MONEY: Cost of Driving? See The Chart Below, It Could Save You A Bundle Of $$$

      With the constantly changing cost of gas sometimes it is hard to figure the cost of taking a trip.  This chart was made for two reasons.  The first was to make an easy way to figure the cost to make a trip.  The second was to show people the cost savings of going to a newer, high mile per gallon vehicle.  I know some people need a gas sucker for work or to haul a large family and groceries.  However the back up vehicle when not working does not have to be a gas sucker.  If you are a person who drives over two thousand miles per month and have your gas sucker paid off it might pay to look into a getting a second vehicle for when you do not need the gas sucker.  If you drive in the four to five thousand mile per month range it definitely will not only pay for itself.  It will pay the additional insurance cost also.  The old saying, "You have to spend money, To make money." definitely applies to this situation.  As fuel prices go higher it will apply even more so.  You may be able to help not only yourself but the country.  If enough people buy cars it creates jobs.  If enough stop wasting fuel when they do not have to it will help America reduce our need for imports.  Not to mention helping save the planet by reducing emissions.  It can be a win, win situation.


                                    MILES PER GALLON


PRICE PER      6      8     10      15      20      25     30       35         40        45        50
GALLON
                                        PRICE  PER MILE IN CENTS

$2.20            .366  .275   .22     .15      .11     .08   .073   .062     .055     .048     .044

$2.60            .433  .325   .26    .173     .13   .104    .086  .074     .065     .057      .052

$3.00             .50   .375   .30     .20       .15   .12      .10    .085     .075     .066       .06

$3.40            .566  .425   .34     .22       .1    .136     .113    .097   .085    .075      .068

$3.80            .633 .475    .38   .253      .19   .152     .126    .108    .095    .084     .076

$4.20             .70 .525    .42     .28       .21   .168      .14      .12     .105   .093      .084

$4.60           .766 .575     46      306      23   .184     .153     131     .115  .102       .092

$5.00            .833 .625   .50     .333      .25    .20      .166    .142    .125    111        .10

TO USE THE CHART SIMPLY MULTIPLY THE MILES YOU DRIVE PER MONTH TIMES THE PRICE PER MILE.
EXAMPLE YOU DRIVE 2000 MILES PER MONTH AT 15 MILES PER GALLON AND GAS IS $3.40 IT COSTS
2000 DIVIDE BY 15 = 133 GALLONS PER MONTH X 3.40 = $452.20 FOR GAS
2000 DIVIDE BY 35 = 57 GALLONS PER MONTH X 3.40 = $194.28 FOR GAS
IF YOU TRADED FOR A 35 MPG CAR AND DROVE 2000 MILES THE COST WOULD = $257.92 SAVINGS

YOUR SAVINGS PER MONTH WITH A 40 MPG FORD FIESTA WOULD BE = $ 282.20 SAVINGS

MONEY: Getting Your Loan.

     This post continues the post I made on 10/10 about Starting Your Own Business and Dealing With Banks.  Hopefully I got across the point that when dealing with banks you tell them no more than you need to tell them to get your loan.  That being said you have to properly prepare yourself for seeking help from a  bank.  Banks are interested in one thing making money.  You need to convince them that your plan will make money.  More than that, that you will make them money.  You need to know the answers to the questions they may ask you.  The thing they need to know is that your idea or plan is profitable.  Of course this is something that you also need to know.   They do not want to hear, "I think it will make this much."  They want to hear "It will make this much and here is how."  Then you need to be prepared to tell them why you need the money your asking for.  You also need to be able to tell them how much profit it will make.  If you can not answer these simple questions you are not ready to deal with a bank. You need to practice your sales pitch that you will give the bank till you are totally comfortable telling it to anybody that asks.  This will help you sound convincing when you go into the bank.  You may be nervous, but it should not show.  You need to project confidence and professionalism.   That starts with what you wear and how you look.  What the banker sees the first time he sees you will influence his decision.  You may work in cutoffs or jeans with holes in them and a T shirt with your favorite slogan on it.  However when you enter a bank you are on the bankers turf and you need to look up to the part.  I always wear a suit or slacks and a nice shirt or sweater when dealing with people I am asking to invest in my business.   Is it hypocritical, not really.  It shows you know how to be professional when you have to be.  When doing sales work I almost always had on bib overalls.  The one place I did not compromise is my beard.  My beard is pretty long and gray.  Picture in your mind Santa Claus and you have just visualized me.  Sometimes I had to ask people to give me thousands of dollars up front strictly on my word.  Sometimes people would say to me, "How do I know I can trust you?"  I usually just smile and say,  "If you can't trust Santa Claus who can you trust."  I hardly ever had a person say no to me.   Could Santa Claus rip them off? You betcha it could happen and does, but not by this Santa Claus. 

