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December 2014 Newsletter: Request of Readers; the other 99% slogan; and, Knowing the Marketplace
December 24, 2014
Hello to all my frugal friends:

I hope everyone has a nice Christmas celebration, time off, or however you enjoy this time of year we find filled with holidays. This year end I’m spending time with friends and family away from home, so I’m spinning wheels and traveling through heavily populated areas of the central, south and eastern states. All of my travels lead me to a one conclusion: it’s nice to stay home, and it’s nice to live in Wyoming where five cars in a row constitute a traffic jam.

And, of course, my buddy Dude is along for the ride. He’s a good dog, but I’m not quite sure what he’s good for…he doesn’t drive, he doesn’t navigate, he doesn’t even help pack up the car, but he sure can snore. And, with him in tow, there is never a shortage of gas…and it’s all at no additional cost.

This newsletter is a bit different, as it has three parts: as usual, an article about personal finance; another article in my series about economic and financial preparedness; but first, I’d like to ask my readers for topics that I might address in future newsletters.

Your Interests and Concerns

Before we get to the articles, let me ask you to do a bit of thinking about what you might be interested in reading about from my perspective. Having been interviewed a few months ago, I thought it might be nice to more narrowly target my experiences and views to help subscribers gain insight into issues that are most near and dear to them. It seems to make sense that I spend time addressing what concerns you and others like you.

I can’t promise that every issue will be covered, but if you have an item that you’d like to have addressed, please let me know by replying to this newsletter or sending a separate note on the contact form on the site. Just be sure to ask that the discussion be presented in an upcoming newsletter and I’ll do my best.

It seems that there are limitless topics one might address when it comes to living a frugal life, managing personal finances, and otherwise being more successful in money matters. Here are some general topics to help trigger your thoughts about specific issues and questions near and dear to you:

  • Staying employed
  • Finding employment
  • Getting higher pay
  • Side jobs and businesses
  • Saving money
  • Spending money wisely
  • Value of our currency
  • Alternatives to currency
  • Inflation
  • Making things last
  • Reusing, recycling, and repurposing
  • Living on less
  • Minimizing taxation
  • Prioritization of spending, investing, saving
  • Becoming entirely free of debt
  • Staying out of the debt trap

I’m hoping that some of these topics might stimulate ideas about issues and questions you have. If you pass them on to me, I’ll take a good stab at addressing them.

Now, let’s get focused on the articles. As in previous issues, these articles do not appear on the website.


The Other 99% Slogan

by Clair A. Schwan

Quite a while back I drove passed a home that had a large sign in front that said, “We are the 99%.” It was a curious sign, and I was tempted to ask what they meant by it. A month or so later I heard about occupy Wall Street and their 99% slogan, so I eventually figured out what that large sign was trying to convey.

What a great concept.

After I started thinking about it, I remembered another 99% sign in a doctor’s office. It read, “1% are misfortunate, the other 99% are misbehaving.” Excuse the improper use of words, but the point of the sign was to remind folks that whether they’re trying to quit smoking, lose weight, or make better choices in diet, there are roughly 1% who fail because of misfortune – the unfortunate – while the other 99% fail because they don’t apply themselves in a deliberate manner – the misbehaving.

Hey, now that’s another great concept.

You certainly don’t need a road map to see where I’m going with this. We’re either part of the success oriented crowd, or we’re misbehaving. It doesn’t matter if the slogan has proper diction or the percentages are accurate, the concept is right on the money (if you’ll allow me to use that expression); if we’re going to do well with respect to personal finance, we’ll need to be deliberate about it.

In other words, we’ll need to be that 1% who are successful because we stay “on plan” or “on point.” And, if we’re not successful, it won’t be because we’re misbehaving, it will be because we’re truly “misfortunate.”

Positive Indicators

When we try to stay “on plan,” it’s helpful to know what our aim point ought to be. Here are some indicators that we’re headed in the right direction…we’re on target, or at least on the paper somewhere. When we recognize these aim points, we can be sure that we’re part of that 1% who know what they’re doing and how to do it:

Increasing your earnings – a faster way to get out of debt and accumulate wealth is to bring in more money. Try to promote yourself at work through better performance. Start you own enterprise to gain more control over your income, and then guide it upward.

Saving money – whether you’re putting money away in the bank or simply being frugal when it comes to making decisions about spending, you’re saving money, and generally that’s good behavior.

Investing for your future – it’s funny how the future always comes around, and if you’re making investments for a better tomorrow, chances are you’ll be glad you did. What’s the worst that could happen? Think about it. Perhaps you’ll have too much financial security? That sounds like a good problem to have.

