Document created by keithwarter on May 30, 2016Last modified by on Dec 5, 2016
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I am almost 100% debt free. I have only $5,000 left on my $25,000 student loan I took out for my B.A degree I got from UC Berkeley four years ago, and I have only about $500 left on the $5,000 I had left over from my five years I spent in city college trying to figure out what I wanted to do with my life. On my student loans alone I have saved myself an estimated $4000 in interest over the past four years and gotten paid ahead by about two years because of a keen eye for business that was instilled in me when I received practical advice from a wealthy avocado farmer when I was in my late teens. When I was around 19 and I was attending Santa Barbara City College, one of my first jobs was as a Bee Keeper. One of the farms where we kept our bees was at a lavish avocado farm near Santa Barbara California. The main house was your textbook mansion. It had a view of the ocean from it’s backyard poolside cabanas. When you pull up to the house the first thing you see is rows of palm trees leading to a flat rock driveway that made you feel like you are pulling up to the lobby of the Ritz-Carlton. Every time we would drive by it on our way to the avocado orchard I would keep my eyes glued to the window, wondering who lived inside of this house.

         One day, while we were out working our hives, the farmer stopped by to greet us and offer us some fresh guacamole. I ate slowly, secretly waiting for my boss to walk away so that I could inquire about how this guy really made his money. I was not buying the “avocado farmer” front. Buy the looks of this house, I was convinced that this man must be using his avocado business to launder money he makes from something much more interesting-and illegal. Being less concerned about remaining appropriate in my early years, desperate to get ahead, I sought to get to the bottom of this. Once my boss had walked back to the hives and shot me a glance to indicate that I better do the same, I quickly asked him, "How did you get so much money!?," as I took a chip and put one last scoop of guacamole in my mouth, and chewed slowly so that I had an excuse to stay and listen. Without missing a beat, he advised, "If you want to make a lot of money, you need to learn how to make money while you are sleeping."

         He saw the curiosity in my eyes and continued, “Take bee keeping, for example. Most people don't know this, but bee keeping is an amazing business model. Bee Keepers partner with local famers because the farmer needs bees to pollinate their crops, and the bee keeper in return is brought back honey from those bees, which they can sell. The farmer does not charge the bee keeper anything to rent the space at the farm because they are receiving a service to have the bees there. The bee keeper doesn’t need to invest in any real property of their own. It is truly a win-win partnership. The start-up costs are minimal, and once you set up the hives, you can leave them there with very little upkeep, and even while you are sleeping, your bees are working, and your investment is making you money.”

         He continued, “Now, I am going to let you get back to work, but the same holds true for many deals out there. This avocado farm was a larger investment than bee hives would be, but now that I have made the initial investment and hired the right people, even while I am sleeping the avocados are growing, making me money. Whoever said that, ‘Money doesn’t grow on trees,’ obviously wasn’t a farmer,” He laughed. This clearly was one of his favorite jokes to tell. I offered a forced chuckle and he went on. “Anyhow, making an hourly wage is fine for now, but it’s never going to get you wealth. Be the bee keeper, don’t be the bee. Business is a poker game. Continue getting your education so that you are schooled in the rules of the game. Then, invest your money or your time in deals that make you money even while you are sleeping. That is true wealth.” With that, he turned to walk back to his house. He took a few steps and then turned around one last time to say, “Also, it doesn’t hurt to be an accountant.”

         On this day, I learned two valuable lessons about wealth: 1. Become an accountant, or if you aren’t, at least start thinking like one. A great way to do this is by following websites like where you can begin to think like an accountant about your finances. 2. Look for win-wins that will allow you to make money while you are sleeping. This is also an idea that is talked about in the famous book, “7 Habits of Highly Effective People,” by Stephen Covey. Habit number four is to look for “win-win” situations. A common misconception in business is that someone has to lose for you to win. If you develop a keen eye for great cooperative deals like a bee keeper, you can create equity for both you and others, and you can position yourself to make money while you are sleeping. An easy example of this kind of deal is to invest your money in high performance mutual funds, bonds, or certificate of deposit accounts (CD’s) that have no risk or very low risk. By doing this you earn a guaranteed return on your investment, and even while you are sleeping, there is cash flow into your pocket. It is a win-win because you are creating equity to help grow the companies or projects you invest in, and in return you are getting a piece of the pie.

