Tag Archives: Capital Active

Computer Entry: Trends in Computer Pricing

I have been in the computer industry now for over 15 years.  During that time some trends have been the constant, that prices drop, and new technology is always making things.  So as of today this is what I am seeing in the world of computer pricing.  Here are my basic findings.

Laptop computers are very affordable. Laptops have been falling much faster than desktops, I think this is because they are all made by 7 main highly competitive companies, and they are trying to push eachother for market share.  The world of desktops is still controlled by many different companies and most all computers are built by companies in the same nation they are bought.  This raises costs, and reduces competition.

Margins are increasing. I have noticed that most stores that sell computer hardware have really increased their margins.  I was at Staples today and most of the hardware they were selling was at least 2.5 times their cost.  That is much larger than in the past.  I have seen this trend in retail stores.  Basically they know that if you want/need it now you are willing to pay.  In computer systems the big companies have really increased margin on desktop computers.  This makes a small company like me much easier to compete.  I think that most of this is due to the large reduction of competition in the retail market, most local computer stores are out of business and even big companies like COMP USA are basically gone.

Monitors have leveled off. LCD monitors have been coming down in price for a long time but they seem to reach a point where they don’t go down any more.  19″ and lower size monitors are only 10% less than they were a year ago.  22″ monitors are down a bit more but they still are near the price they were a while ago.

Hard Drive Prices are plummeting. Storage is king, this is mostly due to the higher data density.  They can put more data on the same hardware as before simply using new technology.  In just the last 2 months 500GB hard drives are down over 20% and most drives are down over 15%.  They are much cheaper than they were last year. Even with the decline in prices

RAM has leveled off. RAM is always going up and down, DDR2 RAM, the main RAM used to make computers is going down a bit but is fairly stable.  DDR has really dropped in price, at the start of the year it was double the price of DDR2, but not it is just a bit more.  I think this is mostly due to lowered demand of DDR.  If you are using a computer with less than 1GB of RAM right now then do yourself a favor and upgrade!!!

CPUs Fell off a cliff. The largest change in systems prices has come from the CPU.  They have fallen like crazy.  1 year ago a 6400 Athlon 64 was over $400 now you can get a Faster Quad Core version for UNDER $160.  Most CPU have lost over half their value, and the stock prices of AMD and INTEL have followed.

Motherboard have increased in price. The motherboard is the HUB that everything connects to.  Due to the higher demand and more precice demand of the rest of the better hardware it is now required to use a much better motherboard, so the average price of a motherboard has gone UP about 10% in the last year, but for that extra 10% you get much more for your money.  The old ones simply don’t exist any more.

Cases and Power Supplies have gone up. Power Supply Units have gone up slightly due to increased power stability required by todays newer motherboards, CPUs and RAM.  But cases have gone up by over 15%.  They are the largest and most bulky part of the computer, the production cost is tied to that of commoditys and they have gone up, and their shipping is tied to the price of OIL and we all know about that.

Optical Drives continue to decline. This year we have seen a 20% decline in the price of Optical Drives.  They simply can make more for less.

Flash Memory has plummeted. The price of flash memory has also fell like a rock.  Flash Memory is an open standard so cheap Asian production has killed the prices, this is great for us the customer, we now can have lots of memory to carry with us, or use in our toys.  The only thing that dropped faster than the memory prices is the stock of SanDisk, the largest producer.

Over all desktop systems have dropped about 10% in the last 3 months, and about 30% in the last year.  Now is a GREAT time to buy.  If you have a computer that is more than 3 years old then you should really think about upgrading to a new system.  It is a whole new world out there now.  Also many people may have bought a computer 2 years ago or so, but you purchased a computer that was built with 2 year old technology then you need to upgrade.  You will be glad that you did.  Click on the Image to the right to see our prices.

