May 10th, 2008
There are two schools of thought on this one:
1. It’s a recession. No one is buying. So in order to get new customers and keep my current customers happy, you lower your prices.
2. We are also seeing inflation. Increased gasoline prices have affected your business significantly. So you have every right to pass along these increases to your customers.
I vote for #2. People expect you to raise prices. I’ll bet you haven’t done it in a while. People won’t holler as much now; they understand about gasoline prices and their affect on small businesses. You won’t lose any customers, and if people see the value in your product or service, they will keep buying.
Let us know what you think. Vote on the current poll.
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By Jean -- 1 comment
May 9th, 2008
I’m still not sure we’re really in a recession. “Experts” have been talking about a recession since January. I figure by the time they decide we are in a recession, it will be over. But we do know that the only certainty is uncertainty. And business people don’t like uncertainty. So, what kind of business should you get into or invest in, and how do you run your business in uncertain times? Over the next few posts, I’ll give you some ideas and I’d like some of yours. For example:
1. Create a business in a recession-proof industry. That’s an industry in which people will continue to buy, even in a recession. The food industry is probably the most recession-proof I can think of. Everyone always needs food. Other essentials, like diapers, toilet paper, and other things that everyone needs that wear out and need replacing come to mind. Clothing probably isn’t recession-proof. I can do without buying clothing for a good while (well, not forever, but you get my meaning). What other industries should boomers invest in and have businesses in?
2. Find businesses that cater to customers who don’t care about recessions. I’m talking about the very rich, people with lots of discretionary income. They still want what they want, and they are willing to pay for it. “Concierge” services are an example. A new type of business, concierge services cater to the needs of people, finding hard-to-find items or providing very personalized services.
Next, what can you do to keep customers in uncertain times?
Image www.newscom.com
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By Jean -- 1 comment
May 9th, 2008
There is a shortage of containers for shipping goods from the U.S. to other countries. Shipments are backed up for 3 months on refrigerated containers. The trade deficit for the past month is at its lowest level since 2001. Gas consumption is down substantially. The dollar seems to be holding at about 150 Euros. India seems to be running out of cheap labor to support its own economic boom. Like the song says, “The times they are a changin’.”
Well, that’s good news, because there is always money to be made in changing times. You just need to be sharp enough to figure where. If you’ve invested in companies that do lots of business overseas, you’re doing well. If you’re invested in retailers, you better hope they are on the ball and cutting inventories. If you know something about ocean shipping, you could make a buck or two.
Lots of people are still paying sub-prime mortgages. Maybe they’re hanging on in hopes of a bailout from the lenders or the Federal government. It won’t be as good as they hope or as bad as you fear. Lenders are being much more cautious then they been in a long time. They are charging higher fees for loans. The lending processes are require more due diligence and that is expensive.
Anyway, the rate at which money is flowing in the housing sector is down to a crawl. Liquidity is a real problem. The question for someone buying in today’s market is “Can I afford to park my money for the next 10 years in this piece of real estate?” If the answer is yes, buy that distressed property. If the answer is 5 years, think again. Real estates take a lot of time to unwind.
Credit card debt was up substantially last month. That might be due to the price of gas, because mid-level retailers are getting hit hard. On the other hand, people can’t tap their home equity. So, maybe capital flexibility comes on the credit cards.
Is this a good market to make money? Sure, especially if you have strong nerves and can stand a loss for a period of time. Long term investors will make money because the rules of the game will change a few more times before things become clear. Remember to keep an eye on liquidity, your own and those things in which you invest. Lastly, don’t invest in anything that keeps you from sleeping at night.
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By jim -- 0 comments
May 5th, 2008
says MSNBC.com
And in a new book titled Nextville, Barbara Corcoran talks about where we will be retiring. One group of retirees is heading back downtown. They are tagged as “ruppies”(retired urban professionals) . For example, I know a couple who left their beautiful home in the country, with landscaping, and flowers and trees, to live in a condo in the city. Now, it isn’t a very big city (Cedar Rapids, Iowa), but it certainly is a far cry from the country. Then again, no lawn to mow, no snow to shovel. They have a lovely view of the Cedar River…and the local convenience store. In the summer, they can walk to the Saturday a.m. farmer’s market… but not to a real grocery store. They both work in town, so they certainly are saving on gas money, and these days, that might be enough to pay the mortgage on that condo.
Would you move downtown? Not me. I spent too many years working downtown. I want to be able to let the dog out in the yard, and watch the birds at the birdfeeder. And I want to be able to plant a garden. Anyone out there want to be a ruppie?
Tags: , baby boomers, retirement, ruppiesShare This
By Jean -- 0 comments
May 2nd, 2008
A couple of weeks ago I ran several posts on keeping mentally fit. Someone must have read them, because a company called vibrantBrains now has come up with brain gyms. Well, why not? The gym is billed as “a workout centre for the brain” and their slogan is “-
Where the Sweat is Figurative,
but the Results are Real
Also check out BrainAge, from Nintendo, with games and puzzles, including sudoku.
We may be suffering from an epidemic of obesity, but at least our brains will be fit.
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By Jean -- 0 comments
May 2nd, 2008
I got a phone call the other day from an automated calling system. It played me a recorded message. An unnamed credit card company was about to raise the interest rate on my credit card. This was my final warning. The only way I could stop them was to press 1 and talk to a representative.
I really didn’t care because I pay my credit balances off in full every month, but I thought this was a very sophisticated scam. It could catch people unawares and get their credit card number.
