Category Archives: economy

A job is becoming a dim memory for many unemployed

Far too many friends and acquaintances have been unemployed for more than a year.  Some since the recession hit and the first wave of layoffs came roaring in.

It is no surprise that our aging Boomer population would be hard  hit, but the length of unemployment is. Watching savings dwindle to zero and finding yourself unemployable due to age and often skill set, can be heartbreaking.  Here’s a rundown of the pickle we are in.

http://m.apnews.com/ap/db_6775/contentdetail.htm?contentguid=XKi5F7Ys

Changing homes

If I’ve been suspiciously silent over the past few weeks it is because I was caught up in end-of-summer business frenzy combined with selling my old home and moving to my new home.  I held onto my home of 12 years after having decided when I initially moved in, to move in 3-5 years.  And before the blink of an eye, I had stored a decade plus of memories inside those lovely walls.

It was very hard to make the choice to move (I had my house on and off the market for about 2 years) but I saw a once-in-a-lifetime opportunity.  To sell my house (yes…at a big markdown because of the housing market collapse) and convert the remaining equity to a home that would satisfy my needs for another decade.

As a self-employed person, it was almost impossible to get a mortgage (just as it is impossible as a small business owner to grow a business other than self-financed and organically in this bank-driven market).  I can personally say that the banks have the money and don’t want to lend money, even to those that can prove they can repay their debt.  But I found the one bank and loan officer that were willing (and excited) to partner with me.

The conversion from one home to another will only increase my monthly outlay by a small bit, and one that I can shoulder, even if the economy recedes a bit. So that was the financial challenge.

The process of moving, both financially and emotionally, so greatly parallel the political arena that I am compelled to make the comparison.  In order to get the credit, my past laurels didn’t count.  I had to show I could repay debt in a way that the banks would accept.  That was tough.  Virtually impossible and required leveraging  every possible opportunity.  My family came through where I needed them to, and I’m financially beholden to them now, in addition to the banks.  I doubt that blood will pursue me for favors as a lobbyist would, but, say I were running ….  I don’t know…let’s say…a country…those that had given me money for my house might want to use a bedroom, or a bathroom, or part of the garage from time to time, if they needed it.  And I’d have to agree.

The emotional challenge was something else and much worse.  Like a political party, my memories and emotions were deeply entrenched in the home I had lived in.  My daughter’s childhood flavored the wood walls.  My dogs scratched their ways across the oak floors.  My mother and I enjoyed many an afternoon breathing in the scents of rose and lavender and jasmine from our beautiful garden.  We had a multitude of family gatherings and celebrations around our dining room table.    We shared zucchini and freshly baked muffins with our neighbors, watched their cats and dogs when they needed help with a feeding or a potty break.  My daughter learned to ride a bike on our street.  We ate peaches and apples from our trees.  Knew the best candy at the best houses on Halloween.  Built a community. Shaped my life and my business around my home.

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Packing up was painful.  What to toss, what to keep, what to donate.  What furniture was a must keep and what was a do not move?  In the end we tossed about 50 full garbage bags of unusable items (found in every nook and cranny you can imagine), donated about 20 full bags and boxes of items to Vietnam Vets, gave away a piano, washer, dryer and fridge.  I deliberated over so many items and cried many times due to my reluctance to give up my past.

When we walked away from our home for the last time, I thought my heart might break.  My daughter hated me for ripping her away from her home and my mother was definitely a bit wobbly on her feet after, literally, a month of packing and a couple of years of wavering upheaval.

Fast forward, exactly a month later.  I didn’t think about my old home with any sort of regret from the moment I set foot in my new home.  Nor has my mother.  Not one second.  That surprised me more than anything else.  My daughter hated me for a couple of weeks, but is starting to love me (and her new room) again.

Big lesson learned? Much of the furniture I had such angst over keeping (and which is now here) doesn’t match this house in character or style, and I should have donated or sold it without batting an eye.  We took our old memories and let them drift into this new home.  What is really clear is that those old memories really are in the past.  The new home is for new rules, new memories, new celebrations, new budgets, new neighbors, new resources, different and new.

When I ponder the standoff between the two political houses (well, really 3 now with the fractured Republican/Tea party) I see them sitting in their houses, glaring at each other across the aisle (like neighbors fighting over building a shared new fence), holding onto past glories, past doctrine and…basically…the past.

