Building that financial wall - Part 2

Building a financial wall - Part 2

What is a "financial wall"?

A financial wall is a metaphor for a physical wall. A physical wall separates and protects. A financial wall does the same thing. It protects your lifestyle and your family from the vagaries of economic flux. Once it is established, effectively you are insulated from economic changes that would normally affect the typical wage earner.  It is income that is now permanent and ongoing, often called "residual income".

Are you a wage slave?

Myself included, most people find themselves only a few paychecks away from a shopping cart.  Due to the protracted downturn in the economy worldwide, most of us have exhausted any reserves and may have also maxed out any credit lines we may have had.  At this point, there is no safety net!  If you stumble for whatever reason, you can find yourself in pretty dire circumstances.

• Lose your job?
• Suffer a medical condition either short or long term that impact your ability to earn a wage?
• Suffer a vehicle accident that disables your transportation and therefore your ability to get to work?
• Illness or death in the family that requires you to take a protracted period of time off from work?

There are many, many reasons that can adversely impact your ability to make a living and pay your bills. With no financial reserves and no "financial wall" there are not a lot of options.

How does one build a financial wall?

Building a financial wall, in its simplest form, is merely putting in the work needed to create a residual income stream that no longer depends on your physical ability to produce it. For some people, this means "investing".  Investing means taking money that you do have and putting it to work. This can be purchasing Real Estate, rehabbing it and then renting it out or simply "flipping" properties. This particular method is quite popular these days with all of the foreclosed and "distressed" housing available on the market.  Nice work if you can get it but it requires money. Money that most people don't have.

Another way might be investing in the stock or bond market called "equities" or shares of stock.  Obviously, given the current volatile nature of the stock market and the economy, this could quickly turn a millionaire into a "thousandaire". Unless one is highly skilled, is very experienced and has a knowledgeable broker, this is not a great way to go either.

Yet another way is to get all entrepreneurial and start your own business. This particular avenue is quite popular these days.  In many cases it's a last-ditch effort by an out of work professional to salvage something from their corporate experience. In some cases it's a dream they've always had to be in business for themselves and to "fire their boss".

If you have a useful skill or trade, why not turn it into a business? This can be a great idea if......... and it's a big if, if you actually do your due diligence and find out what it really takes to start and operate this kind of the business until it becomes profitable.  Statistically most new businesses fail within the first two years.  The most common reason is lack of capital to keep it afloat until it starts making money and secondly, lack of knowledge on the part of the business owner on how to actually run the business.

The second part, lack of knowledge, can be overcome by plugging into a pre-established business system such as a franchise.  Here, the business plan and all of the operating steps have already been worked out.  You just need to add money, sometimes lots of it.  These days, it costs something like $1 million to open a McDonald's or other big-name franchise.  Smaller franchises like a UPS store or other small business still run into the many thousands of dollars start up costs.  That option is off the table if you don't have that money.

How about an online business that can be started for little or no start up costs? These do exist (I'm running one right now) and the start up costs can be $500 or less. The main drawback to these is that there are literally hundreds of thousands of "opportunities" on the Internet. Unfortunately, a high percentage of them are scams and the only one that makes money is the scammer.

In my experience trying to "get in on the bottom floor of the latest hot thing" is usually doomed to failure.  A true "bottom floor" opportunity is rarely offered over the Internet to the general masses.  If it is a new, groundbreaking technology or idea, they will get their funding through Venture Capitalist investment companies. The latest million-dollar idea is not going to be handed to an average Joe for only $49.95 start up costs. Get over it!

All of this being said, there are genuine and viable business opportunities on the Internet.  Multilevel marketing is one of them.  This tried and true business model has been around for a long time and it works. It provides everything one needs to get actual business started.

• Low initial start up costs typically.
• A proven, duplicatable business plan.
• Mentors/trainers to help you get started.
• A solid, proven product line that people want to buy.
• A proven track record of success for many an "average Joe" making it work for them.

