Tuesday, 25 November 2008

Mr Darling to the rescue

Britain it seems to me, has changed radically in the last few days.  We are no longer a free market economy - the package of measures put forward by Mr Darling mean, in effect, that Britain has become a command economy.   It is a bit ramshackle and ad hoc as command economies go.  We haven't become the Soviet Union overnight.  But we quite clearly aren't leaving things to the invisible hand of the market either.

Reading between the lines I think I can see what is being attempted.  At the height of the property boom about 8% of consumer spending was funded by what was called Mortgage Equity Withdrawl (MEW), i.e., borrowing against the increased equity in your property.  This source of new spending has, to say the least, become untenable.  The chancellor's proposals in the short run seem to amount to replacing this missing spending with government spending based on borrowing.

In so far as it goes, this sort of makes sense.  The shock of a sudden removal of spending would benefit nobody.  We need to get out of the debt dead-end we are in, but going cold turkey isn't the best strategy. 

Will it work?  I hope so, although there is a lot that can go wrong.  And I really don't think that in reality there was much alternative.  The big question is whether it is part of a sustained effort to redirect us to an economy based on generating real value.  I will wait and see.

Tuesday, 18 November 2008

Bail outs for car giants

The big news today is the big American car giants are tapping the US government for loans. These are big companies with big problems and they need big money. I forget the numbers even though I listened to it with great attention on the radio only this morning. But frankly, once it gets beyond billions it doesn't really register anyway. It is worth taking a step back to think about how these companies got into this state. American industrial strength was not the result of a quirk of history or uniquely favourable natural conditions on the North American continent. It goes back to the country's puritan roots.

From the days of its first settlement the Americans have been uniquely well organised, success orientated and probably most important of all hard working. The great corporations of the twentieth century that made the country great and bestrode the globe like colossi were above all great feats of management and organisation. Where did it go wrong? I think it was when they lost sight of the meaning of what the organisations were actually doing. Managers who understood the products were replaced with management scientists from the big universities. The top leaders became financial whizzes who understood money but not the actual products they were making. At first it didn't matter because the financiers understood the balance sheets. In fact they seemed, on paper, to be doing an even better job.

They started to become reliant on borrowed money. It went fine when things were going well in the economy. But it doesn't look so good when things turn down. Once again, debt is behind the destruction of wealth. Not maybe on the scale of the banking crisis, but the same principle is in play. Fortunately there is probably something to be salvaged from the wreck. There are still car plants, engineers and a skilled pool of workers that can be turned to some good purpose. It will probably turn out to be what you would least expect. But Ford and GM as organisations? They have had a great past but it is hard to see what keeping them alive is achieving.

If I were the next US president I would let them go as quickly as I could. 

Sunday, 16 November 2008

Writing a book based on a website

My main blog is Colin's Beauty Pages, a blog devoted to the science of beauty and its practical applications. I want to reproduce some of the key content as an e-book. Having a full time job, a sideline business and a half dozen blogs to maintain I have to work out a way of keeping this project going in very very small chunks. I find I can usually manage to scrape an odd 15 minutes together at some point most days, so ideally I want to be able to fit this project into 15 minute chunks.

I don't know how it would work for other people, but I find that I can often get a blog post done in 15 minutes. Sometimes I bite off more than I can chew, and I have to spread a post over several 15 minute sessions. A 15 minute session to tart up and extend an existing blog post also works well.

So my challenge is to get writing a book into that format. The trick to it seems to be to set things up so you can sit down and start working straight away on what you want to achieve - the organisation has to be pretty fluid. Blogging fits in fine with this because it is so immediate - and a short blog post is worth doing.

Can I make it work for a much bigger project. The key will be getting the organisation right. I will try the following approach.

Set up the chapters on Scribd.

Set up the drafts of the chapter as drafts on Ecto - publish them when they are sort of readable and then transfer to Scribd.

Keep a master file of my progress on this blog. Nobody ever reads this blog so that shouldn't annoy anyone, but if they do I will have links to the Scribd documents to look at if they are interested. I know that statisitically speaking it is unlikely that many people will stumble across this blog as I make no effort whatever to promote it and it doesn't have any keywords. But the fact that someone might look at it is quite a good discipline - it forces me to write in a way that is intelligible, or at least intended to be, for the sake of my theoretical but probably non-existent readers.

Saturday, 1 November 2008

How to cope with the Credit Crunch

Some parts of the media seem to be treating the current financial turmoil, the credit crunch, as if it is some kind of wierd abnormal happening that we don't understand and which will eventually be solved and we will all go back to normal.

I think this is completely the wrong way to look at it. I think the abnormal period has been the last seventy years. What is happening is that we are now returning to normal. Cheap fuel. cheap credit and widespread borrowing by governments, companies and individuals are not coming back. The World has changed and we need to change with it. There are some people suggesting we are heading towards deflation. I don't know enough to offer an opinion on how likely this is, except to say that when it comes to houses we are already seeing rapidly falling prices. If falling prices spreads from the housing market to the general economy then we are looking at huge problems, and problems that we are not used to. Saving up for something rather than buying it becomes the best strategy. The longer you save the lower the price and the more interest you receive. Of course if everyone does this then lots of jobs get lost. If you are one of the unlucky ones, you will find that losing your job in a deflationary world is no picnic. Prices are falling including the price of labour, i.e., your wages. You are unlikely to get a new job that pays as well as your last one, As unemployment mounts you will in any case be lucky to get a job at all. The good news is that your savings will last longer. The bad news is that if you need to sell something to raise some cash, you won't get much for it.

Of course there are other folks who say we are heading for rampant inflation as spent out governments cheerfully turn on the money printing presses to inflate away the value of their huge debts.

I am not an economist and I can't judge which scenario is more likely. Indeed I can imagine one following the other in baffling succession derailing the most conservative of personal financial policies. Got savings? Inflation can wipe them out. Got assets? Watch deflation turn them into illiquid liabilities.

