Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.

I’ve written about 250 book reviews on The Simple Dollar since I started the site in late 2006. Along the way, I’ve found a few books that I just immediately recommend for certain topics. My general personal finance recommendation is Joe Dominguez and Vicki Robin’s Your Money or Your Life. My regular debt management recommendation is Dave Ramsey’s The Total Money Makeover. For investing, I usually recommend Larimore, Lindauer, and LeBoeuf’s The Bogleheads’ Guide to Investing. Time management? I’ll point to David Allen’s Getting Things Done.

Throughout all of those books, though, I’ve never really found a single book I could recommend about entrepreneurship. There’s not been one book that really talks about the process of taking an idea you have in your head, investing your spare time and effort into it, and building it into something sustainable that can earn you significant money over time. The closest book I’ve found to that goal is Michael Masterson’s Ready, Fire, Aim, which does a very good job covering the topic, but feels incredibly rushed in places.

That’s why I felt pretty optimistic about reading Dave Ramsey’s latest, EntreLeadership. Ramsey is very good at hammering home the basic ideas you’ll need on a topic and pairing it with enough motivation to get you to go out there and try it yourself.

EntreLeadership Defined
In order to be successful, an entrepreneur has to be a leader. Even at the very start, when a business is nothing more than a side gig or the germ of an idea, it will never get started if you don’t step up to the plate and say that things need to happen. Even then, you’ll have to communicate with people and likely delegate some of the tasks that have to be done. Without some leadership skills, it will never happen. Entrepreneurship and leadership are intrinsically connected, and the principles of leadership help even the nascent entrepreneur.

Start with a Dream, End with a Goal
A lot of us have dreams of what we’d like to do with our lives. I’ve made no secret of my dream to be a writer. Others dream of other things. The difference between a dreamer and an entrepreneur is whether or not they can convert that dream into a goal, particularly a goal with a plan to get there. A dream is a fun indulgence, but it doesn’t come true if you don’t set it as your destination and focus on how exactly to achieve it.

Flavor Your Day with Steak Sauce
A big key of entrepreneurship is good time management. In order to have the time each day you’re going to need to make your business work, you’ve got to have a great grip on your time. Ramsey advocates using to-do lists, but also reflecting on Covey’s four quadrants (important and urgent, not important and urgent, important and not urgent, and not important and not urgent), where, obviously, important should always trump urgent.

“Spineless Leader” Is an Oxymoron
The best thing you can do as a leader is to make decisions quickly based on the information you have and be able to explain why you made those decisions. “Leaders” who don’t make decisions tend to lead organizations that fall apart. Leaders who make decisions without basing them on information tend to make horrible decisions. Leaders who make decisions based on information but can’t explain them tend to sow mistrust with their team.

No Magic, No Mystery
This chapter is most of the key ideas of a “business 101″ class wrapped up into a single chapter. Ramsey covers the life cycle of a product (introduction, growth, peak, decline) and how to start over again. There’s also a deep look at marketing a product, with basic ideas such as scarcity and appeal covered in the discussion. Almost any business you get into will involve some level of marketing, so it’s important to understand the basics of it.

Don’t Flop Whoppers
Here, Ramsey discusses the process of turning a detailed idea or a small side business into a larger entity. There are two keys to this, in Ramsey’s eyes: passion and calling. Passion is something that gets you excited to get out of bed in the morning. You can’t wait to get started on the activities at hand. Calling is what you want to achieve in your life. I’m passionate about writing, but my calling is using my words to change people’s lives.

Business Is Easy… Until People Get Involved
One of the biggest challenges in growing a business beyond a solo gig is the people. I can speak to this from experience: it was dealing with employees (interviewing, training, cleaning up their mistakes, etc.) that was the single worst experience of running The Simple Dollar, in my eyes. Ramsey offers a lot of good material that covers the entire life cycle of an employee, from the hiring process to maintaining good work to letting go of problematic employees.

