By Dr. James M. Dahle, WCI Founder
We had a bit of a financial crisis recently. As you know, putting on conferences is really expensive. It also induces some serious cash flow issues, where you get most of the income for the conference very early in the process but all of the bills come due late in the process.
Well, it just so happened that we ended up spending too much of that money on fancy trips to Europe and heli-skiing, and then, all of those bills came due at the same time. We needed to make payroll for all the folks working at WCI, and the money wasn't there.
So, we had to get creative. There were a number of options available.
The first was to put the cars up on Turo, basically the VRBO for cars. Our lousy cars weren't going to rent for much, though. But since I wired the garage with electric car chargers when we did the home renovation, we thought we could lease three Teslas. However, it was going to take too long, and it would not make us enough money to make payroll.
The second option was to sell off a chunk of the company to a ready buyer. We asked around and found a large insurance company that was willing to be a minority investor. We'll call them SouthEastern Mutual to preserve its anonymity. We got a pretty good offer, but in the end, it turned out that SEM wanted to shut the site down completely (or at least delete 5-10 specific posts about whole life insurance), so we turned it down.
Our CTO came up with another great option. We were going to start a WCI Crypto Coin, talk it up for our audience, and then cash out as much of it as we could. It would be a truly functional coin, and it would also serve as a novelty collector's item for true WCI fans.
But it just didn't feel right to run a pump-and-dump scheme on our audience, even if it was for a good cause.
In the end, we settled on a more practical option.
We took out a short-term HELOC on the house and used it to short Ethereum. At the time, Ethereum had been going to the moon. It was pretty obvious that the bubble was about to burst. In fact, it had already started down by the time we “sold” it. Remember: when you short, you first sell an asset (that you borrowed from someone else) and then you buy it back after it drops in price.
How did the numbers work out? Well, we sold at about $4,300 a coin and bought at about $2,600 a coin for a gross profit of about $1,700 a coin. Given our 42% marginal tax rate on short-term gains, our net profit was $986 a coin. That doesn't seem like much, but it was a pretty big HELOC—close to $800,000.
We ended up selling/buying 300 coins, making us close to $300,000 in profit. That was enough to make payroll, pay a little bonus, and still have something left for ourselves. Pretty easy, too, given how clear our crystal ball was on this particular decline. It was the least we could do for our beloved employees.
If you run into a cash flow crunch for your small business or even just your family, consider getting into the crypto markets. There's so much volatility there that it should be easy to make a killing by getting in and out at just the right time.
If all the employees at work are talking about it, short it. If even the Crypto Bros on Twitter have gone quiet, then it's time to buy.
What do you think? Which of those options would you have chosen to make payroll? Should we have bought the Teslas? How else are you planning to celebrate April 1? Comment below!
WCI recommending active trading. Huh?
OMG. He got me!! But are we sure? He did interview an options trader not too long ago.
That is a massive payroll at the WCI!
Lol! April fool!
OMG. He got me!! But are we sure he didn’t shirt ETH? He did interview an options trader not too long ago.
Well he really did a great job of masking the joke with adages… When everyone’s talking about it, short it…he almost had me…!
He killed the joke. My head almost popped. We bumped heads so much just on just holding bitcoin the asset itself long term. I was like how did WCI just become a degen crypto trader lol. Well done.
Got me. I thought it was a reality based post.
For a minute, I thought WCI actually did this and I was worried my entrepreneurial hero had gone over the crypto crevice.
Then I thought, Dr. D…$800,000 HELOC, crypto? Not likely.
Last years was more believable. This one I was on to it from the title.
Last year the staff told me that it wasn’t obvious enough. They changed it to make it more obvious. I changed it back. They were right. I still have people asking me about my Tesla. So this year I went with much more obvious I thought. We’ll see what happens….
Last year’s was more fun though! Maybe make it more realistic but just throw a “April Fools!” in at the end or something.
There’s a surprising number who never read to the end. They literally just read the title.