In other words, I am saying that I think that the economic system has become so unstable that there is no way to guarantee a comfortable future simply by saving/spending/investing - though I dare say if you are very wealthy indeed you will probably be all right.

Is this a council of despair?  I really don't think so.  I think it is much more a call to look at what is really important.  Money in the bank is handy and a nice house is great, but at the end of the day what really makes us happy?  I think it is how we get on with people around us and how we feel about what we are doing.  If you lived in a small community where you knew everyone, would you really want to be the person who worked out how to skive while everyone else did all the work?  I know I wouldn't.  And I know what I would think about the people who dodged their share.  Of course, we are human and know that some people are brighter or stronger or just have more energy and imagination than others.  Of course these people are going to get more out of life - but they probably put more into it.

I think the way to live is to behave as if you live in a village and you want to be a good neighbour and to pull your weight in the community.  This means doing what you can to help other people.  It means keeping your skills and abilities at their highest level.  We might not live in small communities any more but we can still behave as if we do.  I think this is probably the best bet for our mental health, and it is probably the best option for our general well being as well.  We can't get out of the fact that we live in a world dominated by money - but that doesn't mean that we ourselves have to be dominated by money.   And when you look at what the world of money is likely to do to us over the next few years that may well be just as well.

Wednesday, 29 October 2008

Banks - They always go bust

Every bank ends up going bust.

This seems to be as true as every man dies. The fact that there are some men still alive that haven't yet died doesn't disprove this. We know we are mortal and we ought to know that banks are as well. The fact that some banks haven't yet gone bust, though by the time you read this there may well be fewer than when I wrote it, likewise doesn't alter the inevitability of them going bust.

Banks collapsing here in the UK hadn't been very common until the last couple of years. The run on Northern Rock came as a real surprise to a lot of us. In fact, there had been a bank failure in the early nineties. BCCI, Bank of Credit and Commerce International was quite a spectacular failure but hadn't really directly impacted on people. The only run on a bank that had really made an impact had been the one in Mary Poppins.

But taking a longer view, bank failures are not only commonplace, they are an inevitable part and parcel of the way banks operate. One of the most illustrious banks in history was Barings. Despite being a British bank during the Napoleonic wars Barings played a key role in the financing of Napoleon's war effort. They really did believe in light touch regulation in those days! Amongst many notable activities they actually put up the money for the Louisiana purchase. This netted Napoleon some eight million dollars which he used to wage a series of disastrous wars across the continent. Still, I guess business was business. Napoleon himself was wary of the power of bankers -

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815

We all need to get used to treating our relationships with our bank as a Faustian bargain with the Devil. We might get riches and success out of it, but there is always the prospect of ending up in Hell.

Postscript - a lot of people are scared by banks, see http://www.californiapredatorsclub.com/lofiversion/index.php?t9754.html

Monday, 13 October 2008

Politicians - don't you just hate them?

Well no, actually I don't. I do find them annoying when they have been too well briefed and drilled and go on the telly or write in newspapers trying to work in phrases from focus groups and trot out what their PR consultant tells them we want to hear. It particularly grates when Liberal Democrats get on the telly and they fall over backwards to namedrop their leader. I understand why they do it. They need to raise their number one guy's profile. But that doesn't stop it getting on my nerves.

Political parties are very tribal things. At one time you voted Labour if you were working class and Conservative if you were middle class. You identify with your side and detest the other lot. I have certainly thought that way in the past. It is very comforting. Your side is right and the other lot are wrong. It works particularly well when your favourites are out of power. Anything that goes wrong can be blamed on the government and you can shrug your shoulders.

The trouble with this mindset, and the reason I have dropped it, is it is really dis-empowering. You might feel good, but it doesn't DO any good. I think it is much better to thank politicians from all the parties for what they do. The reality is that politicians, opposition as well as government, do us a great service. They bring up a lot of issues that are important and which we really ought to think about. I know that I would not do a good job of coming up with a programme that would get even the support of the members of my household let alone a majority of voters. It can be very interesting to listen to what politicians have to say. Even if you don't agree it with it at first hearing it is worthwhile to listen carefully and try to work out what they are really suggesting and why they are saying it.

I find it helpful to treat what they are saying as a valuable lesson in how the world works. They will have thought it through more than I will have time to - and they have resources they can draw on that I don't have. The fact that we have three big parties and a couple of smaller ones is a great asset to us as a country, and one that we don't appreciate very much.

I have adopted this attitude for about a year now. Has it changed the way I am going to vote. Well not much in the event, I still think the party I have always supported is the one I most want to vote for. But I can now conceive of voting for the other lot - though I probably never will.

How Do We Get Out of Debt?

It's easy for an individual to work out a strategy to get out of debt. Spend less than you earn and sooner or later your balance will get back in the black. It might be easier to say than to do, but it doesn't present any big intellectual problem.

But weaning society off debt is a bigger problem, and one that throws up all sorts of difficulties. The debtor might feel isolated and alone with his problem, but the fact is that there are a whole set of interested parties. For example, the bank will be keenly interested in how a bank loan gets paid off. If the loan goes according to plan and is paid off according to the agreement when the debt is going t be cleared. When it is the bank has lost its income from the loan and needs to either sell the same guy some more debt, or find a new customer. When the debt is paid off the debtor now has a choice. He can spend his new income on other goods, he can start saving or can raise another loan. What he decides will affect people around him. This all might seem a bit obvious - but it is worth thinking through just how big a difference this one person's decision can be.

Suppose he saves the money. If he puts in his bank he has now compounded their marketing problem. Not only have they lost him as a net contributor to their profits, but now they have to find the means to pay him interest on the money he has deposited with them. If everyone does the same the bank becomes a very dull business indeed. They won't run out of cash. In fact they have plenty of the stuff. But they are not going to be very profitable.

But if he doesn't save it he might decide to take out a huge mortgage to buy a bigger house. In this case the bank are laughing, just so long as they have the money to lend him.

