Business advice

The times; they are confusing
March 26, 2008, 6:57 pm
Filed under: businness advice | Tags: , ,

Prices are rising, credit is crunching and unemployment is rising. The Fed is dumping money into the system more vigorously than previous. We see nonstop headlines about rates cut and worries over cheap money. What’s it all mean? What’s it going to mean; and most important how is everyone going to cope?

There is no way to know all the answers. There are certain things that are different than previous economic crunches. Monies are being offered to investment banks to keep them from folding. Legislation is in the wings in an attempt to minimize the mortgage rate mess.

The credit crunch is trickling down to credit card companies. A tighter hold on credit means a slow down in buying, investing and jobs. Slow downs or the threat thereof usually means demand in all markets slows. A decrease in buying prompts a decrease in prices, the exact opposite of what’s going on.

This influx of money into the system, better known as the money supply, has a nasty side effect. It has been referred to in the media without an adequate explanation. The more money in circulation, the cheaper the money. This means it takes more to buy the same amount of goods: rising prices, not good.

How all of this pans out is anyone’s guess at this point. There are some things you can do to ensure you make wiser choices.

Uncertain times means you need to be more careful with purchases of durable goods. Think of this as anything that will still be around after you are finished paying for it, hopefully. Making long term commitments, tying up funds, long term payments, is not wise now. Things may change where you have to move in a hurry. You may be forced to move out of your home. You may be forced to change jobs. Investors may also see chances at making money when stocks, gold/silver, make a quick change in prices. All this boils down to a needed shift in your liquidity preference. Can you get your hands on cash in an emergency or will you have wait until your escrow closes. If you are employer and you are forced to cut back, it is much easier to get rid of temporary workers than letting go long-standing employees. Having more liquid assets means you are equipped to move quicker when changes come and come they will.

Sellers of durable goods are keenly aware that buyers are thinking harder before signing on the dotted line. They are up nights thinking of lures to bring you into their market. The latest I heard was a radio commercial offering car deals with no payments for 12 months. The announcer also encouraged listeners to get themselves pre-approved before arriving at the showroom. Car dealers’ aim is to get your signature. They create an atmosphere with promises that make you not think past tomorrow. The problem is they want you to forget about extra charges they have in the contract. Anyone promising durable goods without payments in the beginning is going to charge you at the end of the contract. Don’t be lured into thinking the salesperson is your friend. The only person they are looking out for is themselves. Bigger lures are bound to appear in our future.

The best thing you can do for yourself is to ask whether or not you can get out of a commitment easily six months down the road if your finances change. If not, forgo the purchase or the hiring of the extra employee. This also applies to investments that wouldn’t allow you to withdraw your funds without a stiff penalty.

Long-term planning has probably never been so important. Think twice and wait a day or so before signing any contract. You’ll be glad you did.

For examples of my work:

Laura Bell



More craziness in the Real Estate Industry
March 18, 2008, 8:48 pm
Filed under: Business Advice | Tags: ,

The real estate industry is in flux and will be for quite some time. The latest are bailouts to various banking institutions. We are jumping back to the 80s. Some may not remember the savings and loan bailouts. It was a mess. The recession of the early 90s exploded shortly thereafter.

Things are hard for the buyers and sellers as well as brokers who relied on their sales talents for an ongoing income. Trouble happens. Agents and brokers are trying innovative techniques to cope. A short clip on the Los Angeles prime time news highlighted one such attempt. A new helicopter service is in LA. The market niche: take potential real estate investors on a complete area tour in an hour. The cost is $1k an hour. It seems that foreign investors are being lured to our real estate because of the weakness in the dollar. They see our real property as a good deal. (It takes two dollars to make a Euro.)

There is also a radio commercial about a guy flipping houses. He convinces his buddy to try the same thing. I can guarantee you no one is successfully flipping houses in this market

There are still ads on the Net and the radio talking the line “interest rates are down again.” My question to that theory is so? This applies to both foreign investors as well as those responding to such a lure. Getting in on a good deal is only beneficial with consumer goods. You don’t worry about whether or not you can afford to keep them once the cash register rings. The good buy/bargain theory doesn’t work for real estate.