Death of a Salesman
The best thing a good salesman can do is to focus on the customer and come up with solutions for that customer in mind. Sometimes, that means doing things that aren’t directly beneficial for your business, such as helping with things that are outside of your business or suggesting products and services that you don’t sell. If a customer walks away from you happy with the exchange and in a better place because of it, you’ve succeeded in your goal.

Financial Peace for Business
Businesses need to manage their finances well and, yes, be frugal. Owning a business isn’t a ticket to spending like a madman. Here, Dave takes the personal finance advice from Financial Peace Revisited and applies the advice to small business management. It actually works quite well, because the basic principles of personal finance – spend less than you earn, avoid debt, etc. – work very well for small businesses.

The Map to the Party
When a business grows into a multi-person outfit, the key to success is communication. The more people feel that they’re able to communicate and that their ideas are of value, the more they actually do communicate, the more involved they are, and the better decisions you can make for the business as a whole. Good communication feeds on itself, as does bad, so the best thing a leader can do is be candid and open.

People Matter Most
The people in your business matter more than anything else. If you can’t do right by them, you can’t do right by the rest of your business, and if you can’t do right by that, your business will eventually fall apart. Treat the people who work for you well. Respect what they need and work with it. Listen to what they’re telling you and don’t brush it off. The more you do that, the more they’ll respect you (if they’re good people that you want working for your business).

Caught in the Act
One key way to build your business is to make sure your business is recognized, particularly when you’re doing good things. Little steps, such as your email signature or your stationery, makes a difference. Mentions in the media also help. The more little pieces of positive recognition you have floating around out there, the more likely it is you’re going to draw in a random customer off the street.

Three Things Successful People Never Skip
Contracts, collections, and vendors. Dealing with each of these is the kind of detail work that can drive a person mad, but it’s the details of these things that can make or break a small business. Being detail-oriented in these areas almost always pays off.

Show Me the Money!
Be generous to the people that cause you to win. There are a lot of ways to do this – bonuses, higher salary, and so forth. Keep in mind, however, that the reason to do this is to reward the people that are showing good performance – and good performance is demonstrated in the form of happy customers.

Mastering “the Rope”
At some point, you eventually have to start delegating decisions to others as your business grows. The key to that is to make sure you’re surrounded by people you trust who you know will make decisions that are good for the business as a whole, people who share your perspective on how the business should be run. Your immediate team should consist of these people.

Is EntreLeadership Worth Reading?
This is the best single book on entrepreneurship that I’ve yet read.

Most of my problem with other entrepreneurship books is that they give short shrift to the early growth of a business, when it grows from an idea to a side business to perhaps a full time solo endeavor or one with one or two employees. They skip this part and move on to the point where a business has a handful of employees.

While that latter part is important to understand, so is the infancy of the business. It’s often that infancy that makes or breaks potential entrepreneurs, and Ramsey spends a good half of the book talking about issues at that level before moving on to growth issues.

Ramsey maintains the friendly tone that has worked well for him in personal finance books, and it works well here with entrepreneurship. There’s just the right level of detail in the information, mixed with great anecdotes.

If you’ve ever thought about launching your own business, this is a great book to start with.

Check out additional reviews and notes of EntreLeadership on Amazon.com.

One of my favorite statements about personal finance is that it all boils down to five simple words.

Spend less than you earn.

Often, I’ll break this down into two methods you can use to earn more money. You can either increase your earnings (through a better job, better investments, and so on) or you can decrease your spending (through frugality).

The other day, I was having a discussion with an old friend who reads The Simple Dollar. He mentioned that I often repeated that statement and he suggested that I was actually just talking about two different kinds of success and that what differentiated the two types of success was how accessible the action was.

He said something that really left me thinking. “Anyone can get rich,” he said, “but the ability of a lot of people to multiply their earnings is extremely limited. Simply saying ‘earn more’ doesn’t mean a whole lot to an awful lot of people. What you’re telling many of your readers is just to ‘spend less.’ That’s a success, of course, but that’s not very clear from your statement.”

In other words, personal finance success boils down to two main avenues.

