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How to Decide if You Should Work for Free

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Whether you’re just starting your career, trying to break into a competitive industry, or launching a freelancing business, there comes a time when many of us are faced with a tough question: Should I work for free? 

It’s a complicated issue with valid arguments on both sides, so knowing the pros and cons can help you decide when it may be the right decision for you.

THE ARGUMENTS FOR:

We all want to be paid for our time and effort. There are, however, a few scenarios in which you might consider donating that time and effort. For starters, if you’re just breaking in to an industry and you need to develop certain skills, a non-paying job might give you access to resources that can help you build those skills. “I built my network and job security by working for free very strategically,” Robbie Abed, creator of the Fire Me I Beg You program, tells mental_floss. “It gave me access to connections that still prove valuable today.” 

Abed lists a few instances in which working for free can be a smart move: If you get to build connections with people you wouldn’t normally get to meet, or you get access to certain resources, the job might be worth it, he says. Even so, you should still make sure the hours and terms are extremely flexible.

“Basically, only do it if it's on your terms,” says Abed. “If you have hard deadlines, then you're getting used.”

THE ARGUMENTS AGAINST:

Even if you are building skills and experience, working for free can be the wrong choice. Abed disagrees with working strictly for exposure or to build a resume, for example. 

“The biggest reason I'm against it to build exposure is that this used to work 20 years ago. Now, we have this wonderful thing called the internet that allows us to build our own brand on our own terms,” he says. “Why work for free as a marketing analyst when you can build your own blog and build your own brand? You can show the world how you can not only create interesting content, you know how to market that content ... So instead of working free for a company, you can work free for yourself and arguably have a better return on investment.”

Beyond that, some argue that working for free lowers the bar for others in your industry. When you agree to produce quality work for nothing, you increase the supply of free labor, which theoretically devalues the services your industry provides. 

“I may be overly sensitive from spending most of my 20s in the music business and working three unpaid internships in college, but I'm not in favor of writing for free,” says Kate Dore, a writer who runs the personal finance site Cashville Skyline. “Even with a full-time job to cover my bills, I feel a duty to our community to be compensated appropriately.”

She also agrees with Abed about working for free to gain exposure: “Exposure isn't recognized as currency at the electric company.”

OTHER CONSIDERATIONS:

As a compromise, content marketer Katherine Kotaw recommends offering a sample of your work. “Never work cheap, but give your work away when it serves your long-term goals,” she says. “For example, if a potential client insists I reduce my fee, I walk away. If a potential client says, ‘I love your work, but you're twice as expensive as your competitors,’ I offer a free sample.” 

Kotaw offers the sample with the below set of conditions. And while her rule of thumb is aimed at freelance work, these conditions translate to internships, too. According to Kotaw, she will only send her free sample if:

- I know I can prove my value ... meaning I am fully confident I will get hired and paid.

- The project will benefit both my pocket and my portfolio. It's worth giving a sample to a Fortune 500 company or a potential Fortune 100 company (a startup such as Google), but generally not worth it for a small company or entrepreneur.

- If the potential client's purpose meshes with my own, giving a free sample is like giving to charity—I'll feel good about it even if the money isn't great. 

Every situation is unique, however, so there’s no blanket, foolproof formula for deciding whether working for free is smart in your own individual scenario. On his blog, writer and entrepreneur Seth Godin suggests some questions to ask yourself before making a decision. Here are a few of them:

- Do they pay other people who do this work? Do their competitors?

- Am I learning enough from this interaction to call this part of my education?

- Is this public work with my name on it, or am I just saving them cash to do a job they should pay for?

- Will I get noticed by the right people, people who will help me spread the word to the point where I can get hired to do this professionally?

If you’re more of a visual person, designer Jessica Hische built this useful flowchart to inform your decision.

The bottom line: Most career paths don’t come with a blueprint, and ultimately, you have to decide on the best course of action for your own situation. If you still can’t decide after weighing the aforementioned considerations, Abed suggests a simple gut test: “If you even have the slightest ‘I think this person is trying to use me’ moment, don't do it.”

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Before Bitcoin: The Rise and Fall of Flooz E-Currency
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In the late 1990s, Silicon Valley entrepreneur Spencer Waxman was in Morocco on holiday when he heard an Arabic slang term for money—flooz—that stuck with him. In the dot-com boom taking place back in the United States, URLs with obscure etymology were popular. When Waxman and partner Robert Levitan decided to co-found a novel way of disrupting the online commerce industry, calling it Flooz.com was almost a foregone conclusion.

What Levitan and Waxman envisioned was a virtual gift certificate that would drive business to participating online retailers, give consumers some sense of security over their private information, and make shopping for stubbornly gift-resistant recipients easy. Rather than merely offering cyber currency, this was a service with purpose.

Unfortunately, it was also one that was doomed to fail.

A screen capture of Flooz.com
Flooz.com

Non-cash currency has been with us since the Chinese used cowry shells to sort out debt for goods and services more than 3000 years ago. In the 1960s, credit cards became an alluring alternative to saving and carrying paper bills. When online retailing exploded in the 1990s, it was only natural that startups would begin to explore virtual payment methods.

