make a place for people how I want it. How I see it."

Even as Wes began to dabble in the fitness space and pursued his powersports education, he ran a shop -- you know, in all of his free time. "I did rebuilds, brake jobs, oil changes, whatever. I did that going to school Monday through Thursday, come home and wrench on the weekends. . . I was hungry, man. I wanted to do anything to make a buck. . . It was going well, but I wanted something more. . . I wasn't satisfied."

Wes's original shop
A saturated mechanic market ultimately provided difficult conditions for a new mechanic in the area. Instead, Wes had his head on a swivel and always looked for opportunities to turbocharge his success. "I saw an opportunity with fitness while I was running that shop. The Fitness Warehouse used to be my bike shop."

Wes graduated from Power Sport Institute in 2009 and became a certified personal trainer in November that same year. He then started working with Flex Fitness. But Wes pursued one last hurrah in his ultra successful swimming career. "In 2012, I went into U.S. Masters. I made it to the U.S. Nationals. . . I was kind of starstruck, man, I made it into the top heat. And I was swimming against guys I'd read about my whole life. All of a sudden, you look over and there they are 4 lanes down. Ended up finishing 8th at the nationals, and then kind of settled down."

Diving Into Business

After his swimming stint, Wes dialed in and became completely focused on starting The Fitness Warehouse. Although he had some experience running his shop, Wes doesn't consider that to have factored into his entrepreneurial success, stating, "I was clueless."

But similar to many entrepreneurship success stories, Wes had a little luck on his side -- although his version of luck may be a bit extreme. "I ended up with my grandmother, my father, and my mother at the casino in Columbus. So we're hanging out and having fun. And I jump on this video poker machine. And I hit max bet. . . the hell with it, it's $5. And I hit the progressive, man, I won like $4,300!"

I don't know about you, but I have a long list of irresponsible decisions I would make if $4,300 fell into my lap today. Although not necessarily an irresponsible decision, Wes's mind initially went to "thinking about all these car parts I'm going to buy."

And again, as we see with many entrepreneurial success stories, a little mentorship went a long way. "My mom and dad looked at me and said, 'You know, you need to do something smart with that money. Don't just blow it.' And they're right, okay? They were right, I'll say it. They were right." Although he may not have admitted as such at the time (who would?), Wes is extremely grateful for his parents' shrewd advice in that moment.

"So I started thinking, and I was like you know, this is my chance. It literally is my only chance to go for it. And I loved my job at Flex. . . This was an opportunity to make my own place -- what I wanted to do. And I didn't want to own a gym. I wanted a bike shop. Hell, at one point I even wanted to be a chef. I loved cooking. So, I was going to go for it. Whatever. I had nothing to lose except for the money that fell in my lap. And if I lost it, you know what? Hell, I tried." 

Wes laid the groundwork for The Fitness Warehouse by purchasing 2 treadmills and 2 ellipticals with his $4,300. He scratched and clawed for every penny he could find for the rest of his equipment, and his early workouts were mainly focused on body weight rather than all the fancy equipment you'll see in The Fitness Warehouse walking in the doors today.

So in April of 2013, Wes went all in. "I ended up leaving Flex. I came home, and I was shocked, man. I'd never quit anything in my life. I really enjoyed that place. I enjoyed working with those people. . . But I had to do this. I had to go for it."

Wes credits his brother for setting him straight during this difficult and pivotal transition period. Wes called his brother after leaving Flex, "And he told me 'Get up and start working the next day. Go right at it.'" And that's exactly what Wes did.



The Fitness Warehouse's humble beginnings

The Entrepreneurial Life

Wes started scheduling clients and quickly built his clientele to 30 people he was training in his garage. Despite some concern from the neighbors that the traffic in and out of the garage every day was from people wanting to do more harm to their bodies than good, Wes had laid the foundation of a highly successful fitness business.

