Answers to my open question post

Answers

Thanks to everyone who submitted their questions on my recent open questions post. To be honest I was overwhelmed by both the number and caliber of questions asked and while most were easy and fun to answer, there were certainly some tough questions I had to think about before typing my answers :)

The only question I didn’t want to answer was the first question submitted; How much do I make. I’ve thought long and hard how to answer this as the question is very personal and is something I’m simply not used to disclosing. In the end I decided to share what I spend, although it is worth noting that the kind of lifestyle I live can be achieved on less, and a hell of a lot more.

John asks:

How much do make per month? (or at least how much do you spend per month?)

I typically spend around $4,000 on general living (hotels/food/beer) per month while in South East Asia.

Lloyd asks:

Given that there are no actual company, phone contact or business details listed on the Gutshotstudios.com site, is the business registered in the UK/Thailand/Asia and how do you handle personal and business taxes and duties (do you lodge financial returns whilst travelling etc)?

This is an interesting subject that I’ll cover on a future post (I’ve already started writing it!).

Have you thought about the ramifications of a “nomadic” career on your future and later retirement in the event life isn’t always so good.

Life, as in business, is so unpredictable! If I made plans for my retirement now, 99% of those plans wouldn’t be relevant next year, let alone for when I do actually decide to retire. Life is to short, and as I’m only in my mid twenties, I like to put my energy and focus into the present.

In a recent banking industry event I attended there were serious rumblings about governments cracking down on reporting requirements for “international” residents using online systems to avoid taxes etc. If the rumors are correct the 3 major banking transaction networks are set to more than quadruple their financial transaction reporting between 2010 and 2013 with the likely outcome that a huge number of “online” business would suddenly become “visible” to authorities for taxes and duties etc. How would this effect the profitability of your business model?

It’s difficult to comment not knowing what you mean by “online systems”?

Mathew asks:

Are you involved in affiliate marketing, hard goods, information products, etc?

Affiliate marketing, publishing, telecoms and consulting. I’ll be having my first play with marketing physical products online very shortly (and will write about the process extensively here on this blog).

How much of your total earnings come from which sources?

90% of my income comes from affiliate marketing.

What type of systems do you have in place and how do you structure your day-to-day? How much do you outsource and how much do you do yourself?

I’ve been meaning to copy Matt Mullengweg’s “The Way I work” article for a while now and this is a perfect excuse to get round to it. Hopefully I can get something up soon covering how I create and manage my projects (I think a lot of people will be surprised how simple I like to keep my work flow!).

How did you make your first dollar online?

With a very basic affiliate site I set up in Dreamweaver using tables. Back then all you had to do was launch a site and within a few months the payments would start rolling in. This was a huge eye opener for me and as I look back, I realise just how important launching my first site was. I guess the moral of the story is that everyone’s first site looks shit, but the important thing is just to get your hands dirty and learn as you go.

Tajim asks:

What point of your life did you decide that you are going to live a nomadic life?

I didn’t plan on living and working away from home, is just sort of happened! While on holiday in Thailand, I got the traveling bug and decided there and then that’s what I wanted to do for a while. I returned home and quickly began preparing by selling my car, letting my rented apartment go and quit my job. 5 days later I was on a beach in Southern Thailand with all my belongings (2 bags). The rest as they say, is history.

Don’t you ever feel lonely far away from your home among strangers?

Great question. For me, being around strangers is one of the best things about traveling. I like meeting interesting people and by being alone and outside of my comfort zone, it makes it far easier to meet people you wouldn’t normally get to meet if I was at home. I’ve met some of the most interesting people while living away from home, and have made a lot of friendships too (some of whom have turned into best buddies!).

On the other hand, I regularly wish I could wave a magic wand and have my buddies from the UK with me – Having known them since I was 12 years old, we are very close and they are the guys I miss having around me most. Sadly, I can’t have it both ways.

Don’t you ever feel guilty that you are running away from your family and loved once?

No. I’ve always had the mind set that I’m only 12 hours away from my family, instead of thousands of miles away. No matter where I am in the world, I know I could be sharing a cup of tea with my mum the next day. That’s comforting to think like that. My family and friends also know they are always welcome to visit me. I also go home on average twice per year.

Where do you see yourself 10 years down the line?

I hope I’ll be financially stable, have lot’s of kids, a loving wife I adore and most importantly; I hope I’m fit and healthy.

