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Friday, October 28, 2011

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 secind 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

Thursday, October 27, 2011

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.

Wednesday, October 26, 2011

MONEY Time For A New Game Plan, That Creates Jobs Now

    The average American is not happy with the way things are going.  If they are not unemployed the money they do make is not going as far as it used to.  The protests on Wall Street are a good step.  The problem is we need solutions "NOW," not next month, not next year and not over a ten year time plan.  The super committee of Congress is to little too late.   If they come up with changes it will be next year before they take effect.  Millions of Americans will be wiped out by next year.   The American people do not need program changes they need jobs.  In the words of J.D, Wentworth, "They need it now."   I have a plan that does it right now.  It is a plan that pays for itself and can be implemented immediately. It will not be popular but anyone who seriously looks at it can tell it will work. The old saying of "no pain, no gain" is true.  However refusing to change and continue with politics as usual guarantees even more pain down the road.

   My plan accomplishes several worthwhile and needed goals.  It sets in motion a "paid for" plan to fix, repair and replace America's crumbling infrastructure.  It creates jobs and stimulates business.  Fixing the infrastructure requires not only laborers,  it requires equipment, materials and cash flow that stimulates the economy.   This creates payroll taxes that help the struggling economy.  The final thing it does is reduce our dependence on foreign oil.  It will encourage the American people to become a serious part of the world economy and to limit our waste and pollution.  A couple of my blog pages explain plans that could save America millions of gallons per day.   Not by reducing out standard of living, but by maximizing the energy usage from the what we already consume.  Electric cars may help, but they are not the total answer.  If you drive long distances electric at present is not the answer.  What do you do when you head out cross country and hit the middle of Kansas or Nebraska.  You will be parked and have no where to plug in.  There are viable alternatives that will work.  In France a company builds an air powered car.  Yes it runs on compressed air.  It will run seventy miles per hour and go one hundred twenty miles on a tank of air.  If air stations are built a car can refill its tanks in less than five minutes.  Even doing it at home on your own compressor, which comes with the French car, takes less time and equivalent amount of energy to an electric car.

    So how does this wonderful program work.  It is paid for in advance by a tax of $1.00 per gallon on gas.  It is immediate.  All it takes is being voted in and it can be implemented tomorrow.  Based on America's present consumption most states use about eight million two hundred and thirty two thousand gallons a day.  That means the state immediately can pursue projects that are already going or ready to go.  Over a year that would generate about three trillion dollars for each state to use.  The tax can be reduced later if it is doing the job it was designed to do.  This tax will provide an incentive to buy more economical cars.  This program eliminates a constantly recurring budget drain.  This program creates a permanent fund to permanently fix the problems.  The tax collected in each state should stay in the state it is collected in.  The Federal government other than creating the tax, should have no part in it or access to the funds.  The Fed should only be allowed to make sure each state is using the money for what it is designed for.  Fixing infrastructure.   It should generate enough tax income that each state should be able to fund their own programs.   This is a solution and it works now.  Its does not take months or years.  It will start stimulating the economy immediately.

      Many argue they do not want the government involved.  Well my argument is that fixing infrastructure was designated as a resposibility of the government by the Constitution.  Article 1. Section 8 paragraph 1 makes it clear that the duties of the government should be raising taxes and funds, providing a military for our nations security and providing for the welfare of the nation.  The big argument over the past two centuries has been, What constitutes welfare?  My opinion is that it is the same as every family provides for the members of the family.  Shelter, food, health care, education and safety.  Even if that safety is simply a path to the outhouse it is something that is required.  It is the governments responsibility to provide for the needs of the people.  The burden of unemployment could be absorbed in this program and the states could establish and monitor what it consideres adequate for its citizens.  If the government fails to do its job the 99% should replace the one percent that are not doing there jobs. 