     This part may sound a little strange but it helps.  First you do not want to come across as begging or needing the help.  In fact it helps if you can put across an image of not needing the money.  Your presentation should clearly show how you will use the money you are asking for.  If you can not show or tell how you will make money your chances are slim.  If you have already done X amount of business and made X amount of that is a strong help.  Some businesses require little planning and very little equipment.  Basic landscaping may get buy with a pickup truck, a wheelbarrow, a couple types of shovels, several kinds of rakes and some tarp.  Most everything else you can rent from a rental center.  Building decks may be simple also.  The basic pickup, a good saw, a small chain saw, some post hole diggers and some saw horses can get you started.  You can rent a trailer for hauling longer items, or machinery for moving dirt.  You need to figure these rental costs into your estimates.  Time going and getting them, cleaning them up and taking them back are all part of the job.  Knowing what materials are necessary to build the deck are also important.  If you make out a written contract for the job it should have a good description and picture diagram of the deck and how it will be built. When you have this in hand you can go to the bank and tell them I have a contract for a deck of X size, it will cost this much for materials and it will net this much.  You should be able to tell him how many man hours you will have in it.  The banker will decide based on how prepared he thinks you are.  You occasionally will have things that come up unexpected, but generally you should know your business well enough to know how much you will make.  The contract should detail the basics.  How many steps, the pattern of the posts, the type of materials,  are there railings and  is it screwed together or nailed.  How the post are set.  The more detail you can put in the contract, the less chance the customer can add things that will take away from your profit.  Make sure your contract is clear that if it is not in the contract it is not covered and must be negotiated separate.  Believe me I learnt this the hard way.  It does not have to be fancy but it will help you convince the bank you know your business.

     Finally when you get the loan pay the bank first, the materials second, your employees and rental fees third and yourself last.  Paying in this order will help you stay in business.  It will only take burning yourself once or twice to find out if there actually is a profit to be made in your business.  It is best to learn it quickly and adjust accordingly.  If the bank gives you the loan and even if you lose money, as long as you pay them and maintain your credibility you can get another loan and try it again.  If you spend all the money and leave everybody else hanging for the money owed them you won't be in business long.  Going back up to what I said about trusting Santa Claus.  There are plenty of con artist who take advantage of customers, banks and everybody else they deal with.   That is what makes it so hard to get a loan.  I always heard that 50% of all new businesses fail in the first five years.  That number supposedly rises to 95% by ten years.  Some businesses are even worse than that,  Restaurants are even worse than the average business.  They supposedly hit 90% failures by five years.  It is a very competitive field.  You can profit from their failures though.  A friend of mine made a very good living buying and selling restaurant equipment.  When going out of business most will take what ever they can get.   Getting into the business they will pay what they have to for what they need.  He made his living knowing the differences.  He started his business from his own failure.  As long as you learn from your mistakes and keep at it you will succeed sooner or later.  Or at least you will keep busy trying.  Most businesses do not succeed the first time around.  It takes perseverance and determination to succeed.  If you are trying to become self employed to spend more time with your family.  Do yourself a favor and forget it.  If your goal is to work less or not as hard, again forget it.  Finally if it is to be in charge and not answer to anyone. Again I suggest forget being self employed.  You will have to not only keep your customers happy, but your employees if you intend to keep the good ones.  If you are still interested in starting your own business make sure it is something you enjoy doing.  To me there is no worse experience than waking up everyday to do something you do not like.  To me anyhow, life is to be enjoyed, not endured.

