The Finance Blogger


Tax the rich or not

December 28th, 2015 ernie Posted in General No Comments »

Tax the rich or notShould we tax the rich or not?  Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. There are many ways to divide up this bill. In most cases patrons would split the bill into 10 equal payments. But what if they paid their bill the way we pay our taxes? How would we now split this beer bill?  Would it change drastically and who would benefit from discounts if there are any? it would go something like this…

The first four men (the poorest) would pay nothing

  • The fifth would pay $1
  • The sixth would pay $3
  • The seventh would pay $7
  • The eighth would pay $12
  • The ninth would pay $18
  • The tenth man (the richest) would pay $59
  • So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

How to Handle Discounts – Tax the rich or not

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid $2 instead of $3 (33% saving).

The seventh now paid $5 instead of $7 (28% saving).

The eighth now paid $9 instead of $12 (25% saving).

The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

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Baby Boomers Dislike Working from Home

April 7th, 2015 ernie Posted in General No Comments »

Baby Boomers Dislike Working from HomeA recent study indicated that 62% of millennials and 35% of generation X’s take advantage of work at home programs. This is based on programs offered by companies around the US. Only 3% of baby boomers on the other hand take advantage of these work at home opportunities. Turns out that there is a big difference in the mind-set of baby boomers as compared to their younger counterparts. Admittedly not every job is conducive to working at home. For example while sales people can spend part of the day working from a home office they also need to get out and visit customers. Mechanics and service industry personnel also need to be at their place of work for obvious reasons. Companies that can set workers up with a work station and depend on information workers to get the job done are far more adept at setting up work at home situations.

Baby Boomers Dislike Working from Home

But even when the opportunity exists, many baby boomers dislike working from home and would rather go into the office. There are a variety of reasons for this attitude and they also vary with the individual.

Social Interaction is important for many, because they live to work rather than work to live which defines the major difference between the various groups.

Seniority and position in the company also defines whether you can work at home or must go to the office. Baby boomers tend to be older and in more senior positions.

Career aspiration is another element that can distinguish a person. Those that want to be promoted tend to go into the office where they can be seen and heard. Working from home provides far less opportunity in this regard.

Work tends to define the older baby boomer and they identify with the job and their success. They are working to be successful rather than working to earn a living that they can enjoy other elements in life.

Let us know if you agree with these concepts or if there are other elements that factor into whether people in various groups prefer to work at home.

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Negotiate Discounts

July 21st, 2013 ernie Posted in General No Comments »

Negotiate DiscountsWhether it is an oil change or a new loan or mortgage always ask for a discount. Lots of times you will receive a discount just because you asked for one , with no questions asked. Why not try and save money when you are making purchases. This is a perfect way to stretch your income and make it last longer. No one ever has so much money that they never have enough. There is always something more that you want to have and why not. So when you can save a few dollars or thousands of dollars, why not?Some people suggest that you should only focus on the large savings and forget the small stuff.  I suggest that you should focus on the big stuff, but also on the items that are really frequent. Over time you can save thousands of dollars as well which goes straight to your wallet.

Negotiate Discounts

Two examples will illustrate.

Car Maintenance Discounts

The first example was when I was having an oil change for my car. I asked if they gave senior discounts or discounts for triple A members. Without hesitating the parts manager offered me $10 off the price!

Now this includes an oil change, a 100 point checkup and a car wash for $31! What a good deal and I got this discount because I asked! There was no coupon or anything like that. It just goes to prove that you should always ask for a discount. Remember that the worst that can happen is that they say sorry, no discount.

Mortgage Discounts

The second example was when I was negotiating a new mortgage . I was already to sign the documents and I hesitated, put the pen down, looked the lender in the eye and asked if he could give me a discount. To my surprise he said yes and took another half percent off the interest rate, which saved me hundreds of dollars over the life of the mortgage!

Hotel Discounts

We travel a great deal and stay in hotels all of the time. We routinely receive discounts for carrying a AAA card as well as being seniors. In addition occasionally there is some problem with the room we stay in and the hotel is usually more than willing to provide a discount to compensate you for any inconvenience that you may have had. One time the air conditioner in the room was literally freezing up with ice. It was low on coolant so we just shut it off. In the morning we mentioned this to the clerk that they should really get it fixed before renting out that particular hotel room to another guest. Without even asking, the gave us the room for free. Now that is a discount.

