Off the keyboard of Dr. Eddie
Published Inside the Diner on January 3, 2014
Discuss this article at the Kitchen Sink inside the Diner
Post-Collapse Jobs & Small Biz Ideas
All of us who regularly come to the Diner Forum to read, discuss, cuss and rant, can see that the years ahead are going to be ones of repeated crushing negative impacts for those of us who aren’t part of the power elite. Disagree? Well, we can talk about it, but I think that’s the trend.
So, with that in mind, how would it be best to gird one’s loins to avoid taking the slings and arrows of outrageous fortune in one’s gluteus maximus? I’ve been giving that a lot of thought in the last couple of years.
One thing I’m certain about, is that I don’t intend to increase my exposure to bonds, equities, insurance annuities, or commercial real estate. I’d be lying if I said I have no exposure in those areas, because I started trying to build for my golden years a long time back, before I really saw the Big Picture. But no more will I play the Wall Street shell games. I’m done with it.
I’ve actually spent time online just googling “assets that hold their value no matter what”, and I’ve read some interesting comments as to what people think is worth stockpiling.
Boots, blue jeans, quality firearms, ammunition, and good tools. Farm land. Gold and silver coins, even copper and nickel get recommended, and I think none of those is a bad “buy and hold”. But I don’t think that’s the way to thrive and prosper, just buying and holding on to things. It costs you…storage, flood, fire, and theft are always a threat. Land can be and is taxed.
What I really believe is that the best way to prosper in the coming crisis years is to create small streams of income through micro-business models that intentionally try to manipulate the existing system for advantage.
What I mean by that is this: You have to be coming from a place where you understand that the government wants to bleed you dry. To tax you, to regulate you, to place various intermediaries in your way to bleed off the treasure acquired through your work and financial discipline.They want to be your silent partner, with you doing all the work and all the bookkeeping besides. You have to be proactive. You have to look at the system and see the chinks in the armor of the empire, and do your business there.
Am I recommending trading in the Black Market? Yes I am, if you have little to lose, and if you can get away with it. In fact I think the Black Market is keeping a lot of Americans afloat right now. Why do you think that now, after forty years of Drug Wars, that pot is suddenly becoming legal in more places every year? I’d say the number one reason is that TPTB have suddenly realized they can’t afford not to tax it anymore.
But I don’t intend to play in the Black Market. It’s risky for anyone who has assets to lose, because it’s illegal, and if I did that, I’d be risking what I’ve worked hard to build. All of it. These days the government can confiscate your wealth so easily. It’s not worth it.
What I recommend for anyone who can, is to build a micro-business that is structured to minimize intermediaries and taxes, and regulations.
Is there an area of commerce where this is possible? How would you go about it? I’ve given it a lot of thought, and I have some ideas.
I’m a small businessman already. A healthcare provider. I can tell you that that’s NOT the way to go, for many good reasons. The insurance companies own the game now, lock stock and barrel, and my very existence is at their whim. Every year, they take more and give less. Every year the people I call my patients have less disposable income to pay their way. Every year my costs go up, and I can’t raise fees enough in the current milieu to compensate. More regulations, more training requirements. Also, the rapidly changing technology impacts my practice the same way it might impact a farmer. In order to compete, I am constantly pressured to take on debt to buy high tech equipment. If I don’t I’ll be left behind by my younger colleagues, who have already been completely sucked into that trap, and who likely will never escape.
And, of course, I have employees. As the cost of living goes up for them, they either get raises or they quit. The thought of living within ones means is not part of the American paradigm. And each employee means more taxes for the business to pay. The employer pays half of employee’s Social Security on every paycheck. And having employees means providing insurance. Not just health insurance premiums, which are continuing to spiral, in spite of our pathetic attempts to provide universal coverage. Workman’s comp keeps going up even if there are no claims, and Heaven forbid if one of my employees decides I need to support them forever because they got carpal tunnel typing FB comments on their iPhone at work, or that working at my place gave them back trouble.
So…there has to be a better way.
I already started one micro-business. It’s a boat storage warehouse that I run myself from a single laptop. No employees, and in Texas, no sales tax to collect. Easy book keeping, using Quick Books and a cheap proprietary mini-warehouse software. But it does require some stoop labor from time to time. And a few repairs. And I have some deadbeat tenants I’m going to have a to evict eventually. I have to carry slip-and fall insurance, and fire protection. But it meets my number one requirement, which is “No Employees”. This is my first and most important recommendation for you, should you choose to venture into the world of micro-business. Do it yourself. Don’t hire anyone.