But the chain of events doesn't stop there. If he uses his new big mortgage to buy a house at a higher price than has previously been paid on the street, he might increase the value of the whole road. All his new neighbours suddenly feel a lot richer. If the banker has a really lucky day a lot of them will be down raising new loans against the increased wealth in their houses.

This is all a bit simplistic but I think it shows that people's behaviour with their money is something that has a big impact not only on themselves but on those around them. No man is an island. Certainly no man is a financial island.

As I write this article governments around the world are ploughing huge sums of taxpayers' money into their banking systems. They have had to do this because there is a real risk that without this support the entire financial system will collapse. Even with this support there are some people who think that it might still go pop. The quantities involved are staggering and it is hard to see how this intervention isn't going to end up costing us dearly for years and even decades to come.

The thing that has surprised most people is the speed with which it has all blown up. But when you look at how big an effect the different options open to us as to what to do with our money, it is perhaps not that surprising that events can move so quickly.

But we need to get out of this situation. We need to escape our dependence on debt as a society and as individuals. And we need to do it gradually. There are many risks ahead, and one of them is that we all start saving all our money. If we all horde cash we will crash our economy even quicker than the credit crunch has managed so far. But we can't carry on living on tick either. We need to develop some social responsibility. Taking out a huge mortgage and paying out huge sums for a house is an anti-social act. But we need to come up with creative ways to allow people who need finance for projects of genuine value to be able to borrow the money they need too. Creative ideas are needed.

Friday, 10 October 2008

Financial Chaos

It seems like an age ago, but it is really only just over a year ago that the financial world seemed to be fairly stable. Since then we have all been watching the news with our jaws hitting the ground. For some reason Sunday evenings seem to be the preferred time for amazing stories to break, each one coming out of the blue and topping the one before.

There doesn't seem to be much doubt that we are heading into rising unemployment, increasing homelessness and its attendant rising crime. The general level of misery is likely to be increasing.

But strangely, I feel okay about all this. I am not naive: I remember previous recessions and I know that they are not a walk in the park. And even then, this one is shaping up to be the worst of my life. The situation is already being compared to the Great Depression. In fact if you look at the numbers it might well be worse statistically. If you buy the idea that it was the depression that led to World War II then there is every reason to be alarmed. I am not positively looking forward to all this - and there are going to be some grim times ahead.

So why am I so calm?

I think that what are now seeing is reality coming back into focus. For a long time now, certainly since I was a teenager in the seventies, credit has grown and grown. The flow of money from banks has been steady and we have filled our boots. Many people owe tens of thousands on their credit cards. Many people owe hundreds of thousands on their mortgages. Most of us have done it to some extent or other. There are very few of us who genuinely have no debts. Even if we don't have debts ourselves, our customers do. Or we work for companies that have debts and sell to others who have debts. The government borrows money on our behalf too. We have been in the red since we beat Napoleon.

Of course we all know this. You can't miss it. Many people spend their whole working lives in the debt business: selling it, counting it, moving it around. Some of our top mathematicians work out complicated deals with weird acronyms for businesses in the city. You can bet money you don't have on the future of a business in which you have no direct interest. Get it right and you can make more money than you can imagine.

Where will it all end, I used to wonder. But nothing seemed to happen. Years came and went and we all seemed to be getting richer. And there was a philosophy behind it. The market was king. Capitalism had triumphed over the Soviet Union and was now unstoppable. Economists concluded that the optimum distribution of resources was only obtainable from the free play of the market, so people should be left to get on with whatever they wanted. Bankers and hedge fund managers trousering millions? Just the free play of the market. Don't dare to interfere. Leave things be and it will all be alright.

This manner of thinking became all pervasive. Even the nominally socialist Labour Party bought into it. Tony Blair got rid of Clause 4 and embraced business. Social justice from now on was an afterthought.

I found all this to be profoundly dis-empowering. What was to be done? Nothing it seemed. Just let the market do its magic and we would all get rich together. Some of us richer than others, but that is just the way it is. In fact, it is the rich people to whom we should be grateful. They were the risk takers, the entrepreneurs, the ones who made it all happen. We just needed to let them get on with it and enjoy all the goodies they came up with.

But now the whole world has changed. Has the free operation of the market worked? Hardly. Look around the world. Chaos and confusion reign. Stock markets tumble wherever they are open. In many places they are closed. Assets, including the houses which many people have huge mortgages against, are losing their value at an astonishing rate. Banks are only prevented from collapsing by the injection of funds on a scale barely imaginable from central governments. And the traders and financiers look on stunned. Many are fearful. None of them know what is going to happen next and how this edifice that they have constructed is going work.

So by rights I should be fearful and worried. And in the sense that I see bad things coming I am. My job is perhaps a bit safer than most, but still highly precarious. And given my age and how specialised my skills are I am quite certain that if I were to lose it the chances are very slim of finding another one. But I don't feel any anxiety. What will happen will happen. But I do now feel for the first time since I was a teenager, that what I do really matters. We are in a dreadful state, but it is a state we can get out of. We know now that the financial masters of the universe have been owner operators of feet of clay for some time. They are bankrupt figuratively. Some of them are bankrupt literally. Most of them would be bankrupt without state intervention. And for the first time in years things seem clear to me. Yes the market works well for distributing oranges and fridges. But let the market to work on the very financial system itself and disaster ensues. One great depression can be put down to bad luck, but two smacks of a philosophy that just doesn't work. And what is more, there are things we can do to solve this problem. It is an easy problem to understand. Banks have too much power in a free market. And they use that power to promote that which is most profitable to themselves - debt. In a period when the banks are competing with one another, people and companies who take on that debt to acquire assets do well. As the assets rise in value these 'risk takers' see their risk taking rewarded. The more prudent who build businesses by creating value get left behind. A self reinforcing cycle is built up. The entrepreneurs bestride the world. Their enormous red bank balances are invisible - the tangible things that they have spent the money on dazzle us all. They become the heroes of the age. And ordinary people who own their own homes get to participate. Your house increases in value as the credit supply expands. You are richer. Until of course, it goes too far. Eventually the value of assets gets out of all proportion to the income you can derive from them. When you can earn millions simply by buying a few hundred houses and waiting for their value to appreciate whilst doing nothing of value to society, you know it is nearly over.

