Thriving in the New Economy

[PurEnergy]

Ok, I'm game.

MJ has stated that this forum is for people who think unlike most people do. I too am tired of the effect that this 911 like situation has had on my mindset. Hopefully most of us have a long time to live and will have to deal with this one way or the other. Personally I am going to try to forget about the past and work toward the future because it's all we have. We will be given a certain set of circumstances to work with and must learn to adapt.

To me learning to adapt to what the future environment may present could be a challenge. We may have to operate without credit...yikes! This could mean paying for expansion with profits only. What a concept huh. Start-ups may have to build their own websites. Real estate investors will have to learn to do no money down deals.

We are a small group of like minded individuals here and should use this forum to our advantage to help each other. This is a unique situation that I guarantee was not available to people during hard economic times in the past. The Internet and forums like this one could make all the difference in the world. This is one of the few forums I read regularly and there is a reason for that. You guys think like I do.

I'm not sure what the point of this post is but what I would like to see is forward thinking. I would like to see 1500+ people coming together to help each other not just get through this but to thrive. We have a choice...we can spend the next ten years following the herd down the path of misery or we can make the best of this and fight our way to a better life. I prefer a good fight. It's much more fun and exciting. Not to mention that this to me is a time to throw caution to the wind. At this point in time, what do you have to lose...lol. This to me is exciting.

If I can offer any advice to anyone getting started it is this. Spend your time wisely. Look before you leap. And be realistic. Whatever it is that you undertake, you should evaluate what the risk vs the reward will be. To me the biggest risk you will take is giving up your time. As far as I know you will only live once. You should look at things as though you have already spent five years doing it. What is the probable outcome? How much money will you likely make? This should help you decide whether or not to proceed.

Everything changed last week. We now live in a new world. If anyone hasn't already told you this, you just heard it. They didn't tell me the race started when I was young and that you had to get started doing something if you ever want to have anything in life. Because of that I told my son years ago that he is in it and should be in it to win it. The sooner you get started the sooner you'll arrive.

So in conclusion of all this babbling...I would like to say good luck to everyone. Hang in there and don't give up. I'm as scared as the next guy. I have a lot riding on this economy that I have no control over. If you have ideas or plans or hear something that you think is important, post it here. At least the people here will listen to you. We are a different group of people. Most people can't even fathom working for themselves. Most people here probably already do. So keep us posted and let's try to stay positive.

Best Wishes,

Leon B.

 

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[Yankees338]

I think this hammers home the point that you want to be a driver, not a passenger. With all of these big corporations failing, many people -- even those with the white-collar jobs -- have seen their lives change drastically. This whole event is a reality check.

Own your own business so that you're in control and you decide its fate. If you're struggling, it should be because of your mistakes, not someone else's.

On a more entrepreneurial note: I'd be lookinig into more recession-proof business at this point. I know there is a thread on this somewhere here, and it may have been started by phlgrl.

Rep+++ for the discussion starter, Pur.

 

[Runum]

A group of us have already been discussing this. ATW put it best...You are going to have to have at least two plans. You have to have your emergency plan in place and then you have your success plan. These words have helped me get my focus back on track. Good luck to all.:cheers:

 

[MrPink]

On a more entrepreneurial note: I'd be lookinig into more recession-proof business at this point. I know there is a thread on this somewhere here, and it may have been started by phlgrl.

Interesting post Yankees338 because my approach has been a little different.

I have been looking for locations that should not be hurt by this situation to a large extent (instead of businesses). For example, if you want to start a surfing business in Hawaii. I would assume if people are traveling to Hawaii then they will have the money to take lessons. I don't think that due to the current situation that the number of travels will be reduced to the extent that you lose large number of customers.

Maybe I am stretching with this hypothetical situation... but hopefully I have made the idea clear.

 

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[MJ DeMarco]

Real estate investing seems like a great place to be: The assets are hard and it serves people who cannot afford to buy homes. That pool of people is likely to skyrocket in the next few years as credit tightens and people begin to downsize.