As mentioned in a previous article  Starting your own business - Are you the reason it didn't work? the primary reason these types of businesses fail is not because the business model or the products were bad, it's because you didn't do it properly.  You didn't change you!  What you've been doing up to this point in your life is the reason you are where you are in life financially or otherwise. If you are not willing to change, willing to learn new things, willing to be teachable and willing to duplicate a proven system you will likely fail. If on the other hand you're willing to take an honest look at where you are right now and make a decision to change, these multilevel businesses have a proven track record of success. Are you willing to change? Are you willing to accept guidance from somebody who is actually done it? Are you ready to fire your boss?

If you wish further information on a more personal level about this area please feel free to contact me through the comments section.
If you are truly serious about firing your boss, just go here>Your Future

Going into business for yourself.  How realistic is this and what are the pitfalls?

With the World's economy, including that of the United States in somewhat of a shambles, many long-term unemployed are exploring options.  These options may include retraining such as going back to school and finishing that degree they started 10 years ago or seeking specific training and/or certification in a specialized field.  Another option is to fire up one's entrepreneurial efforts and start their own business.  In previous articles I have briefly explored some of the pluses and minuses of pursuing some of these options.  Today, I wish to expand a bit on that topic.

"Brick-and-mortar" or online?

Having actually operated businesses in both venues (and still do), I have a few thoughts on the subject.

Starting up your own business can be challenging.  Doing so in a physical location has its inherent limitations and extra expenses.  A physical location, traditionally called a brick and mortar business referring to the fact that there is a physical structure at a fixed location, is by its very nature  very locally oriented.  One's customer base tends to be people that visit your storefront and make physical cash and carry purchases.  This often brings with it the need to interact with the local political entity and it's many rules and regulations such as parking requirements, ADA (Americans with Disabilities Act) accessibility, liability and other insurances for the physical property and its contents etc., etc. If one is selling a physical product, there is also the logistics of stocking product, moving product and displaying product to deal with.  All of this can require a considerable expenditure of money before the doors even open and one customer even sets foot in your business.  This may be one of the contributing factors to the statistical fact that most new startup businesses fail within the first two years.  These failures are typically attributed to two things; lack of capital and a lack of knowledge.  Getting a business off the ground on a shoestring is almost impossible to do.  Believe me, I've tried and failed more than once! 

On the other hand, a "virtual" business, operated online, often eliminates many of the start up hurdles and cost one encounters with a fixed location.  Since one is not typically delivering a product to a customer at the business location, things such as parking and ADA access and business licenses are not an issue.  An offsetting factor can be shipping and handling of the physical product and getting it to your customers.  This can involve some considerable expense should you choose to handle this yourself. 

This aspect of selling products can also be handled in a better way.  It's called "drop shipping" in which someone else actually warehouses, handles and ships the product to your customers for you.  One can simply offer the product or service online through a website with a shopping cart and then automatically forward the orders to the "fulfillment center" to take care of the physical aspects of getting a product to the customers. 

There are innumerable variations and combinations of these schemes.  There are many "turnkey" options available to open a store.  Amazon and eBay come to mind.  Both of these retailing giants offer one the ability to open your own branded store and host it within their overall system and website.  Since this is a turnkey package deal, one does not even need to actually create one's own website.  It's all included in the package.

Are you a business owner or are you owned by the business?

What is the difference between an entrepreneur and a business owner? 

Entrepreneur -

A definition: a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

This standard dictionary definition does not really paint an accurate picture in my view.  The same definition could be used for "business owner" as well since they perform the same functions.  In my view, a true entrepreneur is already looking at the endgame when they start the business.  They have an "exit strategy".  Few modern entrepreneurs have the intention of starting a business and then dying in the traces 30 years down the road.  They are not following their fathers business model.  They have a game plan which includes researching their markets, nailing down proper funding, "single handing" the functions of the business as they work out the kinks and then gradually passing off control (called delegation) to someone else and then stepping away and starting the process again. 