     Once this program is in place the Congress should remove every inequity from the tax system and every break that is not given to each and every citizen.  Lowering the corporate tax, but make sure they all pay their fair share.  People who are living below the poverty line should not be taxed to start with.  Taxes should not kick in till a person is above the poverty line and then only on the money earned above that line.  What percent should the flat tax be at.   That would probably best be established by the Congressional Budget Office and not by candidates for the presidency.  All businesses and people making over one million dollars net income should be taxed at twice the rate of the average citizen.  If the tax for the average citizen is 10% then the tax on millionares and businesses making over one million should be 20%.   The government budget should be balanced also.  At its present level of spending the budget would require cutting 5.6 trillion dollars in spending cuts.  With all the infrastructure paid by the gas tax it should not be as hard for them to do.  We should also bring home "All" American troops from overseas.  This includes the ones in Germany and Korea that are stimulating their economies when they could be stimulating ours.

     My goal is to encourage every citizen to send a copy of this letter and $1.00 to your Congressman and tell him to pass this bill and put the $1.00 in a fund to balance the budget.  Also tell them if they do not pass this bill immediately they will be unemployed come the next election.  Tell them you have put your money where your mouth is and you want results now.  Not next year or way down the road but now.

     Comments and opinions read and appreciated, both positive and negative.  I will answer any questions I can, if asked.

Saturday, October 22, 2011

Rick Perry and the Republi-can't Problem

     Rick Perry's implosion at the recent debate in Las Vegas showed why President Obama will probably get a second term.  Perry's calling Romney a hypocrite was the height of hypocrisy on his part.  He has defended his view on the death penalty in Texas and that is well and good.  However his denying a man the rights given him under the law to contact his government and to expend all the efforts of due process to save himself is not a very Christian thing to do.  If the problem was the waste of money by the state that makes it even worse.  Then it bcomes more like a murder than an execution. His argument for the solution to America's problems being under our feet is only half right.  Energy indepedence could be gained by better use of the energy we do presently use.  Waste is a major part of the reason we are dependent on foreign oil.  I have several blog pages on the topic if anyone cares to read them.  His performance so far in debates has shown he would not stand a chance against Obama in a serious debate.  

    The performance by Romney was not much better.  He muddled his way through the debate, but while he may be a nice guy, he did not appear very presidential.  His comments since the debate are even worse than his performance in the debate.  His criticism of getting out of Iraq is really a moot point.  We can not afford to keep troops there for fifty years like we have in Korea and Germany.  That is one of the few points I agree with Ron Paul on.   Why did we not have the debate before we got into the fiasco of Iraq which was totally a miscarriage of the use of American forces, finances and ideals.  Not to mention the loss of life on both sides.  Ron Pauls condemnation of the Awlaki attack because he was an American misses the point.  People have been killed on American soil by agents of our government when they could have taken the person alive.  John Dillinger comes to mind for one.  I know that is old news but it is a fact they knew where he was and never made an effort to take him alive.   A more recent episode that, being a Texan, he should have more knowledge of as a miscarriage of American justice and the murder of civilians was the Branch Davidian Raid in Waco, Texas.  Most of the survivors were tried and acquited of all charges.  Something the media forgot to tell us.

     Herman Cain definitely looked the best of the candidates present.  His 9-9-9 program took a beating and he has since changed it to a 9-0-9 program.  I read his site and it leaves a lot of questions unanswered.  What happens to Social Security and Medicare under his plan.  Cain to me is probably the best candidate of what is offered at present.  He has his short comings though.  He appears to be a bit of hawk when it comes to the military.  He is offering real plans while most of the other candidates seem to just keep saying the same old things.  They are not offering different or new solutions to the problems facing America.  The tax system defintitely needs fixed, among other things that are broke in the government.