Obama gained traction because he really thought he could effect change, and in our imaginations, we thought he might be able to.  The Tea Party (I don’t agree with their position, but recognize their popularity) gained traction because their supporters really thought they could effect change.  No one expected this level of stalemate, posturing and obstructionism.  Occupy Wall Street is continuing to gain traction, because the people have had it.  The political dysfunction needs to end.  To change a house, all parties really, really need to move from the old house.  Toss out old, carefully choose who they accept favor from (not just go for the money) and create a different house.  New, different, no old furniture.  A new kitchen and see how to make an omelette in a differently configured workspace.  Shore up the infrastructure, fix the electric panel so the house doesn’t fry, forget the fence feud and make friends with the new neighbors, cut down the big tree if the roots are threatening to pull up the entrance to your driveway (cuz you HAVE to be able to go in and out), fix the sprinklers if the grass is dying of thirst, and change the pool water if it hasn’t been emptied in 25 years, cancel DirecTV, Netflix, and landlines, if you need the extra $ to balance the books, buy local and organic to support your new ‘hood and build this new experience from a new perspective.

Hang an old picture in a new spot.  Buy a new picture.

Debt reduction…the new American Dream

Well, as a country we are in a bit of a pickle.  The government is being held hostage by a very right wing agenda.  The concept of compromise, which is the foundation of any good functioning government, has been replaced by intransigence.  The rich will get richer and the middle class, working classes and disenfranchised are at the short end of the stick.  Our debt load is too high from 8 years of Bush-era spending and then the Bush/Obama infusion of capital to the finance industry…again, on the backs of our children and grandchildren.  It’s not looking pretty.

As I ponder all this in my apparent addiction to the news and the messages coming from both parties, I can’t help but think of my own house and  how most Americans survive when revenues fall short and costs climb.

So here’s how most of us do it.

1) We look at our revenues so that we know what is coming in.  In my case, being a small business,  I have seasonal trends and an unstable revenue stream, but I generally know what is coming in and can project what will be coming in based on the economy as it is today.  A huge number of people are on unemployment and that income may be all they have to count on.  Another chunk of the population are working part time or are bringing in virtually no revenue at all.  In the past, Americans counted on increasing their debt load to manage revenue shortfalls in order to pay the bills.  Currently, all those with challenged credit either have no credit cards, lines of credit or any equity to leverage, or have chosen to go the cash only route.

2) We look at our expenses.  From mortgage or rent payments to chocolate chips cookies.  We look at all of it.

3) We figure out what is a must-have and what is a nice-to-have.  For each person those definitions are slightly different, but I think we can agree on shelter, transport, food, education, health care, shoes, clothing (things to cover our otherwise naked bodies), emergency fund.  Everything else can go if money isn’t there to support it.

I’m a single mom.

I must care for my child — have a safe place for her to rest her head at night.  If I had no money for my rent or mortgage, I’d have to move in with friends or family.  If I had no friends or family in LA, I’d have to move to where friends and family were willing to help.

I must have a car in Los Angeles.  In other cities, I could abandon the car.  In LA, not an option.  I don’t need a new car with high payments.  I could have a used car, or even a severely used car as long as it was safe.  If I had to give up the car, I would.  I’d bike, take public transit, change my routine if possible.

We must eat healthy food, she must go to school and we both need shoes and clothes.   We do eat healthy — it costs a bit more, but we also give up buying packaged and preserved foods.  It balances out but we are healthier as a result of good, fresh food.  My daughter goes to public school.  If she were in private school, I’d transfer her to public school in order to make ends meet.  We could both make do with one or two pairs of good shoes and a few changes of clothes.

Medical coverage — If I could continue to afford my medical coverage, it would remain a top priority for this family. If I needed government support, I’d take it.

Austere?  Yes.  But we’d survive in the short term.  In the long term, while we could survive in austerity, we wouldn’t grow.  Because we’d be stuck in poverty.  So I’d have to look at my revenue options.  Ways in which I could earn money.  If my business dried up, I’d look at anything from cleaning peoples homes, to consulting on small business and everything in between, until I figured out a way to bring in sufficient revenues to climb out of the hole.

Does that ring true to you?