Always ask, they might say no, but lots of times they say OK!

Save

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Negotiate – ask for Discounts

July 21st, 2013 ernie Posted in General No Comments »

ask for DiscountsWe have noticed recently that many people just pay whatever the asking price is for something. They never really try to negotiate or ask for discounts. Some people will only negotiate on the large items and don’t bother with less expensive items. Always try to negotiate whenever you can, always ask for discounts. Any money you save is money in your pocket which can be used for other expenses including trips and dining out with the family.

Negotiate on Expensive Items

Expensive items that are negotiated and result in saving 10% of your cost means that there is a lot more money in your account as a result. You might save hundreds or even thousands of dollars as a result and yes this is some thing you should definitely focus on whenever you are buying something like a car, a home, or large appliances. But what about things that you may buy more often. Can you save money on the purchase of your TV service, your telephone service or your internet service. You get these bills every month and if you can reduce the bill by even $25 a month, this can add up fast over the years.

Negotiate on Inexpensive Items

The latest example was when I was having an oil change for my car. Based on the mileage I put on my car, I have to change the oil every couple of months.  Since I believe in always asking for a discount, knowing the worst thing that will happen to me is that they could say no, I asked if they gave senior discounts or discounts for triple A members. Without hesitating the parts manager offered me $10 off the price! Just like that with no hesitation or counter offer. I did not even have a coupon to offer. All I did was ask him if there were any discounts and he gave it to me. Now $10 is not a lot, but it does pay for many other things that I need to buy and based on my oil changing habits, I save about $40 a year on oil changes.

Now this includes an oil change, a 100 point checkup and a car wash for $31! What a good deal and I got this discount because I asked! There was no coupon or anything like that. It just goes to prove that you should always ask for a discount, the worst that can happen is that they say sorry, no discount. Lots of times they offer some reduction which keeps money in your pocket and makes a loyal customer!

Even if they charge me the full price next time I will be going back to this garage because of the service and the features that were included in the oil change. The car needed to be cleaned inside and out. To have someone do it for me, it would have cost me $18 somewhere else. The 100 point checkup is pretty standard, but not all places give you a full report like this with even the tire tread depth and the brake width measurements provided. Not only do they give you peace of mind, you know when you need to spend some money on things like tires and brakes.

Negotiate – ask for Discounts

So bottom line is always ask for a discount. The worst thing that might happen is that they say no and apologize when they do that. The very best thing that will happen when you ask for a discount is that they will offer you a discount, a future coupon for something, or a free gift of some sort. Many companies are getting really creative as far as discounts are concerned. You never know what will be offered, so the best idea is to always ask and see where it takes you.

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Rich Grandparents, Poor grandparents: What to do? Help!

January 7th, 2013 ernie Posted in General 1 Comment »

Rich Grandparents, Poor grandparents: What to do? Help!What do you do when your children’s in-laws are well off and shower them and the grand children with gifts? As a grandparent, you would like to spend time with your kids and grand kids and provide them with some of the things you know they will like.  Kids are young and immature and sometimes they just do not understand when someone gives them something they really think they want and is expensive vs. something that is a lot less interesting and a lot less expensive.

How do you compete with rich grandparents? We think that the answer is that you do not compete in showering gifts on to the kids. We think that you can make a far stronger relationship with your kids and your grand kids by being there to help them when they need help.

Grandparents and Grand Kids

Grandparents come in all shapes and sizes some with money and some without money. They all have many strengths and weaknesses and we have found that what is important to little children is much different to children as they become older. In fact we noticed that with our grandchild it really does not matter just how rich a grandparent is.

In fact what matters is the amount of attention that you pay to them and how you treat them that really counts. You can give all of the gifts you want and pay for lots of things, but what it really comes down to is the quality time you spend with your kids and grand kids.