I am torn between all that is possible

Right now I feel that I am at a cross roads. I know so much, I know so much that I could never hold down a job, I know what it out there, and working for someone else is not an option. I am a true entrepreneur. Now that being said there is so much out there that I can do but I have limited time and limited focus. I choose to spend a good deal of time with my family because that is a priority. Let me tell you, my readers, what I am thinking about right now.
My main company for over a decade has been Emerald Computers. It was a great business from 1997 until about 2003 but then the industry changed, and got much more cutthroat and less fun. Also the profits dropped out. I lost my passion for it. Passion is a subject I have been thinking about a lot recently. If you do not live your life doing what you have have passion for you are living a wasted life. 80% of people can not stand their job, they can not stand what they now do for a living. 20% of the people their work is their passion, and they love to do it. For years I loved computers, not because of the technology but mostly because I could open peoples eyes up to what is possible and I loved that. But my business did less and less of that and more and more of the grinding out work that was not fun. When the passion left so did the profits. I went from averaging 70 hours a week working my company in 2002 to about 30 in 2005 to almost less than 5 in 2007.

I always was thinking about Real Estate, how it is a business where you make real things that stand there for many years. I know people that drive around a city and point out buildings they had a hand in making a decade before. Also I LOVE the art of the deal, where you negotiate price and terms and come up with a deal. It is like a huge game, trying to get the best for your side in every deal, nothing in business is more fun for me. Real Estate is the land of the largest deals, and the fastest way to make real big money. You can be creative and make transactions by bringing parties and ideas together in unique ways.

Now the problem with real estate is that you need knowledge or you need money. I don’t have this type of money because my computer company took it all, and my knowledge is all theory. I think I know at least 90% of what I know, but every time I think I have it all figured out I find out more I don’t know. Because of this a fear has set in so I do nothing, which is the worst thing of all to do. When you do real estate with no money to invest you will find the deal every now and then but it is far from steady, so I wanted to have something that was more steady.

Because of this I started looking for a MLM, because before Emerald Computers, and even during it I made some good money in the world of MLM business. With all the tools I have for online marketing and communications I figured I would have a huge advantage at any MLM that I would join. So I spent a good deal of time looking into everything that I could do. After looking for months almost all of the major MLM businesses that I saw were promoting a health product that they produced for $5 and sold for $50. I figured out that I really don’t have a passion for doing a MLM that is based on a health product, I think deep down that many of these don’t work, and that even if they do I don’t want to spend my life selling them, I have more important things to do.

So after a while I decided to work with a company called Nouveau Riche. What they do is have a college right down the street from my house. For 1 week every two months they teach a full week of really high quality classes about Real Estate. I bought the CD version of these classes, they were good. Next they provide a community of investors. It all sounded really great, just what I wanted to do. Then I really pushed it hard, trying to find people to invest with, trying to find people to pay to go to the college. They had an event where you could invite people to and they would have a 6 hour sample of classes that were taught by the school. I had been to them in the past, and they were great. At the end they would have a short 30 minute sales pitch for the college. This time there was new leadership and they promised it would be even bigger and better than before. I was really excited. I invited over 100 people. I got 40 people to say they would be there. It was all going well. Then on the day it was backwards, it started out with over two hours of hard sales, worse than if you went to a timeshare. That was followed by even more sales, and then an hour of decent education, followed by 2 more hours of hard sales. The people I had there all felt screwed, and lied to. They wanted education and what they got was this junk. After that day I have not gone to any meetings and have not talked to any leaders in the company, it was a bust for me.

So then I started looking a MLM that was for something that I could stand behind. I set down some rules. First it had to be something that was a good value, it had to save people money or make them money. Next it had to be something that was product driven, I wanted to product to sell the company. (One of my best friends Fred Coit is a big leader in Monavie and they have a great product driven company.) But next I wanted to do something that I would have a passion for. Last I wanted something with no marketing restrictions. You many not know that most MLM companies have many restrictions on how and where you can market, and I wanted something I could hit heavy online, and be creative with my marketing.

After about 2 months of looking I finally decided on SendOutCards, they offered a product that was only 1/3rd the cost of the competition with better service, it was product driven meaning that most people in it only really promote the product. I think that they are the BEST MLM for my style.

Now I am torn. What do I do with my days, I have a computer company, I have a ton of time, energy and passion devoted to getting into the real estate business, which is my true passion. And now I have this new business that is really fun and has a great product. For the last two month I have been floating. I have been like my 10 month old son, I focus on whatever seems the best at the time, but I may change on a whim. Last week a typical day was for me to wake up and talk to a few computer customers, then talk to a real estate agent about some houses then call a few people and tell them about SendOutCards. For the last few months when people ask me what I do for a living I really don’t have a good answer for them. I was at a meeting last Wednesday where I stood up and talked about Emerald Computers and SendOutCards, handed out flyers for SendOutCards and business cards for Capital Active (The Real Estate Company). I must have seemed very confused to some of these people.