Being an owner of affordable housing (whether apartments or SFH) would seem like a investment vehicle that will do well in a recession.

 

[Jito]

I have been working on a plan to open a small auto dealership and I had originally planned on operating in the $10,000 - 20,000 range.

However with the change in availability of credit it may make more sense to operate on the "buy here pay here" model which is $5,000 or less cars, financed in house with interest rates that reflect the inherent risk (1/3 default rate).

The point is to service the lower end of the market, and get people into quality used vehicles which many need to get to work etc. I have also been thinking about combining the car sales with a credit repair service. Buy a car, build up credit and get credit counseling.

Maybe I can package up these risky loans in a security and sell them as triple A rated? Only joking! LOL.

 

[PurEnergy]

I just got off the phone with a buddy of mine who lives in California. He said he's noticed a lot of the new car dealerships (he mentioned Nissan in particular) selling a lot of used cars. He said their inventory of new cars is like 20% of their total inventory. I found that to be interesting. I'm on the east coast and I'm wondering if this is what we will be seeing soon.

 

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[MJ DeMarco]

A few dealers around here have gone out of business -- some popular local names that have been around for decades.

 

[Runum]

I just got off the phone with a buddy of mine who lives in California. He said he's noticed a lot of the new car dealerships (he mentioned Nissan in particular) selling a lot of used cars. He said their inventory of new cars is like 20% of their total inventory. I found that to be interesting. I'm on the east coast and I'm wondering if this is what we will be seeing soon.

The local Chevy dealership has about 10 new cars on it and 10 new trucks. This is about a fifth of what they normally have. I figured it was due to the credit freeze. They can't get inventory and couldn't sell it if they could get it.

I would think that auto repair and auto parts stores would benefit because people will be holding on to their older cars longer. Also body shops and detail shops should do well for the same reason.

One other thing, more people will drop their car insurance in bad times. So you will need to check up on your uninsured motorist insurance.

 

[Jito]

Big dealers are hurting, big time. Huge inventories, carrying costs etc. My mother got 5 quotes before buying her new car last weekend. Everyone was willing to sell cars at nearly cost.

 

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[MJ DeMarco]

One other thing, more people will drop their car insurance in bad times. So you will need to check up on your uninsured motorist insurance.

Great advice. Speed++

 

[AroundTheWorld]

I posted this elsewhere, but will post it again here.... (seems like the proactive posts and topics have been scattered amongst several threads)

Think of areas in which there will be a need during difficult economic times. As MJ mentioned - - - - low income housing is a nice place to be, especially if you are not overly leveraged. We just bought a mobile home park.

Also:

* Food. Sources of food. (animals, seeds)
* Shelter (Low Income Shelter)
* People will turn to bartering
* Low cost entertainment / escape items
* Repair Services
* Car Share Services

I know that Russ had some additional thoughts on this list. Food Transportation and distribution, transportation in general (not just car share), etc.

 

[Yankees338]

One other thing, more people will drop their car insurance in bad times. So you will need to check up on your uninsured motorist insurance.

Interesting. I always thought you needed insurance in order to drive. Maybe that's just in Jersey? Or maybe I'm just wrong?

 

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[Yankees338]

Interesting post Yankees338 because my approach has been a little different.

I have been looking for locations that should not be hurt by this situation to a large extent (instead of businesses). For example, if you want to start a surfing business in Hawaii. I would assume if people are traveling to Hawaii then they will have the money to take lessons. I don't think that due to the current situation that the number of travels will be reduced to the extent that you lose large number of customers.

Maybe I am stretching with this hypothetical situation... but hopefully I have made the idea clear.

I think either way could work.

There will always be a market for things like food (basic things like milk, bread, etc...), basic clothes, low-mid level housing, etc., but the demand for more cost-effective alternatives like a tailor, a repair service, etc. should increase.

