Having a fulfilling activity… a reason to get up in the morning… makes your life better… keeps you living healthier, longer… and maybe of economic necessity as well because of doubts on debt.
When I rise in the morning I really look forward to sitting on my front porch and…
working with this view in front of me.
When I get up in the winter I love working out here!
Loving to work or provide some form of service may grow in importance because the global economy has been driven since the early 1900s by the expansion and spending of the USA. Now fiscal numbers no longer make sense. This mathematical imbalance could cause a rewrite of the global social economic contract.
According to Federal Reserve figures, the value of all US assets just before the late 2000 recession was $56.5 trillion. The value of American liabilities, if unfunded Social Security, Medicare, Medicaid are included was $56.4 trillion. $40 trillion of the $56.5 trillion in liabilities is the unfunded future Medicare and Social Security benefits. $34 trillion of it is Medicare alone.
This means with reduced real estate prices, the numbers could show that America… on a balance sheet basis… is broke. In short the Federal government has spent and/or pledged all our wealth.
Of course balance sheets are only pictures frozen in time. They miss important parts of the whole. Plus by the time much of this 40 trillion comes due… we, the American people, will have created more wealth… hopefully a lot of it. Even so, these numbers do suggest that there is a problem.
We can benefit from anticipating how this problem will be worked out.
If the Federal government has 40 trillion short in unfunded obligation… where will it get the money… or how will it sort this shortfall out?
Retirement and health benefits have to be one of the huge targets. This shortfall is an entitlements nightmare… the type of difficulty that is creating riots in Greece right now and that difficulty threatens the stability of the Euro and Europe’s unity. The US reckoning could threaten America’s stability.
If the current entitlement promises are real government debts, they are also real assets for the people who will enjoy them. If they aren’t real for the future recipients, then they aren’t real for the government either.
The country has elected politicians who have spent, borrowed and made promises irresponsibly on their behalf.
Will the debt be paid?
Will the promises of future Social Security and Health Care be kept?
If so, from where can the money come?
There are five typical avenues used to resolve this type of fiscal pinch.
#1: Increased production. Everyone makes more. Everyone earns more. Tax rates remain stable but everyone pays more and solves the problem. Remember in the late 1990s the Federal budget was in surplus! All it takes is a boom… usually driven by some new unexpected technology.
#2: Increased income tax. The US has one of the lowest real tax rates of any industrialized country… so taxes can rise via increased income rates or reduced loopholes. Everyone will moan and gripe… but this is likely… and could also solve a lot of this economic dilemma.
#3: Increased estate tax. The average US couple (age 65-74) has accumulated a net worth (not counting entitlement promises as either assets or liabilities) of over $500,000. Normally when these retirees die this wealth would pass to their children and grandchildren. But much of this wealth has been gained because these people received money from Social Security and Medicare.
The government might take the attitude, “If Medicare and Social Security are supposed to be insurance against the perils of old age: poverty and illness and not supposed gifts or subsidies to the children of retirees (who will receive money not spent on retirement and medical care) society, having kept its promise should get at least part of that money back.” this would come in the form of increased estate tax.
#4: Reinterpret the promise. The letter below sent by two US Senators gives an example of one way this happens via… recoding. A lot of coding is above my pay grade but bottom line recoding means a reinterpretation of procedures or work that means less pay for the same work.
#5: Renegotiate the promise. Expect reduced benefits… later retirement dates, etc.
#6: Default. A horrible option for everyone at this time.
#7: Deflate the benefits through inflation. The unfunded promises have been made in US dollars are may be kept in dollars but due to lowered inflation increases real benefits decline.
The risk of inflation especially is one reason why having a way to earn some extra income will become a financial necessity.
If… taxes rise… inflation eats savings and investments earnings. Then we have five options that I have written about often.
#1: Move to less expensive areas within the US. This is why we have our Smalltown USA focus.
#2: Export retirement to lower cost countries. This is why we offer our Ecuador Living service. See Ecuador on TV and two ways to earn in Ecuador here.
#3: Live in near poverty.
Options #3 and #4 are not good options and we have no service for these!
#5: Keep working. This can be a good… fulfilling option if your doubts on debts make you feel that your economic future could be in peril. The ability to provide an elastic (price can rise with inflation) service that you love makes sense wherever you are… right where you live now… or in small town USA or abroad. This is why we offer numerous courses on how to earn extra income doing something you enjoy. We are working here to provide lots of ideas/help so that you can achieve this happily and easily…
See details about our: Online Course on how to have an Internet business
Online course on how to have a self publishing business.
Online course on how to have a seminar tour business.
Here is an excerpt from our latest lesson of “Event – Full Business – How to Profit From a Seminar, Tour and Events Business”. This excerpt outlines why events can create profits but why to be careful if you make them free.
“At that time the US seminars were free. That was a double mistake… triple actually.
Free Event Error #1: People appreciate what they pay for. A fee makes an events worthwhile. Because the delegates who enrolled had not made a financial commitment they were far less likely to show. In fact about half those who enrolled did not show. This left our meeting rooms half empty (bigger rooms cost more empty or not) as it wasted a lot of donuts and coffee (which still had to be paid for)… not to mention the cost for the left offer handouts I was lugging around.
Error #2: Free events put people on guard. Everyone… well almost everyone… knows there is no free lunch. This reduces the effectiveness of an event when delegates have their defenses up. They are waiting for the penny to drop. They are suspicious… as they should be. This reduces their receptiveness and diminishes the effectiveness of the event to complete its purpose.