So this is where I sit now. Emerald is the business that is putting food on my table, it is what I live on but every time I want to make money I have to trade large amounts of time for it. Sometimes it is easy and I get a call and make $500 in 2 hours, other times I make calls all day and make nothing. SendOutCards could be a huge business and with two months of good effort I could have a team large enough that I could pay all my bills from the money it makes. And Real Estate could make millions with ease and joy if I could get all the pieces to the puzzle together.

So my question for my readers, is this multitasking normal for someone who is a serial entrepreneur, and what would you do? This is interactive so please leave a comment, I will reply to them.

The best MLM for me, and why

I finally did it, after about 3 months of research, investigating, going to meetings and trying to figure out what I wanted I finally selected the BEST MLM that I could find.

I have been in many MLM / network marketing companies, I have been to hundreds of meetings over the last 15 years, I have built teams, I have sold products, I have marketed many things but this is the first time that I stood back, and researched the pros and cons of different MLM concepts. You may remember back in April I wrote a series of blogs about the idea of a MLM. You can read them HERE, HERE, and HERE. I never wrote the last two in the series because I was still doing my research. In the process I actually joined 4 other MLM companies even before I was sold on them and all of them did not pan out. But now I finally found the best MLM company I have ever seen, more on that later.

So what makes this company better than anything else I have ever seen. There are so many reasons why. Read these reasons and compair them to any MLM that you are looking at.

Well first it is a product that EVERYONE can use, it is easy to understand, and everyone has a need for it. It also is something that you can easily prove, too many MLM promote a product that you just have to have faith that it works. (Most nutritional companies.) But for me the MOST important reason I think that this is the best MLM is because it is a great value, cheaper than normal way of doing things, and the reward of using this product is measurable and instant. You can sign up and start making money the same day, and with only three sales you are already in the black, in MOST MLM companies it is very hard to become profitable, in this it is easy. There is no other company doing anything even close to what they are doing. They are old enough to have their act together but not too young to be saturated. They are in a multi-billion dollar industry and with a radical new way of doing things will take huge market share from the two companies that have over 80% of the market share. Another thing I really love, is that everyone who hears about this product says something like “Of course that is a better way to do it, sign me up.”

If you are in a MLM now, or are thinking of joining one read that list and objectively think about how the company you are with stands up to all of these things.

The name of the company is something you probably never heard before. It is Send Out Cards. What they do is print and mail physical greeting cards that you select, customize and order online. It is a great business tool, allowing you to follow up and keep in contact with all of your co-workers, customers and business contacts. It is also a great personal tool, helping you make the people around you feel good. If you would like to try it out right now I have set up a special offer for all of my blog readers, you can CLICK HERE and you will receive a free account where you can send out two cards to anyone you like, you can play with all the features and see how it works.

Even if you are already busy building your own business you need to look at Send Out Cards as a marketing tool for that business. What would happen if you were able to follow up with EVERY prospect 2-3 times? What would happen if you sent a thank you note to each of the top 20% of your customers, how much extra business would they bring in. Think about it, try out a demo now.

I hope this blog shows some light on your journey to success. If you are looking for the best network marketing company around this one may be for you, it may not.

How to pick a MLM company, and what to stay away from.

There is a huge range of different MLM companies out there in the world. Some are small, some are huge. Some sell a product some have services. They all have a good sales pitch, and they all promise success. But how do you go through all of these and find the ones that you can be successful at? How are companies different from each other? What should you look for in a good MLM Company? How do you do all of this while not being taken?

Well there is a very wide variety of MLM companies out there. At this time there are about 5000 MLMs with a sales force of over 5000 people. There are 100 or so really successful ones out there. For this blog I will keep it all concept, in the next blog I will name names and rate companies that I know of.

To me one of the FIRST things that I look for is the ROI, this means how many sales do I need to make to get my money back and start making profit. I also look at the cost of maintaining the membership, the value of the product, the support of the team.