 

[White8]

I posted this elsewhere, but will post it again here.... (seems like the proactive posts and topics have been scattered amongst several threads)

Think of areas in which there will be a need during difficult economic times. As MJ mentioned - - - - low income housing is a nice place to be, especially if you are not overly leveraged. We just bought a mobile home park.

Also:

* Food. Sources of food. (animals, seeds)
* Shelter (Low Income Shelter)
* People will turn to bartering
* Low cost entertainment / escape items
* Repair Services
* Car Share Services

I know that Russ had some additional thoughts on this list. Food Transportation and distribution, transportation in general (not just car share), etc.

Good Post!

Also, keep in mind that the economy is cyclical and depending on how the new economy shakes out, we may be looking at one of the greatest opportunities to buy bargain properties and businesses in generations.

 

[Runum]

Interesting. I always thought you needed insurance in order to drive. Maybe that's just in Jersey? Or maybe I'm just wrong?

It's the law in Texas as well. So they drive without a license as well. They don't care. My wife was hit in the rear by one just before B&P this year. He promised to pay cash for 3-4 weeks. We finally turned it over to our insurance. Wound up costing us $500 for the deductible. I don't know what they did to him.

 

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[Yankees338]

It's the law in Texas as well. So they drive without a license as well. They don't care. My wife was hit in the rear by one just before B&P this year. He promised to pay cash for 3-4 weeks. We finally turned it over to our insurance. Wound up costing us $500 for the deductible. I don't know what they did to him.

Ah, good point. Guess I haven't been on the road long enough to figure that out.

 

[randallg99]

A few dealers around here have gone out of business -- some popular local names that have been around for decades.

the national trade group for car dealerships were at Capitol Hill during the bailout testimonies/debates complaining that finance companies/ banks were not approving deals even for people who were well qualified..... this was probably one of their final nails in their coffins....

 

[phlgirl]

The idea I can't seem to get out of my head is a small business selling Scooters/Mopeds.

I know absolutely nothing about the industry but with car sales becoming an issue, the 'Green' movement making such a strong surge and a tough economy to boot, I just don't see how it can fail.

A loan is not required to buy a scooter. Some of these scooters start at $999. People could simply pay cash or finance on a credit card, if need be.

I would think the start up costs of such a business would be relatively cheap - a storefront (parking lot) and a few bikes for inventory. In fact, I watched one such business have their 'grand opening', in St. Augustine, just two days ago, in this exact fashion.

I have been hinting at my husband for weeks that I might just park my car and get myself a cute little scooter. We have been looking to buy a business for almost a year and cannot find anything that makes financial sense!! Maybe I need to start a scooter shop back north???

Runum, how is that new scooter treating you?

 

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[CactusWren]

A friend of mine opened a scooter store about 4 years ago. I have not seen her in months she is so busy. Definitely a gold mine!

 

[andviv]

I wonder how the scooters would work in a more "winter-prone" area, like the mid-atlantic...

 

[AroundTheWorld]

Yea... LOL

I told hubby (across the coffee cups) about the scooter idea. He said, "Not in MT!"

 

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[andviv]

Then what if you open a scooter shop, sell chains for the tires, parkas, and Alaskan gloves? Package the whole thing.... oh, and add the training wheels (with their chains as well) so people get less concerned about sliding

 

[phlgirl]

Agreed. Montana would not be the place to own a scooter!

I think it would be a hit in more densely populated areas - not required that is be a major city but pretty sure people don't want to be driving these things on major highways (although some of them certainly provide sufficient power for that type of use).

Of course, I always think of center city Philly. Snow would be an issue a few days a year - but we seem to be getting less and less these days. There are currently a few other scooter/moped dealers but it is also big city. One question I struggle with is where do people park them? Not when you are out and about but when you get home? I would think they would be really easy to steal, if you were to leave them on the street.

 

[Runum]

The idea I can't seem to get out of my head is a small business selling Scooters/Mopeds.

I know absolutely nothing about the industry but with car sales becoming an issue, the 'Green' movement making such a strong surge and a tough economy to boot, I just don't see how it can fail.