Success in the Margins
Simply put, finding financial success in the margins means that you’re finding financial success through ordinary actions. Frugality is, of course, one of these, as are most methods of passive investing (putting money in savings accounts, putting money into 401(k)s, and so on).

These methods bring one to riches, but they require a continuous input of small successes. However, these small successes are available to everyone and aren’t that hard to achieve by themselves. The biggest components needed here are willpower and a good work ethic.

Frugality, as mentioned above, is a key component of this. Seeking out ways to reduce your spending is vital in this process, as it is that reduction in spending that provides the extra money that you’ll use to build your wealth.

Steady income, ideally with a steady increase over time, is another essential part of success in the margins. You have to have enough income coming in that you can cover your bills with a bit left over. Ideally, frugality will serve mostly to increase the size of that “bit left over.” A typical career falls into this category and getting steady raises over a period of time certainly falls into this category.

A savings plan That “bit left over” needs to be saved for the future. You have to have the willpower to save it and the willpower to leave it alone once you do start saving it.

Patience is a necessary component. Because the components here are so straightforward and available to everyone, they don’t magically work overnight.

Anyone can follow this path to financial success. The reason many people decry it as impossible is that they don’t have the patience to plan for the long term and they don’t have the willpower to overcome short-term temptations.

Success in the Mainstream
On the other hand, finding financial success in the mainstream means that you’re finding financial success through extraordinary actions. Think of Bill Gates or Mark Zuckerberg when you think of these things.

Success in the mainstream means that you’re able to build wealth through enormous leaps in income. Through some mechanism or another, you’re able to earn a significant amount of money quickly. Often, some components of success in the margins (like living frugally and continuing to earn a steady income) are essential at the early stages of success in the mainstream.

There are several methods and components for mainstream financial success.

Entrepreneurship is certainly one path to this type of success. Controlling the entirety of a business so that the profits from that business flow to you is a path many people have followed to wealth, but the vast majority of businesses fail within the first few years of existence. It’s risky and it’s incredibly challenging.

Exceptional talent, usually built through a lot of uncompensated or lightly-compensated practice and sometimes mixed in with natural physical or mental gifts, can also earn a person exceptional wealth. Whenever you think of a top athlete in a mainstream professional sport, you’re usually looking at this category. They usually have some physical gifts that they’ve immaculately refined through a ton of work.

Blind luck also plays a role. People win lotteries (though this is a pretty poor strategy). People get windfalls and are included in estates. People find themselves in the right place at the right time. This is a completely unreliable path to financial success, almost completely devoid of planning or effort.

Anyone can try to follow this path to financial success. However, it is far from a guarantee, and the road is littered with people who fail along this path. It also often sacrifices success in the margin along the way.

What’s Your Success?
As mentioned above, anyone can find financial success in the margins. All it really takes is willpower and patience, traits that virtually everyone has or can cultivate within themselves.

At the same time, success in the mainstream is available for anyone to try, but is much more difficult to succeed in. Anyone can be an entrepreneur. It takes exceptional work, more than a bit of luck, and some skill to make it in an entrepreneurial path. Anyone can also be lucky, but there’s little you can do for that. Exceptional talent requires a lot of work to refine (work without compensation) and often also requires some physical gifts that not everyone has.

In other words, success in the mainstream is not a guarantee. However, many of the avenues in it provide a challenge and a pathway for those who wish to take it on.

Good luck, whichever route to success you choose to take.

Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.

One of the biggest reasons that people fail in their entrepreneurial ambitions is that they simply didn’t lay the groundwork for their business venture. They didn’t ask themselves hard questions about what they were ready for, what their best skills were, what skills needed boosting from others, and what they needed to actually accomplish to make things happen. Often, entrepreneurs believe that they’re Superman. They’re not.

The premise of The Entrepreneur Equation by Carol Roth, then, is to guide you through that very process. Instead of asking “Are you really ready for entrepreneurship?” as almost an affront to someone’s skill, Roth is asking it in the sense of saying “Have you laid the groundwork to maximize your skills, cover the things you’re not strong at, and maximize your chances to actually make this work?”

