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Hard Times

I know times are really tough for many people. Here in America, we have incredible opportunities to succeed, but our social safety net has a lot of big holes in it - you can fall right through to complete disaster. If you do fall, it can be very hard to move back up, but I fully believe that the best way upward for many of us is self employment.

Self employment doesn't mean automatic riches. It may not even mean riches at all. Many self employed people earn a decent living, but we can be affected by recessions and depressions just like any business.

I just finished up our 2009 taxes and realized that our gross income was about 55% of what it was 5 years ago and 20% less than what it was last year. That's quite a pay cut, but it does illustrate one of the great advantages of being self employed: I may have less income right now, but I still have income. When you work for yourself, you don't get laid off - unless you've done something very dumb (such as only having a handful of customers), you will always be bringing something in.

By the way, I did much better in January and February is also doing well - almost seems like old times.. I don't dare think that things really are about to turn around, but it was nice to have a good run again. We'll see what the rest of the year brings.

Are you taking advantage of the lull?

Not being busy brings opportunity. When you are running flat out, you may be making money hand over fist, but you probably aren't learning new skills. Slow periods are ideal times for education - and learning new skills can help you through the next down-turn or even avoid it entirely.

That also applies to people looking for work, of course.

You have more time for planning. More time to reorganize your files, clean up deadwood, more time to do all the things you just can't get to when you are busy.

All work and no play makes Jack what?

You have time to play, also, and while it may feel inappropriate or even wrong, taking some extra vacation might just be the best thing you can do with your increased spare time. If the business just isn't there, you can't spend all day every day fretting about how you will find something to replace it. You need a break - take one.

You aren't going to give up, are you?

The absolute last thing you'd want to do is seek employment. Oh, sure, it can look very attractive: you'll take a part time job, maybe 20 hours a week and that will bring in enough to make up the shortfall and you still have time for your business.. but you won't. You won't be available to old customers or new while tied down with that part time work - that's lost opportunity that could be worth many times the paltry hourly wage you get from the job. You'll also be more stressed trying to juggle too many things. If you really think a part time job is going to help your self employed business, you might as well just close it up now and start looking for full time work!

There may be exceptions to that advice, but in most situations you just need to lean into the wind and keep plodding forward. If you have done well before, you can do well again. You may have to do something different - for example, ten years ago a lot of my business still came from SCO Unix. I saw the writing on that wall years before and was already moving my business in other directions. I was fortunate in that I knew SCO's demise was coming even before they started up their Linux nonsense (not that it took any great brilliance to recognize that!). Even so, changing the main focus of a business is much like changing the course of a giant oil tanker: you usually can't do it instantly.

Income is more important than expenses

While you are waiting for the helm to turn or the snows to melt or whatever it is that you have to wait for, while you are tightening your belt and turning down the heat and canceling your HBO subscription, closing off the spare room or doing whatever else you need to do, try to remember that your time could be better spent looking for more income. I made some cuts, but they were things I would have done anyway: my primary goal is always to increase income, not cut expenses.

OK, maybe this isn't the year for a month long Caribbean cruise. But it isn't the time to stop advertising or sell your computer, either. In fact, it might be exactly the right time to ramp up advertising and buy new equipment. If you can't afford it, your every waking thought should be "What can I do today to improve income?"

Income is more important than expenses

Yes, I already said that. I said it again because it's important. When faced with economic difficulty, most people's first thought is to cut expenses. Look at the Tea Party movement as a perfect example: they want to cut taxes. Our roads are crumbling, our bridges falling down, our schools failing our children. Crime is rampant, we're entangled in two wars - what do we really need? We need more money. Fine, we can argue about how much of the control of that money should be at the Federal, State and local level, but government at all levels needs more money, not less.

There are places in government where there is waste. There is waste in every business, too. I pay for an Internet fax service even though very few people send faxes any more. If I were a Federal Agency, the Tea Party folks would be screaming that I am wasting money. Maybe I am, but every now and then I have someone who wants to fax me something, so I keep the service - it may be "waste", but it's an insignificant part of my expenses and it's convenient when I need it.

If it really is waste, cut it (in your business or in government). Just keep your main focus on increasing income - that's what is important.