We think that whether you are poor grandparents or rich grandparents it really does not matter. It is the amount of quality time that you spend with them that counts. Even little children can tell when you are not paying attention or just tolerating them. When they see that you genuinely like spending time with them and love them, it really does not matter how much many things you give them. They know that you care and will gravitate towards you any time that you are around. This is what’s so great about being a grandparent, regardless of whether you are rich or not.

The other thing to remember is that it is not always a competition. In fact it should not be a competition at all between grandparents. Spoiling the child with all kinds of gifts is not going to teach them other than you can be counted on for expensive gifts. Would you rather be counted on to be at their hockey games, their sports activities or their plays or whatever things that they are in?  They will naturally gravitate to you and be more comfortable being around you. You will have more time to bond with them and they will appreciate this and just be comfortable around you.

Kids are not stupid. They quickly pick up on who gives them gifts and who spends time with them and who is there when something is needed by them. Whether it is a ride to the store, an ice cream cone or just a phone call, the kids know the difference between someone who is there for them vs. someone who showers them with gifts and then leaves.

Our bottom line is do not worry about the rich grandparents, focus more on being there for your kids and making sure they have time to get to know you and bond with you. Babysit, go to their games and be involved in their lives is the best way to show that you care. There is a fine line though, were you must not try to replace your kids roles as parents. Let them fill the parent role and you fill the grand parent role and everything will be fine.

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Identity Theft – Bank Fraud

February 21st, 2012 ernie Posted in General 1 Comment »

Identity Theft - Bank FraudWe recently opened a bank account at a Wells Fargo branch on Palm Springs. This account was to be used as a winter vacation account for us to place money in for our vacation. It was to be used to pay for condo deposits on places that we rent from time to time in the area. We were told that there would be no fee’s as long as we made a transfer of at least $75 from the checking account to the savings account. We did not expect to be the victims of identity theft. We really only needed the checking account but also had to open the savings account in order to do this transfer and get the no fee account.

We ended up closing these accounts for two major reasons, both were quite frustrating on their  own.

  • First there was a fraudulent withdrawal from our savings account in my wife’s name
  • Secondly the bank changed it’s mind and decided to charge a $15 per month bank fee.

Identity Theft – Bank Fraud

Someone opened an account in New Jersey in my wife’s name with our address and then took $300 out of our account and deposited into this new account. She or he then withdrew $100 from this new account. Imagine our surprise when we started getting statements for this New Jersey account ! Same last name, first name and initials with our address!

The bank was good in that it immediately reviewed the case and deposited the funds back into our account in Palm Springs, however it took them about 3 months to investigate and determine what was going on with the other account. We continued to receive statements for this account and saw the activity on the New Jersey account.

They claim that a bank employee opening an account in New Jersey for a customer in New Jersey with the same name as my wife, accidentally clicked on the wrong person when they opened an account. Now this could have happened, however it still does not explain the removal of $300 from our account in Palm Springs.  Something pretty fishy is going on, but we will never know the real answer.

Bank Account Fee’s

There has been a lot of news recently about bank account fees, the high costs and the increases. Bank of America has really received a lot of press. Well Wells Fargo should have also got some of this bad press too.

We went from having a checking account with no fee’s to an account that they were going to charge $10 or $15 a month for just having the account. We keep a small amount in the account until we need to make a deposit so that we can pay for a rental fee on one of our vacation trips. This was not going to work and the bank person we spoke with was apologetic and tried to convince us to keep the account. We decided to close the account just because of these fee’s.

Actually we are happy that we no longer have these accounts. It is just one less thing to be concerned about. How can they suddenly start charging such a large fee ? If it were $5 or less, then maybe we would go for it. But at a price of $15 per month, there is no chance. Now they did say that if we kept a minimum balance of $7500 in the account they would waive the fee’s but who is going to do that today. You get so little interest for your money no one can afford to have that kind of money sitting there earning no interest.

We talked to a store clerk one day about this and he said that he does not even have a bank account. He uses a check cashing service and carries cash around with him all of the time. Check cashing is expensive as well. This is not something that we are prepared to do.

This is our story about banks and the fee’s. If you have something similar let us know by leaving a comment or two.