It’s a powerful question and one that potentially separates Roth’s book from many other entrepreneurial books out there.

The Issue – The Assumptions, Myths, and Realities of Entrepreneurship
Many people associate entrepreneurship with some sort of fulfillment of the American dream. Everyone’s supposed to be a big success in business, right? The truth is that most businesses fail and the only people that see entrepreneurial success are either extremely lucky or have been hardened by repeated failure. The most important thing for a first-time entrepreneur to know is that you have a huge chance of failure and the most valuable thing you’ll get out of it is what you learn from the failure.

(Now that’s a rah-rah way to open a book!)

Simply put, not everyone is meant to enter into that grindhouse. Some people function best in an environment where they’re given straightforward tasks. Other people simply can’t handle the stress involved. Still others have a skill set that’s best designed for technical and specialty work.

Assessing Your Fit with Entrepreneurship
Is entrepreneurship the right situation for you? The book is divided into two major sections (with two smaller ones bookending it), the first of which addresses whether or not you have the mindset that works for entrepreneurial endeavors – and if so, whether it works best in a partnership and so on.

Much of the writing here comes in the form of imploring you to evaluate yourself and offering up a lot of ideas on how to really figure out whether entrepreneurship is right for you. Mostly, Roth seems to be trying to persuade you that it’s not right for you, which, again, is an interesting tack to take. The big difference seems to be that a true entrepreneur is willing to take on these problems and flaws and seek ways to correct them, either through partnership or self-improvement.

Assessing the Business’s Fit with You
The flip side of that coin is the question of whether or not the business idea you have really fits with you. Much of this section really comes down to a complete re-write of your business plan, because that is what it amounts to. Roth pushes you to look for every possible flaw in your plan (particularly ones that match up with flaws in your entrepreneurial style), then seeks out ways to correct those flaws.

My feeling, after reading this section, is that it should lead to a serious re-write of almost any entrepreneur’s business plan, particularly that of a first-timer. If a business doesn’t fit with your skill set or your style, it’s not going to work and it has an extreme likelihood of failure, so the key is to take what you know of yourself and make sure that the business you want to start matches it.

Assembling Your Entrepreneur Equation
Roth’s term “entrepreneur equation” mostly refers to your entrepreneurial elements and the things you’re going to need (mentors, partners, etc.) to make this business idea succeed. Assembling those elements and getting them in place as early as possible will pave your road to the level of success that you want to achieve.

Is The Entrepreneur Equation Worth Reading?
If you’ve ever considered starting your own business in even a halfway serious manner, Roth’s book will be a worthwhile read for you. For most of it, it will make you feel as though you’re completely not ready for this leap, but at the same time, it’ll also point you in the direction of what you need to do to be ready for the leap.

If you read it and actually follow through with the ideas within, you’ll find yourself in a much better place to succeed with your entrepreneurial plans.

Because of that, I would almost always encourage people to read this as one of their very first reads on entrepreneurship. Rather than jumping into a “rah rah everyone can do this” book on entrepreneurship, this one gets you ready so that when you read the cheerleading-type books, you’ll know there’s actually something behind the cheerleading.

I loved this book because it felt genuinely challenging, as if Roth wasn’t there to just cheerlead you and tell you everything was going to be okay. We all need that dose of reality sometimes.

Check out additional reviews and notes of The Entrepreneur Equation on Amazon.com.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

Tammy on Facebook wants to know about “How to know when your part-time small business can transition into your full-time income.”

This is an experience I went through in 2007 and 2008 and an experience I’ve discussed privately with several other small business owners. It’s a scary transition indeed.

For me, there were five real factors I looked at before deciding to make the transition.

First, could I do the work consistently over a long period of time? In other words, would I still want to be doing this in, say, five years? I asked myself this question in 2007 and it’s now 2011, so I think I got the answer here right.

This is basically a passion gut check. It takes… something to be able to write two personal finance articles a day every day for years. Whatever it is that you’re doing, can you see yourself doing it every single day for years? Is this something that excites you from the moment you wake up?