The issue is what happens once you are in the house, whether for your family or as an investor. People buy real estate because they want the price to go up. They also want to be able to stay in the home with a mortgage they can afford.

If you are convinced you still want to invest in real estate during this time, commercial real estate and hi-end homes are still moving. Do your own research on any potential project involving real property. Depend on no one else during these turbulent times.

Agents are continuing to scramble. Zeroing in the tiny portions of the market they are still active is one option. If one is stuck with homes that are not moving, a leasing package for corporations that have a need for relocation or traveling employees .might be the answer.

Hold back on refinancing for now. Refinancing is not possible when property values go down. So, even if this has not happened to your property, it could after you refinance. The decreased value could wipe out your equity. In these situations, the only way you can get out from under, other than bankruptcy, is a quit-claim. Neither paints a pretty picture.

There will be a time coming where they will be a shift. It is known as pent-up-demand. This is the term for the market’s reaction to any slowdown. It doesn’t really matter what market. This will come when investors and individual buyers again feel confidence in the market. Keep your eyes out for shifts in figures for your region. This shift will come at different times in different regions. Then, there will really be good bargains.

More strangeness in the market is still to come. Be patient if you want to be one who makes a good deal.

For more samples of my work:

Laura Bell


The publishing industry is shifting
March 8, 2008, 9:21 pm
Filed under: Business Advice

Last week’s announcement that Ziff Davis is filing for Chapter 11 is a big thing. It is simply repeating what the world, as a whole, has known for quite awhile. The publishing industry hasn’t been the same for a long while and there are more dramatic changes ahead.

I believe that the changes started much longer back than anyone probably realizes. I was working as a stringer for a daily newspaper at the time, just out of journalism school. USA Today was big news that year. (I’m not telling you what year.) The working journalists were afraid no one would ever completely cover another complex story.

Well, that didn’t happen. What has happened is an ongoing evolution of the industry. We have several contributing factors. There is the lack of desire for young people to sit down and read. When they do read, they want it fast and easy. There is also the fact that with the growth of ‘online news’ we have a publishing industry so crowded it is choking on itself.

This move has put news everywhere. If you despise news reports, but log in to one of the major pages daily, you are going to see the latest news headlines. We haven’t even gotten to ‘citizen journalism’ or blogging.

Those interested in news aren’t willing to wait for the next issue to hit the stands. Celebrity news reporters have also gotten in the act of ‘getting it now.’ There is a celebrity newshound with a car full of tech equipment. He follows his photographers all night. Once footage has been shot, he enters his work space/the car and uploads it to the Internet immediately. This guy owns a website that gets one million hits a day.

Any publishing operation that is too costly and relies on retaining ongoing ads is in big trouble. The competition for an audience is so tremendous that the larger online newspapers who had previously charged for content are changing their tune.

All this boils down to one axiom that now rules the publishing industry, get the readers and do it as cheaply as possible. Readers are saying they don’t want to pay because they know they can find it elsewhere if you put up a roadblock for them. This is truly a buyers market. If you are selling, your hoop jumping days have just begun.

Never in the history of this industry has it been more important to define your niche and stick with it. Smaller is going to be better for a long time. Publishers, no matter what format, with excess staff will find themselves running in the red. Successful publications in the foreseeable future will have to be lean-mean fighting machines for a chance to stay in the running.

If anyone plans on opening a new magazine, newspaper, or online newsletter, the only chance you have at it working is that you have all your financial ducks in a row. Even, fully financed, you will be in for the fight of your life.

The publishing industry isn’t finished chucking out the unprofitable. I advise ducking for quite awhile. The unemployment rolls will continue growing with unemployed writers and editors.

For examples of my work:

Laura Bell