     Newt Gingrich came across good and his past political experience showed in his statesman like answers, however he like Romney carries baggage from his past.  As the majority of the Republican party are conservative Christians the Mormon thing is definite albatross hanging around Mr. Romney.  Thanks to the lack of control exercised by the CNN moderator most of the other candidates hardly got a decent comment in the debate.  Bachman was almost nonexistent in the debate.  Her past gaffes have made her a rather discounted candidate anyhow.  Short of invading Saudi Arabia and taking their oil and maybe Iran also, there is no way gas we will ever see $2.00 a gallon again.  Well I guess it could happen if the United States continues on its present course.  Of course if we are in a severe depression hardly anyone will be able to afford gas at any price, which is about where we are at now.

      If the Republi-can'ts keep it up.  They can't raise taxes.  They do not seem to have any kind of solution and they evidently can't hear the American people Obama is sure of a second term in office.   We may make it through his first term, but if we are forced to endure another four years of his gum flapping and changes that never come to fruition America will be totally bankrupt.   The housing slide keeps failing to find a bottom and if the unemployment situation is not addressed it will continue its slow slide into an economic abyss.

     To me the only answer is a Constitutionally based third party that is determined to get rid of the waste in government.  It can start by getting rid of all the loopholes and tax breaks for business and the wealthy.  I think if all the loopholes were closed businesses could have a lower real tax rate, but they would actually have to pay taxes.  Another thing that would help, and it already exists technically,  is to take all Americans who are living below the poverty level off of the tax books.  Taxes should start once you are above that level and it should be a straight level tax with no deductions or loopholes.  It might take awhile to establish what that level would be at, but it could be done.  It would not change much as they are not paying now anyhow.

    Finally a permanent infrastructure upkeep and repair program should be established outside of the present tax system.  My solution is a $1.00 a gallon gas tax strictly for infrastructure.  It should go directly to the state it is collected in.   The only roll the Federal government should have in the program is to insure the funds are used solely for infrastructure and not for state budget problems.  This system will create a permanent program that generates jobs and stimulates demand and growth in the economy.  This would continue permanently as infrastructure is in constant need of repair and upgrade. As the taxes on the new employment are paid in they will stimulate money for the Federal government.  The Fed can take the time and cut, slash and eliminate programs that are wasteful and not needed.  With the government paying $1.2 billion dollars per day interest on our national debt we need to make serious cuts.  By my estimation and from what I have read and the basic math I have done.  The government needs to cut $5.6 Trillion dollars from the budget just to quit going in debt.  The present super committee, while well intended I am sure, and their plan to get rid of $1.5 trillion over a ten year period is a joke.  At that rate based on what we pay in daily interest we will only $2.5 Trillion more in debt than when they started.   My personal view is the two present parties have not a clue to the magnitude of the problem or the size of cuts it will take to make a difference.

      Can the American people afford a $1.00 a gallon tax to create a program that might fix the problem. Not really, it will hurt and it will not be fun, but if the government goes totally bankrupt it will hurt far more that the $1.00 per gallon.  During the Great Depression the market fell over 89% from its all time high.  Based on that number the bottom would be 1557 from the all time high of 14,150 points.  The Great Depression started in October 1929 and did not hit bottom till July 1932 which was roughly 33 months.  We are 36 months into this "Recession" and nobody really knows if we have hit bottom.  The only thing that ended the Depression was demand for supplies for World War II. My personal feeling is that we have not hit bottom.   Especially if something is not done to generate jobs.  The bleeding will continue.  As the government only counts those actively looking for work.  Those that have just plain given up are not counted and the numbers are probably much higher than the government is admitting to.  They do admit to quite a few 'Underemployed" which shows the smoke and mirrors system they are trying to use.  The only hope is a new party with a new direction and a realistic goals that deal with the real problems.  Throwing all the incumbents out only means you get a new breed of incompetent politicians that try to follow the same failed policies and programs as the present batch.  There are solutions but they will take a completely new mindset to get them enacted.  The Republi-can'ts are not going to do it, and he Dum'ol Crats are not going to rock the boat that they are comfortable in.

Tuesday, October 18, 2011

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 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)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.