For me, I often start my days with such relish that I can’t wait to get started with the writing. I’ll write my posts (an average of about three per weekday all year long), plus other contracted writing, plus additional things I’m writing for my own enjoyment (like my sometimes-mentioned fantasy novel). I love to write.

Second, is there a way to consistently earn money from this work? As long as I can consistently write content of a reasonably high quality, I’ll be able to earn enough money to get by with my work. The Simple Dollar earns money from ad revenue, but I have several outstanding offers to write for other sources.

Unless the environment of writing online drastically changes, I should be able to earn at least a limited income from my writing online. This gives me a route to consistently earn money.

What’s your pathway to consistent income? Do you have an abundance of prospects for earning money, or are those prospects limited?

Third, are you able to market yourself effectively to find more work? Are you able to find new clients for your work? Are you able to reach an audience for your work? Are you able to grow both of these things?

This likely involves the use of things like social media, effective emailing strategies, and so on. Without clients, fans, or customers, you can’t make it. Without tools with which to contact them, you can’t build them up.

I had the advantage of already having a large audience for The Simple Dollar when I chose to play it full time, and the site itself incorporates a lot of tools for audience members to share the content, which further expands the audience. For many people, social media (like a Facebook fan page or a Twitter account) is the tool with which they reach and expand their audience of readers, followers, clients, and employers.

Fourth, do you have an extremely healthy emergency fund? Do not dive into a side business, freelancing, or any form of self-employment without some sort of significant financial safety net. If you can’t live for a few months without any income, you’re not ready to make that jump.

Going solo means that you don’t have the reliability of a regular paycheck to rest your head upon. Instead, you will be going through periods with a lot of income and other periods with little income. The only real way to survive that is to have cash on hand to supplement your income during the dry periods.

When I walked away from my previous job, we had enough cash in savings to survive for several months even if I didn’t earn a dime in income. I would not have walked away without that support in hand.

Finally, do you have a sensible grasp of your accounting needs? Paying taxes, continuing to save for future goals, and maintaining a working household budget are tricky things to juggle when you’re self-employed (welcome to quarterly taxes!). You’ve got to have a plan for keeping things in order or else you’re going to wind up not getting financially ahead or, even worse, finding Uncle Sam on your tail.

You’ll find a lot of solutions out there for this. For me, the best approach was to take every dollar I earned and split it in half. Half of it went into a “tax” account and the other half went into our normal household account. Each quarter, I would pay income taxes out of the “tax” account, and I’d make up any shortfalls at the end of the year out of that account. Anything left would be rolled back into our household money.

You may find a different solution that works well for you. However, if you don’t have a clear plan in place for all of this, you’re going to run into some serious problems down the road. This must be in place before your business is large enough for you to seriously consider making the leap.

Cover these bases thoroughly and you’ll be in a much better position to transition from side business to full time concern.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

Julia on Facebook asks about “Good ways to make money on the side or as a stay at home mom.”

There is essentially infinite ways to make money on the side. The only way to really narrow down that list is to start putting some restrictions on it, which Julia does very quickly with the second part of her question. So, for starters, let’s look at the requirements of a stay-at-home parent.

SAHM Requirements
Here are some of the requirements that tighten down the options for a typical stay-at-home parent to earn money on the side.

Flexible time This is the biggest reason why people choose to become stay-at-home parents: the time flexibility. They want to be there for their children during the day and engaged with them. However, there are naptimes and there are times after spouses come home from their jobs where they can engage in “me” time or in employment time.

Limited space Typically, stay-at-home parents have at least some tightness on the space available in their home environment and usually can’t afford storefront space or even significant storage space.

Limited startup budget Most stay-at-home parents face limited cash resources that they can invest in getting a side business going. After all, stay-at-home parenting inherently means a single-income family.

Income Options Meeting Those Requirements
Even with these restrictions, there are still a multitude of options for stay-at-home parents who wish to earn a side income. Here are some of the more popular options that I’ve actually seen stay-at-home parents have success with.

