zutroy.net

I finally got a job offer. I start next Monday. It took a couple weeks longer than I was hoping for. Man this is a rough recession.

No really, it is rough. I’ve seen it in my life but I know there are still people out there that haven’t personally felt it. As much as I don’t wish pain and suffering on anyone, I think it’s a good thing to be reminded just how fragile our little economy really is. I think if we don’t all wake up and see it soon, we’ll all regret it later. Darn that golden arrow of consumption.

I also started a new company. This one’s just me. I’ll be running all my freelance design projects through it. Adam gave me a really sweet deal on some office space and I moved in yesterday. I just finished hanging my big whiteboard. Now I need some client projects to put up there. I figure that once I start the new job, I’ll be coming down to the new office 2 or 3 times a week for a few hours in the evening.

It’s a cool thing to be surrounded by like minded entrepreneurial folks.

So it seems that just about every article in the news is about or related to the current economy and dismal state of things. Who am I to stay off the band wagon?

So I’d like to just point out my views on who is to blame and what we can do to avoid worsening and/or repeating things. First my blame list:

1 Walmart. Those who know me know that I hate Walmart. The thing they have done that is hurting us can be seen in our current trade deficit. Levi’s wanted to place their jeans in Walmart. Walmart told them in essence “No. Not until you have closed your current manufacturing plants and moved them to cheaper markets”. Now some argue that this makes sense, but it doesn’t help our economy does it. Victims: Rubbermaid, Vlasic, Levi’s, the list goes on and on and on and on.

2. Stupid Consumers. This one goes without saying. When you are trying SOOO hard to out do your neighbors with your shiny new boat, truck (that you don’t need), ATV’s, motorcycle, SUV, BMW, and landscaping you didn’t stop to figure out if you could really afford it, did you? No, you didn’t. For the last 30 years or so we’ve been leaning towards this attitude that “the world owes me this” and we justify without consulting the books. Instead, we consult people who stand to profit from our ignorance. “Hey, the salesman looked at my debt to income ratio and told me this is what I should be spending on a car”. Yes, I have actually heard that one almost word for word.

3. Credit Card Companies. For years the credit industry has successfully lobbied to get laws passed where they are not held to the same rules as banks regarding your money. They have the ability to change a contract that you signed without your approval. At any time, for any reason. And then they urge consumers to keep the maximum balance on those accounts. What did they think would happen?

4. Jimmy Carter and Affirmative Action. Now you may be saying, “What the crap does that have to do with it?” I have always felt that affirmative action was not the most thought out solution to anything. “But could it really help ruin the economy? Think of it in terms of equal housing lending. Prior to the 1970′s, banks gave loans based on whether or not you could pay it back. They changed the rules when they gave banks breaks for giving loans to people based on race. Think about that for a second. Just because you’re black, red, yellow, brown, slightly blueish, whatever the color, if you have a non-white color, we can give you a loan that the accountants would normally deny. It doesn’t take a statistician to see where this can start to mess things up.

5. Mortgage Lenders. There are cases where someone gets income only a few times a year. So they invented these interest only loans. Perfect for the right people. Put in the wrong hands, it’s a financial nightmare. The lenders knew that if you let the wrong people into these mortgages, it would come back to bite them but they were more concerned with getting the fees and selling off the mortgage, hoping that they could get rid of the mortgages fast enough.

6. Mortgage Brokers. Now who gets the wrong people into the wrong loans? It’s the brokers. They knew what they were doing. I have a neighbor who is in an interest only $300K mortgage on a teachers salary. Of course they can’t refinance now, and what’s going to happen when they have to start paying the principal? They don’t have any options now. Thanks mortgage broker.

7. Real Estate Investors. For the last decade, real estate has been touted as the perfect investment vehicle. Signs everywhere. Like when Amway came out. Everyone had an angle on the market. But what happens when you get more real estate investors than home buyers?
Seriously, DID NO ONE STOP TO ASK THESE QUESTIONS?!?!

8. Big Oil Companies. Now everyone knows that with the prices of oil rising, the price of gas must also rise. But not so disproportionately like it has. Ok, so I think that’s fine for people to change their prices. That’s just capitalism. But when your price effects the price of just about every other good bought and sold on the market, it must be done with more prudence than has been demonstrated by the gas companies. I’m not usually in favor of regulation but when your kids have proven that they aren’t grown up enough to cross the street alone, you have to do some hand holding. Curse you big oil.

So what to do about it:

1. Use Cash. It helps you be more conscious of what you spend on personal things

2. Spend less than you earn. How many times have we heard that and said “Well Duh”? We must need to keep hearing it cause I hear it all the time.

3. Drive a used car. What’s the point of having a car that was made this year? Really.

4. Live if a house that fits your needs AND BUDGET. If you don’t know your budget, please move to China.

5. Buy American. No really. look for the little Made In **** Label. Avoid Places with whom we have a trade deficit (CHINA)

6. Don’t take advice from ANYONE who is going to receive money because of your actions. Real estate agents, car salesmen, insurance brokers, maybe even waiters. K, I actually listen to my waiters quite a bit, that one might be going too far but you get the point.

7. Invest in small business. Maybe by buying at small business, maybe by referring them to friends, maybe by actually investing money with them. Small business is who finances this country. Jobs, taxes. Their money stays here for the most part. That means it makes our economy more healthy.