Thursday, October 13, 2011

MONEY: Great Idea....But, Are You Self Employable

    Starting your own business first requires and idea.  Then you have to evaluate it to determine if it is a viable idea.  Will it make you money or do what you want to do.  Sometimes ideas are not about making money but about getting recognition for whatever reason.   My focus will stay with the making money aspect.  Being self employed requires a lot of self motivation.   No one is going to tell you when to go to work.   No one is going to tell you to knock off for the day.  Until you get started it is doubtful anyone will advertise for you.  A good business sells itself, but it takes someone who can follow through.  If the job requires tools you have to get them.  If you are smart you will take care of those tools so you get the maximum life out of them.  When planning your business budget and pricing you have to allow for the time you know you will spend cleaning up from a job.  If a tool only lasts for say twenty jobs the price of that tool has to be divided by twenty and figured into the job.  When I started my first landscaping business after I got out of  the Army I had no tools.  I started by doing yard work and I always gave my customers 110% and did little extras and cleaned their tools they let me use.  I did the maintenance on their tools and they saw I took care of them.  As I expanded and changed to landscaping from yard care I often borrowed tools from customers.  I developed a good working relationship with the local rental center and rented bigger pieces of equipment like backhoes, trenchers, chain saws and other power tools.  When I did rent a tool I often got it over the weekend if possible.  The local company let me pick it up Friday night and return it Monday morning.  They only charged me for one day.  Some machinery like that has a meter for how many hours it runs and you only get so many hours.  However you will find ten hours on the machine may take twenty hours to use up.   You have to do other things and make preparations that require time but not machine time.  It will be sitting.  My goal was to line up enough work to maximize that usage.  It might mean working twelve to fifteen hours or more a day on the weekend.  That is one of the hazards of self employment.   If you only want to work 8-5 or 9-4 and no more.  I do not recommend being self employed.  Someone has to do all the running around to get the materials before you even start a job.  That means you have to spend hours and hours planning to make sure you have everything you need to do the job and that you allow for the cleanup after the job.  The trick is figuring all that into the price and giving a fair price.  My preference is to give a flat fee for a job and if I go over or come up short I bite the bullet.   Some things you do will require a contract and believe me make it as specific as you can.  If a job takes extra stone, gravel or time because the customer makes changes as you go along you need to specify who pays for it.   Customers love to make changes as a job proceeds and that is no problem as long as it is not coming out of your pocket. 

     Some jobs take more planning than others.  I knew a guy who made good money buying pop cans.  He had a simple system.  He bought an old semi trailer and bought the plates for it.  He negotiated a site to set it up and bought himself a nice scale.  He set up 10-3 four days a week.  He was in a small rural town of several thousand people and he bought pop cans at about 25% of scrap value.  People bought the cans to him rather than go to the scrap yard in the big city.  When he had enough cans he paid a guy a flat fee to haul the cans to the scrap yard and bring his empty trailer back.   He got the best price possible and got the bonus for having over three hundred pounds at a time.  He made very good money for his efforts and spent many hours sitting and reading and following the markets.  What made it work for him was he paid cash on the spot and most of his business was kids who wanted a quick buck to play video games or some other thing they needed a little money for.   He expanded into batteries for cars, trucks and tractors and found and outlet to get rid of a semi load at a time.  Again he made good money and provided a need as no one else in the area was taking batteries.   The trick is to study and know your business and how it works.  Some people do scrap paper and cardboard.  The opportunity to make money is out there.

      Two of my favorite stories are very simple but they show what you can do if you think hard enough.  The first one happened during the great depression.  A man down on his luck came up with an idea to furnish packing materials to moving companies.  Moving companies have to pack dishes and glasses and other items for shipment.  They usually do so with paper which they buy in roughly fifty pound bundles.   Well the guy went around the neighborhood and made arrangements to pick up all the used newspapers from his neighbors.  Then he would take them home open them out flat remove the colored pages and adds.  When he got fifty pounds he would roll them up.  When he got enough he would take the bundles and sell them to the moving companies for about half what they could buy new paper for.  He turned it into a steady business and survived the depression.  It took thought and creativity on his part and the ability to see noy only a need but and opportunity.