Understanding value – in America, we tend to buy things that are cheap, and then we realize that we’ve wasted our money. If we strive for value, even if the product or service is higher in price, it’ll likely serve us better and end up costing less in the long run.

Having meaningful goals – so, you’re out of debt and saving money, that’s great, but what are you saving it for? Have meaningful goals like putting yourself through school, paying off the mortgage, making strategic investments, remodeling the house, or starting your own enterprise. It’s not necessary to start with specific meaningful goals, but it’s sure a great idea to have them clear in your mind before you spend a lot of dough.

Warning Signs

It’s also helpful to be aware of indicators that suggest perhaps we’re in the ditch or off in the bushes somewhere, or at least not operating at an optimal course and speed. Here are some indicators that suggest we’re part of the 99% who are misbehaving: Spending on desires – we need to eat, we need to get around, and we need shelter; however, do we need to eat out and eat out so often, do we need a new car, do we need a big home? Wouldn’t we be dollars ahead by preparing our own meals, buying a good used car, and selecting a modest home that meets our needs? Much of what we spend money on turns out to be wants instead of needs. Those discretionary interests throw many of us off course with respect to our personal finances.

Living beyond our means – is there more month left at the end of the paycheck? This should be a clear indicator of insufficient income or excessive spending, or both.

Becoming satisfied – there seems to be any number of people in America who are satisfied to be “making it” or “getting by.” As an acquaintance of mine once said, “You can get used to just about anything.” Just scraping by seems to be a lot like settling for mediocrity. We shouldn’t be satisfied with where we’re at until we know we’re well beyond where we might ever need to be.

Dreading bills – paying bills is a normal part of life. If you’re dreading the arrival of bills, especially regular bills the likes of which come from your utility company, then perhaps you’re overextending yourself. If you’re having trouble paying your bills, you might consider what I refer to as “load shed.” Find out where your money is going, and discontinue or curtail those activities that drain you financially.

Using cash advances and check cashing services – it always amazes me to learn of the many individuals who use cash advance services and don’t have a bank that can cash their paychecks. If you need someone to front you money each month, that’s just digging a financial hole. If you don’t have a bank where you can cash your paycheck, then that suggests you aren’t saving money and you’re living check-to-check. I can’t think of a clearer indicator of a financial train wreck in the making.

Strive to be the 1%

So what’s the bottom line in all of this? For me, it’s simple. If you’re on top of your game, living deliberately and making good financial decisions, then the likelihood of financial failure is small, perhaps 1%, and that will truly be a unfortunate situation should it occur. Most often, when things go wrong, it’s due to financial misbehavior, not misfortune, and it’s usually something that’s well within our control. Decide to be in the upper 1% in terms of financial responsibility. The peace of mind alone is worth the extra effort.

To be sure, you’ll have a lot more company as part of the 99%, but remember, they’re misbehaving, and that won’t lead to financial success as near as I can tell. It might make for a great sign on your front lawn, but that’s about it. Aim higher, you’ll be glad you did.

Economic and Financial Preparedness – It’s Time to Assess the Marketplace

by Clair A. Schwan

We’ve been talking about economic and financial preparedness, with emphasis on starting your own enterprise. It isn’t for everyone, but it sure can be a great way to boost income and put you in a good place financially speaking. Our recent discussions have focused on what kind of enterprise one might select. What’s been missing from the discussion is why one might select a particular enterprise. That’s what I want to address in this article.

We can have an interest in an enterprise, but we need to know why that enterprise might be successful. To make this determination, we need to dust off the old crystal ball and look into it carefully, with our eyes wide open. It’s time to do our best to foretell the future.

Know the Marketplace

As a business owner, the idea of success within the economy centers on knowing the marketplace, fitting into it well, and being able to project what it might look like so when it shifts you can shift right along with it. Otherwise, you might be offering something that the marketplace isn’t interested in. As an example, would you start a pet rock business these days? Well, would you? Of course not, and neither would anyone else who knows that pet rocks have come and gone.

To illustrate my point, let me take a few example businesses from previous articles to show you how knowing the marketplace is a key to your success.

If you’re trying to run a lawn maintenance business, you’ll need to be in a marketplace where the grass needs cutting, people have money, and your customers would find it worthwhile to hire you. It would also be nice if you could engage in your enterprise for more than just the traditional summer season.