Wouldn’t you like to see all our politicians live on unemployment for a year and see how they’d do?  What would they do?  Where would they cut and how would they find ways to bring in additional revenues while cost-cutting.  At some point they’ll remember what life for most Americans is.  And maybe at that point they’d understand how to balance out the country’s budgeting woes, stop catering to the top percentage of the uber-rich who will continue to earn tremendous amounts of money as they swoop in and buy bargain price stocks yet again.  You can cut costs all you want, but in a recession/depression/shrinking world economy/double triple dippity-doo, KNOWING that your tax revenues will falter, you have to look at where to possibly bring in more tax revenues and from those that are hurting the LEAST, not suffering the most.  In your own house, you would NEVER say you wouldn’t look at ways to bring in more revenue.  That’s shooting yourself and your family through your two pairs of shoes.

Myths and Facts About the Debt-Ceiling Compromise | The White House

If you haven’t received this via email (you can get on the email list at www.whitehouse.gov), here is a good schematic that shows you a top line view of what the debt ceiling agreement contained and how it was structured. 

http://www.whitehouse.gov/blog/2011/08/03/myths-and-facts-about-debt-ceiling-compromise?utm_source=email125&utm_medium=graphic&utm_campaign=deficit

A conversation at the pump

Like so many of you, I get overwhelmed by the news.  The creaking, crawling recovery is mind-numbing in the scope of the disaster we sit in, in Amercia, the government polarization disheartening, catastrophic world events that recede from headlines, while people (in Japan, let’s say) are trying to figure out their futures from evac centers, and the divide between the haves and have nots around the world increasing minute by minute. 

There is so little that I, as an individual, can control.  I’m not a lobbyist, a political mover and shaker, or even a major opinion influencer.  I try to advocate on behalf of Boomers and beyond.  I write about what I see from my unique perspective as a Canadian expat.  My sense of social consciousness tears me apart as, at the same time, I am able to function as an entrepreneur in the hungriest consumer market in the world.  I think about best choices for my child and worry about her future.  Cook my own food, try to stay purist in buying organic and local.  Take political action as I have the power to, write to politicians and bureaucrats knowing that I am just another number that gets standardized letters of response.  I donate money to worthy causes and for disaster relief, even though my own coffers are tighter, as a small business entrepreneur.

So to combat these overwhelming feelings of powerlessness, I look long and hard (and just about every day) to what I can control, rather than drowning in what I can’t control. 

Which brings me to today.  Today, as I waited for 15 minutes in line at the Costco gas pumps to save $0.15/gallon, my van (a necessity in my pet service business) stood next to a Prius, both of them drinking the expensive brew.  The Prius’ owner (a well-groomed, attractive man in a jogging suit) and I started a conversation.  I told him my tank cost $92.  He looked at me wide-eyed and told me he’d barely reach $36 AND he’d be able to go about 500 miles without a refill.  I’ll go about 400 miles on my $92.  And then he said something that got me. 

I don’t care how much gas prices go up, now…not with this car.  Not even if gas goes to $10/gallon.

Ayay.  At $10/gallon, I’d never be able to fill my tank in one sitting.  I’d have to drastically change all my routing (even though I’m extremely well-routed now.)  So it gave me a good think…about what I can control.  I bought my 2007  Buick Terraza in Januray 2008…and sadly, it is a lemon.  The warranty is about to expire and at this point, GM has spent more money on repairing my car and covering my car rentals while the car has been in the shop than what I paid for it.  Because of its age, it isn’t worth it to try and pursue lemon law legal relief (although I should have much earlier on.)

I still owe for the 0% loan that I took out on the vehicle and, this morning, looking at the beaming, shining, happy face of that Prius owner, I decided that I am selling my van.  He LOVED his vehicle.  I TOLERATE mine.  Big difference. 

Now comes the dilemma.  With the horrible crisis and shortage of car parts from Japan, do I go for a Honda or a Toyota?  Or do I stick with American and take my chances, again, with a higher mileage American made vehicle.  I know a few of you would have strong opinions.  I’m still in need of some sort of utility vehicle (like a Honda CRV, Subaru Forrester), and I like my little accessory luxuries, although I’m willing to do without for the sake of better gas mileage. 

What would you do in my shoes? If you have an opinion or recommendation, I’d love to hear it (even better if you are a lawyer!! or a mechanic!!! or Marine engineer!)  I’ll be making the switch within the next couple of months.  You can post your comment, or email me at wspiegel@genplusua.com