Some of the most successful business people one hears about these days are essentially "serial entrepreneurs". They have started businesses, gotten them running smoothly and then moved onto a new game.  The whole point from the beginning was to get the business going and train someone to take over.  Success is a journey, not necessarily something one achieves and then stops.

If one becomes bogged down in the everyday minutia of running the business and trying to micromanage every aspect, the business owns you!  If your business plan did not include replacing yourself, you have essentially just paid a lot of money for a job.  Was that your intention?

Leveraging time

What the heck does that mean?  By applying the concept of leverage to business and career success, you can, with a little thought, accomplish very much more than you can without it. Without leverage, you may work very hard, but your rewards are limited by the hours you put in. With leverage, you can break this connection and, in time, achieve very much more.

Time Leverage

Using the leverage of time is the most fundamental strategy for success. There are only so many hours in a day that you can work. If you use only your own time, you can achieve only so much. If you leverage other people's time, you can increase productivity to an extraordinary extent.

To leverage YOUR OWN time.

    Practice effective time management. Eliminate unnecessary activities, and focus your effort on the things that really matter.
    As part of this, learn how to prioritize, so that you focus your energy on the activities that give the greatest return for the time invested.
    Use goal setting to think about what matters to you in the long term, set clear targets, and motivate yourself to achieve those targets.

To leverage other people's time.

    Learn how to delegate work to other people.
    Train and empower others (through team building).
    Bring in experts and consultants to cover skill or knowledge gaps.
    Outsource non-core tasks to people with the experience to do them more efficiently.

Providing that you do things properly, the time and money that you invest in leveraging other people's time is usually well spent. Remember, though, that you'll almost always have to "pay" up front in some way in order to reap the longer-term benefits of using leverage.

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Starting Your Own Business. Are you the reason it didn't work?

Nothing will change until YOU change.

It has been said many times over; "Doing the same thing over and over again and expecting different results is a workable definition for insanity."

Nothing will change in your life until you make a decision to change yourself and do something differently than what you have been doing. You are where you are in your life because that's where the things you have done and the decisions you have made have put you.  

Are you broke?  Do you have a job but hate it?  Are you unemployed?  Are you driving the car you want to drive or living in the house you want to live in?  Are you saving money for retirement?  Fairly simple questions aren't they?  For most people, the answer is NO!  The real question that needs to be asked is "Why am I in this position?"

 Excuses-Excuses-Excuses

Yes, yes, we have all heard all the excuses.  "I need a better education."  "It's the economy!"  "My boss hates me!"  "It takes too much money to start my own business."  "I've thought about starting my own business but all my friends said that I couldn't do it."  I could fill pages and pages with the excuses I have heard.  When push comes to shove, they are just that, EXCUSES!  

It's only human nature to try to blame something or someone else when things go wrong.  Remember, when you point a finger at something else, there are three fingers pointing back at you!  Majority Rules!  You, my friend, are the real problem.  You can't fix a car with broken tools.  You can't fix your life if you are broken.  So the first place to start fixing your life is fixing yourself.

If you don't fix yourself, nothing will change.

 Self-evaluation is often uncomfortable. People around you, and life in general, do a fine job at beating us down.  Why should we participate by doing it to ourselves?  Because if you don't, nothing will change!  When it comes down to it, YOU are the central figure in your life.  What you do affects every thing else in your life. It's not being selfish or self-centered to focus on yourself and what you are doing.  It's survival!  If you don't survive well, others that are connected to you will not survive well either.  Be it coworkers, your family, your friends or just people in general, if you are doing poorly it impacts everyone else in some way. On the other hand, if you are successful and thriving, it benefits those around you.  

When you are doing well, you are upbeat and excited about life.  The people that you come in contact with can be positively effected by this. If you have money to spend, it benefits the businesses you patronize and the economy in general.  Being upbeat and excited is like a beacon on a dark night.  It draws people to you and lifts their spirits. It provides people with an example that one can win at life.  Wouldn't you like to be that example?  You can be!