When I think of cutting grass as an enterprise, I think of Florida. It’s a place loaded with retired people who probably have considerable financial resources but have little interest in getting out in the heat and humidity to cut their own lawn.

Let’s say you’d like to start up a business raising dogs to sell to others. If you’re located near a large metropolitan area, I’d certainly look into raising guard dogs, as they might be in high demand and ever higher demand in the event that crime rises or is expected to rise. There is no sense trying to sell Pekingese puppies when the market demands a good personal guard dog or the fabled junkyard dog.

The Big Marketplace Myth

It’s usually common sense that you want to be the first one in the marketplace offering the best product or service. That’s largely a myth because there are plenty of “me too” companies out there that have become successful even if they’re not the first one on the block offering a particular product or service. In fact, you might target service areas where there are plenty of competitors: that’s one sure way to find a large marketplace, one that has plenty of room for you. The key is getting noticed, being very good at what you do, and being someone who others would like to do business with…then you can take market share away from your competitors.

Think about Progressive as a start-up car insurance provider. By all sense of timing, they entered the marketplace many decades behind much larger and very successful operations like Allstate, Farmers, and State Farm. Nevertheless, they took away a big chunk of the market and they’re here to stay. I don’t have any insight as to their business strategy, but as a Progressive customer I can tell you that their rates are competitive and they provide great service. What more could I ask for? I get what I pay for and I pay a reasonable price?

Let’s consider one other example of an enterprise “swimming upstream” against tremendous competition and nevertheless succeeding: Wal Mart. Many complain about Wal Mart and how they come into a community and put smaller operations out of business. This is true in many respects, but it’s clear that Wal Mart is offering what customers want, and at a price they’re willing to pay. That’s a key to their success.

Getting back to the myth about competition being a bad thing, consider that Wal Mart has beaten the pants off of Sears and Kmart, yet both of those retailers were giants in their time. They’ve since teamed up to survive, yet I don’t see near the number of cars in their parking lots that I do in front of Wal Mart. And, as many of us are aware, Wal Mart is the largest retailer on the planet. How is it they made it in the retail sector against two giants like Sears and Kmart? I can’t tell you how, but I know they weren’t apprehensive about entering the marketplace because they saw it as very large and they knew they could offer something the consumer was looking for.

There is always room for a new and better player, it’s just a matter of being that better player.

The Other Big Marketplace Myth

When you listen to most small business people who have interests in the retail sector, they’ll tell you that they can’t compete against Wal Mart. You’ve probably seen the signs warning against “the shark that ate Main Street.” It’s a common concern, and not without merit, but it’s another big myth. When you’re a small enterprise, you can do things that the larger enterprises just aren’t able to do nearly as well, as easily, or as fast. Here’s a short list:

  • Closer relationships with your customers
  • Personal service
  • Specialization in your product line
  • Stocking high quality products
  • Making management decisions on-the-spot
  • Teaming up with other small enterprises
Let me give you two examples of how local enterprises can compete against big players like Wal Mart, using a couple of the ideas from the list above.

First, let’s look at stocking high quality products. We have a shoe store in my town that sells top quality products and offers a great selection. Despite the much higher prices, I buy my shoes and boots there because they have much higher quality products. One pair of shoes from the local shoe store will last me a couple of decades, whereas I’m likely to walk right out of some of the inferior products sold by that menacing big box store. It’s one of the problems in the marketplace, the average American wants cheap crap. To succeed, find a marketplace niche that demands quality and value, and provide it to them with personal service.

Second, let’s look at specializing in terms of a product line. We have a small natural grocery store that opened its doors recently, and it’s busy all the time. Sure, there are lots of places to buy food in my town, including the Wal Mart Super Center and several grocery stores, but for individuals who are looking for organic and other specialized foods, they just can’t be found in such wide variety anywhere else. If your marketplace demands specialty products, you can meet that demand and be successful.

If you’re looking to get yourself a place in the economy as a player so as to create a bit of financial security for yourself, you can do just fine in a competitive environment, and you can do just fine against much bigger players in the marketplace. Knowing your marketplace is essential for success. Otherwise, you’re just shooting in the dark.

Next Month

I hope you’ve enjoyed these articles and can put some of their lessons to good use. Please feel free to pose questions about issues of concern to you. I’d like to use your interests to create relevant material for upcoming newsletters.

Next month, let’s look at an expression I learned from a good friend of mine, “Don’t start nothing, won’t be nothing.” And, as we look at being better prepared from a financial and economic perspective, we’ll take a quick look at making investments.

Wishing you all a great 2015,


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