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Rethinking Retirement

21 Mar

Retirement to most people today means the end of working a job and living off of portfolio income (401k), a pension and social security. This concept, which is fairly new, is already obsolete. To understand this let’s examine its origins and progression.

Traditionally, in early America (from its founding until the mid 1880’s), when a family member was too old or physically unable to work, the other members of the extended family took care of him. However, four important demographic changes happened in America beginning in the mid-1880s that rendered the traditional systems of economic security obsolete: The Industrial Revolution, rapid urbanization, the disappearance of the extended family and a marked increase in life expectancy.

The Industrial Revolution transformed the majority of working people from self-employed agricultural workers into wage earners working for large industrial corporations. This meant mass migrations to urban centers where the work was to be found. In the crowded urban environments, family sizes were forced to get smaller. The cost of housing, clothing and feeding an extended family (grandparents, parents and children) was undoable in the new economy. This fostered the creation of the “nuclear family” (parents and children only) which most of us are accustomed to seeing today.

The final significant change happened in the early decades of the 20th century. Better health care, sanitation, and the development of public health programs, led Americans to live significantly longer. Between 1900 and 1930, average life spans increased by 10 years. This was the most rapid increase in life spans in recorded human history.

The net result of these historical demographic and social changes was that the traditional strategies for the providing for those no longer able to work quickly dissolved.

The decade of the 1930s found America facing the worst economic crisis in its modern history. Millions of people were unemployed, and the majority of the elderly lived in dependency. The traditional sources of economic security: assets, labor, family, and charity had all failed. Radical calls for action were being made by the public. President Franklin Roosevelt responded by signing into law The Social Security Act on August 14, 1935 to pay retired workers age 65 or older a continuing income after retirement.

Fast forward to today… Four major demographic changes have made that system obsolete as we emerge from the second worst economic crisis in US history. Change from the Industrial Age to the new Innovation Age, globalization, further dissolving of the nuclear family, and another marked increase in life expectancy.

The loss of manufacturing jobs, the increase of exportation of jobs, and importation of goods from the global economy has changed the face of the job market forever. Companies no longer promise work until retirement and a pension plan for your twilight years. Nuclear families have gotten even smaller and young people are more detached from their parents as this society celebrates individuality and independence over cooperative living. Finally, as medical technology improves, people are now outliving the age for which social security, their pensions and portfolios were designed to last.

The solution… the whole concept of retirement should be reevaluated. You only retire from a job (earned income) – especially a job you don’t enjoy. There is no retirement from passive income sources. With passive income sources that pay dividends (real estate, securities and business ownership), you work hard to acquire the asset and then it continues to pay you continuously until the market changes and it can no longer provide positive cash flow. You don’t retire; you simply shift your resources into a new cash producing asset.

The Popcorn Effect

18 Mar

I often get asked by people that are new in business how to remain profitable in a down economy. To answer that question, let’s take a lesson from the Great Depression. Prior to the Great Depression movie theatres were luxurious buildings with grand, elegantly designed lobbies that rivaled the fanciest opera houses. What people do not know today is that the richly designed lobbies did not include concession stands.

What changed? The decade of the 1930s drove most Americans into dire financial straits.  People could no longer afford the relatively high price of a theatre ticket and movie houses were closing in droves. Some innovative theatre owners discovered that if they lowered the price of admission and sold an inexpensive snack, more people would come.

What was the solution? Popcorn! Popcorn is very inexpensive to make. The popcorn that you pay $5.00 for costs the theatre only 50 cents to make. The popcorn is served in an overstuffed bag or gigantic bucket to make the perceived value greater than it actually is. They also discovered that the more salt that you add to the popcorn, the larger the drink people will buy. To this day, far more money is made at the concession stand than on admission tickets (billions of dollars).

To thrive in business in today’s economy, you have to find your popcorn. You don’t have to try to create a totally new industry. You have to find a way to extract maximum profits from a market that people already have an affinity for. You have to find ways to overcome the financial barriers that would prevent people from buying, draw them in with perceived value, and make them feel comfortable with upsells, cross sells and side sells. They have to feel happy spending more money on your popcorn than the cost of admission. 

