One area where I have developed considerable expertise is in hiring and dealing with overseas developers. I have hired many dozens of developers on rentacoder and odesk (my two primary sources) over the years, and I wanted to share a few tips with you.

The first thing you need to decide is whether you want a fixed bid, or would like an hourly worker. Depending on the project, I have used both, and there are pros and cons for each.

A fixed bid project is perfect for a small, well-defined task. "I need a logo." Great, you can find a cheap or reasonably priced provider to do that kind of work for a fixed amount up front. "I need a small, 5-page web site." "I need a program to calculate the odds of lightening hitting a golf ball mid-flight."

An hourly bid project is more suited for tasks that still have some unkowns in terms of scope and duration. With hourly contractors, you can change your mind on things, tell them what to do. Ask them to make changes that you hadn't considered beforehand. "I need to convert a ASP web site I have to ASP.NET." "I need someone I can call to do a few hours work a week."

Of course there are down sides too. Fixed price projects generally are less flexible for changes. You need to know what you want up front, and specify it in the bid request. And once the programmer thinks they are done, you have a harder time trying to get them to do a little more. Of course, I've had fixed bid projects where the programmer did extra work for free just because they're nice. There's just no guarantee.

In the hourly project, the risk is that the project will take longer than you expected. That the programmer will be slow. And if you're not happy with the work, there's not much recourse because you're buying their time, not quality.

So, let's say you've chosen between fixed and hourly? Now what?

Well, you post a bid request to a freelancer site. Pick one and stick with it, don't post your request to multiple sites. Be as detailed as you can, be specific. Mention when you will like the work done. Also be detailed about what skills you require (PHP vs. .NET for instance), and ask to see sample web sites the person has worked on. If you don't ask, you won't always get it.

Sometimes, the site asks you to enter an expected price. How much per project or per hour you would expect to pay, although the bidders can bid more or less. Be realistic with this, but don't show your cards. Always put a price in there that is lower than the maximum you really would pay.

To set expectations for you, for programming talent, the cheapest you will find of reasonable quality is in the $8-$10 an hour range. Now there ARE people out there bidding $2 and $3 on projects. I tend to stay away from those. Because you get what you pay for to some degree. For projects I may not care about quality as much I might be tempted to try those low bids. For $2 an hour, you really can't be taken advantage of too much. One week of work for $40. But I am comfortable paying $10.

Then comes the fun part. You will undoubtedly get applications. In my case, I can get 30 or 40 applications on a typical job posted for 2-3 days. I have had as high as 100 for jobs I've left up for a week. In both cases, that's just too many people to seriously consider. So how do I choose?

1) Reject those that are too expensive. As I said in my last post, I can't pay someone $44 an hour for PHP development.

2) Reject those with bad reputations. If 1 or 2 people rated this developer poorly (less than 4 out of 5), steer clear. Buyers don't rate developers poorly for nothing. I rate all my developers 5 out of 5 unless they really did let me down.

3) Reject those who are easily determined as unqualified. I am looking for an ASP.NET developer, and the person's application summary says "Expert PHP Developer", that's an easy reject too.

4) Reject those who didn't follow instructions. No cover letter, no links to work they have done, a cover letter of only one or two lines. That's a sign of someone who applies to 100 jobs a day.

Now we are getting to the ones harder to reject. If I still have a lot of resumes, I might have to cut deeper.

5) At this stage I reject people at $20 an hour, there are just way too many qualified people at $10.

6) I also reject those with no online experience. I would rather work with someone 5-star rated, with hundreds of hours of online experience. Why take a chance?

7) And lastly, if your English is just way too poor, I will reject it at this stage. Communication is difficult enough over IM and email.

Hopefully at this point, you have 5 or 10 good candidates. They are reasonably priced and they are qualified on the surface. Now its time to read their letters in depth, visit their links, and reject them solely based on the quality of their work and experience.

It pains me to see web sites that strive to "improve", add new features, and redesign their look... only to make the new site worse and less useful than the previous version.

Today's case in point is oDesk. And their new AJAXY interface. Do these people not use their own product?

So today I visited the site to see a job I have posted, which has 89 applicants at the moment. (That's another story for another day.)

I have a fairly systematic way of weeding out applicants in cases like that. I CANNOT read each and every application and decide from between 89 who is best. My brain does not have that type of internal ranking mechanism. So I do some bulk things first, hoping to take 89 down to 10 good ones based on a number of easily to judge criteria, before getting into the finer details of relative experience and evaluating value.

I bulk remove the ones who fall outside my qualifications, or who just don't feel right for one reason or another, and then I make the decision based on the hopefully handful of people that remain.