MONEY Investing for Retirement versus Reality

     As people enter the work force they have to make up there mind if they will invest for retirement.  Many do not as they are not making enough to get the necessities of life.  It is all about management.  I use to think that a person could not get by on say $10 and hour and only one person working to support the family.  My son in law, Lance, proved me wrong on that count.  He not only fed a family of five on his $10 an hour income.  He managed to buy the materials over several years time to almost completely build a new home on his own.  He did borrow some to get the concrete work done and have the trusses set.  The insulating and  drywall finishing he also hired out.  When he was done he had a $135,000 dollar three bed room home with a full basement and about $90,000 dollars in equity.  He did all that by planning and working with his spouse(my daughter, Glenda)and staying in a budget.  He is one of the most self disciplined individuals I have ever met. 
   
     That was all said to show that planning can profit the individual.  Over the last few years I have seen many people watch the money they had counted on for retirement disappear as the market started to look more like a roller coaster.  Seeing that, it really bothers me to see media financial advisors still telling people to put the money in the stock market.  They will come out ahead in the long run the advisors tell them.   My question is this, if you are smart enough to make your money and pay your bills, why do you need an advisor to invest your money?  Advisors make their money by getting part of your money.  They are like people who advise people to invest in oil wells.  People who drill oil wells do not usually put their money in drilling the well.   They put other peoples money into the well.  If the well is dry they simply say, so sorry.  Then they will offer you a chance to invest in another sure fire deal.  Yes some people get rich, but they generally drill more dry holes than wet ones.   Financial advisors work under the same principal.   Yes they know the tax loopholes and can save you money that way.  However if you have a competent tax person doing your taxes they can usually steer you in the right direction.

      When I started my second business I told my tax person.  I do not care if you make a mistake.  That happens sometimes.  If you do make a mistake or a bad decision make it in favor of the IRS.  My first business I made some bad decisions about taxes and they haunted me for almost seven years.  That being said, never fear going to the IRS with a problem.  They will work with you and they will give you a budget to work it out.  They are not the heartless jerks often portrayed in adds and movies.  At least that was my experience when dealing with the IRS system.

    If you are self employed you need to get a tax ID number for yourself and do all your dealings directly with the IRS or through your tax person.  If you are not self employed you simply need to first do a very serious and realistic budget and determine how much you can invest.  The second thing you need to determine is how and what you will invest your money in.   With the stock market moving like a roller coaster it is not a good investment regardless of what the financial planners say.  Interest rates are in the tank.  The profit on most bonds will be lost to inflation.  The only choice left is for you to self manage your money.  Most investment managers will tell you that is a bad idea.  The main reason they say that is because they will not be getting a piece of your pie if you do.

   The trick to self management is you have to be very proactive.  The advantage is you always have access to your money.  Having access can be both a good and bad situation.  The question is do you have the discipline to do your own managing.  If you are disciplined enough to go to work everyday and pay your own bills and not waste your money.   The answer is yes.  If you stay out of the credit card debt trap and other wasteful practices you can do it.  The system I use is real simple.  Make good buys on almost anything and then sell it for a profit.  The trick to this is you have to be a bit of a horse trader.  That means you have to be actively involved in the buying and selling.  My thing is going to auctions and buying broken stuff and fixing it in my wood shop and then selling it.  The thing going for me in this situation is when I retired from trucking and sold my truck I had this very big building right on Main Street and hardly anything in it.  Woodworking had been my hobby so I already had the tools.  So then it is a matter of looking for bargains at the auctions.  If a piece of furniture is broke and I can fix it my practice is to let everybody know it is broke.  First it keeps the price down for me.   Secondly it keeps someone from buying something they can not use.  Some people say that is not fair.  Is it fair to sell something you know is broken and try to get top dollar out of it.  My needs are not as great as some people.  My goal is to simply supplement my retirement to make ends meet.  Some say that is not really retired, my answer is, I am actively retired, I enjoy wood working.  What would I do with all the stuff.  I can only use so many chairs or dressers.