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© Anthony Lawrence







Mon Feb 22 14:21:03 2010: 8103   TonyLawrence

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I saw Governor Arnie on This Week yesterday. I'm not a fan of Republicans in general, but one thing he said about infrastructure is absolutely true: you can't let that fall apart or you will fail. That's true in business and government. If you don't have your businesses equivalents to roads, bridges, schools, fire, police and all that, you soon won't have a business.

I also agree with him that we need to start raising the age of Social Security entitlements as a way to cut expenses. People DO live longer now, so that makes sense. Sheesh, agreeing with a Republican twice in one hour - that must be a new record for me :-)






Mon Feb 22 14:37:56 2010: 8104   MikeHostetler

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I break Tony's rule and work full-time and freelance part-time. I'm not saying it's easy but for my situation it's necessary.



Anyway, things are brisk for me as well, and they are brisk for my customers too. I'm not saying people are raking it in, but it seems that January 2 brought a boom for business. Some have too much (which is why I'm working for some of them --bahhahaha!)



I've found that the old adage about word of mouth being the best advertising is very true. One customer started out a year ago with a simple problem that he just needed fixed. He was referred to me by a mutual friend. That was a few hours work. This fall he emailed me about a POC with a possible medium-term contract. A referral and one-off work has now become my best medium-term customer.



Mon Feb 22 16:43:33 2010: 8106   BigDumbDinosaur

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I also agree with [Arnie] that we need to start raising the age of Social Security entitlements as a way to cut expenses.

I completely disagree.

People may be living longer than when Social Security was enacted in 1935, but that doesn't mean they are any healthier. Most of the longevity gains are the result of being able to resuscitate those who would have previously not survived a heart attack, stroke, etc. Also, advances(?) in prescription medications can extend one's life despite medical conditions that would have resulted in death in the past. While all of this may delay the inevitable, it doesn't make the quality of life any better, and doesn't assure that an elderly person will be physically capable of getting up and going to work each day.

Consider your wife's situation. Do you really feel she should/could be forced to work to, say, her 70th birthday? How about someone like me with Pac-Man disease? Do you think I should be working full time at age 70 regardless of my health? What about the guy down the street who's in his late 60s and has a weak ticker? You think he should be risking his life by working full time so Social Security funding can be shifted elsewhere? How about you, Tony? Do you think you will be sufficiently healthy when you're in your late 60s or early 70s to maintain a full-time work schedule? I'm three months shy of 65 and I'm struggling to maintain the workload I did five years ago. What am I supposed to do? Just suck it in and hope that Pac-Man doesn't take me out as I work full time instead of draw Social Security?

The problem with the Social Security mess has little to do with retirement age and everything to do with benefits proliferation, As of right now, here are the major drains on Social Security:

* Federal Old-Age, Survivors, and Disability Insurance
* Unemployment benefits
* Temporary Assistance for Needy Families
* Medicare
* Medicaid
* State Children's Health Insurance Program (SCHIP)
* Supplemental Security Income (SSI)

Clearly, only one has anything to do with retirement. Medicare and Medicaid, while administered by Social Security, are actually separately funded programs rife with waste and fraud. All the others are entitlements that were enacted in the last 40-odd years to pander to special interests. SCHIP, in particular, primarily benefits a certain segment of the population that is prone to producing a lot of illegitimate children.

So, tell me: how is raising the minimum Social Security retirement age going to plug up all the funding leaks produced by SCHIP, SSI (which has far more young beneficiaries than old), temporary needy family assistance, etc? Retirement benefits payouts are actually fairly predictable. Payouts for all the other stuff are not. How about if we target the areas that produce the least benefit per dollar spent? A good place to start would be SSI.



Mon Feb 22 16:48:54 2010: 8108   TonyLawrence

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Obviously you need to be able to retire with disability and probably the definitions of "disabled" should become easier as you age.







Mon Feb 22 16:58:55 2010: 8110   TonyLawrence

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Just what is it you want to do about the supposed swarms of illegitimate children you see stealing your tax dollars?

Do we ignore them and not provide good nutrition so that they can grow up stupid? Do we let them die when they have health problems? Lock them up if they acquire a communicable disease?

Do we sterilize people instead?

Just what do you want to do?



Tue Feb 23 17:26:08 2010: 8119   BigDumbDinosaur

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Just what is it you want to do about the supposed swarms of illegitimate children you see stealing your tax dollars?

Supposed swarms? Nearly 40 percent of births in the USA in 2007 were out of wedlock. That's not what I would call "supposed."