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Loans, Mortgages and Credit Ratings

August 21st, 2011 ernie Posted in General 1 Comment »

Mortgages and Credit RatingsI have been writing a lot of material for a customer of mine about loans, mortgages, interest rates, and the impact that credit ratings have on what people pay of these financial items and whether they can even get a loan due to their credit rating. Mortgages and credit ratings play a huge part in everyone’s life, so why not write about this subject. It is time to write a general post about all of these issues here on my  blog since it has such a huge impact on our personal life, our quality of life and even our jobs.

If it was not for the economic downturn that took place in 2008, we all would be writing about something else, because presumably life would be rosy, right. We think the answer is wrong, since it really comes down to personal accountability and whether you can pay your monthly bills or not, whether you can borrow money for a new car or a home or just put food on the table.

Mortgages and Credit Ratings – bottom line is the following:

  • You are going to pay higher interest rates if you have a bad credit ratingMortgages and Credit Ratings
  • You are going to have a bad credit rating if you do not pay your bills on time all of the time.
  • If you carry a balance on your credit card you are going to pay huge interest charges each and every month
  • If you spend more than you earn, you are going into debt and if you do not repay this debt, your credit rating will fall
  • If not managed , it can be a downward financial spiral that does not end until bankruptcy

Sounds pretty bad and even negative, however if you pay attention to these details and manage your money properly with some discipline you just may find the following occurs:

  • Your credit rating is high
  • You can borrow money with loans and mortgages easily
  • You enjoy some of the most competitive interest rates on these loans and mortgages
  • You have money for some of the things you wish to buy
  • Your life style is enjoyable and you do not worry about money

Financial Recommendations Everywhere

There are literally thousands of articles out there on the net talking about this subject in various forms. This simple post summarizes it all and boils it down to a few simple lines which if followed will vastly improve your life style over Mortgages and Credit Ratingstime.

Too many people , especially the young want to have everything now. When kids get married today, they have the house, the car, the fancy clothes and the furniture to go with it. They also have a huge debt to go with all of that it is pretty tough for them because they are living paycheck to pay check. A friend of mind said a few days ago, there are many people in our neighborhood that are “two pay checks away from bankruptcy”. Scary but so true. If you lose your job you lose your home, your car and much more.

Financial Discipline

When we grew up we had to do without until we could afford it. As we saved and made enough money, then we began to add the homes , the furniture and the cars along with the fancy trips.  If only the people in Canada and the US had followed this approach, perhaps the entire depression which started in 2008 would not have happened or at least have not been as bad as it was!

Comments welcome!

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The Finance Blogger

July 26th, 2011 ernie Posted in General 1 Comment »

Finance BloggerThe Finance Blogger – This is our first post on the finance blogger web site and we thought we would spend this post talking about why we started this site. Basically we  just are retired and trying to figure out what we should do with the rest of our life. We are financially secure, however there are a lot of decisions to make over the next few years which will have a huge impact on the quality of life that we have during our retirement years. We felt that it would be helpful to people like us to discuss these issues in a blog like this one.

First of all let me tell you that we like to travel and spend our winters somewhere warm, we like to have a nice car and we really enjoy our backyard. Our needs are pretty basic, and we have enough money to do what we want, but there are some things we have to prioritize. Like most people, there are more expenses associated with our lives than what we think we can handle unless we are really careful.

There is always more that you want to do and never enough money for all of those activities that you want to try. We thought that blogging about it would help us get through the process of deciding what to do and would help other people at the same time.

Retirement Planning Issues

Here are some of the issues we are facing, which we will talk about in subsequent posts.