Ben asks:

I gather that you are employing so-called geo-arbitrage since your biz is based primarily on IT and information. I understand that foreign firms in Thailand are usually restricted to like 49% foreign-owned equity. I personally think that this is a major legal hurdle for foreigners wanting to incorporate in Thailand. Philippines is another case in point for foreign entities. I presume your company is not incorporated in Thailand then? Where is it incorporated (if it is at all)?

I agree, Thailand is not very foreign investor friendly and I wouldn’t advice opening a company here. As for Gut Shot Studios, we are not currently incorporated anywhere, although this is likely to change next year.

How do you deal with employing like ur 4 Thai staff (if I rem ur previous posts correctly)? I mean to say if ur firm is not a legal entity (am assuming here), then how do you deal with issues like Thai income taxes for employees? Or would it be like a Contract-for-service type agreement between you (as a client) and your staff (which includes your non-Thai staff, which are treated from a legal standpoint more like freelancers)?

Gut Shot Studios has no Thai staff and have yet to do any business with companies based in Thailand.

At Gut Shot Studios we have never discussed “contract for service” type of agreements. We’ve just concentrated on satisfying the clients we’ve been fortunate enough to work with. I understand this is not ideal for everyone starting a business with a team, but as I know everyone on the team very well, it just made sense to keep things simple and to wait to see where it took us.

How do you engage your lead designer as an employee, who according to your Gutstudios website, is based in Pakistan? I presume he would be like under a Contract-for-services agreement too? I was wondering how you as an employer also engage your UK-based staff?

See above.

I am also curious as to how you bill and invoice clients as a biz. How do you file your taxes? I know the UK HM Revenue and Customs is particularly strict abt taxes derived overseas. Do you consider stuff like DTAs (Double Tax Agreements)?

As per the second question above, I get these types of questions a lot and will cover the options available to UK citizens in more detail soon.

If your biz is not a legal entity, would it be correct to presume that your clients see your biz more like a freelancer? If this is the case, how do you protect yourself legally from ‘fraudulent clients’, your staff and IP-stuff like your trademark?

Yes, you could see us as a team of freelancers who work together as a team. What I will point out is that we are a young team (a year old this week) and from day one have brushed aside issues like worrying about trademarks in favor of putting our time and resources into making our clients happy. As Aaron Patzer points out in this excellent talk, who sold Mint for $170 million, they too just concentrated on building an excellent product when they started out – just as we are doing.

I understand that most of your clients are from the West (UK firms, maybe). Maybe that’s why you have chosen a Western-based server also due to upload and download speeds. I was wondering how your firm pitches to potential clients in the UK since most of your staff is based there.

Apart from a few leads that have come in via this blog, most of the clients we’ve worked with over the last year have come from my own network of contacts. What we didn’t expect was the number of clients who would go on to recommend us to their peers.

Final question. Thailand is no doubt is an attractive place for like the backpacking and geo-arbitrage IT/SEO crowd. There are problematic restrictions on foreigners wanting to own property there. How do you cope with this? Renting?

I find it mind boggling there are foreigners who actually buy property in Thailand (A good friend of mine bought an apartment in Bangkok), considering there so many restrictions and instability. As I’m just in my mid twenties with no real commitments (i.e kids), I’m happy renting and investing my spare cash into properties I have full control over (i.e web properties).

Dan asks:

What’s one throwaway business idea that you aren’t going to do that you think would be awesome for somebody.

The city promotions idea I wrote about a few years ago. It would be cheap to execute, is investor friendly, would work great on mobile and is scalable. To give you an idea of how confident I am in the idea, I and a partner were going to invest in someone to work on a Bangkok version of the idea, however sadly it fell through at the last minute.

What are your favorite 3 blogs.

TechCrunch for Tech, Smitten Kitchen for food and Smashing Magazine for design & development.

Whats an online resource that you read for any interesting topic that you think is world class, undervalued, or overlooked.

The videos Scobalizer produces are world class. Everyone knows the valley is leading the web technology space, so to get an idea of what’s going on there by Robert interviewing start-up founders while I’m based in Asia is really valuable to me. I also think Paul Grahams essays are a must read for any web start-up founder.

If I could guarantee you a yearly cash income that could neither be invested or earned interest on, you’d have to spend/donate 100% of it each year, what would be the minimum amount you would take to essentially stop making income for yourself. (Weird I know…!?)