Blogging and/or freelance writing There’s a reason that you can easily find an army of “mommy blogs” out there. Blogging about parenting concerns is a perfect business for a stay-at-home parent which works particularly well because you can directly involve the children in the typical article creation process. To do this successfully requires a bit of a business approach, however, and will definitely take some startup time. Another approach that can scratch the same itch and provide more immediate (but less long-lasting) income is simply engaging in freelance writing. One good place to start is freelancewritinggigs.com.

Child care Multiple stay-at-home parents I know engage in some degree of child care. They take in the children of a neighbor or friend for some fee during the day. In other situations, a small group of stay-at-home parents will rotate their children among different households during the week, giving the stay-at-home parents a free day or two a week to have a limited part time job.

Home economizing I know several stay-at-home parents that focus their energies on home economizing, which minimizes every dime of income actually spent. They’ll maintain a garden, engage in projects like air-sealing their home, prepare and freeze meals in advance, carefully plan their grocery shopping trips, and search for great free activities for their families to enjoy. They’ll research all product purchases to find the best bang for the buck and put effort into making handmade gifts as well. These actions can shave a tremendous amount from the monthly spending for a family.

Social media representative Two different stay-at-home parents I know work as social media representatives for local businesses. They’ll set up Twitter and Facebook accounts for these businesses and maintain them for a small fee, making the customer interaction as easy as possible for the harried small business owner. In exchange, they’re often paid a small fee or sometimes paid in discounts or coupons for the business.

Freelancing Two other stay-at-home parents I know engage in part-time freelance work in their previous career path (one in graphic design and one in computer programming). Most of these gigs are standalone projects that they’ve found by developing their own online resume of their work and seeking out opportunities on their own using the contacts from their previous career and within their community.

A few things to avoid If you see a system advertised that will help you make great money from your kitchen table, avoid it. Often, it simply places you in the middle of a multi-level marketing scheme that’s difficult for a person without extensive networking skills to make a lot of money at. Alternatively, the plan requires a ton of time investment to earn significant money, time that is better invested elsewhere. If someone is going to set you up with a moneymaking opportunity, they’re the ones that are going to make the money here, not you.

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

On Facebook, Patsy asked about “Spouses with disabilities… how can you help your spouse by earning extra income? Also, when you have funds for bills only, should you invest in starting a home business by not paying on a bill that month?”

Patsy is asking a number of interrelated questions here. However, the situation she describes is not an uncommon one. Many households involve one disabled spouse while the other spouse works outside the home. Their finances are often challenging, and the disabled spouse often has a big desire to do something to contribute to the income level of the household.

This brings us to the first question implied here.

How can a disabled person earn extra income?
There are several key factors to consider when thinking about this question.

First, is the disabled person able to earn an income? Some disabilities enable a wide variety of activities, while other activities may be completely out of the realm of the disabled person. A realistic assessment of what work can be done is a vital first step.

Second, how much additional income can be earned? Many disabled households have deep restrictions on additional income lest their disability benefits be cut. Before you start engaging in an income-earning activity, know exactly what your limits are on additional earning.

Often, disabled individuals have a hard time finding suitable employment because of their disability, but that doesn’t necessarily mean that they can’t produce useful work. A great option for individuals in this situation is piecework at home, where they can produce up to their physical or income limits with great control.

One option for this is Amazon’s Mechanical Turk. This is piecework broken down to a very simple level, with quick tasks to perform, but you don’t tend to earn a strong hourly rate (you’ll earn less than minimum wage). However, you can do it whenever you want at whatever rate you’re comfortable with.

Another option, particularly if you have writing skills, is freelance writing jobs. Usually, you’ll be asked to write an article (or a number of articles) for a website and are paid a small amount per article. Many such services exist, including freelancewritinggigs.com. Again, you won’t earn a mint from this, but it has incredible flexibility with time and energy restraints, which are often chief concerns with disabled individuals. If you are successful with this, you may eventually reach a point where you will want to launch your own website.