  • Replace our 2 year old car in 2 or 3 years
  • Home maintenance :
    • Windows
    • Roof
    • Driveway replacement
    • Fence replacement
    • Pool liner replacement
    • Furnace upgrade
    • Furniture upgrade
  • Still have a mortgage
  • Still have loans
  • Should we down size
  • Should we move to a condo
  • Should we move to a bungalow
  • Should we make a life style decision i.e. move away
  • Should we purchase a vacation home
  • How should we invest our retirement money
    • Blue chip dividend stocks, what stocks
    • Blue chip mutual funds, what mutual funds
    • AAA rated bonds, what bonds
    • Aggressive growth stocks and funds
  • Should I continue working
    • Full time
    • Contract
    • Part time
  • What will I do with my time
  • What about the grand kids
  • How much time should we spend with them
  • Should I spend all my money or save for old age
  • When should we transfer the house to the kids

With all of these questions and others we probably have not even thought of, it is almost easier to just do nothing and I suspect that this is what a lot of people actually do. It is just too difficult to resolve all of these issues or make decisions, so why not just leave it the way it is. These are some of the things we will try to talk about over the next months and years as we continue with our blog.

Many Consumers Like Us

We know that there are millions of seniors out there that are in the same situation as us and trying to resolve what they want to do. One friend of ours who is well off and really does not have to worry about money at all, wonders if he has enough money for retirement and is bored silly. He made the comment that he gets up in the morning, has a coffee, reads the paper and then watches the grass grow! What a way to retire!

Although this is not really a financial issue, we will include these sorts of issues as well since they affect the quality of life during retirement and ultimately how much money we will need during retirement. If you are bored, you will probably need to have more money because you are going to spend it! It may be a golf membership or it may be travel.

Anyway this is the end of our first post and we are looking forward to writing several posts a month, so bookmark us or follow us on Google reader so you do not miss our posts.

Your comments are welcome both on what we are writing as well as on topics that we have not addressed.

 

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Dividing up Group Restaurant Bills

July 7th, 2011 ernie Posted in General No Comments »

Dividing up Group Restaurant BillsHave you ever been in this position? A group of you go to the restaurant to have a nice meal and the restaurant does not want to give you individual bills? This has happened to us on several occasions and it really bugs me when this happens. There are so many issues with this situation and invariably someone leaves being upset, because the bill does not get divided up properly. Dividing up group restaurant bills can be contentious.

We have encountered this situation several times, once in a foreign country and another in the US, with different outcomes and both had situations were people who are supposed friend got taken advantage of.

Dividing up Group Restaurant Bills

Here is a list of some of the issues and why you might want to avoid them if you can:

  • Restaurant wants to charge a 15% to 20% tip automatically regardless of service. We have seen this happened and often the service is not even good. In fact it can be down right bad if a server or waitress gets flustered.
  • Some people order expensive meals , while others order expensive meals. Some want to split the meal equally while others want the exact split. Problems all around calculating the tip, the amount, the tax etc
  • Some people do not leave enough to cover their share either because they are cheap or because they just made a mistake. There can be a lot of frustration in this situation on both sides.
  • If there is a dispute with the restaurant or between patrons, how do you resolve it and who goes away upset. You can be sure that the restaurant will get what they feel they deserve, otherwise they just call the police.

Examples of Bad situations in Dividing up Restaurant Meals

This example was a combination of a bad waitress and some unethical people. The waitress only kept a tally of what everyone ordered, so for example if our group ordered 5 salads she recorded 5 salads and no who ordered them. The same approach was used for all of the other items as well.

When it came time to pay, we told the waitress what we had ordered, she tick the number off and the person paid their share. Well when the last person came a long there were items ordered but not ticked off which they had not had. The waitress and the restaurant wanted to be paid or they were calling the police. Of course the members of our group had all scattered and it was left up to the last person to pay up.

Moral of the story is never let yourself get into this situation in the first place and never be the last one to pay.

A second example happened to us recently. There was a group of 11 of us, each person ordering something different with no clear decision on how we were going to pay at the end. i.e. divide equally or figure out what each owed at the end. One guy even said to me we will likely divide equally so don’t go cheap, implying that we would not get our money’s worth.

We ended up figuring out what each person owed, however some people left early without seeing the bill and not knowing what the tax was and the tip was. This is a situation were the tip was automatic at 18% , not 10% or 15%. the service we received as not worth 10%, but who is going to argue when you are part of a large group? So did the people who left early leave enough? No one really knows.

We ended up being $20 short so two couples just through in $10 each with a look of frustration on their faces.

Why does this happen so often?