Use Craigslist to Build Business

4 Aug

Ask an Expert: Craigslist can build business

By Steve Strauss, for USA TODAY

Q: Would you know of any cheap and easy ways to get more business? My tried-and-true strategy seems to have hit a dead end and I cannot afford to spend much time or money figuring out something new. — Peter

Ask an Expert

By Steve Strauss

  • Zay Lopez, left, answered a Craigslist ad in Grand Junction, Colo., and within an hour of meeting Bob Beasley, sold him his tractor and was offered and took a job to farm 3 acres for Beasley.

    Christopher Tomlinson, AP

    Zay Lopez, left, answered a Craigslist ad in Grand Junction, Colo., and within an hour of meeting Bob Beasley, sold him his tractor and was offered and took a job to farm 3 acres for Beasley.

Christopher Tomlinson, AP

Zay Lopez, left, answered a Craigslist ad in Grand Junction, Colo., and within an hour of meeting Bob Beasley, sold him his tractor and was offered and took a job to farm 3 acres for Beasley.

Sponsored Links

A: I do, and let me share a little story first by way of background: In 1995, Craig Newmark created an email distribution list in order to share local goings-on in the San Francisco Bay Area. It proved popular, and before long, Craig found that people liked to use the distribution list for things other than social event posting, specifically, they would use it to post job listings. No dummy he, Craig soon added the category “jobs” to his email list. Soon thereafter, Craig decided to take his popular list to the nascent Web.

Craigslist was born.

By the year 2000, the site had grown so rapidly that Craig had a team of employees working on it with him and today, according to the web site, “Craigslist is responsible for getting an amazing 20 billion page views each month. That is good enough to crack the top 25 (sites) worldwide and the top 10 in the United States.”

So I have one word for you if you want a cheap, easy, and effective way to build your business: Craigslist.

There are many ways the site can be of use to you, but here are a few of the main ones:

Sell: I have a pal who recently started a mobile notary business. He gets all of his business by listing his service every three days on Craigslist. That’s it. (Tip: Because there are so many ads on Craigslist, redoing your ad with some regularity keeps it near the top of the listings.)

Think about it: Who reads the classifieds? Right, people looking to buy stuff right now. So list your service or products and get in front of that valuable audience.

Get Gigs: There is a small category listing, almost easy to miss, under the major “Jobs” listing, called Gigs. Gigs list people looking for help in a variety of categories: Labor, talent, creative, writing, computers, etc. By scouring this listing regularly, you can find work. (Note: Gigs listings are free to post, so it may take a bit of work separating the wheat from the chaff in this area.)

Respond to proposals: When I was looking for a Web developer to develop a new site for my business, the first thing I did was place a Craigslist ad in the Jobs section under the Web/Info Design category. I received a slew of qualified developers wanting my business. When I needed an assistant, my first stop was a Craigslist ad (Note: four years later, I am still working with my incredibly talented Craigslist find, Vivian.)

So if you need work, if you want to find proposals to respond to, if you need business, then the first place you should look everyday is the appropriate Craigslist listing.

By the way, that word “appropriate” is critical. You may think that the right category listing to find work for what you do is, say, Marketing and PR. But it may also be that your gig is waiting for you under Administrative, or Media, or TV and Film. Be expansive in your search.

Get Help: By the same token, finding qualified people to help you complete your projects and thereby help your business grow is easily done via Craigslist. Yes, a job listing cost $25, but that is a bargain compared to the many qualified applicants you will encounter as a result. Also, because t does cost to post here, the posts tend to be legitimate.

Search: The Craigslist search function is robust, and one benefit of it is that you can turn any Craigslist search into an RSS feed by clicking the orange RSS button on the bottom right of your search result. Another option is to use your mobile to keep up with your search. Apps such as Craigslist Mobile and Craigsnotifica give you instant updates.

Today’s Tip: Doing what I do, the nature of the beast is that a lot of books about starting a business come across my desk. But recently, one came in that stood out above the rest. “Heart, Smarts, Guts, and Luck,” by Anthony Tjan, Richard Harrington, and Tsun-Yan Hsieh, gives you what you really need to succeed in business: Entrepreneurship tests, real world stories, workable strategies, and lots more. Maybe the subtitle of this excellent book says it best: “What it takes to be an entrepreneur and build a great business.” Check it out.