One of my main tests of any MLM that I look at is the source of the money. Most good MLMs out make all of their money off of selling a product or service. They have to have a good product because this is where the money is made. But at the same time there are MLMs that focus on recruiting, and almost all of the money being made is from a huge ($300+) fee that new recruits must pay. Almost all of this money is paid to the upline. In many of these companies almost all of the money is being made from the recruiting fees. If you think about this, it is not sustainable. And I feel that this is unethical, you are promising people a dream, and taking their money, and the only way they can get to their dream is to take more money from their friends and family. And most of that money goes upline. In these companies history, and the math, shows us that about 1% of the people win big, 5% of the people win, 5% more break even and the rest LOSE MONEY.

When I tell someone that they can make it, and they can have success I want to mean it. I am NOT going to put my name on it if the chips are stacked against my friends. The first MLM I was in was, and still is, the largest MLM in the world. They had great motivational meetings, but almost everyone there was loosing money. On top of that they were spending a ton of time, and hurting many relationships by trying to force people to consume their products. You became good friends with the other people in the company, and you would have pressure to use the products, even though they were vastly overpriced, you also would be pressured to buy “tools”, overpriced educational materials. With all of this going on they had weekly meetings, monthly all day meetings and a few times a year they had 3-4 day conventions. All of these meetings had various costs, and you were told to come early and stay late. Even people who recruited 10-20 people into this company did not make money, if you counted the amount they were overpaying on their products. Almost everyone there was loosing money, but they were sold a dream, and they would hear from people who made the dream. Some would try for years never reaching success. Other would get 50 or so friends and family to join in, who were all loosing money so that they could make a decent income.

Other companies that I have seen have a product where you make very little on, some as little as $1 a month for each customer, but these same companies have fees over $500 to join, and these fees are almost totally paid to the upline. I was presented a company last week where, as far as I could figure, over 80% of the money made in the program was ONLY from these recruiting fees. You can always tell these companies because they have a large fee to join and once you are in they tell you to focus on getting other people to join so that you can pay back your fee. Of course this all is great for the person on top, but for me, I can’t ethically build a company like that where for me to have success I have to hurt other people. Yes they have a chance to make it, but that chance is slim, and for them to have success they also must hurt others financially. Personally I like to stay away from ANY company that pays for recruits. I want it to be easy for people to sign up.

There is a semi new evolution of this concept. This is where, instead of a large recruitment fee there is a smaller monthly fee. Some companies even go so far as to charge a monthly fee for you to have a website so that you can sign up other people. And they have yet another fee to be allowed to sell their products. They call it a technology fee. I am in the computer industry also and I know to make a dedicated server with a self replicating software on it costs about $50 a month to maintain, and such a server could host tens of thousands of associates. So if they are charging $40 a month PER USER that is a huge profit. $30 or so of this money was paid to the field and the rest was kept with the company. I talked to a lady there, who was making great money, she had recruited over 1100 people. I ask her if more than 100 people have broken even and her answer was “ I think it about 100” That means that over 1000 people paid $350 to sign up, and $40 a month for months on end and did not make any money. The even worse part was that they sold a product that was very bad. I was in a meeting with the leaders of this company, as they presented it to me and some other people looking at the company. At the end we asked them if they have ever even used the product they are selling, and to our surprise and horror not even ONE of these leaders had ever used the service that they sell. It was crazy. Their response to the objection that many of us had to the monthly fee was that “If you personally find 6 other people to pay the fee each month yours will be waived”. To me this was a horrible answer. I told all of my friends in this company to quit, and they did. (I tend to have that result, the last three people who were new in a company that was bad and presented the idea to me I showed them logically how it was bad, and the next day they were quitting and getting their money back.) A pyramid scheme is a company has NO product at all and all the money is made from the new people paying the people who have been in longer. This company has almost no product of value.

Believe it or not there are many even worse companies. One company charges 1000 to join, and you have to then pass up the first few people that you get, with the full 1000 going to your upline, then you start to find more people to sign up and you get the full 1000 from them and also from the first two people that they sign up. So what is the product, you will laugh at this. The product is a $20 a month website that allows you to sell the $1000 memberships. If you stop paying the $20 a month you then lose your chance to make money off of other people. The guy who thought up this whole plan has over 100,000 people now paying him $20 per month. All this running on servers that I bet cost him a few hundred per month at the most. What a smart, devious idea.