A loan is not required to buy a scooter. Some of these scooters start at $999. People could simply pay cash or finance on a credit card, if need be.

I would think the start up costs of such a business would be relatively cheap - a storefront (parking lot) and a few bikes for inventory. In fact, I watched one such business have their 'grand opening', in St. Augustine, just two days ago, in this exact fashion.

I have been hinting at my husband for weeks that I might just park my car and get myself a cute little scooter. We have been looking to buy a business for almost a year and cannot find anything that makes financial sense!! Maybe I need to start a scooter shop back north???

Runum, how is that new scooter treating you?

Mine is running OK. I haven't ridden in a couple of weeks. Hurricane Ike stirred up some nasty pollen and I'm still getting over the effects of that. When I ride right now I can just fell myself getting blasted by the pollen. So that's a downer.

I know that scooter dealers can't keep them in stock but the price of gas is falling. Gotta keep that in mind. Most of the veteran scooterists (?) don't care for the lower end cheap scooters. They are typically imported from China and apparently are not friendly toward maintenance and repair. They are basically sold as a disposal form of transportation. Also, I'm reading that most of the better scooters will last around 10K miles if properly taken care of. I have about 1200 miles on mine. Kinda concerned about only getting 10K miles out of it. I'm not sure is the negative noise I hear about the cheaper scooters is jealousy, prejudice, or facts. I do have a scooter blog that gets RSS feeds from all over. PM me if you want the addy.:cheers:

 

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[JesseO]

I bought a Honda CRF230L when gas prices spiked, and I love it. Living in Phoenix, AZ makes it interesting when it's 100+ degrees and you arrive at work sweaty as can be (I stopped riding when it gets that hot; it's tough to look professional when you're sweating that much). The bike gets around 70-75 MPG and goes as fast as 70 mph. I plan on riding offroad a lot with it this winter. It's amazing the difference between cars and 2-wheeled vehicles...you can see, hear, and smell everything around you, and you notice the subtle changes in temperature from street to street.

 

[phlgirl]

Interesting about the 10k, Runum. That's something to think about... I would have expected more.

St. Augustine is a big tourist location and there are a few companies here who have always rented scooters. More recently, they have picked up in retail sales as well.

Anyway, when people come down to visit, we sometimes rent scooters - it's a great way to see the town, ride over to the beach, etc. The guys who own the rental place stock a few different bikes for retail - but for rentals, it's the Kymco brand, which I think are made in Taiwan. We have rented a few times and I have definitely been on a bike that had over 10k on the speedometer. That said, they do have in-house repair guys - so maybe they swap out parts?

JesseO - I was thinking the same thing about heading out for meetings and such. It's typically pretty hot down here - tough to show up looking professional when you are soaking wet!

 

[slim_jim]

I have seen lots of kids are riding them around OSU. I think I have seen a new dealer in the campus area. Economical to own and operate, along with the green buzzword/image.

 

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[hatterasguy]

Good Post!

Also, keep in mind that the economy is cyclical and depending on how the new economy shakes out, we may be looking at one of the greatest opportunities to buy bargain properties and businesses in generations.

X2. Watch this closely, if we don't fall apart, fortunes will be made...

 

[Jill]

Interesting. I always thought you needed insurance in order to drive. Maybe that's just in Jersey? Or maybe I'm just wrong?

Right. Just like you need to be a citizen to vote. :smxE:

I learned this the hard way when I broadsided a car who abruptly turned across my lane a few years ago. I was legally "in the right", according to the officer. The other driver was in a car that she did now own; she spoke no English; she had no drivers license; she had no job; she had a fraudulent insurance card. The cop told me, "sorry, but you can't squeeze blood from a turnip" . . . a southern colloquialism that means, I wasn't gonna get diddly because she didn't have diddly.

I ended up writing a check to the body shop for $5,500 because I was naive enough to actually have believed that "Uninsured Driver" insurance was unnecessary because Texas law "requires" that every drive have liability insurance.