Of course, some of these options inherently have startup costs. For starters, many of these options require a home computer and internet access. For many households with a disabled person, finances are tight. How can you make that transition? That really hits on the second part of Patsy’s question.

Should you skip bills to fund a microbusiness?
No. Do not skip bills in order to fund a microbusiness. If you do this, you are putting yourself and the rest of your family in a very precarious financial position because, if you’re in this situation, you don’t have enough resources to keep the bills paid.

You shouldn’t start a microbusiness on credit, either. Don’t use a credit card to buy a newer computer because you dream of using it to make money. Again, you’re putting yourself in a more precarious financial position than you were before because of the dream of making money, not the reality of it.

The solution, as always, is frugality. Shave your spending in every way you can. If you need money for a basic piece of equipment to make this happen, start by cutting back spending every chance you can. Each time you do that, put away some of what you saved for that purchase. Even if it just means putting a dollar in a jar, that’s still a positive move.

Also, don’t invest in high-end equipment unless you’re upgrading low-end equipment that you’ve used to death. For starters, never overinvest in starting a business in an area where you don’t have a proven track record. If you’re trying to start an online business, don’t buy a top-end piece of equipment. Buy a low-end piece of equipment, as it can do most of the things you’ll need to do. Always minimize your startup expenses in every way you can.

Similarly, this is a perfect situation to ask for help with. If your financial reality is this tight, consider asking your church for help or look for help with other community groups. Many people would be happy to donate older equipment to you for just this type of use.

Very rarely will you improve your situation by buying something, particularly when you can’t really afford it. If you’re in a state where you’re deciding between a purchase and paying your monthly bills, you can’t really afford it.

In September 2004, I was about to leave my first post-college job. My boss at that time – who happens to be one of the people I respect the most in this world, even now after my radical career shift – observed that I had a pile of unused vacation time that was basically going to disappear when I left that job in mid-October. He sat down with me and, once he was sure that the things I was working on were in good shape and that I’d be easily available if anything else needed to be finished up, he suggested that I use that remaining use-it-or-lose-it vacation time in order to transition to my new job.

In other words, I had about two weeks of vacation coming to me. I wasn’t really sure what to do with that time, though. I didn’t have children. My wife didn’t have any vacation time coming. So I asked him what I should do with the time. He looked at me thoughtfully and simply said, “Why don’t you just take a sabbatical?”

A sabbatical means a period in which you choose not to work in order to achieve something else that will improve your life. If you take a week off of work in order to re-pave your driveway, that’s a sabbatical. If you take two weeks off in order to take a class, that’s a sabbatical.

So what did I do during that week? I drafted a novel. It was the second novel-length work of fiction that I’ve completed in my life (and, like the first one, I now think it’s pretty awful). It was also a great learning experience for me. It taught me how to organize the threads of a complex story. It showed me that I had the capacity to write such a lengthy thing. It gave me the experience that I can build on with better stories later on.

Since that first experience in 2004, I’ve tried to take a sabbatical once a year or so. I’ll take a week off of work in order to work on some project or increase some personal skill of mine. One year, I used the sabbatical to take a Photoshop course. Another year, I spent the sabbatical working on my finances and, eventually, laying the foundations for The Simple Dollar. I plan to use a sabbatical in the fall of this year to “woodshed” on the piano, focusing squarely on mastering a couple of piano pieces.

What can you do on your sabbatical? Complete a personal project that needs a lot of focused time. Teach yourself a new skill that you know will be valuable in the future. Take a compressed course to pick up a skill.

The specifics depend entirely on you and what things you wish to accomplish and learn in your own life. Building a skill that you can use professionally is almost always a strong idea, as is a class that leads directly to a professionally useful skill. Completing a large personal project is also quite valuable, as is setting up the infrastructure for a side business or a larger personal project.

I could write a very long list of such ideas. Learn how to use a particular computer program like Photoshop. Learn a computer programming language like Scheme. Start an online business. Write a novel. Clean out every closet and nook and cranny in your home. Re-shingle your roof. Give a number of speeches and presentations to improve your public speaking skills. Take a compressed course on a topic valuable to your career at the local college. The list goes on and on.