How to Avoid these Uncomfortable Situations

We think it is easy to avoid, it just takes a bit of planning, organization and negotiation.

Organization – it is hard to organize a group, but someone needs to ask before you get into the restaurant, how everyone intends to pay for their meal.  Split equally or calculate individually.

Planning – Bring a pen to use to do the calculations, ask for the bill before anyone leaves, make sure you have everyone’s money before they leave and a clear description of what everyone ordered.

Negotiation – If you are concerned about the tip, the auto inclusion of the tip, negotiate with the restaurant ahead of time for individual bills, or a fixed % for the tip. If you are a group of 10 or more the restaurant does not want to turn away potentially a large income from a group like that so they will negotiate and they will make sure they give you good service. It takes someone to lead the group and do the negotiation.

If you have comments on our post, please feel free to add them. If you have had this experience or something similar , leave a comment for our readers to learn from.

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Online Internet Content Types

June 7th, 2011 ernie Posted in General 1 Comment »

Online Internet Content TypesThere is so much junk content available that it is tough sometimes to really know what is real and what is not real when you are looking at a page. We thought about this and decided to write a short blog about all of the different types of content just for fun. It is our opinion only and you may  not agree with it or you may feel that we missed some different types.

There is no order of importance or priority other than the supposed real stuff or non fiction is at the top and junk is at the bottom. Other than that there is no real order to this material. We have grouped a lot of stuff into major categories, so let us know if we have missed a few or have lumped some together that should not be. Comments that are constructive are always welcome.

Online Internet Content Types:

  • Private sites- Government, corporate, scientific
  • Public sites – Government, corporate etc for dealing with the public
  • Information sites with real information
  • News information sites
  • Entertainment sites
  • Social networking sites
  • Personal information sites
  • Propaganda sites runs by various organizations and government
  • Content farms with some real content
  • Content farms with no real content
  • Porn sites, sex sites,
  • Junk sites
  • Domain name reservation sites

While this list may not be complete, it represents the vast sphere of information that you can fine online. There is a dangerous trend among the content generation business. This is the generation of content for the sole reason of attracting readers to click on advertisements. Some of this content is good stuff, but most is not in that they provide no value to the reader other than perhaps taking them to an advertisement that would give you some value.

Our Blog

This site you are reading is an example of a site that attempts to provide real content that can be useful to the reader, however this site depends on ad revenue to survive. In this case it is much like the news magazines or the self help magazines of the older days that sold their copies for a small price, but really depended on the advertising revenue to exist. Same situation here, except that this site is free to the user to read and browse, even leave comments.

Competitive

The internet if nothing else is extremely competitive and an example of market forces at work. If you do not have good content over the long run, you will not do well and you must compete with a legion of people all over the world who are also generating great content as well as terrible content.

Leveling Factor

Google, Yahoo,Bing and other search engines are the levelers in the market. They are working hard to deliver real results when you do a search using their engines. No one wants to be delivered junk search results. The search engines are getting better a filtering the good stuff from the bad stuff and over time I think that real good content will win out over bad content that is not only poorly written, but does not contain any real value to the customer.

We also find that the search engines are updating their algorithm on a regular basis which will change the search results. Like all experiments, sometimes it is for the better and sometimes not. This is why our blog is hard to find right now. We hope the next search engine release will do a better job.

Lets hope this is true. If you have comments on these ideas or would like to see others discussed, please leave us a comment and well will be glad to add to them our blog.

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Wisconsin Balancing Their Budget

February 21st, 2011 ernie Posted in General 2 Comments »

Wisconsin Balancing Their BudgetWe decided to write about this subject on our blog. Since it is likely to impact all of us sooner or later. Many of the states are in a severe budget crisis, including the state of Wisconsin.  Wisconsin Balancing Their Budget hit the news recently. Now we are certainly not experts in this field. However if the governor of Wisconsin is telling us he has a significant shortfall between the money coming in and the money going out, then it is time to sit up and listen. There have been many posts recently talking about other states as well that have the same problem, especially California  who it has been said is broke.

Wisconsin Balancing Their Budget – What are the Solutions

The solutions are pretty simple, although very difficult to implement as seen by the current news items covering Wisconsin. What are the solutions?