Okay I'm ready - How do I start?

 

The first thing you should do is to look at where you really are.  Strip away the social veneer and really look at where you are in your life.  This establishes a starting point so to speak.  Without a starting point to measure against, how would one know if any progress is being made?

The next thing is to decide where you would like to be.  Call it a target or a goal.  Whatever it is, it's something you want to move toward.  Don't be overly concerned at this point about how you're going to achieve that goal or target.  That part will be discussed a little further on.

 

 

Wish - Want - Need - Got

 

Consider this concept: 

Wish; This is something you would "sort of like to have."  It would be nice, but it is unlikely you will put in the effort needed to get it.  As my father used to say "If wishes were horses, beggars would ride."

Want; This is something you would really like to have. This might be attainable but it's going to take some work.

Need;  A "Need" is something you are much more likely to put in the effort to attain.  "I need to eat" or "I need to put gas in my car or I won't make it to work" or "I need to pay my rent or I will be living on the street."  

It's amazing how it works.  Needs some how get accomplished.  Wishes and Wants are less likely to happen.

So what's the message here?  Turning your wishes and wants into needs.  It's a "mental" adjustment, that's all.  It's as simple as that, turn your wishes and wants into needs.  When you turn them into needs, you'll figure out how to get them. 

"Dream Building"

The goals or targets that you set should be real to you.  They should be something that you really need.  

Go-ahead, start dreaming.  But don't just do it in your head.  Make it real, write it down on paper, start collecting pictures of the things you really want.  Make a craft project out of it if you will.  Get yourself a poster board and start cutting pictures out of magazines and sticking them on the board.  Find pictures of the exact car that you would really like to be driving.  Pictures of vacation spots you would like to go to.  Pictures of the house you would like to live in.  Pictures of anything you want.  Be detailed and definite.  If you want a red BMW of a certain model, find that exact picture.  Remember, these are your "wants" that you're going to be turning into needs.  A picture of something "sort of like" the thing you want is not good enough.  It needs to be the exact same thing to work its magic.  

So..... where are we now?  By doing a sincere and honest self-evaluation, we have established our starting point. (Call it "Point A".)

By doing some dream building and then making those dreams real to you by finding the pictures of those exact things, (call this point B) you have now established the parameters of your journey.  Now you know where you are and where you're going.  Next comes the road map.  

To be continued..........

Building a Financial Wall

Building a Financial Wall 

Alas, Long gone are the days of our parents and grandparents when one could work at the same job for 30 years and then retire with a decent pension.  This pension combined with Social Security was enough to live comfortably for the rest of one's life.

Bad economic times, financial disasters and outright fraud have gutted most pension plans, leaving a huge number of honest people financially destitute. Now they are attempting to live on Social Security alone and that is a joke, although a cruel one. I know this because I'm one of those.  As a result of choices I made throughout my life, I must keep working or start looking for that packing crate that will be my new home.  Not a great position to be in.

Hang on! There is hope!

Regardless of your age or current financial state, there is hope. In this day and age of technology and the internet, there are opportunities to launch a business that will make money come in the door that do not require one to reenter the workforce and take another "job."  There are numerous online "work from home" opportunities available.  Yes, yes, I know, scams abound.  Many are designed to lighten YOUR wallet and fatten theirs.  Been there, Done that!  Not even a crappy T-Shirt to show for it.  With some careful "due diligence" one can find legitimate work at home businesses that do very well IF one follows the path of other successful people that have done well in the same business.

The key to success is Duplication

Long ago, I was taught that the key to success is duplication.  What does this mean?  Duplication means; Find someone that has what you want, be it a lifestyle, a nice car, a successful career or whatever and find out how they got it and then do exactly the same thing.  One does not need to reinvent the wheel.  There are plenty of successful people that are willing to share their methods and tools with others as a form of "paying it forward" and helping others dig themselves out of the ruts they were once in and that you have created for yourself.  I am now involved in one such business myself and it is gaining momentum rapidly thanks to the mentoring I am receiving and the tools I have been given.

