A Job or an Internet Home Based Business Opportunity - Moms and Dads Must Answer This Question

Many moms and dads are asking the question whether to stay in their job or consider an internet home based business opportunity.

The current U.S. economic crisis has changed the lives of many families.  Some Americans have seen their income reduced or sometimes eliminated because of lost jobs.   Others are feeling job insecurity as their companies struggle.  

The employment picture appears to be improving.  Job losses are declining.  The unemployment rate remained at 10.0% in December.  It then fell to 9.7% in January and February.  However, if the work force had not lost over 660,000 discouraged job lookers (given up on finding a job), the unemployment rate would have been 10.4%.

But the current economy indicates that it will be extremely difficult to find another job if you are presently unemployed or unhappy with your present employment.  

When you consider the total of unemployed plus underemployed (employed but making less than before they were laid off) individuals, there are almost 27 million Americans who are looking for a job or a better paying job.  It will take many years before all these people find jobs, even if the economy grows at a very high rate.

However, there is no way that we will see high growth rates in the economy.  The massive federal government spending is resulting in huge deficits.   Higher interest rates and increased taxes will be needed to finance these deficits.  Both of these will cause a major drag on any economic growth.  

As a result, unemployment rates will remain at high levels.  Finding a job will be difficult for many Americans.

We are seeing a major change in families throughout this country.  Many moms and dads are considering the pros and cons of joining an internet home based business opportunity.  Some are discarding the traditional path of working a job.

When talking about an internet home based business, I’m not talking about a job stuffing envelopes or doing medical billing.  

To pursue an internet home business is not a bad thing.  In fact, it is considered a blessing for some.  Many moms and dads have considered this type of business before.  A job loss or job insecurity can provide the motivation to make this change.

Robert Kiyosaki, the best selling author of Rich Dad, Poor Dad, recommends owning a business, rather than having a job, in order to create wealth.

Of course, owning an internet home based business is not for everyone.  A business owner must be a self-starter, be dedicated and willing to work hard, and be willing to learn and develop the skills needed for success.   This isn’t an easy job.  

I recently heard Mr. Kiyosaki interviewed while promoting his latest book, Conspiracy of the Rich, 8 New Rules around Money.   He discussed how the middle class was being eliminated and how holding onto a job was keeping families poor.  He talked about how job holders were being held back by current tax laws, accumulation of debt, and coming inflation. 

He indicated that the working taxpayer would end up being the loser in today’s economy and the business owner would be the winner.

Moms and dads need to make a decision.  Do they want to play it safe and have a job?  Or do they join an internet home based business opportunity?

Kiyosaki asserts that holding a job, traditionally considered the safe choice, is actually the riskiest option.  So the question is, what do you choose?

Are You Ready for the Next Mortgage Crisis 2010?

The United States sub-prime mortgage crisis 2009 is behind us.  But an Option ARM mortgage crisis 2010 is on the way.

The United States economy appears to be improving.  Housing sales continue to rise.  Home prices have stabilized in many areas of the country.  Foreclosures have slowed dramatically.

The economy grew in the third quarter by a revised 2.8% (down from an original 3.5%).  

The Conference Board just published the Leading Economic Indicator (LEI) numbers for October.  They showed a 4.2% increase, the seventh month in a row that an increase was reported.  The LEI is a good indicator of the direction in the economy.  

Federal Reserve Chairman Ben Bernanke is boasting that his monetary policies have brought our country from the brink of economic disaster.

But let’s take a look at the last few years.  It is quite obvious that the Fed had no clue that their low interest rates and accommodative policies were major factors in creating the housing real estate bubble. 

When the housing real estate bubble burst, the Fed grossly underestimated the severity of the crisis.  In 2008. Bernanke said the housing market issue was contained and would not be a problem. Later he stated that the total losses from the debt crisis would not exceed $100 billion and could be written off.  We all know that these losses were far greater.  If you followed his advice in the stock market, you would have lost a bundle of money. 

After the federal government bank stress tests were completed earlier this year, Bernanke stated that, “most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized.”  So why do these banks continue to hoard the money the federal government gives them?

So how in the world can we trust this group to get us out of the economic crisis?  It’s quite obvious that Bernanke does not trust natural, free economic forces to bring us out of this downturn.  