And now it is over. The credit bubble is not just deflating: it has popped. We have had all the fun, now we just have the debts. And debts are the problem. We live in a sea of debts. Many people owe a huge proportion of their likely future income. Significant numbers of people owe more money than they will ever be able to pay back. These are not just problems for the individuals. They are huge problems for all of us. The person who defaults on their debt takes a big chunk of spending power out of the economy. The bust company that does the same thing does it on a larger scale. A bank defaulting on its debt takes out a huge lump. In the end, we all pay. And boy are we going to pay.

But at least we can see the way forward. There are clear messages for how we should behave as individuals. how companies should behave and what the government should do.

We all need to look at our own financial affairs. We need to pay back what we owe. If you want something - save for it. Getting into debt is antisocial. It harms people around you and it undermines society. There are times when you have to, but take a deep breath and get out of it as quickly as you can. Remember Mr Micawber. If your net income is greater than your net expenditure the result is misery. When you are looking where to put your savings, it must be safety first. Don't look where you get the best return, look at where your money will be looked after. The ideal place is the local mutual building society - if there are any of these left anywhere. We need institutions like these to be recreated and we should praise the people who do, even if they don't get to appear on the Dragon's Den. And we should vote for parties that take a long term view and put prudence first. The retail banks need to be nationalised. They are simply too key to the economy to be left in the hands of unaccountable investors. Banking should be as boring as plumbing.

But for me the biggest thing to come out of this crisis is simply that what we do matters. If we want things to change, we need first to change our own individual behaviour. We need to think through the consequences of our actions. And if we want to be wealthy, we need to offer something of value. There are no quick easy ways to make money any more. And for that, if for nothing else, we should be pleased for the lesson the financial chaos has taught us. It has been an expensive lesson but maybe that was the price we had to pay.

Thursday, 9 October 2008

Raw Diet - I have learned a lot

I have learned a lot experimenting with the raw diet. I have failed to keep to it but I have changed my eating habits for the better, and I have learned a lot. In particular I have discovered that processed carbohydrates, yummy as they are to eat, really do play havoc with your energy levels and your mood.

I have looked into it in some depth and I think that moving in the direction of raw food is a good move. But really the key thing is to avoid overloading your bloodstream with big bursts of sugar.

Gödel's Incompleteness Theory

I am not a mathematician and I don't really have any particular knowledge of it beyond what I have picked up when working on statistics and the basic maths you use in science. Science generally, and particularly the kind of rough and ready development work that I do, is a pretty imprecise business. There is a lot of guesswork. There is something very impressive about maths. It is pure and logical and you can actually prove something. In science even the best theory is just sitting waiting for someone to come along and knock it off its perch.

So when I was driving to a symposium I was delighted to hear on Radio 4 a programme in Melvyn Bragg's In Our Time series on Kurt Godel's Incompleteness Theory. It seems that at the end of the nineteenth century mathematicians had come to the conclusion that they had nearly 'finished' setting maths onto its final form. A large conference was held in 1900 at Königsburg where David Hilbert issued a challenge. The structure of mathematics was impressive but it rested on some axioms that could sometimes be inconsistent or even paradoxical. These needed sorting. Then mathematics would be established as a logical coherent whole - a solid framework into which everything could fit.

But it didn't quite turn out that way. A maverick called Kurt Godel managed to prove, with some pretty advanced set theory, that it was possible to prove that it is impossible to have a logically self consistent logical set of theorums from any given set of axioms.

David Hilbert was really cheesed off. He never acknowledged Gödel's achievement, but he never worked in that area again tacitly accepting that his project was now known to be impossible.

I have always had a soft spot for Godel's Incompleteness Theorum. I once saw it in a bookshop in paperback. Just £5.95 for the whole thing. Think of it, the whole incompleteness theory for only just over a fiver. The perfect gift for the person who has everything. And not only does it solve that particular conundrum, I also find it comforting to live in a world in which it is possible to prove by algebra that somehow things will never completely make sense.

P.S., I have just realised,doing a bit of research, that it should be the incompleteness theorum, not the incompleteness theory. If you have got here from Google you have probably put the wrong search term in. Try http://en.wikipedia.org/wiki/Incompleteness_theorem instead. I don't know what the difference between a theorum and and a theory is.


Wednesday, 8 October 2008

What a turbulent couple of weeks

I have been distracted from just about every productive activity by the turmoil on the markets around the world. But it has had the most strange effect on me. Far from being worried and fearful I have a strange sense of relief and freedom and also a high level of motivation. I hope this last one continues because I have rather a lot to catch up on.

