Here is a snippet from my book
MASTER THE NEW ECONOMY
Remember 25% of the proceeds go to supporting kids sports.
"Don't let what you cannot do interfere with what you can do"
- John Wooden
- John Wooden
The world today is a far more uncertain place than ever. We are constantly bombarded with negative stories about financial crises, corruption in politics and business, growing unemployment, increased risk of terrorism, increased pollution and global warming.
None of these should be trivialized and many will affect you whether you are considering starting your own business, about to start your first job or are closing in on retirement. It is a fact that there are many things that are completely out of your personal control. It is equally true that there are things you can do and over which you do have control. Concentrating on the things you can influence gives you the ability to compensate for much of the negative. Everything else may seem less overwhelming.
The decisions you make about employment and how you earn a living are specific actions you can take, either to control or to abdicate personal financial responsibility. In the final analysis, the choice is yours.
Financial crisis
“Our love for our children requires that we do not shove today's problems under the rug only to be discovered again tomorrow. Our sense of decency must require that we stop using tricks that will make next year's budget problem even worse.” - Chris Christie – Governor of New Jersey
There should be no doubt in anyone's mind that we are in the middle of a severe financial crisis and that it will, in fact is, affecting us all. It is questionable whether throwing money at the problem will provide a solution or just create a bigger issue 5 years or 10 years from now or just pass a huge problem on to the next generation. Perhaps this time it will be different but history is littered with similar failed experiments.
There are rules for the banks and rules for everyone else. They are not however the same. Everyone knows the saying about the golden rule. "He who has the gold makes the rules". Now here's a well known secret for you. Those making the rules no longer have the gold but for some reason they still get to make the rules. In fact those making the rules are simply printing paper or in the case of the United States are borrowing paper that happens to a have a number stamped on it. A one Hundred dollar or Euro bill is simply a promissory note that allows you to exchange paper for goods instead of carrying around the equivalent value of gold, silver, chickens or turnips. The problem is that the currency is not backed by anything of true value. The US dollar has not been backed by gold since early 1971. The rest of the worlds currencies are tied to the US Dollar. So it doesn't matter where you live, if the US dollar loses value so does the currency in your pocket.
During the last depression Germany attempted to keep its economy afloat by printing money. It did not work and hyperinflation was the result. Today, the outlook is not looking that good either. Wages are dropping but basic costs are on the rise. Young people earning minimum wage are
somehow expected to pay $3,000 per month for a mortgage on a small first home. In mid March 2010, an article by Jeff Rubin in my local news paper warned that “record low interest rates and record high deficits” could not continue for long. Sure enough by the end of March mortgage interest rates began to rise. It is not too difficult to see an imminent collapse in house prices in my home town which up to now has been fairly resilient.
A more troubling trend is that governments start shifting debt. Senior levels of government will attempt to control their deficit by reducing transfer payments to lower levels of government. At every level, services will be cut with local authorities expected to pick up the burden. Ultimately, the tax payer will end up paying for services no longer provided by their government but will do so with expensive after tax income. At the same time many explicit and hidden taxes will either increase or be added to existing services. These are quaintly called ‘levies’ (such as transportation levy, emergency service levy, etc) to pretend they are not taxes.
We are in for a rocky ride unless we have ways of earning an income without being held hostage to the vagaries of the world economy and its influences on our employers.
*** - ***
Change in how business is done
“When the increase in velocity of business is great enough, the very nature of business changes” - Bill Gates
In the late 1990's, Bill Gates predicted huge changes in how businesses would be run. I'd be very surprised however if even he foresaw the scope of change we have already seen and which promises only to be the beginning of what the next few years will bring.
Business occurs at a faster rate every day. Not only is it faster but it is becoming increasingly invisible. It used to be that if you wanted to sell something, then the hours your store could open were regulated by city bylaws or community preferences. Your store may have had to close on Sundays with an additional half or full day closure midweek. Your customers were local, whereas today you can operate a business worldwide from the comfort of your own home; 24 hours a day 365 days a year.