    If you are investing to retire you may need to make more money.  Then I suggest either cars or real estate.  Both of these require you to know the real market value and what a really good deal consists of.  In the state I live in you can buy and sell up to ten cars per year without a business license.  If you are married and working together you could do up to twenty cars a year.  Again the secret is spending time finding the true bargain and then taking the time to sell it.  If you do it right you can easily make two or three thousand dollars per deal.  In horse trading if you are selling it is gold, if you are buying what they have is crap.  The trick is you have to be able to sell it below the market value and still make your profit.  You have to not only buy a bargain, you have to sell one.  That keeps your money moving.  Just because it is cheap does not mean it is a good deal.  When I started my wheeling and dealing I bought five couches at an auction for $5.  This made me think I was a real wheeler and dealer.  A year later burnt four of the couches and finally sold one for $10.  Now when you figure loading, transporting and storing for over a year and then disposing of the ones that did not sell, I made a bad deal.  However the upside was I learnt early that just because something is cheap does not mean it is a good deal.   The trick is knowing what people need, what they will buy and how much they will pay.  I buy dressers, night stands, baby beds, dining room sets and entertainment centers. They all sell good.   My rule is that I have to buy it for a fifth of what I think I can sell it for.  Then even if I have to discount it, my investment is safe.  Do not get in bidding battles and just because you think something is nice does not mean others do.  If it really is nice it will sell accordingly.  Auctions are a place to get some real good deals.  It has also been my experience to watch people get in bidding wars over building materials and see them pay twice what they would have paid at Lowe's or Home Depot.  You have to know what you are bidding on is worth.

    You can easily make far more than you would in interest on invested money.  You may have to sit on some items for some time.  The catch is, are you willing to invest the time.  If you are not then go ahead and follow the old standard investment route.  My wife retired in January 2009.   Over the last couple years she was working she watched over half of her retirement account simply vanish in the market.  Timing is everything when it comes to investing for retirement.  Will you even be around when it comes retirement time.  Having been dead twice myself, I know not being is a definite possibility.   That being said, we have to plan like we will live for a long time.  The other part of the equation is to enjoy life while you are living it.  Why make yourself miserable and die before you get to enjoy it.  It is all a matter of what is important to you.  One of my grandsons is sixteen and already has two houses he bought at tax sales.  His mom and dad make a living in real estate.  He took his yard mowing money and invested it in real estate.  His goal is to retire before he is thirty.  Having two houses which are paid for and the rent money to roll into more investments he may accomplish his goals.  His goal is ten houses buy the time he finishes high school.  That is certainly possible to do.   If he keeps going through his twenties he could be looking at as much as $10,000 a month income from his properties.  He may not retire, but he will be able to decide what he wants to do for a living.  Tax sales are a definite money making opportunity for almost anybody.   If your not into managing your own money though just go ahead and plan on working till your 65 or so.   The decision is yours.  My good fortune has been to see that the American Dream is possible to anyone willing to put in the effort.  Good luck.

MONEY:Getting Financial Freedom by Starting Your Own Business...Dealing With Banks

             Starting Your Own Business...Dealing With Banks 

      The present job situation sucks.   That sucking sound may create an opportunity for a person who is smart enough to turn it to his or her advantage.  Smart has nothing to do with how much education you have.  In the course of my life I have met people with college degrees who were not smart enough to pour piss out of a boot.  Even if the directions were written on the sole of the boot.  Steve Jobs was one of the richest men in the world and he was a college drop out.  Another of the richest men in the world was John D. Rockefeller.  A story I heard about him sort of says it all.   He had never gone to higher schooling but was a genius at business and marketing.  Supposedly one time he was touring one of his refineries and had some of his new employees with him.  One of the employees took the opportunity to beat his own drum by stating, "Mr. Rockefeller I recently graduated from Harvard before coming to work for you.  May I ask where you graduated from?"   Mr. Rockefeller looked at him and stated. "'Son I did not have time to go to college.  I was too busy creating you a job."