Now it’s 3 Teslas!!😂
Lol! Overspending ….. shorting crypto…. And not just 1 but 3 Teslas….. the antithesis of WCI. Yeah! Good Aprils fool joke.
My favorite was the “Southeastern mutual”, the exact opposite of you know who.
Well done.
I fell for last year until about 1/3 through. Didn’t fall for this years! Fool me once shame on you, fool me twice shame on me. Still hilarious and creative
Happy April fools!
This one was really good
Hilarious. I love these April fools posts. I hope this becomes an annual tradition.
Was expecting it but very entertaining nonetheless!
Kudos!
For those who have not seen Big ERN on early retirement now has a gag post up today that is pretty entertaining too.
I kept on checking at the start of the post thinking this has got to be a guest post.
There April 1st posts are very entertaining !
Sometimes the best way to get a message across to somebody who knows what you think is to say exactly the opposite of what you believe. This way, people have to think more, and they analyse more what you just said.
Keep those posts up. I look forward to next year’s gag !
Good one, Jim!
First few sentences made me think, why Jim mixed personal and business finances. What’s going on here!? The Turo hustle seemed a poor idea to make payroll. Then the SouthEastern Mutual gave it all up. I stopped reading and went check the date this post hit my inbox. LOL, April 1!
You got me!
I was wondering how your wife would let you do something like that.
I don’t think tech bros would find crypto (WCI-Coin?) attractive. NFTs against WCI-Coin?! Now we’re talking!!! I could sell the idea to my friends, family and FOOLS!
I knew something was up when Jim mentioned he spent the conference fees on heli-skiing and Europe.
And thanks for reminding us of exactly what NOT to do with our finances!
Good one!
You almost had me! Haha great April fools joke!
Hilarious, love it!
🙂
awesome post! btw NJ is not charging income tax this year! woo-hoo!
A lot of weird stuff going on in New Jersey today:
https://www.wavy.com/news/gov-murphy-changes-nj-state-bird-to-the-middle-finger-in-april-fools-day-joke/
Right around when you mentioned Turo I realized what day you posted this.
After the fantastic joke post last year on this date, I came to the website looking for what you’d have in store for today. Did not disappoint lol. Cheers
Glad you enjoyed the post.
Thanks for the April fools joke but I thought “oh my “has Jim lost it….Heloc and buying Teslas and bitcoin … mixing business and personal monies . I was a little nervous and it’s not my money !
Lots of fun in the email box from this post. Here is a sampling:
Haha April fools
So when times got tough, resorted to betting on market timing. That could have gone the other way just as easily. May need to delete about 1000 posts on your site to justify this one. Thanks for keeping us involved in your journey.
April fools day again.
😂 you had me until the white coast investor crypto coin, good one 😆 😆 😂
Nice April fools 🤣
Ha love it. Have been looking forward to this since last year’s. Very good.
So now you recommend people to begin to day trade crypto when they have a cash crunch? Wow. Most will be slaughtered—poor advice. Nice trade though. Glad it worked out for you.
Followed two minutes later with:
Lol. You got me. Haven’t had my morning coffee yet. Well played.
April Fools!
Thanks for the APRIL Fools post.
Sucked me in for a couple of seconds….APRIL FOOLS!
I almost unsubscribed until I realized what day it is. (Incidentally, 5 people DID unsubscribe after receiving this post, but that’s pretty average when there are tens of thousands subscribed).
Now that was funny!
Happy April Fools day!
Well it’s official. WCI has officially jumped the shark. Took out a HELOC and then shorted ETH. It worked but I mean how many things in there that I just said would you never expect to come from WCI?
HELOC to invest in a risky asset.
Shorting strategy.
Ethereum.
My god. End of days is upon us.
Oh my! This totally got me….. 😀
I love this, Jim. Keep fighting the good fight.
Are you nuts! What happened to the “live within your means” concept. OR IS THIS SIMPLY APRIL”S FOOLS DAY !!!!! I love your blog. I share it with my family!