Step one of being "unqualified" for me, is that you're too expensive. I'm sorry, but if I want a simple programming job done and you bid $44 an hour, you're higher than I am willing to pay. You may be the Jesus of programming, and maybe you will do the work twice as good in half the time, but at that rate I will use up my typical budget in a few days and I can't take the risk that you're no good.

So I go into oDesk, view the 89 applications (which for some reason are now only 10 to a page instead of the all-on-one-page I am used to) and click "sort by price".

And guess what? The first bidder is $20, the second is $44, the third is $19, the fourth is $21... You can't even do SORTING right?

Come ON oDesk. Clean this stuff up. Don't tell me you didn't test this thing. And don't go breaking what works for the sake of paganation and ajax. I don't need either.

I've been thinking about a vacation. Not just an ordinary run of the mill vacation, but something more. I guess it can be called a sabbatical.

It's been a plan in the back of my mind forever. An old friend of mine Alan told me a story 12 years ago about how he and his wife took a 9 month vacation through China and India. Now to me that seemed an impossible dream. But now, its not impossible. It will happen. I don't know the "when" just yet.

I'm getting my my wrapped around the "how". I'm listening to an audio book called "Escape 101". There seems to be a lot of good tips in here about how to get yourself to believe and commit to it.

The first and major problem with such a dream is money. How much money would be required for such a vacation? Imagine 6 months in Europe, sipping cappucino along the seine, checking out many of the less famous museums, learning French, sleeping in til 3pm and staying out til 3am.

I think the reality of it will be we will need to get an apartment. With a kitchen. Where we can buy some baguettes and brie and a bottle of wine, and take it home for lunch. I can forsee getting a $1,200 a month apartment and be quite comfortable.

I think the cost might be quite reasonable. Imagine all those college kids who spend the summer in Europe, and probably do it for only $2,000 including air fare. I'm not ready to slum it quite that way, sharing rooms with strangers and such. But I don't need to stay at a 5 star hotel either.

So can I do 6 months in Europe for $15,000? That seems quite possible. That works out to $75 a day. Or $30 a day not including housing. Can you do Europe on $30 a day if you have a good place to sleep?

I bet you can.

And then there's the thought of having a source of income while we're away. So if I can get $1,000 a month going or more, and it's something that can continue regardless of where and the world I am, that doubles my budget. Now I can spend $60 a day.

I think I can do this. I can taste it.

Useful web sites:

• Escape 101
• The 4 Hour Work Week

With all the hand wrining over the markets, what is really going on?

This powerpoint deck explains it really, really, really well.

http://www.docstoc.com/docs/1822343/Sequoia-Venture-Capital-Warning-to-CEOs

Most interesting and informative thing I've read on this crisis by far.

Federal Reserve Chairman Ben S. Bernanke today said that "Outlook has worsened", and that phrase has been plastered on everywhere from CNN to the New York Times. It makes a convenient headline, and unfortunately its not at all true.

With all due respect, I disagree. I use Outlook every day, and in fact my experience with the software has gotten better. Microsoft has turned Outlook into one of the most useful software programs on computers today. Bernanke must be a Mac zealot, or a Linux head, blindly hating everything Microsoft does without regard to the facts.

Oh what's that? He said "outlook for economic growth"? Oh, that's different. Nevermind.

http://www.timesonline.co.uk/tol/news/world/asia/article4810644.ece

“Corporate India is in shock after a mob of workers bludgeoned to death the chief executive who sacked them from a factory in a suburb of Delhi.”

He was meeting with a few of them to discuss bringing them back to work, but I guess the negotiations weren’t going as well as the workers wanted. Apparently violent protests from workers are becoming more common in India, and I wouldn’t be surprised if India loses significant amount of foreign investment because of these events and others.

http://www.timesonline.co.uk/tol/news/world/asia/article4817414.ece

“However, Oscar Fernandes, who heads the country’s Ministry of Labour and Employment, declined to criticise the attack, saying it “should serve as a warning for management”.

Mr Fernandes added: “Workers should be dealt with with compassion . . . workers should not be pushed so hard that they resort to whatever happened.””

Unbelievable. He’s saying it is management’s fault this man was killed by a mob. I guess politicians are slimy no matter where they are. But those comments will be sent around the world, and I predict investment in India will pretty much stop.

Yes, I'm certainly going for the sensationalist headline with this.

But one of my formerly-favorite personal finance bloggers, who has not been heard from on his blog in 5 months, lost $75,000 more on his portfolio since I last wrote on it. I calculate PFBlog's investments at $737,000, where they stood at $896,000 in May. That's down $160,000, or 17%. Ouch.

I'm not sure he could have picked a worse batch of stocks to invest in: AIG, eBay, and American Express. Coupled with steep 30-40% losses in international mutual funds.