At the time, digital transactions were perceived by many consumers to be a near-guarantee of identity theft. Handing a card to a vendor in a closed-loop retail environment was one thing, but the thought of hackers seizing their information once it was entered into the borderless environment of the internet kept many away from online shopping.

As it turns out, that paranoia would turn out to be justified in our current climate of constant data breaches. It was also good for businesses hoping to turn their apprehension over credit card security into a monetized solution. Flooz.com debuted in 1999, just one year after another currency-based URL, Beanz.com, had garnered press. Beanz were a kind of earned points system, with approved transactions gifting customers with redeemable gift vouchers. Flooz took a different approach: Customers would sign up to Flooz.com and purchase gift certificates for specific retailers, which they could then use themselves or pass along to a gift recipient via email.

For businesses, it was a way of driving traffic to sites; for consumers, it was a way to keep credit card transactions limited to one vendor; for Flooz.com, being the intermediary meant taking a 15 to 20 percent cut of completed transactions on the selected retail sites, which ranged from Godiva Chocolates to Barnes & Noble and Tower Records.

To help Flooz.com cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and Flooz.com money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using Flooz.com.

Whether it was Goldberg’s pitch or the concept itself, Flooz.com met with a receptive audience. The company debuted in the fall of 1999, and had opened 125,000 accounts by January 2000. That year, roughly $25 million in Flooz.com money was purchased and used. (In a nod to the impenetrable vocabulary of the internet at the time, the media loved to point out that Beanz could be used to purchase Flooz.)

Bolstered by the attention and early success, Flooz.com was eventually able to raise $35 million in venture capital. Consumers could meet their gifting obligations by emailing a code to their gift recipient without having to waste time shopping. For a time, it appeared Flooz.com would become a leading method of payment for online transactions.

Actress and Flooz.com spokesperson Whoopi Goldberg is photographed during a public appearance
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But it didn’t take long for the seams in the Flooz.com model to show. While gifting vouchers to family and friends was convenient for the gifter, the giftee was stuck with a very limited number of vendors that took Flooz.com as payment. If Amazon, for example, had a deal on a DVD or book that Barnes & Noble didn’t, Flooz users were out of luck. Shopping for a bargain wasn’t possible.

The second and most crippling detail was one Flooz.com was forced to make in order to strike deals with vendors. The company guaranteed its transactions, meaning that it would make good on orders even if Flooz dollars had been purchased via fraudulent means. By the summer of 2001, that commitment became a tipping point. Agents from the FBI informed Levitan that they suspected a ring of Russian hackers had purchased $300,000 worth of Flooz in order to launder funds from stolen credit cards.

This created a paralyzing cash flow problem: As their credit card processor withheld funds until Flooz.com could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for Flooz.com to reimburse them. Suddenly, customers trying to pay with Flooz were greeted with error messages that the site was down.

Those issues, coupled with the fact that corporate clients had already started to move away from gifting employees with Flooz dollars, forced Flooz.com to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. (Beanz.com was also a casualty of the dot-com bust, when participating retailers processing the points steadily went out of business.)

Levitan rebounded, founding the Pando file sharing network and selling it to Microsoft in 2011 for $11 million. Meanwhile, Flooz.com remains a barely-remembered footnote in e-currency, though it would be hard to chart the rise of digital funds like Bitcoin without it. Like with so many other good ideas, timing is everything.

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These Are the Top 25 U.S. Cities With the Lowest Cost of Living
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Coastal cities like New York and San Francisco bustle with excitement, but residents pay plenty of hard-earned cash to enjoy perks like Central Park and world-class museums—and to pay their sky-high rents. If you’d rather have a full bank account than a hipster ZIP code, consider setting down roots in America’s most affordable region: the Midwest.

Niche, a data analysis company, has ranked the 25 cities with the lowest cost of living across the United States—and the top 10 are all located in America’s heartland. Their selections were based on factors including access to affordable housing, food and fuel costs, and median tax rates, all of which were gleaned from U.S. Census and Bureau of Labor Statistics data.

Indiana was the most-represented state in the list’s top 10 section, with Fort Wayne, Evansville, and South Bend nabbing the first three spots. The remaining cities were mid-sized metropolitan areas in Kansas, Ohio, Iowa, and Illinois, all of which offer urban conveniences at a fraction of the cost of their coastal counterparts. After that, other cities in the mix included municipalities in Texas, Michigan, Alabama, South Dakota, and Minnesota.

Check out Niche's top 25 list below, and visit their website to view their methodology.

1. Fort Wayne, Indiana
2. Evansville, Indiana
3. South Bend, Indiana
4. Topeka, Kansas
5. Toledo, Ohio
6. Wichita, Kansas
7. Akron, Ohio
8. Cedar Rapids, Iowa
9. Davenport, Iowa
10. Springfield, Illinois
11. Rochester, Minnesota
12. Dayton, Ohio
13. Springfield, Missouri
14. Wichita Falls, Texas
15. Kansas City, Kansas
16. Odessa, Texas
17. Cleveland, Ohio
18. Indianapolis, Indiana
19. Abilene, Texas
20. Sioux Falls, South Dakota
21. Montgomery, Alabama
22. Lansing, Michigan
23. Des Moines, Iowa
24. Brownsville, Texas
25. Warren, Michigan

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