The Internet has already greatly changed how we conduct our daily lives. If you are in any doubt, read 'Grown up Digital' by Don Tapscott. Not only are people using the Internet to conduct their business, they are demanding a say in how business is conducted and in the type and design of the products that are developed. “The customer is king” has never been more true than today.
All of this affects you in ways that are not immediately obvious. What is happening is that because the customer is increasingly driving the rate of change and because the customer wants the best deal. Manufacturing, indeed many service jobs will move to the least expensive sources of labor. A small price or cost of production change might mean the difference between your job continuing in the country where you live or seeing it to move offshore.
It is ironic that in North America we hear people bitterly complaining about manufacturing jobs moving offshore, while the same complainers can frequently be found shopping at Walmart or other discount superstores for the cheapest deals.
The speed with which your job functions change is a large factor in how secure your job really is. As customers demand novel functionality or presentation, you may find yourself in a vulnerable position. The length of the product life cycle is greatly reduced. Even though you may feel secure, your job, even your profession could be reaching obsolescence due to some disruptive innovation just over the horizon. For example, the personal computer killed the typewriter, the DVD became an almost instant changeover from VHS tape and Digital cameras have all but replaced traditional film.
Anyone trying to live a traditional – get an education, get a job, retire – life path may have no control whatsoever over their financial security. They will be completely subject to the rather unpredictable ebb and flow of economic trends. To counter this we must find ways to mitigate the risks of finding our jobs obsolete and ourselves redundant. To achieve that, we have to understand how to survive and prosper in the new economy.
*** - ***
The job security myth
"If you don't run your own life, somebody else will.”
- John Atkinson
The days of get a good education, find a good job and live happily ever after are gone. The new reality is that you will not only have several jobs, you are likely to have several careers. The degree you earned today may be outdated before you've taken off your gown at the graduation ceremony. You will need to invest a great deal of time and effort just to stay current in your chosen field. Education is expensive; ignorance however, may well be ruinous.
Even if you do invest in ongoing education, it may still not be enough. In the early 1980's, I knew people who thought they could create an employment niche in the new word processing field. Within a few months, programs such as Microsoft Word and Word Perfect had made word processing available to anyone who had access to a computer. Those who thought they'd found a career niche very soon found themselves obsolete. Technology has changed the face of many careers. A graphics designer friend abandoned her career, because computers became an essential part of the job. She did not want to work with computers and became a chef and a very good one as it happens. Her original career was completely changed by technology in ways she was not prepared to deal with.
Today I subscribe to a number of online social networking discussion boards. One in particular is targeted to people who find themselves not only unemployed but with their options very quickly running out. A common complaint is that their technical certifications have expired, often after only a few months. Personally, I have significant doubts about any certification that is not only expensive to get but which becomes irrelevant very quickly or because the next “new thing: has arrived.
Nonetheless, this is what employers are demanding and if you are unable to practice your profession for any length of time, the cost of the education needed to stay current can eliminate you from you chosen career.
Investment advisors almost invariably tell their clients to diversify. I’m not convinced but if this is good advice for investing, then surely it is even more appropriate for how you earn your income. It is an increasingly rare person who will not find themselves made redundant or whose job will not be lost due to corporate failure. Being prepared by diversifying and having multiple streams of income will stand you in very good stead when [not if] the day comes that you have to make a sudden career or job change.
MASTER THE NEW ECONOMY
Remember 25% of the proceeds go to supporting kids sports.
_____________________________________________________________________________
Do you have an eBook you want to list? Check out Jogena's
Jogena's - eBook and eZine Directories - Get Listed Today!
Hi Andrew ~
ReplyDeleteJust came across your blog! and wanted to say hello! keep up the good work!
Beth
Schmillen
http://www.goodnewsforall.com/maxtraffic/?r=5