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Thursday, May 3, 2012

Money, Who Turned Off The Flow? How To Turn It On

       Sometimes it is hard to decide which direction to go and what to do.  Especially when you are going through major changes like losing a job, ending a relationship or even discovering that though you still have a job it does not make you enough income to meet your needs or pay your bills.  Sooner or later something has to give. It has been my misfortune to be in that position several times in my life.  Especially the one where I was working my butt off, but still did not have enough to survive on.
       My solution when I found myself in that situation was usually to find a second job or if that did not work, create one. The double income would usually make it to where I could meet my needs.  However I am retired now and looking at the job market from the outside.  A couple things struck me as I have watched my grand kids enter the job market.  They are not getting a fair shake for a couple reasons.  First there are barely enough minimum wage jobs to  go around.  Not that a minimum wage job is something to aspire to. The second is that the minimum wage has not even come close to keeping up with the cost of living.  When I entered the job market the minimum wage was fifty cents and hour.  Yes I am old, sixty-five plus.  If you think that is bad my grandfather told me back during the depression he worked for $3 a week.
     Time to get back on track.  At the same time that the minimum wage was fifty cents a bottle of pop was a nickel and you got two cents back when you took the bottle back.  Also a candy bar was a nickel.  They still had penny candy that was three pieces for a penny and best of all gas was only 17 to 19 cents a gallon.  Not so anymore.  Well with pop at a $!.50 a bottle, that is 30 times what it cost way back when.  If you figure in the deposits it would be even more.  Candy bars have done about the same amount of increase.  Gas has had the lowest increase with only costing 23 times what it cost in the late 50's or early 60's.  That means if the minimum wage had just stayed even it would be between $11.50 and hour and $15 an hour.
      The price of gas has kept pace with inflation.  The seventeen to nineteen cents it cost way back then was roughly 34% of the minimum hourly wage.  So at today's prices it is still close to 34% of what the minimum wage "should be."  Most other things that people buy in the course of life have also gone up many times what they cost way back when.  The new price of a car has gone from the $2700-$3000 range into the $35,000 to $45,000 dollar range.  Oh yes you can still buy the low end cars at lower prices, but even they are many times what the low end cars cost back then.
     What is sad is when you project the annual income levels of the minimum wage.  If you take the 40 hour week times 52 weeks per year.  The annual wage for a minimum wage worker back then was just a whopping $1040 dollars.  That is versus the present working minimum wage that would get you an annual salary of $15,040 per year.  While if adjusted to the rate of increase of the cost of living.  That wage would bring you $31,240.  Sounds incredible but what is considered a middle class wage today is in reality only a  minimum wage job.  My method for figuring this rate out is not very scientific.  Basically what I did was take what the buying power of my wage back then could buy and what it can buy now.  In other words an hours pay would buy me ten bottles of pop out of a machine.  The same pop today would cost $15 and the same for the candy bar.
        What does all that mean. It means the buying power of American wage and therefore the standard of living of the average American has diminished greatly.  It means the middle class wages have been diminished also.  Your labor does not get you the buying power it did back then.
       So when today's youth go to work they are only making twenty-five to thirty to percent of what my generation did.  So now they need two and a half jobs to just break even.   They can forget getting ahead.  That is why my grandchildren have been urged to get a good education or create their own job.  The odds of getting ahead on a minimum wage job are slim to none. Even if you are a master at managing your money.
      It is about knowing that when life gives you a bunch of lemons, learn to make lemonade.  Use what you have to work with to your advantage, especially your brain. I entered the work force in my early thirties.  Not that I was privileged or anything like that.  I just spent thirteen years of my life in the Army making up my mind what I wanted to do. The military taught me a lot of skills which I was able to translate into jobs in civilian life.  Just writing this blog is one example.  My last year in the Army was spent writing for the Command newspaper in Panama.  That job became available not because of my writing skills, but because my Commander saw some of my pictures displayed for a photo competition I entered and he liked them.  He needed a photo/journalist and I had half the skills which were learnt from my hobby.
      This story is not about me though.  It is about the American working class and the fact they are being bent over and having it stuck to them.  They in general do not even realize it.  The only way you are going to get ahead in the world we live in today is create your own job.  You have to figure out what level you want to live at and go for it to make that kind of money.  You say but I do not have the skills to do that.  Well you better learn to grab hold of the shirt tails of someone who does and be the ultimate good worker for them. Giving them a full hundred percent of your support.  Even entry level management jobs in today's market are really only at where the minimum wage "should be."
     The only and best way I know of to get ahead is to learn to let your money work for you.  Instead of you working for your money.  Basically it is learning to see opportunity when it knocks and taking full advantage of it.   When you get that tax return invest it.  You have to look for a "real deal."  What is a real deal something you can buy for 10 to 20 percent of its actual value, OH YES, AND IS NOT HOT.  You can find the deals if you take the time to look.  They are out their.  Then advertise the item through some form of free advertising.  Something like Craigslist or if your town or county has one, an online yard sale site.  If you do it a few times and turn the profit back into the business it will not take long to get to where it actually makes you some income and an easier life.
     One bit of advice.  Do not use advertising media you have to pay for.  I use the local newspaper to go find yard sales and deals.  It costs as much as $40 to put an add in the paper.  Often times that is more than a lot of people make off the yard sale.  It is bad enough to sell stuff that you no longer need at a loss, but to make the loss even worse is sad.  I understand that things wear out and kids grow up, but often when I look at yard sales I see lots of stuff that people are selling that I am sure they bought it on a whim to start with.
      Another place to look around is for stores that have super clearance sales.  I do flea markets and farmers markets to sell stuff myself.  I generally enjoy it.  I have found that there are a couple of chain stores in my area that when they need to clear shelf space they sell stuff.  Brand new still in the box and at 10 to 20 percent of the marked value.  If I buy a $10 item for a $1 and sell it for $4 the person buying it gets a good deal and I am making my money,  which means my money is working for me.  It is not rocket science but it works.
      Here is an example.  You see a deal on a riding mower for $200 and you know it costs way over a $1000 new.   So you buy it and sell it for say $500.   You just made $300 for a couple hours of wheeling and dealing.   That is what a minimum wage job pays for forty hours of work and you did not pay taxes on it.  Of course I advise you if you get into it big time to keep track and pay your taxes.   The government does not like getting ripped off.  That is their job.

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