      The second one is my absolute favorite.   A guy invented a product and was very successful nationwide.  He built his business over several years and had the market cornered.  His only drawback was that he was in a very old run down shop and was very limited on how much he could expand.  One day a person from a major nationwide chain came into his shop and offered to buy the business lock, stock and barrel and even take all his employees and he could walk away with several million dollars.  It was a blessing and an answered prayer.   He had invented a new and improved version of his product and wanted to put it in production but did not have the room or equipment.  After the deal closed he went down the road built a brand new building with plenty of room to expand, bought all new equipment and went to work building his new and better product which made his old product obsolete.   He also hired all his old employees, gave them all raises and sold his new product to all his old customers.  A very, very shrewd business deal.  The old company tried to sue him, but he had a new separate patent and won his case.  Which got him several more millions for his hassels.

    While these are some neat stories, or at least I think so.   They show you can get ahead no matter what the circumstances.  You have to find what you want to do.   If is is already being done that is not a problem.  You just have to do it better or offer a better deal.  The two tricks are that you have to be able to figure "all the costs" and you have to be willing to do the work yourself without anyone pushing you along.  If it does not get done the only one you can blame is the person in your mirror.   Learning to understand "all the costs and all the details" are the secrets of success and being willing to put in the hours.  In my years in business I think my record was a 117 hour week.  My average week was 70 to 80 hours.  Was it worth it?  Well that depends on how long I live and how much the cost of living goes up.  Right now I think it was worth it, ask me again in 10 to 15 years and if I am here to answer it the answer will hopefully still be yes.  I retired at 57 and can now do what I want.  Part of what I want to do is share my experiences to help others accomplish their goals.  My life is comfortable, but certainly not fancy. Pursue your dreams, but don't forget to take enough time to enjoy life and family along the way.  Dreams without memories don't mean much.

Wednesday, October 12, 2011

Assassination Attempt or A New Form of WMD

An update may be in order at this time.  This blog is in reference to a supposed Iranian attempt to assassinate a Saudi Ambassador to the U.S. on American soil.

     I do not like to believe my government would lie to the American people, but I have to ask myself who would really benefit from this assassination attempt.  Certainly it would not be Iran.  My opinion on what really led to America's invasion of Iraq has already been expressed in a blog I wrote on 15 April 2011 called WMD The Real Truth. WMD really means Wealth Melt Down and not Weapons of Mass Destruction as many believe.  That blog explains how our government attacked Iraq because of their threat to the United States Dollar.  Iraq was selling their oil for Euros.  This threatened the dollar as a stronger Euro meant a weaker dollar.  The first thing the United States did after invading Iraq was put the Iraqi oil back on the dollar.  In 2009 Iran started trading its oil for Euro's and Yen as it was under continuing pressure from the United States over its nuclear program.  The real question is the nuclear problem, really the problem.  Even if Iran gets the "Bomb"are they going to use it to cause their own annihilation.  Does anyone think they could use it without guaranteeing the end of Iran as a world power.  Could they feel a bit intimidated with United States forces near two of their borders and ships off another side of the country. However they do support and encourage suicide bombers which makes it hard to tell what drives their decisions.  The leaders do tend to make Hitleresque statements which might cause others to question their grasp of reality.

      While it may be hard to understand Iran.  It is not hard to understand the United States.  It is the almighty dollar drives America.  What role the CIA mightbe playing in the whole thing is hard to tell.   However I find it convenient that a drug related party might be involved.  Could a deal be made to get a false confession to promote a  reason to invade Iran.  Who really would gain from this assassination attempt? The United States is trying to drive a wedge between Iran and their Russia/China connections.  That has been reported in the media.  Would our government lie to us.  They did on the WMD issue.  It is a known fact that WMD's did not exist, but the United States pushed it anyhow.  The real question is, is there an underground movement inside the American government, that is pushing an agenda to supposedly save America.  Another question might be, why is it an act of war when someone proposes to kill someone in America, but not when America does so in another country.  We can argue we were killing terrorists, well maybe Iran can claim the same thing.  After all most of the hijackers on 9/11 were Saudi's.