11.10.08 Update - I have written a full account of what I think all the financial chaos means to me and to all of us.

Friday, 12 September 2008

Raw Diet Update

I have not been keeping up with this blog much because I have had other things that have been more important, especially keeping my main blog on track. It has been getting some very promising traffic and I have been keen to keep updating to make sure I don't lose momentum. I really ought to update the raw diet story though, which has gone off in a totally unexpected direction. Back when I started it in the middle of August the intention was to switch to a total raw diet over a couple of weeks. I hadn't really envisaged it as anything other than an experiment which I would wind down again when I had learnt from it. That isn't how it is turning out. I am now on a regular routine of eating cooked egg and bacon, or something similar, which I eat with some raw veg and fruit. Typically carrots and celery, but sometimes cabbage and cauliflower. Then a banana and an apple. It was wierd at first and to begin with a really missed the toast that seemed to be an essential accompaniement. But I have stuck to this breakfast ever since. It doesn't seem wierd any more and I find it a much better start to the day than a traditional cooked breakfast or cereals. For lunch I just chomp through some more raw veg and fruit. I don't feel either tired or hungry all day. On my conventional diet I usually snacked in the afternoon, and always got home feeling ravenous. Since starting the raw thing I have eaten one solitary packet of barbecue flavoured Mini Cheddars. I don't know what happened that day. But I must point out that avoiding snacking was supposed to be something that I was going to phase in at the end. I am still eating cooked meals in the evening, though with plenty of fruit and no processed puddings. This is the next thing I will work on. I have lost about 4 or 5 pounds but given that I weigh 13 stone plus and am six foot tall this is not much of a deal really. But I have had several people comment that I have lost weight. I have lost about 2" around the waist, so I suppose I look slimmer. Other benefits are feeling less stressed and having a bit more energy. These are noticeable but not huge effects. I feel that I have a bit better ability to concentrate and I sleep better - except when I have a big carbohydrate rich evening meal. Unexpected benefits are that my teeth feel better. I used to be continually worried about them not being clean. And a couple of chronic aches that I had learned to live with seem to have cleared up. I am going to be really interested to see if these benefits persist. I have been going about a month so far and I definitely do not want to go back to my old eating pattern. I will try to keep more regular notes, if only because for my own benefit I want to keep track of what I have changed and when.

Saturday, 16 August 2008

Raw Diet Day 4

I finished off my last tin of tomatoes at breakfast this morning, and also got to the last two slices of bread. I will treat this as an omen and switch to a raw breakfast, given that the raw lunches seem to be working at the moment. I can't bring myself to give up my bacon and eggs yet - but I will have them accompanied by something like raw cabbage. I think I will have to be a bit creative here. I am getting to quite like raw cabbage but it may be a bit too much to have it for breakfast and dinner. Today has been interesting. I have done my usual raw food lunch and basically forgotten all about eating the rest of the day. Just as I was about to go home when one of my workmates asked me to get her a bar of chocolate to get her through working late. When I handed it over she quite naturally offered me a piece. I found that I really did not want it, even though this 5.30pm and I hadn't eaten a thing since lunchtime. I found the idea of something as sweet as chocolate in my mouth quite unappealing. Bear in mind I was tucking into and thoroughly enjoying a jam donut and home made cakes just a few days before. I won't read too much into this as I am still a long way from even getting onto a serious raw diet yet, but I do find it interesting that I seem to be losing my sugar cravings. I had better qualify that by saying that I tend not to crave sugar that much anyway, so I it may not have anything like that effect on someone else, and it may just be a flook for me. Got home to a huge, and I mean huge plate of chicken and rice. I have a bit of a problem when it comes to leaving food once it has been served up so I faithfully chomped through the lot. Although I didn't get indigestion or anything, I did find it hard to sleep. I now weigh 13 stone 8 and a quarter. I think the first firm conclusion that I can draw is that incorporating large amounts of raw food into a conventional diet does not lead to an immediate weight loss. I am feeling a bit more energetic, but not a huge amount and it might well be psychological. I am ready to up the ante and make my diet still more raw....

Thursday, 14 August 2008

Raw Diet Day 3

Started the day with bacon and eggs with toast. I am beginning to get impatient now, given my good results so far. I think I will soon switch to bacon and eggs with raw cabbage instead of toast and tomatoes. I think the raw diet is associated with veganism but I don't see any reason why it shouldn't work with meat as well. Unfortunately the day itself was not really a real raw food success. My colleague who bakes delicious cakes brought some in to celebrate her birthday. And after work I went to see some old workmates and ended up with a KFC and chips for my evening meal. Having said that, I don't think I ate as many chips as I normally would have done. My weight now stands at 13 stone 11lbs which I think is the heaviest I have ever been in my life. (I am six foot if you are interested, so even this doesn't really represent a problem weight in itself.) Things are going to have to get a bit more serious with this diet if I am going to get anything out of it.

Wednesday, 13 August 2008

Raw Diet Day 2 (Continued)

20:10 update. Just finished a very enjoyable plate of salmon and chips with a bit of rocket salad. Current weight 13 stone 9 and three quarter ounces. Mental state good, energy level above average.

Raw Diet Day 1 - post mortem

After lunch I became absorbed in my job and didn't give my diet a second thought. But on the way home in the car it occurred to me that I had not had a mid-afternoon craving for a snack as I often do. I generally put these down to boredom anyway, so it could just be that my work was a bit more interesting than usual. It could be a coincedence, but I also managed to get a bit more done than I do most afternoons, which tend to be my lowest ebb of the way energy-wise. The other thing I noticed was that I still wasn't particularly hungry when I got home. I wasn't full though, because as soon as I tucked into my evening meal I had no problem polishing it off. It was a particularly big one because we had a large batch of rather old potatoes to eat up. With some chicken in my wife's rather nice creamy sauce and a side salad it was very enjoyable. Conclusions? Well yesterday was far from a raw food day. In fact I probably ate a bit more cooked food than normal what with the donut and the large evening meal. I did nonetheless think that I got some benefit from what was in effect a fairly small raw food snack on top of a conventional diet. I am going to stick to my initial plan of simply adding raw foods at lunchtime for the first week to see if there really is any noticeable effect and how consistent it is. I am not too concerned about my weight. I am 13 stone 5 and three quarter pounds as of today. But I am a scientist and I like measuring things, so I will keep track of my weight as this trial progresses.