Instead, he believes that only he, in all his wisdom, can manipulate the economy in a way that allows us to recover.  His track record is not good.

Many economic numbers indicate an improving economy.  So here is the big question.  Why are the policies of the Federal Reserve so accommodative when the economy appears to be improving?

The chart below shows that we are beyond the United States sub-prime mortgage crisis 2009.  However another mortgage crisis is coming.  During the period between September – December, 2009, we are actually at the lowest level of the mortgage reset problem. 
 
But look what lies ahead.  A huge number of Alt-A and Option-ARM mortgages are due to reset from the second quarter of 2010 through the fourth quarter of 2011.

These resets will be at much higher rates resulting in more delinquencies and foreclosures.  Many of these Alt-A and Option-ARM mortgages were taken out during the peak of the housing real estate bubble.  This will result in extremely high loan to value ratios.  This will only aggravate the foreclosure problem.

The result will be further write-downs in the banking sector.  This is why Bernanke is keeping short term interest rates so low.  He knows that the coming mortgage crisis 2010 will create huge financial problems for the banks.  But he is keeping this information from an unsuspecting public.

Corporate professionals are keeping a close eye on the economic recovery. 

For those who have lost jobs, a strong recovery will improve their chance of finding employment.

Others professionals are hoping a strong recovery will help stabilize their companies.

The President Obama administration claims that his policies have brought us to a point of economic stability and recovery.  The Federal Reserve proudly asserts control over the economy through their manipulative monetary policies.

My advice is to be wary of statements made by the administration and the Fed.  I do hope that their words prove to be accurate.  But the economic data I study indicates more problems ahead.  

Having a job backup plan, a Plan B strategy, makes complete sense to me in this uncertain economy.

Scott Hubbard has retired from 25 years as a Chief Financial Officer in corporate America.  He now teaches corporate professionals and network marketers how to start a successful internet marketing business.

His primary business, at http://Your-Guide-To-Wealth.com, has provided the general guidance individuals have needed to make good financial decisions in economic downturns as well as in expanding markets.  You can reach Scott toll free at 877-878-4036 or by email at Scott@ScottHubbard-Consulting.com.

The Coming U.S. Dollar Devaluation Will Have a Major Impact on All of Us

The coming U.S. dollar devaluation will have a major impact on all of us.

The fact that the dollar is falling in value means that investors consider the United States economy to be in disarray and out of control.

This is not something that has occurred in the last year or even in the last decade. This is an event that has been in the making for much longer than that.

I don’t have to tell anyone this. The U.S. economy is mired in a huge amount of debt.

In fact, the U.S. government is sitting on up to $125 trillion of debt which must be paid at some time in the future.

This debt includes:

• $11.5 trillion National debt – this debt has exploded in the last 12 months. It includes cumulative debt plus all the bailouts, stimulus plans, and the 2009 deficit.
• $104 trillion Unfunded obligations – this includes obligations for social security and medicare. There are 80 million baby boomers scheduled to retire over the next decade. We do not have the money to make these payments.
• $9 trillion Projected deficits over the next 10 years
• $1 trillion Health care reform – When the final health care reform package is passed, this number will probably be much higher.

Investors have major concerns about the U.S. government’s ability to pay what it owes.  Therefore, we are seeing the dollar on very shaky ground.

In order to pay its bills, the U.S. government must borrow a significant amount of money from investors (lenders). A large percentage of these lenders are foreign countries such as China, India, Brazil, and European countries.  Spending Huge Amounts of Money is Hurting the U.S. Dollar

For some time now, many of these countries have been complaining about the falling value of the dollar. They are imploring the Obama administration to start getting its financial house in order. Instead, the government continues to expand its debt level in a very major way.

Let’s look at it this way. China and India have built up large cash reserves because their economies are booming. They want to invest this reserve cash.

In the past, U.S. dollar investments made sense. For example, long-term bonds were a good investment. They were backed by the good faith of the U.S. government.

But because of the falling value of the dollar, this is slashing the return on their investments. They have every right to move from the U.S. dollar into stronger investments. Many are doing just that by investing in gold, oil, and natural resources. This puts pressure on the dollar to fall even further.