      One might question if the 2008 melt down of the markets by the subprime crisis might not have been an engineered collapse.  Much of the money that was lost, was lost in the European markets which caused widespread instability in Europe.  Could the American financial sector be involved in a plot to collapse the Euro.  Lying to the American people is something our government does on a fairly regular basis.  During the Great Depression the government plowed under crops and poured milk into the ditches to control prices while many Americans were starving.  My goal is to write a book exposing many of the lies and programs that the United States government has used on its own people.  They have done undercover drug tests, germ warfare tests and nuclear fallout tests knowing full well it would hurt or kill some Americans, but they did it anyhow.  Some of the scientists involved in the development of the atomic bomb advocated for not using the bomb.  They believed it might start a nuclear reaction that would turn the world into another sun.  The government dropped the bomb anyhow.  That is a very scary scenario. 

      Certainly I do not have all the answers and I may be wrong on this.    My earlier post lays out a very clear line of how the events transpired that led to the present day wars we are still fighting.  My belief is that the present economic crisis is a generational one.  Every sixty to seventy years the economy makes a major adjustment.  There was one in the 1870's that did not end till the 1890's,  It followed the economic advances and cutbacks caused by the civil war.  Nations started recovering in the 1890's and that led to fights for control of resources which culminated in World War I.   The advances in industry and machines during the war led to major changes which led to the Great Depression.  That lasted from the late 1920's till World War II started.   The industrial recovery finally happened when it was needed to feed the needs of war.  The progress of that period flowed and carried us into the 1970's.   Since that time the world has been trying to find a level playing field.  The oil crisis of the 70's showed America the power the dollar had in the world.  The last forty years or so has been a struggle for America to secure its power.  As China and India become world powers the United States is hard pressed to keep control of world markets.  As long as the value of oil is tied to the dollar America can stay on top.  However if other currencies become powerful it threatens the almighty dollar.   This is certainly oversimplified but it is based on several provable facts. 

     America's history shows a record of manipulating events to accomplish its goals.  The forces in America that are doing that manipulating may not be quite as visible.  However the CIA has a record of trying to manipulate world events to what it sees as advantageous to American interests.  If you would like to see how it works a good read would be the book, Charlie Wilson's War.  Yes there is a movie by the same name but it leaves out many of the details the book explains and shows.  The ability and power to shape and change world events by individuals has certainly not been diminished since Charlie Wilson started a one man vendetta against the Russians.  In fact it was out of that chaos that a little known man rose up and became leader of terrorism throughout the world.  A thorn we created and which was caused by our hypocritical relationship to the country of Saudi Arabia.  Almost all the 9/11 participants were Saudi's and Saudi Arabia supports religious training in mosques all over the world that create more of the same kind of people with the same mindset.  It does not matter though.  America gets the oil and the dollar rules and that is all that does matter.  At least to some of those in the shadows and pulling the strings and manipulating power.

Monday, October 10, 2011

MONEY: 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. Rockerfeller.  A story I heard about him sort of says it all.   He had never went 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. Rockerfeller I recently graduated from Harvard before coming to work for you.  May I ask where you graduated from."   Mr. Rockerfeller looked at him and stated. "'Son I did not have time to go to college.  I was to 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 drop out 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 followed 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 know how 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 to 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 take orders and 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 banks share and pay off the note and pocketing the difference.  Which later came back to haunt me as I had a run in with the IRS over three years of back taxes.  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.  Which 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.  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 was a couple lessons learned from all of this.  First never, never ever give a bank anymore 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 develope 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.