Although the thought of working with charity organizations over a few years appeals to me (that’s what I’d do if I had money and couldn’t invest it), I think I would eventually get bored. I like coming up and executing ideas, and although most turn out to be useless, it’s what I’m passionate about.

On the other hand, give me $500k a year and I could throw some seriously awesome parties! :)

What is your prediction for the future of Thai visas for internet business guys (5yrs)

My prediction is nothing will change over the next 5 years. I would even put a wager on it.

Do you have an opinion on the best place to found an internet business in Asia for tax/invoicing reasons.

This is something I’ve been looking into for the last 6 months and my thoughts and findings deserve a separate post. However in a nut shell, it’s basically a choice between Singapore and Hong Kong depending on what you plan to do. Both offer some nice incentives to foreign investors and both places have great infrastructure and are stable. While I work on my post, you can check out VCO’s piece covering the basics here.

What is the best beach in Asia for a mix of party/chilaxing?

I don’t think there is a beach that is best for partying and chilling. A beach is normally good for one or the other. For chilling, I would say Jimbaran bay beach in Bali for it’s beautiful sun-sets and tones of great affordable seafood restaurants on the beach. For something different, Don Daeng island on the Mekong River in Southern Laos is very special.

The best beaches for partying (where the party actually takes place on the beach) would have to be Koh Samui. There are a ton of bars along Chawang beach playing loud music which normally have a great party vibe.

Anon Asks:

Do you still run adult-related services, and if so how do you feel about doing so?

Myself or my team have never created any adult services or products ourselves – although I am involved with promoting affiliate programs that are aimed at adults (dating etc.). As for my feelings on it – I’m open to any partnerships as long as it’s legal.

You very rarely mention this side of your business, instead (understandably) focusing on other, more mainstream projects.

Let’s take the dating niche as an example. It’s one of the most competitive, if not the most competitive, niche on the web. To survive, you need to have volumes of traffic in order to leverage better pay-outs. It’s not a fair playing field. As a result, I wouldn’t suggest people go down that route and is why I don’t write about those niches here. There’s also the fact I have no desire to create more competition for myself :)

Harriet asks:

Have you not made it to Cambodia yet? If not, why not?

I visited Cambodia about 6 years ago. I would like to return as I’m sure a lot has changed since I last visited.

Mike asks:

My wife wants to know if you married that nice Thai girl you have?

Nope, I’m not married and have no plans to marry in the near future.

Erik asks:

What is your favorite business or way to make money?

Anything that’s automated and generates residual income either by recurring billing or repeat customers.

What is your most profitable business or way to make money?

For me, it’s a bunch (30 or so) affiliate sites that rank very well in organic search that generate the bulk of my income. I’m looking to diversify as it’s worrying to know most of my eggs are in one basket (Google’s basket).

If you were to start all over or advise a good friend what business style or direction would you point them in to make a location independant living online.

Great question. First up, I’d advise them not to start a blog, as 99% of blogs out there don’t even cover the cost of the domain renewal, let alone enough to cover a decent living. Secondly, I’d advise against a business that relies on content – unless they enjoy writing or find a way to leverage user generated content.

Secondly, I think finding a partner to compliment their skill set would be the biggest tip I would give. Business can be lonely at times and having a co-founder they can share the lows and highs with is extremely important.

If they are technical savvy, I’d recommend finding someone that is either good at marketing or design. If they are good at business, I’d recommend finding a technical co-founder. No matter what the partnership, I think one of the partners should be technical savvy if starting an online business.

There are tones of online business models to explore, however I like the idea around creating an app that solves a real problem – a big enough problem that people would be willing to pay for the solution. Another simpler alternative when starting out is to simply spend a weekend researching keywords on something you are passionate about. Look for a keyword that a) has decent search volume and b) has low competition or the space could be shaken up by creating a better site/service/product/experience.

Lastly, I’d advise friends to try and not be too ambitious. Creating a couple of sites generating $50-$100 per day is a lot easier than creating a single site that makes $500-$1,000 per day.

What are your favorite places to live and travel on a tight budget?

Most of South East Asia. Loas, Vietnam, Thailand and Indonesia all offer great value and low cost of living.

What are your favorite places to live and travel with loads of money?

I’ve never traveled with loads of money :)

Do you sell physical products or do any exporting from asia?

Not at the moment, although this will change due to my recent trip to the Hong Kong Mega Show. There were so many opportunities there it was a little overwhelming. I plan to select a single product to act as a learning experience starting from new year and will write about my experiences I learn along the way here on this blog.