A United Kingdom newspaper recently reported that Gulf Arab nations were joining with Russia, China, Japan, and France and are considering replacing the U.S. dollar in all oil transactions. This would be a major blow to the dollar. When this report came out, the value of the dollar slumped.

Even if this meeting did occur, they are probably far away from doing this. However, this is the path we are on. It supports the strong probability of the coming dollar devaluation. Most likely it will not occur immediately. It could happen in a few months or even a couple of years.

Another way to cover these huge deficits is to tax Americans. Unfortunately, this will probably be coming soon. But in the middle of a serious recession is the worse time to impose a major tax on us.

The only other alternative to covering our deficits is to devalue our currency, the U.S. dollar. This will have a very detrimental impact on all of us.

I will not go into this subject right now because of its complexity.

This scenario is likely. Here’s how it will impact you and me.

The result is major inflation. Many Americans don’t remember this type of inflation unless you remember the 1970s. I do remember it, and it’s not pleasant.

This will primarily hit seniors and those living on fixed incomes.   They will discover that their lifetime savings do not cover their rising expenses.

Even those who have built up a nice nest egg for retirement will be hurt. As the prices for goods and services soar, they will find that they haven’t saved enough money to cover their accelerating costs of living.

But inflation will hurt all of us. Because of the coming dollar devaluation, the price of imported goods will rise. That means that we will be paying much higher gas prices at the pump.

Walmart’s revenues have held up fairly well during the current recession because of its low prices. Because many of its products are imported from other countries, Walmart will be forced to increase its prices substantially.

In the past, a high percentage of our country’s Gross Domestic Product (total sales of goods and services) was from manufacturing. Today, it’s not. Much of our country’s sales are now from imported products.

The purpose of this article is to let you know that the coming dollar devaluation is probable. This impacts all of us, whether you are a corporate professional looking to leave your job in corporate America,, a small business owner, or a network marketer.

But there are things you can do to help offset the negative effect of this event and even profit from it.

I add one additional caveat to this article.  Inflation may not come as soon as many experts expect.  Why do I say this? I list two factors below that can cause this.

The federal government continues to throw tons of cash at our economic problems.  But the United States doesn't have this money to spend.  So it must borrow the money, or increase the taxes on Americans, or print the money out of thin air.  In normal circumstances, this would soon lead to major inflation. 

1. Much of this money is going to U.S. banks.  The banks, instead of lending this money to businesses and individuals, are hoarding the cash.  They are doing this because of the high level of bad debts on their balance sheets.

2. U.S. consumers are not spending.  Instead, they are saving and paying down their debt.  

Both of these factors are preventing this money from getting into circulation in our economy.  They may be a factor in delaying inflation in the near term.  On the other hand, the fact that banks are not lending and consumers are not spending has a major detrimental impact on our economy. 

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The Key to an Economic Recovery - Major Structural Changes in the U.S. Economy

The only long term cure for our economic downturn is a major structural change in the economy.

I can just hear the laughter by the economists in the President Obama administration. “What are you talking about? The economy is already recovering,” they say.
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Just look at the stock market. Euphoria is all over Wall Street. The Dow Jones Industrial Average has risen to well over 10,000.

Goldman Sachs and J.P. Morgan are reporting record earnings. IBM’s earnings exceeded those expected by Wall Street pundits. The earnings of many other companies have been better than expected. 

Many corporate professionals in our country are paying close attention to a potential economic recovery. 

Many feel insecure in their jobs and would love to see a strong recovery bring stability to their work  place.

Others are like me just a few years ago. They want to retire but can’t afford to. The stock market crash last year and the decline in home values have reduced the money they expected to have available for retirement.

Others are moms and dads who want to work from home. They want to spend more time with their children.

For all these people, I think it is important to understand what is happening in our economy. It’s important to have a Plan B, a job backup plan, in case the economy continues to falter. For me, it was a work from home online business that allowed me to retire from corporate America after 25 years as a Chief Financial Officer.

My job backup plan was to obtain the best internet marketing training. I was able to find online training at a very reasonable cost and continue working in my regular job until I was ready to make the move.

You may not want to go that route. The important thing is to have a Plan B. I feel that we are a long way from recovery. When it comes, it will be a very slow process.