  • Borrow more money
  • Cut expenses
  • Increase taxes
  • Do all of the above!

Only the US government can print money, the states are not allowed to print money of any kind, so their options are more limited than the US government.

The solutions above are no different than they would be for your personal situation if you were faced with not enough money to pay your bills. It has to come from somewhere. Let’s take a look at each and see what the pitfalls are.

Borrow More Money

The state is no different than you or I. If you borrow money, you have to pay it back sometime and you must pay interest on the money your borrow. Borrowing money just increases your problem and really over the long term can make the situation much worse. At some point the state will not be able to borrow any more since lenders may consider them a bad risk. Same as you or I trying to borrow money from a bank. If you cannot show that you will be able to repay the loan, they will stop lending to you.

Cut Expenses

Right now, Wisconsin is in the news because this is exactly what they are trying to do. Unfortunately the unions are viewing this as an attack on them along with their members, because they will have to give up some of the gains they have received in past years. Roll backs in wage increases, benefits removed etc are all on the table. Obviously they are upset, but then the people in the private sector do not have a lot of sympathy. This is exactly what they went through in the past two years with lost jobs and salary cuts.

Wage decreases, layoffs  and new hire reductions are probably on the way for many state employees in the state of Wisconsin!

Increase Taxes

Taxes are going to go up! Not just state taxes, but every area were the state collects money from residents. Traffic tickets and fines, tourism taxes, income taxes, property taxes, downloading to municipalities, entry fees to state parks and on and on.

We have seen this in other countries, notably Canada, and it will come to this in the state of Wisconsin as well. The state simply must generate more funds to use to pay its bills.

The Reality

The reality is that the State of Wisconsin and likely most if not all of the other states will have to do the same thing. California recently has already doubled traffic ticket fines and there is a lot more to come.

The big question is whether they can cut expenses enough, raise taxes and borrow enough money to see them threw this current crisis? It does not help when government employees are demonstrating, however if these steps are not taken, they are going to lose their jobs in a big way, because the state will have no alternative, but to lay them off and then services to the general population are going to suffer big time.

We are going to write more about this subject, however if you have comments about this subject, feel free to leave your comments. Please keep them constructive and too the point.

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Office Etiquette

October 25th, 2010 ernie Posted in General 1 Comment »

Office EtiquetteOffice relationship issues occur every day and sometimes it is caused  by poor office etiquette issues. This is a subject that I expect many people will be able to identify with. Almost all of us should be able to say they have experienced some sort of Office Etiquette infraction over their careers and have wondered what to do about it.

Office etiquette can be simply at the nuisance level or it can develop into a full blown war between two people, causing broken friendships and even legal consequences. The most important thing to remember is that none of us want to see something escalate beyond our control and we certainly do not want to see someone get hurt, yet it happens every day.

Nuisance Office Etiquette Issues

These situations can be classed as nuisance items simply because they really don’t get people upset, however they do waste time and they do bother people. With most cubicle type offices these days it is impossible to not overhear your neighbor discussing his or her job, or even their personal life. It goes without saying that most of us just tune it all out and focus on the work we are supposed to be doing.

Sometimes however it just gets too juicy to ignore, or they get excited and raise their voices bringing the entire office into the discussion. A polite wave or tap on a desk wall usually does the trick if you are on good terms to begin with.

Then there is the office bore, who thinks the world revolves around him or her and want the entire office to be in on their conversations. I recently experienced a situation were a supervisor would yell over the baffle at one of his people to join him at his desk or ask him a question. Of course the entire office is involved and your work is disrupted as well. Our offices were very close and the only way to have a private conversation is to find a conference room. No one was willing to do anything because he was the boss and they were worried about repercussions of saying anything.

Cell phone Office Etiquette – Non Existent

Everyone has also experienced this as well. In the office, on the bus, in a restaurant and just about everywhere. I think the worst was in a bathroom one day at work. You know I am sitting there doing my business and someone comes into the next stall and proceeds to ream someone out over the phone in a loud voice. I guess he thought it was private!