      Business is often about knowing how and when to take advantage of an opportunity when it presents itself.   I was a high school dropout who went into the Army.  However after leaving the service I understood the value of an education.   My high school and first year of college were finished via the GED program.  Being somewhat older and knowing what I wanted to do, which was be self-employed I took courses that furthered my goals and did not necessarily follow the prescribed curriculum.  I have an associate degree in business and one in recreation and leisure services with the balance of my hours in commercial art.  The management degree was of course to understand management. My goal in the rest of my classes was to make playground equipment, the rough timber kind, and to be able to do my own advertisement.  I worked my way through college tending bar, doing yard work and landscaping with a little bit of commercial tree trimming to make ends meet.  My education ended in the middle of one of the worst recessions since the great depression. At least until this one came along.  This meant it was a dead job market.   So I created my own business.  I did part time work for a local mobile home dealer and managed to turn it into a very lucrative business.  I did mobile home repairs and service and also expanded into building wooden decks which were the rage at the time.  It was not that I was that smart, but I saw a need and met it.   That is half the secret of getting a job in hard times. The job eventually went belly up.  Not because of a lack of business.  It was a combination of two other problems.  One was not managing my money and too much celebrating of my success.   The other and more critical was being to honest.

      Long story, short my celebrating caused me to get a divorce.  Then I went to the bank to restructure my debt so I could pay all my bills on my own.  My whole story was poured out to the loan officer, who I thought of as a friend.  I had never missed a payment and over a couple of years had built up a $15,000 line of credit.  This made me able to go in and get the money just based on my signature.  It was always on 90 day notes, which was no problem.  My system was to go out and take orders. Then get a check to pay cash and get a major discount on my materials.  The stuff was already sold on contract.  It was just a matter of going out doing the work.  My system was to mark up the materials, add in my labor and then when it was all done take the bank its share and pay off the note and pocket the difference.  This habit later came back to haunt me, as I had a run in with the IRS over three years of back taxes. Never fear the IRS, they will work with you and set a payment plan you can afford.  Just believe me if you do nothing else, pay your taxes.  In all the time I ran my business, there was never a late payment.  That is how my credit line grew from the original $1000 to $15,000. 

      A couple days after the meeting with the loan officer I had an order inbound.  As usual I went to the bank to get my money to pay the delivery truck driver which was how my contract was set up.  It was a cash only business.  The girl at the counter informed me my line of credit had been closed smiled. There was a little bit of irony to that situation. I used to go in and get my money in my normal attire which was a biker denim cut off. When I was going to see the loan officer I always wore a suit and she was always sweet and nice. I don’t think she ever figured that the biker and I were the same person.  I asked to see the loan officer and he told me he made the decision based on the fact I was getting divorced.   He no longer felt I was credit worthy and cut me off.  His actions literally put me out of business.  My half truck load of supplies were on the back of the truck and the driver had to return two hundred fifty miles to Nashville, Tennessee and unload my order so he could get to the remaining orders on the truck.  My supplier cut me off over that screw up.  Having never missed a payment or being late I was suddenly out of business.   A small note about justice...The bank later went out of business and the loan officer started his own business and he went bankrupt.  There is justice in the world.   Sometimes you have to wait awhile to see it.  It has to do with reaping what you sow. 

     There were a couple of lessons learned from all of this.  First never, never ever give a bank any more information than you absolutely have to.  Keep your cards and your problem to yourself.  Know what the bank wants to hear and say it in a way that makes them happy.  Generally you will get what you want.  They want to make money and "that is all that matters to them."    As long as you present yourself well you will get what you want.   I know this is true because later in my self-employment career I used that system to balance my books more than once.  If the banks had known what to look for and had paid attention they would have known I was totally over extended, but I played the system and won.   The second thing I learned was that you should never mix your private life with business and never, ever let your bad habits guide your business decisions.  Had I known more and not had my vision obscured by my bad habits I would never have gone to that loan officer.  My business was seasonal and what I should have done was used my credit line and resources to develop other enterprises to carry me through the off season.   The resources were available to me.  It was my own incompetence that cost me.  Not properly using every advantage you have available to you will cost you in the long run.  Budgeting also can cost you.  Just because money seems to be flowing like water does not mean that the well will not slow down or go dry.  If it does you have to understand and know how to turn the water back on.   You can only do that if you are totally focused and bad habits tend to make you very unfocused.  No matter how smart you think you are the system changes and so does what is needed to survive. 

     This is the first of several posts I will be doing on how to start your own business.  The topics will be.  Finding Your Idea, Getting a Loan, Staying In Business.