Now that you know what is bad, I don’t want to give the impression that all companies are bad, far from it, many companies have great products, and a great plan for paying people back. Later this week I will release the blog about that. That being said not every company is right for every person. Some companies focus more on selling products, and other focus on team building. Some sell services; some have just one product, while others sell 1000’s of products. Some are online while others are almost totally offline. Find a product, and a management style that fits you. Don’t just take any opportunity simply because it is presented to you. Find one you will love to represent.

Another key to finding a product is the size of the industry. If you are in an industry that almost everyone needs you will do better than in an industry that has very few people. You also need to look at the profits in that industry. Some industries have huge profit margins while others are very small. The phone industry is huge but the profits paid out to the mlm companies that sell phone service is VERY SMALL simply because competition has forced prices down. Most MLMs sell very low priced items, and these are items that people don’t need that many of. If your company sells something that only makes $10 a month there simply is not much money to work with, you will have to build a huge group to make life changing money.

About 60% of all MLM companies are Health and wellness related. One major reason for this is because health products can be marked up a lot. A $50 product may only cost $5 to make, this gives a lot of room for profit for the company and for the distributors. Another reason that the health products sell in MLM well is because most of them need to have a fairly large explanation for people to use them, and the normal retail channel just does not provide this. Most of these companies have a few core products, or maybe only one that they sell. In general these products do provide some help in our vastly malnourished society, and are fairly profitable to sell. For me personally I have no passion for this, and even if someone uses the product as they should the profit will still probably be under $30 per month for each person you sign up. I know many people who have made it big selling such a product, they have found many people who also found many people and they are making nice 6 figure incomes as a result.

Another major area are companies that sell many products, some they make themselves while others simply get a discount from products made by other companies. Everyone can find something that the company sales that you will like. The problem with most of these companies is that for them to be able to pay the kind of money that people want they have to mark up these products much more than you could find the same products for elsewhere.

One of my great product type is the financial services type. Most everyone needs investment help, a mortgage, insurance, or education. These are items that traditional methods charge huge amounts, these are also items that a large percent of many budgets goes to. One MLM that I was in originated mortgages. The fees charged to the customers was typical of the industry, and yet were still 3000 and more per sale. As you can see, even with a small team it was easy to make money doing this. On your first sale you made more money than all of your first year expenses. In my mind this was a great MLM, the only problem is now there is a credit crunch and it is very hard to get mortgages approved. Most people in this company have quit, and it would not surprise me if the company is gone before the end of 2008.

RULES. People want to join a MLM for the freedom they have to run their own business, but many MLMs have so many rules that they place on their distributors it almost feels like a commission job. Before you join a company look to see what rules you will have to live by. One MLM I know of states in their policy that they “OWN” anyone who signs of for their company and if you mention another business idea to them and they leave the first company you will be punished for theft. Other MLMs, say that you can’t sell their products anyway other than person to person or at their website. This limitation will make it much harder to be successful. Many companies won’t let you discount the products. Most won’t let you be in multiple MLMs at the same time and use your contacts from one to build the other. Most will not let you have your own marketing, your own website for the company and even your own business cards. Before you join a MLM decide what rules you are willing to live by and make sure that the one you are joining allows you to operate in the way you want to.

One last thing to look at is the stability of the company.  Is this a company that had been around for a long time or something that just started.  Most new companies may not survive and they usually don’t have all of the bugs worked out, but you can get in on the ground floor and be at the top.  A company that pays out a ton of money may look good, but if the company can’t make profits you may find one day that they are gone and so is all your hard work.  I also find it VERY hard to deal with a company that is always changing the compensation plan.  I understand as they get bigger you need changes, but I have seen companies that made 8 changes in a year.

Also you need to have a company with an easy to understand compensation plan.  I have been to meetings where the compensation plan is so complex that none of the leaders fully understand it, they simply keep asking you to “Trust the Company” and that the money will all come out right.  If you can’t explain the whole compensation plan in 30 seconds it is just too complex.  This will make it harder to build, and harder to see the direct results of your actions.

So the bottom line, find a company where you can make money, has a product/service you like and a team and system you would like to work with. Do this, then build it big and you will have great success.