In any case, they're not "stealing" just my tax dollars. They're stealing yours, your wife's, my wife's, my neighbors', your neighbors' and the tax dollars of every American who pulls his or her weight. In fact, they are stealing more than just money. They're stealing time, as it takes one's time to produce an income. At my age, time is something I don't have a lot of and I don't like having it taken from me.

Do we ignore them and not provide good nutrition so that they can grow up stupid? Do we let them die when they have health problems? Lock them up if they acquire a communicable disease?

Sorry! I'm the one guy who you can't lay a guilt trip on over deprived children. I was one of them many decades ago and somehow managed without AFDC, SCHIP, etc. They are *not* my problem, Tony. I don't have any responsibility to support the activities of irresponsible people who whelp unwanted offspring into the world.

Do we sterilize people instead?

Just what do you want to do?


*I* don't want to do anything, including supporting other people's kids. If you want to take care of them please do so, just not with my money.

When are we going to stop pandering to the part of the population that is behaving in an irresponsible fashion? As long as we continue to provide unearned money to the riff-raff that pumps out illegitimate children, the problem will continue. These people and their ill-bred offspring are a burden on our schools, a burden on our medical system, a burden on our law enforcement system, and a burden on those who actually work for a living. We are not a socialist country and we have no obligation to care for every Tom, Dick and Mary who can't pull his or her weight because they can't act like responsible human beings. If that means their children don't live at the same standard as yours or mine, so be it.

I'll repeat: they aren't my problem and I really don't give a rat's *redacted* if some bastard in the projects isn't getting his daily allotment of Big Macs, doesn't have a Playstation II, or has the sniffles and can't get to the doctor because mom is too busy smoking crack or getting down with one of her boyfriends.



Tue Feb 23 18:52:08 2010: 8120   TonyLawrence

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they aren't my problem

Then whose problem ARE they?

Your attitude is typical conservative nonsense. To hell with them, let them grow up malnourished and uneducated to breed yet another disadvantaged generation.

Oh well - that's the direction the country seems to be turning - I'm sure most of the Tea Party crowd agrees with you. I don't.



Wed Feb 24 17:48:46 2010: 8131   BigDumbDinosaur

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Then whose problem ARE they?

Their parents.

Your attitude is typical conservative nonsense.

Except it isn't nonsense, it's common sense. If you keep giving someone everything they need or want, they won't feel compelled to work for anything. We've been doing exactly that with the welfare class for nearly 50 years, leading to...

...breed yet another disadvantaged generation.

The breeding never seems to stop, despite the countless billions of dollars poured into welfare programs. In fact, if the welfare class would stop breeding and start working, discussions of this type wouldn't be necessary and the huge federal deficit would be a lot smaller, eh?

Oh well - that's the direction the country seems to be turning...

Apparently a good-sized segment of the Massachusetts voting public turned that direction as well when they didn't vote for Ted Kennedy's heir apparent.

...I'm sure most of the Tea Party crowd agrees with you. I don't.

I'm not a Tea Partier nor am I part of the Pat Robertson crowd. I'm not a religious nut (quite the opposite--I have an innate dislike of organized religion). I have no political alignment whatsoever. My only political belief in all of this is the welfare system has become a self-perpetuating monstrosity, a financial black hole promoted by those who think the gainfully employed segment of the American population is a money tree to be used to support people who do little except produce children.

The reason the country appears to be turning against government-funded welfare largess is because we can't afford it. We never could afford it and it was only a matter of time before the cost started to outrun the revenue. Socialist thinking works great as long as the socialists don't have to foot the bill. What do you plan to do when the money runs out? Tax working stiffs into poverty so they have to turn to welfare to survive?



Wed Feb 24 18:06:14 2010: 8132   TonyLawrence

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I simply do not agree. I'm going to leave it at that.



Wed Feb 24 19:56:13 2010: 8133   TonyLawrence

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Hey, Steggy:

I just took (link) and scored either 19 or 32 (32 if on-line Scrabble and Poker qualify as "video games"). I wonder if we are as far apart on that as we are on politics.



Thu Feb 25 01:44:32 2010: 8137   BigDumbDinosaur

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I just took (link) and scored either 19 or 32 (32 if on-line Scrabble and Poker qualify as "video games").

I scored 7. I have no idea what that score represents, other than I'm a large reptile with a spikes, a long tail and no brains to speak of. <Grin>

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