Ask an Expert appears Mondays. E-mail Steven D. Strauss at: index of his columns is here. Strauss is a lawyer, writer and speaker specializing in small business and entrepreneurship. The latest of his 17 books isThe Small Business Bible, now in its third edition, and he does a weekly podcast, “Small Business Success Powered by Greatland.” Website:; also on Facebook. Follow him: Twitter@stevestrauss.

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Consumers Cutting Back? Are You Kidding?

8 May

By Peter Coy on May 07, 2012

Corrects Thornberg’s first name in 3rd paragraph.

Conventional wisdom says the economy is weak because consumers, constrained by excessive debt, are cutting back. That is wrong on two counts. I have a chart for each.

As the first chart shows, Americans aren’t cutting back a whole lot. Personal consumption as a share of gross domestic product is floating along at the highest it has been since at least 1948, at 71.1 percent. For comparison, it was way down at 62 percent as recently as the early 1980s.

This inconvenient truth—inconvenient for the “Americans are retrenching” camp, anyway—was pointed out to me by Christopher Thornberg, the founding partner of Los Angeles-based Beacon Economics. He and I were guests on KQED’s Forum radio program on May 4, along with Laura Tyson, the University of California-Berkeley Haas School of Business professor who was President Bill Clinton’s chief economic adviser. Here’s a link to the Forum podcast.

Personal consumption includes spending on imports, by the way, so some of the dollars leak overseas. It also includes almost all health-care spending, about half of which is under the control of the government, as my ex-boss, former BusinessWeek Chief Economist Michael Mandel, always likes to say.

It’s not that consumers are on a shopping spree. It’s that the other sectors are even weaker. Investment is sluggish because businesses are pessimistic about growth; direct government spending (not including transfer payments such as Social Security) is lagging because state and local governments are cutting back; and net exports are negative (i.e., we’re running a trade deficit, albeit one that has shrunk a bit).

Bottom line: As weak as they are, consumers are the engine of this sluggish recovery.

The second chart shows a key reason consumers are not cutting back: They don’t need to. This shows the Federal Reserve’s measure of financial obligations. It’s defined as the ratio of debt payments and other fixed charges to disposable personal income. The fixed charges include car lease payments, rent, homeowners’ insurance, and property tax payments.

Extremely low interest rates are making Americans’ debt sustainable. The burden will increase when rates start to rise, but presumably that won’t happen until the economy is getting stronger and incomes go up.

Says Thornberg: “There’s this ongoing argument that we’re in a painful period of deleveraging. No, we’re not, because there’s no reason at these interest rates for anyone to have to deleverage.”


3 Simple Rules for Investing

30 Apr

Published on Mar 12, 2012 by InsidersGroup

Heru Ur Nekhet, financial strategist/founder of Insiders Group Inc and author of Recession Driven Riches, answers your financial-based questions with actionable solutions.

Heru Ur Nekhet, CEO of Insiders Group Presents at Historic Event at National Black Theater, Harlem, New York on Sunday, April 29, 2012

25 Apr

Heru Ur Nekhet – Financial Advisor, CEO of Insiders Group, Inc. is a Guest Speaker & Presenter this Sunday, April 29, 2012 at “The Man Heal Thyself Family Day” at the National Black Theater, Harlem, NY.

Heru Ur Nekhet has been a financial leader, teacher and an exemplary example of a family man in the City of Wellness and The Queen Afua Wellness Institute community for over 20 years. He has been invited to this historic event to present and speak. He presents in the first half as one of the Teachers for the Man Heal Thyself Training and as a Financial Specialist in Wellness Entrepreneurship where he will offer his training in newly COW University.

Global Nation of Wellness Presents …

National Black Theater
2031 5th Ave New York, NY

Sunday, April 29, 2012
3:00 PM – 8:00 PM
Doors open at 2:30 PM





NICHOLAS: BROOKLYN 718-858-4400, MANHATTAN 212-289-3628

Latest Video Interview (3/27/12) of Heru Ur Nekhet of Insiders Group

2 Apr

Author and financial strategist Heru Nekhet responds to the latest viewer questions about how to choose the best strategies for real estate in the current economic climate.


See more about Mr. Nekhet at and