I hope this helps. This is the third blog in this series. Please click here for the first one.

I could write 10 more pages on this but I feel that I have hit the most important points already.

The value of financial education is huge.

It is said you never really know what you don’t know. It is not until you learn something that you really understand the value of the thing you just learned. Some things are very valuable and other have little value. For example if you get a little education on real estate investing and how it REALLY works, (Not always what you see on the TV) it will rock your world.

On the other hand I went to a 4 year university and at the end of it all I felt that I could have learned much more on my own. I am still glad I went for the social side of it all. Too many people spend their whole life in the rat race, it is like a giant treadmill, you only earn enough to get current on your bills, and if you ever make more you tend to spend more.

There are many bloggers, most much more popular than I am, that tell the masses how to save their meager earnings, and how to find deals so that they can spend less. But you really can only save so much. Even if you could save 50% of your earnings you still would take years to really get ahead. What they miss usually is that it is MUCH easier to increase your earnings than reduce spending. It takes a different kind of education, a type that most people do now learn. One nugget of info can change your life. It is much easier to live below your means if you increase you means. You do need to control costs, but spend more time increasing income than controlling costs and you will be ahead in the long run.

There is another blog, by a successful guy who gets this, I highly suggest you read his blog. It is called 7Million7Years. He recently wrote a blog about home equity, and that you should not put all your net worth into it. Read it here

Are you ready to learn how to take your investing, and your thoughts to the next level, well the next step is get educated. Read books by Robert Kiyosaki, Donald Trump, Douglas Andrew and Ric Edelman. I have found them to have the best books on real financial advise. Most of the others really give the WRONG advise. I don’t know what they are thinking sometimes.

If you are interested in real estate investing (Which you should be) my company, Capital Active, sponsors events where we teach people, for FREE, how to get started and how to be successful right from the start. If you are interested in an upcoming event sign up here.

Thanks and have a great day, leave a comment please.

Safari on windows!

Wow, for once I am shocked and impressed by something in this industry. Mac just released Safari for Windows today. (Click here to get it) I was not keeping track and did not know it was coming, but shortly after midnight it came on saying that I could get it. I quickly installed it, and tested it out on my PC. The graphics look about the same but slightly better. I think they up the color setting on everything, and I like it. It seems to load as fast or faster. I will have to learn how to make some changes to it that I like to have but I will give it a good try.

This is a good idea that was a decade in the making. When you use it you feel like you are using a mac. I am a PC guy but I do see how this will get many new customers for Mac. I already see their market share increasing due to the tragic and predictable failure of Microsoft Vista. (Click here to see a survey of how big a failure vista really is)

I also downloaded FireFox on the day it came out, it was not so great at first but as IE got worse FireFox got better. For most of 2007 I used Ubuntu as my OS but I finally had to break down and go back to Windows on my main computer, but I did not go back to IE. I miss many things about Ubuntu, it is a much better OS but there are a few programs I need that simply don’t exist yet in the Linux world.

Thanks mac for raising the bar. I hope Microsoft either steps up or fades away soon.

Is having a budget really a good idea for you?

I hear people all over the place talking about having a budget.   They say you have to plan how you will spend your money.  For wage earners who trade their time for money, and usually trade the same amount of time and thus earn the same money at a predictable level a budget sounds like a good idea.  BUT not everyone is like this, there are us entrepreneurs out there, people who trade effort or ideas for money.  If you are one of the 5% that really wants to be successful in life you need to follow a totally different set of rules, and listening to the people who are in the other mindset will only distract you and give you wrong ideas.

For this 5% a budget is silly. I don’t know how much gas I will use, or how much I may spend on eating out.  The thing is I hope I spend A LOT on gas because almost all of my driving is for business, and the more I drive then that must mean the more I made in sales that month.  The same goes for restaurants, I would love to take a lot of customers out to eat, each time I do I make about $1,000 on average.

So what are we to do in this position?  First FORGET the budgeting idea.  For the things you must buy, find the best deals and be frugal.  When deciding if you are going to do something don’t only look at the cost of the activity, like budget people do, look at the income opportunity.  In January we were planning on going to Vegas for 4 days for the CES convention, a few people questioned us if this was in the budget or not, of course it was not because we don’t have a budget, but going to this event made many changes in our business that have more than paid for the trip.