Raw Diet Day 1 - Just after lunch

My main blog is beginning to get some serious traffic now. In the last couple of weeks I have never been below 40 visits a day and I have had one over a 100. I have responded by lavishing attention on it in a way I have never done before, but now I need to get back to my other blogs. None of these are getting any visits beyond the odd random one. I somehow need to get more energy from somewhere to keep them going. Well I guess we would all like a bit more energy so I was surprised to find a reference on Steve Pavlina's blog that his raw food diet was giving him so much energy that he was finding the surplus to be a problem. Steve is an interesting and prolific blogger on a wide range of subjects most of which have to do with personal growth, interpreted in the broadest possible sense of the word. One of his interests is diet and he often mentions that he is a vegan. Most people would regard that as a fairly extreme way to eat. But his latest diet is one step beyond that. Last January he ran a thirty day trial of a raw food diet. Since then he has apparently been keeping it up with some lapses. I don't want to steal his thunder and he takes these things a lot further than I think I am ever likely to do so if you are interested you will find a lot of detail on his experiences on his website. As I said, Steve Pavlina is a vegan and also has a reasonably unconventional lifestyle as he supports himself pretty much via income from his blog. Like most people I have a day job. I also have what I think is a pretty conventional diet. I eat meat, fried food, drink tea, consume alcohol and I like the odd cake. I probably eat fewer sweets than most poeple, but I make up for this with a conscientious committment to barbeque flavoured Mini-Cheddars. I have a bag of these most days. Two sometimes when I am bored. Another unusual feature of my eating habits is that I have a cooked breakfast with bacon, eggs toast and tomatoes most mornings. I don't think it would be possible for me to get up one day a become a vegan. It might even be medically unwise to unilaterally impose something so radical on my digestive system without warning. However, I do like the idea of more energy and I am aware that there probably is room for improvement in what I eat. So following Steve's cue I am going to adopt a new eating regime and document my experience with it on a day to day basis. My approach is going to be that I am going to try and incorporate a large amount of raw food into my daily intake. I am going to build it up over time, and I am going to continue eating conventially at least some of the time. However, this is an experiment so I might vary what I am doing over the duration. This morning I tucked into a hearty cooked breakfast consiting of a fried egg, two rashers of locally grown bacon (absolutely delicious!) some tinned tomatoes and toast all washed down with a cup of tea. At tea time in the morning I enjoyed a jam donut to help celebrate a colleague's birthday. As I was rather conscious of what I was eating I eat the apple I had brought for lunch straight away afterwards to sort of clear my mouth of sugar. Lunchtime represents my first raw food meal. Some raw cabbage, a few cauliflower florets and a couple of carrots. I then ate an enormous banana, and settled down to blog about it. How do I feel? Well no surge of energy yet. I will say though that the meal was a lot more satisfying than I imagined it would be and I am certainly not craving my normal savoury biscuit treat I usually have about now.

Wednesday, 9 July 2008

Number of Blogs

My aim is to have 20 blogs on the go at once. Monitor the progress and drop any that aren't working. If I have an idea I will kill a blog to make space for it. I don't know if 20 is the right number. I have a full time job and a big project outside work that absorbs a lot of time so I may be giving myself too much blogging to do and would do better to cut the number down. Twenty was pretty arbitrary. I listened to a podcast from Darren Rowse last night in which he said that he got to 30 before cutting down to 2. I will have to keep an eye on this. At the moment I have 8 blogs up on Blogger and plenty of ideas for more. All of them are currently getting the level of attention from me that I think they deserve. I won't be able to keep up the equal time for all of them for much longer, but that is okay because that is part of the learning experience. They are all quite different and my future ideas are all pretty distinct too. If I can reach twenty genuinely different blog ideas that is in itself a bit of an achievement, so I will stick at it for now.

Saturday, 5 July 2008

I had thought it was all about traffic?

My blogging project is chugging along nicely so far and has sort of met my expectations so far. Modest traffic and some earnings, while learning a bit about how it all works and getting my brain around the ways of the web. So far so good I was thinking, and was also beginning to settle into that slightly smug feeling you get when everything is under control and going according to plan. Then yesterday something shook me out of that mind set. I had thought, its all about traffic isn't it. Spot the niches that generate traffic, optimise to pull in eyeballs then work out how to turn that traffic into income. Well over June I was pulling in steady adsense revenue, 10-30p a day and with an upward trend. Just what I was expecting basically. But yesterday I had a quite normal day in terms of traffic and number of people clicking. But for some reason adsense rewarded me out of all proportion. I pulled in a well over £1. If anything, yesterday was one of my lower days traffic-wise. This has really got me thinking. If I can get the return per click up by 250% just like that, maybe I should give more attention to what adverts I am attracting than I have. It might be much more valuable than chasing that which simply generates a lot of visits to my sites. I need to go back to Google Analytics and see what analysis tools are available to work out not just where my visitors are coming from, but what is the most lucrative thing I can do with them once I get them. Having said that, I mustn't lose sight of the goal of having other income sources than Adsense. I love the ease with which Adsense allows you to make money from a blog but especially for the locally orientated blogs I really need to sell direct advertising space to businesses. Quite apart from the financial considerations, I think if I am to be able to look myself in the eye and think that I am a professional blogger, albeit a part-time one, I have to have proper customers who pay me via an invoice because they value the service I am offering them.

Friday, 4 July 2008

Review of June

Well June was a solid start to my blogging career. I now have 5 blogs on the go on Blogger. I have ideas for another 5 to start in July. My 15 minute burst technique is working well so far, though I am doing 2 or even 3 bursts on some longer and more intricate posts. I am learning a lot as I go along. For instance I now realise that by having adsense on all my blogs I am reducing my earnings per click due to the formula that Google uses. So be it. I don't actually need the money but I do want the information I get from who clicks where. I can work on maximising my income from my traffic when I have more. On the subject of traffic, my main (non-Blogger) blog pulled in 1,692 visits and 3,163 page views. I was very happy with those figures. There was enough to do a detailed analysis of what drew people into the blog and what kept them there giving me some good pointers as to how to develop it. Traffic on my Blogger blogs was derisory. But even there, I think I can begin to pick out a winner. What I need to do is keep my efforts on these blogs even, despite the temptation to concentrate on the one that seems to be the winner so far. The evidence is that nobody else is reading this blog, but if it is ever read I am sure you will be interested in how much money I actually made. Prepare to be underwhelmed. All this activity has only netted me less than £7 of actual earnings. My target is about £1,000 per month. I have a long way to go yet. But I still think it is achievable in maybe 18 months. What happens in July will be interesting but I really want to be netting so decent cash by next January.