Where is the employment and business growth?

Which industries are growing and which are shrinking?

 Due to various factors, some industries grow while others shrink. This is important for those still in school and contemplating a career.  Training to be a buggy whip artisan these days does not hold much promise!

I recently read an article on LinkedIn that had a great graphic representing the industries that are growing or shrinking.

Quite enlightening!  Many of the solid, tired and true areas are shrinking. MY belief is that is somewhat due to the aging population. The areas of Health Care, Wellness and other related industries are projecting pretty strong growth.

What is to be learned from this?  If you are looking for employment, training for a future career or looking to move out of one of the more traditional, but shrinking industries, this is where you should be looking.

I myself have launched an online business in the Wellness field and it's growing rapidly. Proof in the pudding so to speak!

My Adventures in the On-line Marketing games

Recently, I have been exploring several opportunities in the online business area. There are thousands of these available.  In fact, it you happen to put in an email address asking for more information, you will get deluged with hundreds of offers by email and phone.  If you do request more info, be prepared to some heavy traffic. 

Given this result, I would strongly suggest that you create a new email address specifically for this type of activity. Grab a new gmail, Yahoo, or other email address.  These are free and you can have as many as three gmail addresses that you can be signed into at the same time.  Just enable multiple login feature.

With the high unemployment rampant in this this and other countries, many are turning to home based businesses as a solution.  Thousands are making it work.  Unfortunately, millions more are getting scammed out of money they can little afford to loose.  Sorting out the real deals from the scams is tough.

Scams, Scams and more Scams!

There is no end to the amount of scams you will be exposed to if you choose to pursue this course of action.  There ARE good, workable online businesses out there but they are often masked by the "noise" that the scammers make.  Strident claims of "instant money for no work" are just blatantly stupid. If you fall for one, you will be sucked into the downward spiral to oblivion where all stupid people eventually end up. You can make money but you have to throw your ethics out the window and sink to the level of the scammers and become one of them yourself. Do you really want to go there?

The usual mechanism is to sign up "for free" and then get pounded by relentless "up-sell" and promotion to sign on to yet another tie-in offer to make even more money. The more money part is for THEM, not you, unfortunately. 

I recently stuck my toe into the water as an experiment on one "opportunity" that looked interesting and doable.  By the time I had had enough of the increasingly strident demands that I step up to the next level of the program "where the real money was" I had spent about 30 minutes wading through pages and pages of their "long form sales letter" pitch.  The capper was when I was going to be forced sign up for yet another "affiliate marketing" tie-in program that I had absolutely no interest in doing, in order to continue.  At this point I stopped and sent a request for my money back, including a rather scathing comment about there deceptive practices.  They quickly refunded my money ($19.95) so that at least was a good mark in their favor.  I sort of expected that this test was going to go this way so I was not really surprised that it did.

So, what is a person to do?

There are good programs out there, I'm running at lest two of them right now and I am making money.  Yes, there was some minimal investment to really make it work. There really is "No Free Lunch" and sometimes one needs to fuel the fire a bit to get it going. Ultimately, I got an ROI (in a pretty short time actually) that was many times my initial investment. WIN!  It's not a lot of money but a few hundred dollars a week is nothing to sneeze at in these tough times.  For some, it's the difference between paying a bill or talking to the bill collectors. If you are just sitting around at home being depressed because you are unemployed, its worth a shot. A little money is much better than NO money. Just be careful and read all the fine print and look out for the "gotchas" buried way in the back or the Terms of Service etc.

Be Careful!

Do a search on "home based business scams" and you will be surprised. In my research I ran across a few sites that "rated" home based businesses.  The one I discusses above was top rated on one of them yet turned out to be pretty scammy itself.  I strongly suspect that at least some of the "rating" sites are scams themselves that are simply set up to mask the scammers.  Like many "review" sites, the reviewers are paid to write positive reviews.  What value does that type of review have? NONE in my view. This even happens on well known sites like CNET for computer and technology products and software.