I read a blog today about a guy who suggests you cut your cable to basic to save the $200 or so per year it costs extra, and also to watch much less TV.  I agree with not watching mindless TV, but I can point to many times where I have seen something on TV that inspired me to do something different, and this action resulted in a large profit for our company.

So many people ignore the dollars, hanging there to be picked because they are so busy picking up the pennies on the floor.   The thing is that MANY people will spend 10 hours in a week, comparison shopping, looking for deals, going to 5 grocery stores to get the best deals but almost all of them spend NO TIME at all trying to find new ways to earn money.  One idea that can earn you money can be worth ALL the ideas you have to save money, yet 90% of the blogs out there on money are about how to save money.   This just shows you the wrong financial thinking that most people have.

The dollar is so weak, and we are paying for it, GREAT!

For years now we have been borrowers.  We spend way more than we make.  I am not just talking about the government but also the people.  You can see this in our balance of trade.  Because of this the dollar is falling like a rock.  People don’t want to lend money because it will probably devalue more than the interest gained.

Imagine that I would lend you $1 million dollars and you need to pay me $1.1 million a year from now, well if the dollar goes down 20% I am only getting paid back (In present dollars) $880,000.  So why on earth would I lend you the money.  This is the problem that we are having now.  Up until recently most of the money being lent to Americans was coming for foreign investment.  These foreign investors as a whole are hesitant to lend us money.

So what is the solution that the government thought up.  Well they offered to lend money, billions of it, to the banks so that they can lend it back out.  But where did the fed get this money to do this, they simply typed it into a computer and created it.  This makes more dollars in existence, and will further sink the dollar down.  This cycle will keep repeating and soon our dollar will be worth very little.

What will this do for us.  Well it will make the dollar cost of most things go up.  Even real estate will soon start to go up with all of this.  Gold is now over 1000, silver is over $20 and oil is at record highs over $110.  This has been coming for YEARS now, I have been talking about it for about 3 years.  This just that start, until we start exporting much more than we import, and we stop spending so much this will keep happening.

So what is the best position to be in?  Well you want to have as little dollars as you can, you even would want to be short on dollars.  This means to borrow them.  I have debt for my house, and for other things, and when I saw this coming I took out as much as I could and invested it in things overseas, and in physical things such as real estate, and I think that in a few months, the value of these assets will be much larger than the debt.  The banks have figured this out and stopped lending to most people.

So what will happen to people who were not ready?  Well it will not be good.  If you have a job, and save money and have no debt you are in the worst position. The money you have saved will be worth less than it should be.  The

What can you do not?  Well as I said before the people who see it first are the ones that are in the best shape, they can prepare for the change.  Now it is too late, there is very little that can be done.  Right now I think it would be good to move money overseas, invest in companies with a large amount of foreign exposure.  Pay off only the minimum on debt.  Don’t keep cash, go turn it into silver.  But MOST important, if you can afford it GO BUY REAL ESTATE.  The prices will never be this low again, you can still usually borrow money to buy real estate and pay back later with money that is worth less.  Prices will go UP much faster than your pay will go up, so be ready for that.  Food cost will go up, and fuel costs will go way up.  Your pay will probably stay flat.  Consider a side business if you need more money.

What should the government do?  Well they were the ones that created this, they were lending money out so cheaply, and printing money like crazy to keep us afloat.  You got to remember that the government is over 9 trillion in DEBT.  They also have over 30 TRILLION in obligations to people in the form of social security and government retirements.  This is a huge debt.  So what they did is they tied this to CPI, the fake, government created index of inflation.  Today it was released and it was 0%.  The people on CNBC just laughed at how fake it is.  But because it is 0% that means that the social security debt does not go up this month.  Now, by any measure dollar is worth MUCH less now than 5 years ago, I would say it is worth half as much or so.  So basically the government just CUT their debt in half because of the weak dollar, and this is very smart.  But they can’t let people know this is going on, they have to spin this so that foreign investors and the general population don’t know what is going on.  For all the people who are not watching are going to be hurt, but for the government, the big investors and all the people who see the signs and act on it, this will be a great time of huge wealth creation.

Jason Dragon