Although Wes faced some logistical obstacles running a gym out of his garage, he was growing so fast that he needed to expand within 3 months. But Wes wasn't completely convinced that this venture would prove to be successful. "I'd definitely have to say I was doubting. But it's win or learn at the end of the day. You don't lose if you learn something. So I kept working with what I had. So, yeah, I definitely doubted it. But at the same time, if we're going to do this, we're swinging for the fence."

Once he convinced his father to allow him to fun the gym out of his warehouse, the operation was, Wes describes, "all hands on deck." Once funding was secured, the renovation and preparations were completed in about a month and a half. "It wasn't easy. But it was fun though. It was a lot of fun."

The Fitness Warehouse's early marketing strategy relied heavily on word of mouth. They did secure a billboard and occasionally advertise on Facebook, but Wes credits his passionate and loyal early clients for helping to build The Fitness Warehouse into what it is today.

Creating a welcoming, comfortable environment to encourage client retention is a major focus and passion of Wes's. "We try to make an impact in everybody's life. We know your name. When you come in, we say hello. And it's not just in passing. If we ask, 'How's your day?' we actually mean how was your day."

Creating this culture is not a solo job. Wes is extremely appreciative and complimentary of each and every one of the trainers currently training at The Fitness Warehouse. "All the guys are good. We're all genuine people. I can't say anything bad about our trainers. They are 110% genuine people."

But the journey hasn't been all sunshine and rainbows. The first trainer Wes allowed in his doors accepted money from people and didn't show up to provide the services they had rightfully paid for. A mistake like this can be devastating to a new business especially in a small community. But Wes built up a little sweat equity to make up for this wrongdoing.

"I was getting phone calls from all of his clients. Every one of them. All throughout the day. This looked horrible on me. Fresh out of the gate, and all of a sudden, we're taking money and not giving a product? We're flying the plane into the ground right now. So I worked those hours and let him go. That was rough."

This experience did make it difficult for Wes to trust another trainer for a little while. Ultimately, he's extremely happy with the trainers who have walked in the door ever since. "Through the years we've accumulated some people, and everybody's awesome. . . There's a lot of energy here."

Wes ultimately decided to take the leap of faith to hire another trainer based on a recommendation from his girlfriend, Emily. Wes has since built up to 5 trainers at The Fitness Warehouse including Patrick Kirk, Adam Hartz, Jonny Martinez, Emily Keller, and Tom Garverick (Wes's business partner) with 1 possible addition.

Wes values his trainers and leverages his experience in and knowledge of the industry to ensure they have a positive and fruitful working environment. "I will tell you right now, you will not find a better gym to work for in Crawford County. . . Working those long hours taught me a lot. . . It makes me respect my trainers and their time. They're people. They don't work for me -- they work with me."

Wes intentionally cultivates the positive culture among The Fitness Warehouse's trainers and members by being completely authentic. "Just walking around, knowing people's names, talking people. Making sure that you don't take any one for granted. . . We're all here to be healthy. These aren't numbers. These are people walking around. These are my friends."

The 24/7 nature of his business is at times admittedly taxing for Wes, but he wouldn't have it any other way. "People call me at 10, 11 o'clock. I'm trying to sit down and hang out with my dogs and just be me for a minute. And I've got somebody wanting to sign up. Which is great. It's a great problem to have. And I don't mind getting up and going."

A major obstacle Wes had to overcome in his early days was banking. As Wes puts it, "They want your firstborn. They want everything." Wes ultimately found his banking home with FC Bank (which just so happens to be the same bank I use for my personal banking -- I wouldn't mind a few extra bucks in interest this month, FC).

The Fitness Warehouse's success has lead to a couple of expansion efforts thus far. When Wes notices a consistently crowded gym and expects an upcoming surge of motivated new members, he knows it's time to reinvest in his business through expansion efforts. When weighing options and decisions to expand and reinvest, Wes states, "It's a balance game. If you don't reinvest in yourself or your business, you're not going to go anywhere. No one's going to hand it to you."

The Future Of The Fitness Warehouse

Although money and profitability isn't a main focus of his, Wes expects his business to profit in the next 3-5 years. Wes's priorities shine through when asked about his path to profitability, stating, "Honestly, we need to keep building, keep packing the house, and keep listening to people. That's the bottom line."