The bottom line is that one can make money on the internet, millions do every day. If you are careful and do your due diligence and research before plunking down your money or signing up, you can find one that works for you.

Good Day!

Unless you have been living on the moon for the past three or four years, you know that the economy has been in the pits.  Unemployment has screamed to an all-time high.  Although the government reports improving conditions, that information is highly suspect basically due to the fact that the figures have been "spun" for political considerations.  On the surface, the numbers appear to be improving.  Those figures are likely highly skewed based on exactly what is being counted. Many workers that are actually unemployed are totally ignored for various reasons.

The unemployment figures reported are inaccurate!  Who'd a thunk it?

Many times the unemployment figures one sees reported are based on the number of workers actually drawing unemployment compensation.  It totally ignores the fact that there is a huge number of workers that have exhausted their unemployment and have fallen off the rolls and are no longer collecting unemployment.  They are still unemployed but have become invisible to the powers that be that make up these reports.

Today, I read a report that the true unemployment numbers are at an all-time high.  When one looks at the overall population and compares it with the number of workers that are actually unemployed, whether they are drawing unemployment compensation or not, the figures reveal that the number of workers with a job is hovering at an all time low of around 58%.  That's a huge drop over the last four years.

Unfortunately, I must count myself as one of the members of the "42% club" of people that are truly unemployed or underemployed.  This has been going on for me since 2008.  In my case, as a self employed business owner, I would never be counted in any of the government studies that generate the unemployment numbers in any case since I am not eligible for unemployment compensation in any form.  So basically I fly under the radar.  People like myself do not get counted and there are millions of us.

Owning one's own business is a two edged sword.  

Given the long-term nature of this crisis, many people are trying to cope by starting their own businesses.  Unfortunately, historically, most start-ups only survive about two years. Many barely last out the first year. If they do survive beyond that, they gradually succumb to the debt load and fail in the second year. 

There are pluses and minuses to going into business for one's self.

On the plus side, 

• One does not have to answer to a  boss.
• No punching a time clock.  
• Your income is more closely associated with your efforts.
• Suffer from age or sex discrimination.  (At least within your own workplace)
• There is no "income cap".  There is a potential to make as much money as you possibly can, with no artificial ceiling based on age, gender or education.  If you have a brilliant idea or concept, market it properly and people actually give you money for it, the sky's the limit.

On the downside;

• There are no guarantees, compensation wise or effort wise. Guarantees come with toasters, not with life (or business).
• In spite of your best efforts, you can still come up at the end of the week with no money in your pocket. Or worse yet, in the hole! You may effectively be moving backwards.
• No punching a time clock.  You don't get to go home when the bell rings.  If you operate your own business, even if it's a brick and mortar operation with posted hours, when the front doors close the work doesn't necessarily stop.
• If you employ others in your business, you carry the burden of supporting not only them but all the people that depend on them for support.  If you make a bad decision. it can have serious consequences for literally dozens or even hundreds of people.
• There can be a serious financial impact on your life and your business due to the additional expenses you now incur for being in business for yourself. If you have a "brick and mortar" operation with a physical location, you have all the expenses that go along with it.  Rent/lease, insurance, security, building maintenance and upkeep, utility costs, physical assets such as equipment, inventory "flooring" expenses if you don't own the inventory.
• No health insurance.  Buying your own health insurance for yourself and your family can be quite expensive since you are not part of a "group". 

 So....what's a person to do?  The only guaranteed failure is to do nothing. Inaction is the true killer. Someone once said "Do Something, even if it's wrong!"  at least you are moving and trying.  Inaction breeds more inaction.  Hopelessness is contagious and will bring down the ones closest to you. It's a downward spiral.
Get up every day, shower, shave and dress. Be ready to do something.  It's a mind set, an attitude you assume.  You will be surprised the opportunities that suddenly appear when you are ready to take advantage of them.  Success is when preparedness and opportunity come together.  Be ready for it.