Tuesday, 24 June 2008

Setting Goals

Darren Rowse has a very handy post that explains in an entertaining way that it is important to have written goals. Well I have written my goals on this blog, i.e., to create 20 blogs on Blogger to find out which ones have the best potential to build traffic. I intend to create dedicated hosting for any that look promising and kill off any that don't cut it. The ultimate aim was to generate income equivalant to 25% of my full time earnings. I thought it was time to add some clarity to those goals. My personal approach is to start with some goals and then review progress to see whether my original ideas make sense. This comes from my training as a scientist where a pilot study is often undertaken to 'prove a concept.' So far I have earned about $15 on per month pro rata basis. I am getting traffic on my main blog of about 40 per day and getting sporadic hits on my other blogs. I think this tells me that my income goal is achievable and my sub goal of 20 blogs still sounds about right. I have just set up my sixth blog. I have so far managed to come up with blog ideas that are all very different to each other. This is quite encouraging. I haven't had to force them at all. On this basis I think that coming up with 5 blog ideas a month is within my capability so my quota of 20 should be achieved by the end of September. After that I will have to come up with criteria for which ones will fly and which will be killed off. I have already decided that this blog has a special status. It will never make any money or attract any serious traffic, but it is a good place to keep abreast of my goals and my progress. Thanks again to Darren for the hint.

Saturday, 21 June 2008

Future of Blogging

I still find it amazing that by signing up for a free Google account I can publish a blog on Blogger.com for no cost at all, and by putting adverts on it I can theoretically turn it into a way to make money online. Of course this is theoretical. I first have to come up with content compelling enough to make people want to read it. and I have to promote it in some way so that people are aware of its existence. Neither of these things are that easy. But not impossible. I started my original blog more as an intellectual exercise than anything else. Almost by chance I have achieved a small but regular traffic which nets me some cash most days. I received over a dollar yesterday. This isn't life changing but I have noticed that now I have the attention of some people they do come back to see what I have added. I also get more search engine traffic and the trend is upwards. I have no idea how far it will go but is obviously not yet anywhere near its full potential. I don't think a blog is going to be my route to riches though - and I don't think it will for many people either. I would say that the situation in the Blogosphere at the moment resembles that in the pop industry in the fifties. It was possible back then to release a single for a relatively small amount of money. From this came a few thousand stars. The Presleys and the Beatles and a few other top rankers made a fortune. Many other artists had successful careers, some more lucrative than others. But most never made it. I think there will be a few headline bloggers who will as the blogging phenomenon spreads become household names and possibly very very rich. Some people will turn blogging about their specialist subjects into full time jobs, much like most industries and hobbies currently have a professional press. It will become normal for someone interested in say horse riding or accountancy to follow a couple of blogs covering their interest. It will also be possible to have a blog on a subject as arcane as mine and for it to represent a reasonable second income. That at any rate is the background to my blogging ambitions. It will be interesting to reread this blog in 5 years time and see how prescient I was. (I have it in my calender.)

Monday, 16 June 2008

Sources of Inspiration for blogging

I am beginning to get into my stride on blogging now. I would love to be able to post on all of my blogs every day but as I am aiming to have 20 of them and I also have a full time job this is not possible. I am struck however by the fact that the biggest single problem is coming up with inspiring subjects for blog posts. It is easy enough to sit at the keyboard and knock out something, but the trick is to knock out something worthwhile. I have given myself permission in this one blog to be as self indulgent as I like. I don't think that there is room for another blog about blogging to make it big, or even to make it much beyond random traffic. But I am not knocking blogs about blogging. I find that they are a source of useful information, which is good. And the best ones are sources of inspiration which is brilliant. I have been following Caroline Middlebrook's blog for a while. Caroline has given up her job and is relying on her on-line activities to make a living. It has to be said that after 9 months she isn't. Her blog is well worth a read. You get to know her as a person - perhaps more than she intends. And you end up hoping she will make it, though I do sometimes almost hold my hand over my eyes to avoid looking as she engages on yet another hair brained scheme. The blogger that many other bloggers seem to rate is Darren Rowse. In fact he was the first one I heard referred to by name. I have just subscribed to his Problogger blog and my initial dippings into his stream of consciousness are quite impressive. He has a very clear writing style. Steve Pavlina is hardly a blogger about blogging, he covers a much wider scope than that. But his really is the blog success story to end them all. His frankly quirky interface is quickly overlooked when you find some truly great content. He has been steadily building traffic since he started and now generates a very comfortable income from his thousands and thousands of visitors. My aims are much more modest than these titans of the blogging world. I have decided to keep my derisory earnings for May to myself, but I hope to get into double figures by the end of June. Time will tell......

Saturday, 14 June 2008

Blogging: Quick Update on where I am and how the 15 minute burst is working

I now have 4 blogs up and running: my original hobby blog Colins Beauty Pages, a cut down blogger version of the same, a blog for essays about the links between the fiction of J.R.R.Tolkien and history. I have also started writing for a blog about the town I live in, i.e., Petworth. Traffic to the Beauty Pages is still healthy but doesn't seem to be growing very much. The others are new and have virtually no content so not surprsingly aren't generating any traffic at all yet. I have had two hits on theTolkien one, but they were probably just random servings up from the blogger platform. Basically it is much too early to tell whether any of these are going to be remotely successful yet. What have I learnt so far? The thing I am really pleased with is that the 15 minute burst approach to writing articles works really well. I find that I can generate enough ideas in 15 minutes to come up with a reasonable sized post. The unexpected side effect is that I find it makes my writing style a lot choppier and punchy than normal. I think this works well for the web. I have just been reading an essay by Nicholas Carr Is Google Making Me Stupid? where he complains that Google is making him stupid. He has lost the ability to concentrate on large bodies of text and whole books as a result of using the internet a lot. His attention span has diminished. Actually I don't not what conclusion he came to because it is quite a long essay and I gave up before I got to the end of it. But he makes a good point. Browsers don't stay on a web page for very long so you don't have long to make your point. It is also very satisfying to get to the end of the 15 minutes and know that this a task you have completed and is not going on the to do list. It gives a great sense of completeness. And as my last minute approaches, there I must end.