8. Drive less. Telecommute. Carpool. Ride a bike. Buy local goods (things that haven’t been transported very far). Build an EV.

9. Don’t do stupid things to try to get ahead. Almost everything on my blame list can be linked to that. What is it they say? “What goes around…”

No, the house didn’t blow up. That worked out just fine.

5 months ago, I decided that in order for Main10 to grow it needed to put more money into reserve than it had been. And the best way to do that was to stop paying myself. We had a few good contracts that I wasn’t doing much of the fulfillment on and so I was the best candidate to take the paycut.

So off I went to get a regular job. Didn’t take long and I landed at Harris Hearing. Turns out that Harris was in much the same boat but with larger figures. Their only option for funding: investors. It’s been a rough time, most of our paychecks in the last 4 months have come late. And today they announced that things just don’t look like they’ll work out. Probably. But maybe at the last second… We’ll find out this week probably.

So meanwhile, two of the contracts that Main10 was counting on to build the reserve have ended and not been renewed. So Main10 isn’t ready for me to come back full time.

That leaves me without a paycheck.

Right now, there is $2.4 TRILLION in homes sitting empty in the USA. Let me type that our with numbers just so you can see how big that number really is. $2,400,000,000,000. That’s right, 13 digits. How many numbers do we deal with that have 13 digits, really? Not that many. Especially when it is attached to a dollar sign.

When a home finishes going throug the very painful and costly foreclosure process the bank adds it to their REO list. Large banks that do deal with some 13 digit numbers can have the REO packages divided into blocks that range in the $1,000,000,000′s. Yes, that’s billions. Those are then sold off to large investors for dimes on the dollar who inturn, divide their new REO package into blocks that range in the larger $1,000,000′s. Possibly $100,000,000′s. Those are then sold off to smaller investors who repeat the cycle until they are liquidating individual homes. By that time, you are looking at them selling at almost face value.

So how does one get in on a forclosed home at $.40 on the dollar? Well you can’t. Unless you happen to have 11 or 12 digits sitting around in liquid assets. But then at that point, who cares about getting $.40 on the dollar? Just go get a private island. Or better yet, just go buy a small government somewhere in Africa or South-East Asia.

So I think it’s funny when you start mentioning bigger numbers that people can still comprehend. $100,000? Easy. That’ll only get you a couple nice cars. Almost everyone I know has no problem wrapping their head around the 100K figure. Now, $1,000,000? Attainable? Yes, for most people. Maybe not in one solid chunk, but I know quite a few “average” people who have had more than a million dollars pass through their hands. $10,000,000? Ok now, we’re starting to get to the point where we’re losing people. Their eyes glaze over and the mutter to themselves “$10M? I have no idea what that would be like.” $100,000,000? Most people are now in college textbook, everning news, world markets that don’t effect me land.

In business, it’s a little different. You lose some people with big numbers. But others perk up and pay attention when you mention bigger numbers.

Here’s a good test to see if someone is cut out for business. Tell them that you are going to inherit/win/find/earn some large amount of money. Make it (semi)beleivable but make it big. People who are not cut out for business will ask what you are going to spend it on if they believe you at all. People who are into business will give you advice as to where you should invest it.

By the way, I’m going to earn $1,000,000,000 :)

How many times have I complained (or just commented) about being soooo busy? I don’t even know. Ever since I left SCO and went back to school, I recall thinking quite often “I can’t possibly be any busier than this” but it’s not true. I think there’s some mathematical equation we could come up with that will tell you how much busier you could be without exploding at any given moment.

But that’s not what I’m really worried about. What I’m really concerned with is keeping the bills paid and keeping Main10 growing. A little while ago I came to the conclusion that I couldn’t do both. I’m not willing to just throw in the towel and give up on it just because it needs more money to keep growing.

So I did the next best thing, I removed myself from the payroll so that the company could use that money better. Course that doesn’t exactly help me with the “paying the bills” part of my goals does it?

So, the solution: I started a day job. I get to work early and work through lunch so I can leave and get to Main10 before the close of business. Everyone has done a really good job at picking up some of the slack so that the company can still function correctly.

Bottom line? Yes once again, I am busier than I think I have ever been. And am I sooo busy that I couldn’t fit anything else? Sure seems like it. But I am determined not to let golf suffer (too much anyway) this summer. If I have to get up at 6:00 AM on Saturday so I can go hit a bucket or something then I guess that’s just what I’ll have to do. So what else can I add? I’m almost afraid to ask.

So I have an interesting situation here. We met with a potential client yesterday. Everything sounds Promising. They have employed a friend of mine who is in charge of the marketing. He has recommended using Main10 to do the writing for the Internet marketing efforts. I am assuming that they’ll say yes. And it’ll be a good contract for us.

At the end of our meeting yesterday one of their guys mentioned that they wanted to be able to push some negative comments out of the top 10. I figured “Hey, everyone gets some negative comments” but I decided today to go take a look at the “negative comments”. All I can say is “WOW” either someone is really out to get them or they have really screwed up big time in the past.

Judging by the dates in the posts it looks like they might have had some bad business ideas or bad customer service reps in the past and are now over it. Maybe it was an elaborate revenge scheme concocted by a really really disgruntled employee. I can’t really tell at this point. If they are indeed a scam, I don’t want to be affiliated with them in any way. But I feel that I need to give them the benefit of the doubt until I have something more than a handful of raging comments.

I’ll see if I can actually post an update on this one when I know more.