What business oppertunities have you found in china or while travling?

I come across ideas that I think would work really well in the west all the time while traveling in Asia, although most are food/restaurant related.

Have you come across any more traditional business oppertunities in Thailand or around se asia, like real estate, hotels, traditional businesses, tourism?

With a little creativity and a strong work ethic, I think there are opportunities in all traditional businesses. What I am seeing more off are businesses that focus on niche markets.

For example a few years ago, the housing letting scene in London was covered by huge portals that would cover the whole of London and list all sorts of residential and business properties on their site. Fast forward a few years, it’s now possible to find sites that just specialise in helping students find 1 bedroom places under small budgets in one specific area of London.

Targeting a small to medium sized niche in a huge market is just one way to shake up traditional markets – there are heaps more to explore!

Do you have any cool sucess stories of yourself or other digital nomads/expats you have met over the years?

Most of my friends who work online, including myself, measure success on 2 different levels. The first level is to generate enough income to over our living costs. The second level is to simply make as much money as we possibly can.

A friend of mine recently noted that he makes more that what the British Prime Minister takes home – Considering he does this from a beach house, I thought it’s kind of cool.

Richard asks:

The first post above was how much you make/spend a month. I’m interested in how little (in Thailand) you can get by with for a month – a.k.a. the minimum you would need to survive and be able to operate an online business or get one started (eating Thai food, living like a local).

To give you an idea, most school teachers starting out in Thailand earn around 30,000 to 35,000 Thai baht per month. I’ve met many people on this salary range and they do survive, even in big cities such as Bangkok. 35,000 is enough to pay for a small apartment with internet, a diet consisting of mainly Thai street food (fruit is very cheap here too!) and a couple of nights out. This would then allow someone to spend most of their time in their apartment working on getting a business off the ground.

Was being a nomadic entrepreneur your plan from the start or did you just fall into the lifestyle?

I’ve always loved to travel. Most of my weekends while at school were spent wondering around the city of London and China town, and then from 16 I would regularly travel to countries in Europe. But as for this lifestyle, it happened over a 5 day period (see my response above).

Is it relatively easy to find an apartment for 3-6 months (i.e. jumping from India to Thailand to Indonesia)? How do you go about finding it? Do you just wait until you get to the city or do you plan ahead?

Apart from renting a small apartment in Mukdahan this year for 7 weeks, I’ve spent the last couple of years living out of hotel rooms. When I know I’ll be staying in a certain location for a while (normally 2 to 3 weeks) I’ll ask the hotels in the area if they can give me a discount. In Thailand, small hotels pretty much always offer something in return for long term guests.

As for apartments, this would differ between countries. In Indonesia (specifically Bali) it’s hard to find short term rentals, whereas in Thailand it’s relatively easy.

What do you do for health insurance?

I’ve never bothered with Health Insurance for a few reasons. Firstly, I know I wouldn’t claim for any small medical expenses due to the time it takes filling out the forms and the hassle of trying to navigate around the red tape the insurance companies set in place.

Secondly, I normally travel within countries with semi-good medical care which is very cheap. If I were to travel anywhere remote or dangerous, I would then consider buying media insurance just for that trip.

I’m not saying this is the way to go. If you worry a lot, then pay the $1,000 for a years worth of travel insurance for the peace of mind. For good and bad, I’ve always had the mentality that I’ll deal with any medical problems when they pop up.

Going off of Erik’s 7th question: do you recommend creating a company where you sell your services (web design, freelance graphic design) or do you think its better to sell physical equipment purchased via wholesalers/your own product?

When starting out, do whatever you can set up in the shortest amount of time to get some initial revenue coming in. Once you have some revenue behind you, you’ll have more freedom to choose what you work on. Also, the longer you work online with an open mind and the more people you meet doing similar things, the more opportunities you’ll be presented with.

How many businesses do you actually own/do you actually need to own to lead the lifestyle you have?

Although I have 3 businesses (my affiliate sites, a blog network and a design firm) I would recommend just concentrating on one business. If you get bored, work on a project that compliments your product or service – i.e work on creating additional routes to market stuff.

When I talk about working on projects, these are almost always creating sites or marketing campaigns that will benefit the bigger picture, instead of going into different niches. Make sure there is some synergy for your projects to work together.

Most importantly,  don’t spread your resources to thin and make sure each business is the best it can be before moving onto the next one (which is easier said than done!).

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