How These Snacks Created a Wealth Feast

By Mike Johnson

Wealth is a mindset far before it’s a physical reality.

In 1990 I was just starting to develop this mindset by reading books. “Wealth Without Risk” (Charles Givens) contained the gold nugget that inspired my treasure hunt.

Side businesses.

Yes, they could be good income generators. Yes, they are great ways to practice business skills in “real life.” Yes, they can even lead to replacing your full-time job.

But the aspect that really lit me up was tax savings.

At the time, I was paying about $12,000 a year in federal income taxes. This was my highest expense. Salaried employees are the highest taxed individuals in America. They have the fewest legal deductions. Employees are the #1 milk cow for the federal government.

Givens’ book taught me that a sole-proprietor business offers many legal tax deductions that employees do not receive. You can typically start a side business without anyone’s approval (pending zoning issues or local license requirements) and you just file a Schedule C on your normal tax return. The Schedule C allows you to subtract all legal expenses from the business’s taxable income. If the expenses exceed the business’s income, that credit can then be subtracted from your employee taxable income.

Better yet, some of these expenses are bills you are already paying. For example, you can claim a per-mile deduction for driving to any business-related location. I soon learned to have a business reason for most of my trips.

You can legally claim a home office deduction. You are already paying for your housing. With a side business, you can allocate a percentage of the home’s floor space to exclusive business use. Just pick a room or two. Say it’s 20% of your house. Now you can legally deduct 20% of your mortgage or rent and 20% of all household costs including repairs, insurance, property taxes, utilities, telephone, and Internet as a tax deductible expense. This lowers your taxable income. If you get that taxable income low enough, your tax bill is slashed or eliminated. You then file a new W-4 with your employer and immediately reduce tax withholding from your paycheck because you’ll owe less tax at the end of the year. Instant raise.

Rules change over time so speak to your tax advisor to verify what deductions are legal for you.

So I realized that if we wanted to build real wealth we needed a side business. I knew a few things about candy so “Margie’s Snack Shoppe” was born.

My wife Margie was a stay-at-home mom and our kids were in school, so she had time to operate an honor-box vending service.

We’d seen the services that used cardboard boxes but we wanted something classier. So we designed the box using a plastic bin that was available at Walmart. We had a logo created and signage designed to fit inside the lid of the box. We bought a selection of treats at the local Sam’s Club and just doubled the prices in our box. We used an index card box as the money box. We trusted that people would pay, and amplified the guilt factor by placing a drawing of Margie on the box signage.

Each box, fully signed, filled with treats, cost about $50 total. This allowed us to start on a shoe-string and scale up as we could afford it. No debt.

Off she went to small and medium employers who did not have vending machines. Her pitch was simple. Let us place the box in your break room free of charge. We’ll come by every week or two and replace it with a refilled box. Your employees will appreciate the convenience of the treats.

Soon she had 50 accounts. The rip-off ratio was about 10%, far less than what the payment on a mechanical vending machine would run. The boxes averaged about $10 profit per week. A simple, self-sustaining, profitable, all-cash business. And it gave us all those legal tax deductions which slashed my $12,000 annual income tax bill by more than half.

A year later, we sold the business for $5,000 or $100 per account.

The real value of this experience was the learning. I became skilled at tracking income and expenses, learning how to legally minimize our taxes ever since. We learned that setting up a system can be worth far more than the sum of its parts. We learned the value of multiple income streams and have owned multiple businesses ever since.

I later opened a freelance writing business, quit that corporate job, started other businesses and finally discovered income property. I was able to 95% retire at age 52. Margie was just 49.

Today I recommend people just learn how to BUY a large enough, already-existing, mostly-passive business or income property with a manager. Then just manage the manager. Now you have both financial and time freedom. No need to save a nest egg for decades. No out-living your money. No worries about market crashes. There are techniques to do this with little money down. If you have some money saved, it’s even easier.

But I also realize that financial and time freedom is a journey. We can only travel as far as our self-image and self-confidence allow. Smaller steps help increase that self-image and self-confidence.

I know when I started, my self-image wasn’t yet large enough to go directly to income properties. If this is you, perhaps there’s a Margie’s Snack Shoppe-type business in your immediate future!


Mike Johnson made the journey from jobs to freelance writer to entrepreneur to passive income and early retirement. Today he teaches people how to skip right to passive income and early retirement at .

Once I learned how to BUY passive income, I stopped chasing the bucks and the bucks started chasing me!