Category Archive

This article so eloquently summarizes how I feel about the ”big bad economy”.  Though it’s funny, it really has a lot of truth in it.  “The economy” tends to make us afraid to expand our businesses and operate efficiently and profitability. 

And that fear keeps us from providing value to our clients and charging for it.  Which is the main beef of this post - good quality businesses that don’t charge for what they do.

My dad said it best when he shared this quote in one of our recent THRIVEal business classes that we teach to our clients:

Good work is not cheap!  Cheap work is not good!

I want my clients to be the experts that charge more than anyone and deliver high-end value and quality that can’t be found anywhere else.  Don’t lower your fees for fear of the “economic downturn”.  The “economic downturn” exists due to fear in the media, and it can’t make the small businesses in this country fail.  Scared business owners can make a small business fail, but not the “economic downturn”.

So don’t be afraid to expand during this “economic downturn” (whatever the heck that is).  Add value in ways no one else is, and CHARGE FOR IT!  Now is the time to gain ground and take over market share that is not currently being protected very well.  Your clients may not be able to reiterate it, but they are familiar with the phrase:

Good work is not cheap!  Cheap work is not good!

Thanks, Jason M. Blumer

The securitization of mortgages is of interest to me (I know, I’m a nerd), as it ultimately affects the individual taxpayer.  Basically, your loan originator funds your mortgage, then sells that mortgage to other entities (sometimes, dang it).  

Those entities then create bonds backed by the guarantee of the payment of your original loan (the process of securitizing loans).  Some of these entities (Ginnie Mae, Freddie Mac, or Fannie Mae) are backed by the US government, which is supported by my tax dollars.  And since these entities are losing their shirts right now, I’m a little worried about this market (as you should be).  Here is a techy write up on this subject, which I thought was interesting.

Some of these original loans are of pretty good quality (solid lenders dubbed “prime” lenders) and some are not (dubbed “subprime” lenders).  The difference is between good and bad credit ratings, or even loan applications that originally had poor documentation on the borrower’s income (called Alt-A loans).  When the entities backing these latter subprime loans are guaranteed by the US government, basically that means you and I back these instruments (although very indirectly).

And now that Fannie Mae is booking huge losses (see here, here and here), I start to get worried about how that will affect you and me.  Will taxes be raised?  The government is always trying to come to our rescue, so I’m worried they’ll be doing the same again.

Most everything in the economy gets back to me and you, and more specifically your tax bill.  This is just another example.

Any more examples of how specific issues in the economy or the news my affect you and me?

Thanks, Jason M. Blumer

An interesting post here on the upside to recession.  Joel Libava says that franchises increase when economies slow down.  The reasoning:  when the economy slows, people get laid off, and they think, “huh, maybe I’ll start that business my wife told me not to start” (or something like that).

But in the end Joel says everything will be okay.  The small business will survive.

I wonder what other potential upsides to recession there are?

Thanks, Jason M. Blumer