The  recession (19 months as of June, 2009) was the longest economic downturn since the Great Depression (43 months).

Unemployment numbers and industrial production are at the worst levels since 1945. Retail sales and housing starts, although slightly improved in the last few months, are worst than any time since the Depression.

Our ailing economy cannot be cured by more stimulus. Stimulus is exactly what caused our present problems.

So what is the cure? What are the structural changes in the economy that are needed to achieve a valid, long term recovery? Well, it’s not pretty.

Unfortunately, the cure for our economy is bankruptcies, foreclosures, defaults, workouts, and deflation. Because of the massive spending on economic stimulus and bailout plans, we will most likely deal with hyperinflation at some point.

These structural changes in our economy won’t happen quickly. Corporations don’t want to go under. Individuals and families don’t want to lose their homes.

However, the longer the federal government tries to prop up these failing corporations and families, the longer this cure and the structural changes in the economy will take.

The federal government and individuals have accumulated more debt by far than at any time in our history. It will take a long time for this debt to unwind.

It took decades to build up this massive debt. It is naïve to think that a few months of pain and stimulus spending is all that it takes to cure our problems.

The federal government believes that stimulus and bailouts are the answers to our financial problems.  They are Wrong. 

It’s frightening when the second most powerful person in the country, Vice President Joe Biden, makes the very “wise” statement, “We have to spend money to keep from going broke.”

You need to consider that “sage” advice as you try to meet your personal financial obligations each month.

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Increase in U.S. Savings Rate - Will This Doom the Economic Recovery?

The increase in the United States savings rate is a statistic that is being ignored by most people but is critically important.

Since the early 1980s, Americans have been saving less and less. In fact, the savings rate turned negative during the peak of the residential housing bubble. However, it surged to 5.7% in April of this year – a 15 year high. This represents a major trend change that will have a negative impact on any economic recovery.

If you save, the money is put to work by another enterprise. The goal of investing is to end up with more money down the road than you currently have.

Therefore you will be able to consume more in the future than you do today. By following the “save and invest” formula, individuals and countries grow wealthy over time.

Here is an important fact. You grow wealthy by saving and investing. You cannot grow wealth and prosperity by consuming and borrowing.

It was in the mid 1990s when the United States savings rate began to shrink. The reason? Alan Greenspan caused the stock market bubble (the dot com bubble) by lowering interest rates to almost zero. As a result, people felt that there was no need for savings in order to create wealth.

Take a look at the following graph to illustrate my point. In 2001 the savings rate hit zero and continued to go down.

Again, it was the Greenspan loose monetary policy that helped to create the real estate bubble, probably the greatest real estate bubble in history. Here again, people decided that saving money was not necessary. They concluded that borrowing and spending was the key to wealth creation.

When the bubble burst, we entered into the worst economic and financial crisis since the Great Depression. You know the rest of the story. The crisis destroyed the dreams of many Americans.

These bubbles created illusions of wealth. But Americans are finally starting to get it.

People are beginning to realize that spending and indebtedness is not the path to prosperity. Some of them took on an unnecessarily amount of debt.

In many cases, corporation professionals have seen a huge reduction in the wealth they planned to use in retirement. They, along with other Americans, are cutting back on spending and are trying to save for their future.

The savings rate has now climbed to over 5%. This trend will likely continue into the future.

So what does this mean to our economy? An increase in the savings rate means a better long-term future for our country’s economy. It provides a foundation for growth and prosperity.

On the other hand, an increase in the savings rate hurts the economy in the short run. It means you save so you can later consume more. But you must consume less now.

Not only is U.S. consumption/spending being negatively impacted by soaring unemployment rates and the decline in housing prices, it is also being hurt by this increase in the savings rate statistic.

Unless there is an increase in income, it’s impossible for spending to rise while there is a rising savings rate. But overall income levels are falling.

A few years ago when I wanted out of my corporate job, I went through the same experience. I realized I didn’t have enough money to retire so I cut back on spending and tried to save like crazy.

Professionals, wanting to leave their corporate jobs, have no choice but to cut back on their spending – especially if they have been hurt financially by the economic downturn. Since 70% of our economy is consumption based, this reduction in spending must have a very negative impact on the economy in the short run and probably for several years.

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