The second rule, which I already alluded to, is to minimize or eliminate any taxes on the business. You could do something like trade firearms at a gun show, and deal in cash. You could buy a self-service carwash, and pay your mortgage and taxes in undeclared quarters. But once again, I’m trying to create a model which is 100% legal, so that I reduce my risk of the government busting me and taking everything I have.
But you need to understand that people do these kinds of things. Most of them get away with it, and they sleep just fine at night. Some sheeple who attend American public schools have qualms about the moral hazards, but I’ve noticed that this seldom bothers immigrants, who negotiate the system with a much better eye to the main chance. Why do think there are so many ethnic restaurants?
But internet commerce is where I think the future is, for micro-business. Hands down, it offers the most opportunity for the least risk. It minimizes taxation on retail sales. It also helps eliminate the middle-man which is my third rule for you. Never let anybody get between you and your customer unless you have to. Of course, something like an Amazon webstore does put a middle-man in the picture, but the bite, for now, is quite small. $80 of 100% deductible business expense each month, and a 2% transaction fee. State sales tax, where applicable. For me, it’s damn sure applicable if I sell something online to a Texas resident. Don’t try to ignore that rule. They’ll eat you alive.
And internet businesses don’t need to pay rent for a brick and mortar storefront, which is the greatest obstacle of all, perhaps, to making it as a retail start-up business. That’s another criteria of mine. Low or no rent for the business.
And one other requirement. NO BUSINESS DEBT. Period. QED.
So I want to sell something on the internet. What to sell? To whom?
There’s more than one way to skin a cat here, obviously. The really smart people sell something cheap, that everybody wants, all the time. Like an online Birthday Card or something like that. Intangible, costs nearly nothing, and has a mass market. That doesn’t appeal to me, because I’m not enough of a true Capitalist Pig, but you might consider something along those lines.
If you have a a fair-trade hang-up, like I do, consider something like this: Buy assets that you believe will appreciate in value over time anyway. Choose something that somebody with real money to spend might want to buy, and make it something that you personally are interested in. Avoid really expensive assets that tie up too much money in one item, or a few items.
Firearms might be one possibility, but there is way too much regulation there, and it’s always subject to change. Ammunition, on the other hand, is surprisingly easy to buy and sell. There is already a burgeoning micro-industry going on in this area, unsurprisingly. Don’t believe me? Check out sites like gunbrokerdotcom.
So what have I decided to sell? I don’t mind telling you, because almost everyone who reads this will think it’s dumb, and an area with too many players already, and a niche market that only appeals to rich old men. To that I’d say, maybe, but maybe not.
I intend to start an online rare book business.
It’s a saturated market, you say, with a bazillion Amazon stores already out there? Well, there’s lots of good reason for that. It’s a business that meets every one of my criteria.
MINIMAL TAXATION on the business.
MINIMIZES BLOOD-SUCKING INTERMEDIARIES between me and my customer
NO BANK LOAN
Inventory is comprised of items that are not prohibitively expensive to acquire, and are assets likely to hold value or increase in value over time, EVEN IF THEY GO UNSOLD IN THE SHORT TERM.
A “product” that I myself find interesting.
Something likely to appeal to elites looking to buy value themselves.
And last if not least, it’s something I could do even if I’m no longer physically capable of doing my regular day job, long into my so-called “retirement years.”
Now, I plan to start small, and not bet the farm on this. At the worst, I’ll be building my own valuable book collection, which I could pass on to my heirs. At best, I’ll build another small stream of income that carries into retirement. As with all my business ventures, the guiding principle is CASH FLOW. If cash flow is not positive after a year or so, I’ll go a different direction. Any new micro-business business venture needs to pay its own way fairly quickly. If not, it just becomes an expensive hobby.
I’m not advocating that anyone do what I’m doing, nor do I think the niche I’ve chosen is necessarily the only one, or even the best one. It simply meets what I consider to be some important criteria for success.
I do encourage each and every one of you to figure out SOMETHING that will flow income to you, so that you can continue to prosper in times that will no doubt be hard for most people. I encourage you to think about the principles I’ve laid down here and apply them to your own ideas and opportunities.
And if you have other principles you think could be added to my list, please share them with me. I’m interested.