Thursday, October 6, 2011

Bank of America's... Totally Unethical Expectations

     The management of Bank of America evidently does not get it.  While Brian Moynihan may be right in stating, "I have an inherent duty as a CEO of a publicly owned company to get a return for my shareholders."  What he does not have is the right to bend over and stick it to the people who invest in his company.  Which is exactly what Bank of America is doing.  People who deposit money with BOA are in effect lending their money to the bank.  They have a "right" to expect a return on their investment in the bank.  Banks make money by charging interest on the money they lend and for the services they provide.  A portion of that profit should be returned to those who support provide the funds for the use of their bank.  When a bank charges a fee for the right of a customer to use his or her own money they are out of line.  If people were smart they would simply leave a bank that does so.

      Bank of America argues that new regulations make it to hard for them to make money. Really?  My view is that the bank made bad investments during the Subprime Bubble.  Then they compounded the problem by investing in companies that had failed, even worse than BOA, to survive the crisis.  These unwise and costly mistakes are what the BOA is charging their depositors for.  They are trying to pass the cost of their incompetence on to the least guilty parties in the whole process.  Why is BOA doing this?  They are trying to look good to their shareholders.  Instead of cutting back and showing a loss, which is what they have done, they are trying to steal money from individual depositors.  They do not, contrary to their opinion, have a "right to a profit."  Profits should be made from sound management and will be if the management is sound.  Holding an asset does not give a bank or person any rights to that asset.  If it did they could charge the safety deposit box holders a percentage of what is in their boxes.  They can not do that.  Yes they charge an annual fee for the use of the box.  The person using the box has the option to decide if that is a fair cost. If they think it is not, they can remove their items from the box.     
  
      A debit card simply allows a bank depositor access to their own money.  It is similar to a checking account.  However with a debit card the bank does not have to physically perform the transactions.  They are automated.  While a checking account requires the handling of a physical check, which the account holder pays for,  a debit card does not.  Depositors do have options.  They can stick their money in a mattress and pay cash for all their purchases.  They can buy money orders for bills they have to mail.  Which is what I do in some instances.  My three bills a month cost $1.50 total plus stamps.  Still cheaper than BOA's monthly fee for the card holder.

      Whining and complaining are not going to change things.  A mass exodus of account holders may cause some changes.  That decision is up to the account holders.  However when large sums of money leave a bank the management and shareholders usually try to determine why.   They can then either fix the problem by changing management and policies or they can follow in the steps of Lehman Brothers and other banks that have made "Bad Decisions."  There is a price for mismanagement.  Depositers who allow the fee to continue are part of the problem.   They are supporting a broken system and are risking their financial security.  In the Army we use to say, "You are either part of the solution, or part of the problem."  If you do not help fix it, by whatever means, then you are part of that problem and have no right to complain.  I hope the share holders take action to fix the problem.

       On a personnal note I paid off and closed my credit card account with BOA years ago.  Yet I get four to five mailings a month encourageing me to get a card from BOA.  What part of no do they not understand.   They are wasting their time and their money sending me applications.   Especially after I sent them a letter explaining why I was closing my account.  They might want to review their mailing lists.  The five mailings they send me would cost $2.20 a month for stamps not including the printing, envelope and labor expended in the process.  Multiply mine times hundreds of thousands per month and maybe they could cut their losses to the point they do not have to charge a fee.  However BOA do not tell me you can not cut costs or that it is government regulations that is the problem.  My mailbox tells my your management is the true problem.  Not only BOA, but Chase, Discover, ATT and CITI could all learn from the same examination of their mailing lists.  Maybe America is finally tired of being ripped off.  The protests on Wall Street say I am right.   The big banks may need to tighten their belts and actually manage what they have. Instead of  constantly trying to grab a bigger piece of the pie.  Bigger is not always better.  People need to go back to the small banks with dedicated and caring staffs before the big banks are all that is left.