Error #3: Free seminars do not create revenue unless the sell something that generates revenue. Events can be used to sell. Many are. Most of us have been invited to free lunches… free dinners… and free seminars. We expect a slaes pitch if we go and if the seminar is to sell… the sales pitch has to be good.
The idea I was selling was too new and had too many obstacles to close on the spot. So there was not enough mutual funds sold to cover the costs and make the seminars profitable. There was not enough time in one day to establish the problem… show the solution, gain the delegates trust and close the sale.
Here is the crux of the one day, free USA seminar error and how I made it. The crux was that I was trying to run an idea driven event into a location driven event when I was not in the locale.
Recall back to lesson number two. I started conducting free seminars in Hong Kong… to avoid traffic… in the process of selling mutual funds. The purpose of those Hong Kong events was to present a problem and solution… not to close a sale. I was resident in Hong Kong at the time. The event gave a presentation… but left the sale for a later personal meeting with those who were interested.
In the US events I zoomed around the country giving presentations… showing delegates what to do. Then I left before they had a chance to take action! I lacked a structure for follow up.
After doing this for awhile, I (or my bank manager at least) realized that this packaging was not sustainable. I made two changes. First I began charging $99 for the one day seminar. This would pay for the coffee… donuts… room and part of my travel. Second, I wrote my first book, “Passport to International Profit”.
The plan was to gain some extra income from the book sale and that the book would fortify the problem and solution so delegates would be more likely to buy overseas mutual funds.
Then came the education! That year when doing my accounts, I saw that book sales and seminar fees created greater revenue than mutual fund commissions. I stopped selling funds (the hard part) and began focusing just on education through books, reports, courses and events. I have never looked back.
This was a good shift for several reasons. First not long after this the regulatory agencies around the world all tightened up making it really hard to sell mutual funds from other countries. That would have put me out of the mutual fund business, had I not already quit.
Second the tightening of regulatory agencies as is the norm when governments get involved in business created an extra need for information. This expanded our publishing and events opportunity.
Third, when we had no fund sales agenda… when we were just providing information we became better… taking a broader view and our events delegates became more trusting. This made our events much better and developed a loyal list of delegates who attended our events again and again.
Up to that time I was operating totally as a one man show… marketing… research… arranging my flights… booking the hotel… getting the room set up… presenting the seminar.
Fortunately there were two big benefits that came from those seminars. One is I met Merri who also had publishing and events experience so now we had a team… of two. The second benefit is I met another writer Doug Casey who was involved in conducting some three day international investing seminars (for Americans) in Switzerland.
Remember from above “Packaging involves pulling all seven of these factors together in the the most balanced way with your abilities and desires”.
Having two of us working on packaging and organizing the events helped a lot. The first seminar Merri organized was a one day event at $99. She was able to attract 100 delegates strictly on a location basis (Naples Florida). This fact and added experience I had gained with Doug Casey led us to try some different packaging combinations.
The added experience showed me that three day seminars based around the problems of the falling US dollar could be organized. Doug invited me to speak at several such seminars promoted by the Kephart Communication. They were filled with hundreds of people. This helped me understand that a repackaging could take place if I focused my target market.
Up to that point my marketing had been focused in the Wall Street Journal. I learn that events based around the problem of the falling US dollar were better focused in subscription based specialty newsletters.
Based on this growing knowledge, Merri and I first tried a one week long seminar with a $1,000. This was a modest success… but then we tried a three day seminar at half that price and sales skyrocketed. The gross increased dramatically since the number of delegates more than doubled. Expenses dropped (hotel rooms, coffee etc. for three days cost a lot less than for five).
We settled into a Friday, Saturday, Sunday (finish around 3pm) schedule that has remained our matnstay packaging formula for 30 years. Our prices have risen from $499 to $749 but otherwise this formula has remained pretty much the same.
Here is why this packaging works for us. First most delegates can scoot into and out of our events losing only one day of work. They can travel in Thursday evening and leave Sunday afternoon.
Second we have been able to keep our fees down (for reasons – such as the internet – we’ll review in upcoming lessons).
Third three days gives us a chance to teach a lot… but not so much it overwhelms the delegates.
Part of our packaging includes a fairly easy 9am to 5pm schedule with half hour coffee breaks (10:30 and 3pm) plus a social get together on Saturday night.
This is the Program which is based on “How much time the potential delegates have to solve the problem covered in the event.” We expand our program definition beyond time to include how much ability does the potential delegate have to solve the problem. In these three days we are providing 15 hours of seminar content which we find is as much as a delegate on average can absorb.
There is a great temptation in packaging to cram in more than a delegate can hold… to go from early morning to late at night… and leave the delegate exhausted so they feel like they got their money’s worth.
A busy program can create overload and leave a delegate confused and scattered rather than informed. This is an ideal package for some events… especially exhibitions with dozens or hundreds of exhibitors. The Purpose is to expose the delegates to a maximum number of contacts and a minimal amount of information. The Purpose of many exhibitions is to help exhibitors pass out business cards and make contacts that can be followed up later after the exhibition.
The purpose of our seminars is to give new delegates some global economic background… then share with them ways they can diversify their portfolios and share ideas on how they can earn income globally though their own micro business. If the seminar crams their head with so much information they cannot even store… much less process and incorporate the information… our purpose has failed.
Plus we find that the social periods… the coffee breaks and social evening are valuable valid educational tools. They are enjoyed (fun is a vital part of the educational process) and delegates share their thinking and act as sounding boards for each other.
End of excerpt
Learn more about
Online course on about our online course on how to have a seminar tour business.
Or attend our next International business and investing seminar in North Carolina October 7-8-9, 2011.
Stay on October 10, for training to earn extra income as a Jyske Global Asset Management Agent. See details here.