Wednesday, 11 June 2008

Adding Blogs

I have now got three blogs on the go on blogger. I have adsense and traffic tracking set up and I have started adding the content. I am concentrating on getting text up at first. I can add pictures and other media later. The text is what people will be reading and what will give the blogs their purpose for now. I will see how they get on and may think about non-text content a bit later. I have a blog based on my interest in Tolkien and history, which aims to blend the two. I am basically going to write what I find interesting myself in the hope that other people may find it interesting too. I have set up a cut down version of my existing blog. This is basically an experiment to see if I can drive a bit of extra traffic from the blogger.com sphere back to my main site. I have no idea if this will work. I have started writing stuff for a blog based on the small town where I live too which I will set up shortly. So far I have learnt that it is very easy to get blogs set up on Blogger.com. It seems to have quite a few useful features that I must explore further. What I don't know yet is how well these blogs will work to attract search engines. This really is the key question. If you don't get any search traffic then they are never going to work. In the meantime I have started using these blog web addresses when commenting on other people's blogs. This isn't in my opinion a cost effective way of driving traffic but it does give some market research about what kinds of topics prompt people to click. The 15 minute per post rule is working at the moment, though I think I will need to allow myself double sessions for some topics.

Tuesday, 10 June 2008

Blogging - My strategy

How do I turn blogging into a respectable second income big enough to make a material difference to my lifestyle, i.e., of the order of about 25% of my main earned income. I have drawn up my blogging strategy by following a couple of assumptions. Any seriously valuable opportunities on the web will be rapidly occupied by professionals. The only effective way to generate traffic is via search engines. The only way to keep the attention of people who find your blog is by offering them compelling content. These assumptions are based on my experience of doing a blog as a hobby and then simply seeing what kind of adsense revenue it generated. A couple of pages seem to attract a fairly regular stream of visits who find the site by entering keywords that don't throw up a huge amount of competition. Some of those visitors go on to explore the rest of the blog. The click rate on adverts is quite respectable. I am reasonably confident that I can continue to increase the size and the appeal of that blog and this is something that I can do gradually. It is also apparent that there is going to be a natural limit to what this blog can achieve, so I need to create some more blogs that address other niches. I don't think this strategy will work without compelling content and I want to create the content myself. I have read other people's blogs where they get content from elsewhere and either use it as is or customise it. I don't want to go down that route because you are intstantly creating the opportunity for someone else to come in and outcompete you. I also think that one of the features of a successful blog is a continual stream of new content. So I intend to create a regular stream of blogs. I will start them on blogger.com as that offers a free start up. I will monitor them and kill them off if they don't seem to work. If they generate traffic then I will set them up with a new domain. The challenge is going to be generating enough content out of my own head to give each idea a fair crack at becoming a success. This is going to take iron discipline combined with a fluid imagination.

Monday, 9 June 2008

Blogging -Tactics: the 15 minute blog post

I think the prospects for a blogger to make money are not very high. If there is serious money to be made the lone individual writing on his laptop somewhere is at a real disadvantage against the professional journalist. The pro knows how to get the copy together, has the support of colleagues and the infrastructure of his organisation and is able to devote the time to get the job done properly. I think it is a bit like musicians. There will always be the odd talented amateur who can break into show business. But these are few and far between and most of the income generated by music goes firmly into the pockets of the music industry and its trained members. We are already seeing the emergence of totally professional blogs like Gawker.com where the whole show is run with ruthless efficiency by ex print journalists who know just what they are doing. So if I am going to make any headway in my quest to generate a substantial second income from blogging I need an inspiring overall strategy and effective techniques. The key is to be able to generate compelling content to compete with the pros. The tactics first. I need to be able to throw up a readable post in a very short period of time and I need plenty of them. I don't yet know what is possible so to find out I am starting with a target. I want to be able to produce a post every day, and I want to be able to produce that post in exactly 15 minutes. I will try this regime for a few days. I might need to extend it a bit - it is vital that the posts I produce are readable and either entertaining or carry some value. So plan A comprises - - choose a subject - set the clock for 15 minutes - write up to the deadline - allow a minute or two to review for obvious spelling howlers or grammar obscenities - post onto the blog And if you are wondering, yes this post did take exactly the 15 minutes I allocated. Next post will be about strategy.

Post 1 - What I am trying to do

Everyone and his dog now has a blog. I have had one for a couple of years devoted to one of my interests. It has been a pretty low key labour of love. I have been paying a modest sum for hosting but apart from that it has been all my own work. I was quite pleased with it and I have enjoyed tinkering with it. One of the things I did with it was try out Wordpress, and as part of that I started using a theme that I had downloaded from an Internet Marketing website. This was a theme designed for use with Adsense and as soon as I set it up the adverts started appearing. My initial reaction was to take them off but they made the blog appear a bit more professional so I left them where they were. Months rolled by and my traffic started to nudge up. I became curious as to whether the benificiary of the adverts (presumably the person whose website I got it from) was making any money out of my website. With a bit of fiddling around I set up my own Adsense account and started redirecting the revenue to me. I was pleasantly surprised to find that I was getting a few clicks a day and now had a new income stream. It has built up a little since I started and I find that I have now added an extra 0.25% to what I earn as a full time employee. Well it is unlikely to change my life, but I couldn't help thinking: what if I could create another similar blogs? That might make a big difference. I did a few back of the envelope calculations and quickly came to the conclusion that it was very unlikely that simply doing the same again would even generate the same level of income as a paper round. But the thought wouldn't go away that there might be a way of making some money from blogging. I haven't fully formulated my ideas yet, but I thought the best way to start was to blog about it. So here I am. If you are interested in my journey, this is the day it all started. (I have started writing this on the 9th of June 2008. As I type it I haven't yet actually set up the blog, so the post date might be a bit later.)