The key is to make sure that you’re either doing something to improve your skill set or doing something that improves the value of the things in your life, particularly something that you can’t quite accomplish while working.

Why not just take a vacation? For starters, sabbaticals are easier to propose to supervisors. My experience – and the shared experience of others – is that it’s much easier to sell a supervisor on using vacation time for a skill-building exercise than it is for an actual vacation. Why? When you take normal vacation time, you’re not really increasing your value to the company during that time spent. If you’re building skills during that time, then you typically do increase your value. Even if you don’t build a skill that’s of value to the workplace, knowing that you’re local in case of an emergency can again make vacation time easier to sell to a tough supervisor.

For another, after a sabbatical, you have a genuine accomplishment. You learned a new skill or you took care of something significant that needed finishing. That sense of accomplishment is incredibly valuable, as it fills you with confidence as well as the rewards of whatever it is that you’ve accomplished.

After a sabbatical, you’re in a better place. That in itself is a tremendous reward and a strong source of good feeling which you can use to fuel your return to work. Good luck.

One thing I love to do is to browse through random personal finance blogs. I’ll jump on links from one blog to another, just to see what a new voice will have to say. Doing this helps me get a pretty good idea of the various perspectives and ideas that are out there. It also helps me notice a few “groupings” of ideas out there as well.

For example, I notice that, often, personal finance bloggers are either wholeheartedly about frugality or they’re all about entrepreneurship and earning more money. They’ll write only about their ideas and sometimes even take swipes at other perspectives (I often see entrepreneurship blogs making fun of frugality).

Frankly, I find this completely silly.

There are times when frugality is the best option. There are times when focusing on increasing earnings is the best option. Most of the time, there’s no reason not to try and do both.

For example, the effects of frugality are more immediate than the effects of building your income. When you make a choice to not buy something or to find a less expensive way of doing something, you start reaping the rewards from that choice immediately. That money goes from being spent to residing in your pocket right now. Thus, if you need immediate relief, frugality is the superior tactic.

On the other hand, frugality has a limit. There’s only so much you can cut before you start having to make seriously life-altering choices.

At the same time, the ability to earn more is limitless. There are always potential avenues to earn more money. You can get a second job, start a business, ask for a raise, and so on and so forth. Unlike frugality, there is no cap. You can always earn more. You can’t always cut more.

However, the value of your actions isn’t always clear when you’re trying to earn more money. Yes, it’s clear how much more you’re going to earn if you take a second job, but what about a decision to start a business? What about raising your skill set? It’s essentially impossible to interpret what those actions will earn for you. They might earn nothing. They might earn a lot. With frugality, you can almost always calculate how much you’ll save.

I tend to think that the biggest differences between frugality and increasing earnings come with your perspective and focus on life.

In my eyes, frugality shines best in the short term. If you’re in a financial panic after, say, a major car repair, frugality will help you. If you’re saving for a goal that’s a year or two down the road, frugality will make that goal possible.

Similarly, frugality is superior when you need precise numbers. For example, if you’re trying to figure out how to come up with a car payment, building your skill set for a better job is irrelevant. On the other hand, eating every meal at home can quickly provide the money you need for that car payment.

On the other hand, increasing earnings shines over the long term. Building your skill set doesn’t pay off today or tomorrow. Neither does networking, nor does starting your own business. These types of things need consistent effort and time to grow into earnings in your pocket, but the rewards they reap often greatly exceed those earned by frugality.

Increasing earnings is all about growth. Growth is often unpredictable, but the rewards of growth are tremendous, pushing you upwards to new heights.

What’s better? My take is that tactics from each side are useful in a successful life. Poor spending choices, for example, make it harder for you to make challenging decisions that can increase your earnings. It’s very hard to make an entrepreneurial leap, after all, if you’re not frugal.

The destination of financial independence is the same no matter which path you take.