So, be aware.
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By jim -- 0 comments
May 1st, 2008
In today’s Wall Street Journal, David O’Reilly, CEO of Chevron, talks about some very hard energy facts, page B1. We all know them, but we don’t really like to hear them out-loud.
Netted out, he states that we are stuck with our current energy technology for the decades to come. If we could start today to re-do the energy infrastructure, regardless of cost, it would take a generation, 25 years, to change over to something other than oil, gas and coal. By the way, we don’t have the money or the technology to meet these new methods of energy delivery and production. That is inconvenient.
In reality carbon based fuels will be with us for a long time to come. If we want to maintain a lifestyle similar to the one we currently have we will have to make come compromises. We’ll have to drill in the oceans off our shores. We’ll have to build many more nuclear power plants. We will burn more coal. We’ll have to drive more fuel efficient cars. We’ll have to build more mass transportation. Industries we rely on today to power our economy will go away. Things we haven’t thought of us will take their place. The laws of physics will not be repealed. We might want to consider intermediate steps to develop a cleaner environment. There is no silver bullet.
I’m sure that the marketplace will work it out, but it will be expensive for each of us. Remember, expensive equals painful and risky.
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By jim -- 0 comments
April 30th, 2008
My husband has a pension coming to him. I don’t. I have some 403b/IRA money in place, but I’m concerned that I will outlive it. So I have spent some time studying annuities, talking to people about a variable annuity that I “can’t outlive.”
I get two kinds of advice:
A. They’re great. You should put all your money in one. This, of course, if from the “financial advisor” who sells annuities.
B. They’re awful. No sane person would touch them. This is a lot of people, including MarketWatch commentator Paul Farrell, who recently bashed annuities. If you read his article, you would run from annuities.
So I read the comments about his article (all 83 of them). Maybe they’re not so bad. I also talked to an advisor from Fidelity (they don’t really sell annuities, and he said they are on salary, so they don’t have any financial incentive to sell them.
So now I’m really confused. Have any of you bought a variable annuity? Did you think the fees were too high? Do you have any recommendations for me?
Tags: , fidelity, Paul Farrell, variable annuitiesShare This
By Jean -- 2 comments
April 30th, 2008
It seems that each of us in the U.S. has 19 feet of retail space allocated for our use. Historically we should have no more than 10 feet of retail space per person. So, we are overbuilt by 90%. Not a good sign for retailers or those who own retail property. For the moment retail is expensive.
There is a realtor in Coral Gables, Florida who takes people around in a green bus to view distresses properties. I heard this on NPR. Seems some folks think that distressed property in Florida is now cheap. Tough call. Economists who study the real estate market think that the price shakeout won’t end until late in 2010.
Another point about Florida is that taxes have gone up. A recent study puts Florida at number 11 of all the states in tax burden, up from 40 something. All those new residents need city services. I live in Wisconsin which is 10, down from 3. Don’t get me started on the insurance issues in Florida.
Still the free market is all about how people spend their money. If someone will buy your distressed property then that is the price of the property. God love’em. FYI I’m not looking to buy in Florida soon.
I saw regular gas was $3.75 this morning. The price of oil is up 85% over the past 12 months. The dollar is down 10%. What else is in the mix to account for the other 75%? Demand? It hasn’t jumped 75% in 12 months. Speculation? I think so. Another, financial bubble about to burst? Probably. Will that be good for drivers in the U.S.? Not if you borrow money from the people who have invested in oil. And, you do.
Sam Zell, a man who has made big money on distressed real estate, thinks hotel real estate is cheap. But, with the high price of gas, the high price of food, and rising unemployment will it be cheap in the winter? Maybe, if you can get financing. Oh, money is tighter now, too. Well, what is it cheap or expensive?
Ethanol production causes unintended consequences. Big da. What did the Congress and the Bush administration was going to happen when they put a big mandate on the use of ethanol? Oh, these are the guys who invaded Iraq without listening to their critics.
Cheap or expensive is a complicated question these days. Things have moved faster than they have in other economic downturns. More appears to be unknowable. People are sitting on their wallets which makes it worse. Risky times.
What do you think? Cheap or expensive?
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By jim -- 1 comment
April 29th, 2008
“The chain-link gate yowled like an angry tomcat in the watery light of dawn.” This is the first sentence of a book by a “New York Times bestselling author.” I can’t say that I’ve seen a more hack-kneed or trite opening to a book since Snoopy wrote one. There follows a number of quotes lauding the abilities of the author and the series of books, all marketing BS. If you are a writer, and I like to think that I am, you wonder how this book got published.
Okay, give the guy another 25 pages. Maybe it’s just a bad start. After all everybody has different tastes. Not every style appeals to every reader.
Unfortunately, I spent another 15 minutes of my time wading through the next 21 pages before I couldn’t take it any more. (I don’t review books or movies for a living because I can’t stand spending the few days I have in this life subjecting myself to crap.) It was over-written and filled with cliche characters. HarperCollins must have lots of money laying around to bet on this junk. Grant you, I’m not a big Jane Austin fan, but her stuff is very well done, interesting and readable.
The good news is that if publishers are willing to shell out good money on this inane book, eventually better writers will their fiction published. Hopefully, I will be one of them.
If you are a writer, have some pride in your thoughts and in your work. If you don’t have time to do a good job, don’t bother. There is more to good writing than punctuation.
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By jim -- 3 comments
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