In the next 3-5 years, Wes wants to complete his vision for The Fitness Warehouse to be the premier gym in the area. He expects to complete his building renovation within that timeframe and has plans to build a deck out back to encourage further development of community among his members.

Wes sees himself as being on the path to that vision of success which in my opinion is evidently true based on the success The Fitness Warehouse has enjoyed thus far. In 20 years, Wes is leaving his options open. He's considered franchising as a long-term growth option, but he's not ready to turn his focus beyond what's currently in front of him and what he's currently focused on achieving. "I just need to finish what I started, and then go from there."

When asked to reflect on his success thus far, Wes is encouraged by his progress in a humble manner. "I'd say it has made it, yes. But that can be taken away any day. You have to really be cautious with what you do. . . It's made a huge impact on my life, I'm self-employed, I help people every day, and I love it. I love what I do. I take care of my guys. I make sure that they have the tools that they need to help more people. So we work together as a team, so yeah. I'd say as a whole, we have made it."



TFW is an impressive, well-kept facility with every piece of lifting and cardio equipment you could ever need. 


Transition & Reflection

Since recently completing his latest expansion, Wes has been transitioning from being focused on training to stepping back and running the business which can be an extremely difficult transition for entrepreneurs. Wes describes that transition as "Bittersweet. It's very bittersweet. I love training. I love the people. I love coming in and starting my day with a bunch of energy. I had a lot of great clients, everyone worked hard. I really hate that I'm not training, but at the same time I needed to slow down because I had too many irons in the fire."

As the saying goes, it takes a village to raise a child. Wes is extremely grateful for his villagers who have guided and molded him to become the successful entrepreneur he is today.Wes credits his parents for instilling good morals and work ethic in him as well as providing sound financial advice. Mike Holtzapfel, Wes's high school swim coach was a "rock" and a "mentor" in Wes's life. Wes's neighbor, Jeff Walker, a fellow business owner, has provided solid entrepreneurial advice along the way. Finally, Wes's friend Tyler, The Fitness Warehouse's honorary idea consultant, has "been in the trenches" with Wes from day 1.

Wes is also extremely grateful for the contributions from his business partner, Tom. Tom has stepped up in a big way over the years both through hard work and financial contributions. Wes credits Tom for keeping the business afloat over this past winter which allowed Wes and his dad to focus on their renovation project to add a new section to the building.

Wes also mentioned Katie Suter-Kruse, owner of Salon Ooh La-La in Bucyrus, as being one of his most important and helpful influences from a business perspective. Katie "Helped me out of the gate on a business plan. Not knowing where to turn or how to construct a formal business plan, she guided me in the right direction on getting everything on paper." Katie has supported Wes's businesses from the very beginning of his journey.

Last but not least, Wes is extremely appreciative of the contributions and support provided by his girlfriend, Emily. Emily has "seen this place go from a 5 star notebook to reality. We've been through the good, the bad, and the ugly that comes with building a business. I'm very thankful to have her in my life."

Wes credits "making yourself available" for contributing to his success more than anything else along his journey. In today's day and age, being present and available is a disappearing art, and attention is hard to come by. The people like Wes who are willing to put in the time and effort to give attention are the people who are going to achieve wild levels of success.

Wes would recommend someone interested in following in his footsteps to educate herself or himself and "Do it. Go after your dream." For someone who has started on her or his journey, Wes recommends to block out the negativity. A couple of close friends discouraged Wes from even attempting to open The Fitness Warehouse before he even got started. Despite the early criticism, Wes marched on.

Oh, and it doesn't hurt to drop $5 on some video poker to seed the startup fund.

Keep Up With Wes!

We sincerely appreciate Wes's willingness to share his story with us! We encourage you to keep up with Wes and The Fitness Warehouse on Facebook. If you're familiar with the business, leave them a review (they currently have 84 reviews at 4.7 stars), or if you're not, shoot them a post or a message and introduce yourself!