         But this is only one piece of the puzzle. After attending university in the current economy I have realized that making money while you are sleeping isn’t just about looking for ways to make money. It is also about learning how to not lose more money than you need to. According to, tuition fees have increased about 24% from 2005 to 2011. It is no wonder that websites such as, state that the average graduate in 2016 has $37,172 of debt. And it is no wonder that I too felt like I was treading water upon graduation with $30,000 in debt. With this much debt, at even the lowest interest rate given out by federal student loan companies, about 5.6%, we are talking about an annual percentage rate of 1,680$ that will be taken out of your pocket, “while you are sleeping.” Just like we learn in algebra, “minus a minus is plus.” When you subtract owing something, it is just like putting money in your pocket. That means that if we are going to “make money while we are sleeping,” we have to also figure out how to keep people from “taking our money while we are sleeping,” which is exactly what happens when we are in debt. Every second you are dreaming, that annual percentage rate is accruing interest, adding to the principal balance, and repeating the process again. That means that if we want true wealth, then just as important as developing a keen eye, and advocating for good deals to make money, it is essential to advocate for good deals to not lose money. One of the biggest ways this can be done is by not taking more student loans out than you need to and learning how to manage your student loans.

         Most people do not realize how much money they can save by learning the rules of the game and advocating for themselves with their financial institutions. Financial institutions are in the business of making money while they are sleeping just as much as you are in the business of making money while you are sleeping, and if you leave it to them, they will do exactly that. I have a perfect example of this.  Right out of college I saw a win-win deal. It was an AmeriCorps program called Teach For America. I would spend 2 years teaching science in New Orleans, Louisiana, and in return, during the time I taught, all of my interest would be paid for by a grant plus an additional $5,500 per year. At the end of my stint I received $11,000 plus a few thousand dollars for the interest that had accrued. Remembering the advice of the farmer from years before and having been a long time “saltmoney” reader I was luckily equipped for what was to come. I understood the importance of investing this money properly if I was going to make money in my sleep, and I had the knowledge of how the game works well enough to negotiate with my financial institution when it came time.

         Most people who have federally funded student loans have multiple loans from the different semesters they were in school. These loans can be for various amounts for different interest rates. For me, I had a number of loans that were at a lower rate of 5.6%, and I had others that were at 6.8%. When I first called my loan provider they suggested that I put all of this money towards paying off my loans that were at a smaller balance first. This is something very common that they will suggest. People usually will go for it because it gives you the illusion that you are getting further faster, kind of like taking a step forward in a line that isn’t moving to make you feel like it is. For example, I had two loans for $300, and $500 at 5.6% APR, and other loans for $6,000 at 6.8%. They suggested that I pay off the smaller loans such as the one for $300, to make my account more “manageable.” If you understand the game, and basic mathematics as it pertains to finances, this makes absolutely no sense. It was a trick!

         The most important rule to remember when it comes to loans is that the interest rate matters the most, not the balance. For example, if you have two loans for $300 and $500 at an APR of 5.6%, and another loan that is $6,000 at 6.8%, then you have a total of 800$ collecting 5.6% interest, and $6,000 collecting 6.8%. Now for the SAT question. Let’s say you only have $800, and the lady at your loan provider is telling you to pay off the $800 at 5.6% first. Should you do it? Let’s take a look at the numbers. If you put the $800 towards paying off the $300 and $500 loans at 5.6% interest, your account will look pretty and you will have one $6000 loan collecting 6.8%. At the end of the year it will cost you $408 in interest. If, on the other hand, you put the $800 towards the $6,000 that is collecting 6.8%, then you will now have one $5200 loan at 6.8%, and $800 worth of loans collecting 5.6%. At the end of the year the $5200 at 6.8% will cost you $353.60, and the $800 at 5.6% will cost you 44.80. That means your total cost at the end of the year will be $353.60 + $44.80 = 398.40. That is a savings of $408 – $398.40 = $9.60 over the course of the year. This makes sense because you will have a total of $800 collecting 6.8% - 5.6% = 1.2% less interest than if you were to put the $800 towards totally paying off the $300, and $500 loans at 5.6%. Your account might not be pretty, but your bottom line will be.

         Even though this doesn’t seem like much of a difference, when you are talking about $15,000, and you add up all of these little decisions you make over the life of your loan, it can mean the difference between a good nights sleep and losing money in your dreams. As that accountant told me a long time ago, “If you want to make a lot of money, you need to learn how to make money while you are sleeping." This includes keeping an eye out for win-win situations and investments that will allow you to accrue wealth, but also being sure to advocate for your self to minimize your debts and losses. This example above illustrates the importance of really understanding how the game works to make this happen because nobody else is going to do it for you, especially not your loan provider. The more you understand the rules of the game the easier this will be. The best way to do this is by reading articles just these because there is often so much information out there that you might not know what you don’t know until you see someone else go through the same thing. I hope this article helps others become more aware of the ways that they can negotiate with their financial institutions and get closer to the financial future that they want. In this way, maybe I will not only make money while I am sleeping, but also help others make money while they are.