Office Etiquette When it Gets Personal

All of the above are truly nuisance issues until it gets personal. You can put up with a noisy office or someone talking on their phone too loud, however when the office bully gets going and begins throwing their weight around, then it gets to be more than nuisance.

Talking to your boss may help, confronting the person may help and ganging up on the person may help as well, however even the office bully has feelings.  The point is that you really need to step above the situation, be the bigger person and manage the situation so that it does not get out of hand. It is just to easy to escalate into a shouting match with the inevitable outcome that someone loses their job or their pride.

We have al heard about situations were people come back to the office and shoot a few people. This is the absolute worst situation and no one wants to ever see this happen. We all have a breaking point and one needs to take care not to push colleagues and friends over the this breaking point.

How to Handle Office Etiquette Issues

There is no one solution that will fit all cases. However for most people, good quality communication is the often the best solution for everyone. Try to avoid confrontations were you put someone on the defensive. A constructive environment often helps make a tense situation more palatable for everyone. Keep it professional and make sure that you do not paint the person into a corner.

Easy to say, hard to do when you are applying these guidelines in real situations. Never the less, if you can create a win – win situation for all parties, then you will have improved the office and all parties will be better for it. So instead of letting the anger build, and then explode, take some time to figure out the best approach to dealing with your situation and then chose the optimum time to implement it.

We would really like to hear from folks who have had to deal with these types of situations. Your comments are welcome, however Spam comments will be deleted. Many people will have solutions that work for them and we would like to hear about these solutions.

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Setting up a Small Business

September 21st, 2010 ernie Posted in General No Comments »

Setting up a Small BusinessSetting up a small business is an extremely challenging thing to do and most people have to work with limited budgets as well as limited help from friends and family. So how do they do it and become successful? The frank answer is that like the lottery there are many winners, but there are also many businesses that fail as well. Some make it because they have the right product at the right time and are very focused on their business. Others do all of these things, yet they fail because cash flow got the better of them in a down market. Cash is king. As long as there is enough cash around, most businesses will survive.

Setting up a Small Business

The following list are areas to pay attention to, however they need to be customized for your personal situation and business that you are in the process of setting up.  There are many more, however these are some of the main issues you need to consider. Above all use common sense and consider every decision carefully prior to proceeding with your small business.

  • Cash is king and never forget this. If you do not have cash you cannot pay your employees and your suppliers. They in addition to the banks will shut you down before you know what happened to you.
  • Hard work is all important along with long hours. You are going to have to put everything into your business in order to make it a success. Combine this with smarts. Working hard without doing it intelligently is just not going to cut it.
  • Surround yourself with excellent people who can make a major contribution to your success. You will have to reward them as you become successful in order to keep them motivated, but then if you are making money why not.
  • Don’t be afraid to fire people who are just not working out for what ever reason even if it is a family member. Sometimes family members are a great source of free labor while you are getting started, however they will need to be treated like employees with salary etc over the long hall if you are going to be successful
  • Incorporating and making sure all your legal documents are in place is also important. A good lawyer and bank manager will help you set this up. You will be able to protect your personal assets from any legal issue that may arise.
  • Although we really should have mentioned this at the beginning, it is never too late to focus on the customer. Providing superior customer service is an absolute must and if word gets around about your great service it is actually better than any possible advertising. The reverse is also true if your service is not up to par. Remember the comment about getting good employees! They must embrace the same notion about providing excellent customer service at all times.
  • Hire professionals for the areas that are not core to your business success. For example, you need to pay your employees, pay your taxes and complete your annual tax filing. Doing it yourself may save you the fee’s but it will take a lot of time and you may not even get it right, leaving thousands of dollars on the table for the taxman. Hire an accountant to do this work for you and focus on making your business successful.
  • Next to excellent service to your customers is excellent quality products for your customers. If you do not provide products that are of great value, reliable and meet your customers needs, your going to have a tough time. It does not matter whether it is cars or widgets, they must exceed your customers expectations!

These are just a few of the basics and you might wonder why this post is on a legal type of site. Lawyers are part of making your business successful and we felt that all of these other ideas might just help you as well to make your small business a success.

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