A Fixed Income Is a Sucker Bet (Blog)

[spirit4711]

Originally Posted by Acting Like Godot

Exactly. And the same question needs to be asked of the self-employed. Such as those who think that they can just set up their own school and make $380,000.

Remember who first came up with that figure? The "pro-self-employed" camp. How come at that point you didn't chip in to ask: "So how many, percentage wise, are there in that non-fixed income group?"

Well, I LOA'ed you to ask that question.

I hope you understand that I am not advocating the salaried job as a superior choice over the self-employment option. I am not saying that either is necessarily superior to the other.

I tend to agree with Steve on this one. The main disadvantages of salaried jobs (false sense of security, slave mentality) weight heavier to me than the perks.

As long as people make conscious choices, it's OK. But the whole system is biased towards having a job. Starting with most parents and the educational system. Posts like Steve's are a nice counterweight and hopefully inspires people to ate least think about their choices.

[spirit4711]

Originally Posted by Arboretor

Thanks for your input, ALG. Illustrators aren't usually paid very much (I realize that this is a limiting belief, but it is not easy to change if you see what people get who are working in illustration.) More important, the type of illustrations I do is not of the kind a movie company needs.

But I'll think about your suggestions, perhaps I can get something out of it.

How about putting a link to your illustrations in you signature? Sell yourself, (wo)man!

[Arboretor]

Originally Posted by spirit4711

How about putting a link to your illustrations in you signature? Sell yourself, (wo)man!

I do that on other forums, but here I like to remain anonymous. No need to let all business partners know about private things I might discuss on these boards...

[Savage]

Originally Posted by Arboretor

I do that on other forums, but here I like to remain anonymous. No need to let all business partners know about private things I might discuss on these boards...

Where did you get that silly belief?

The more people know about you, the more likely they are to do business with you. Even a serial killer can get a book deal, but not if he remains anonymous.

Anonymity repels opportunity.

[alexb5784]

Originally Posted by Acting Like Godot

If you loved teaching, and you started your own school, it's quite likely that you have much less time for teaching.

Instead you would hire teachers to do the teaching. Your time would be spent on issues like HR, finance, operations, customer service, sourcing for school equipment etc.

Yes, you are absolutely correct here. Not all teachers are meant to be administrators nor do some of them want to be.

Not everyone is meant to be self-employed, perhaps they are happier as employees. As an employee you only have a set amount of things to be concerned about. It's easier and for some people, it's the best way for them to add value to society.

I did confuse "stable" with low pay when I mentioned the salary amount.I want to say more about that, but I need a minute to think about it. However, the dollar amount is not really important.

[praxis22]

Originally Posted by spirit4711

How many contractors did so, percentage wise?

No idea, wasn't nearly as interested in economics then, as I am now.

Originally Posted by spirit4711

If not now, then when?

This is not your father's recession, it's your grandfathers. The world, and indeed/especially the developed economies will not easily bounce back from this, IMO. Now is not a good time to try to get into something new, better to find a safe, boring job with a regular pay check, bunker down and sit it out. Personally I would think a good time to get into something new would be in 3-5 years when employment picks back up again.

I actually clicked on a link that brought me here because of the title. "fixed income is a sucker bet" I though fixed income meant bonds, as they are regarded as "fixed income" products.

[MichaelHowe]

*tackles Steve into lovilicious hug* I love you, man! XD

[seeker5]

It's interesting to compare and contrast the responses to those who disagree with Steve's article.

On one hand you have one poster who doesn't like what he does for a living, doesn't make much money and objects very emotionally to what Steve writes in this blog post. On the other hand, you have someone like Acting like Godot who disagrees with Steve, but really likes his job, enjoys how much he is making and is secure in what he is doing. He responds logically and non-emotionally to Steve's post.

So, in the first case, the poster most likely resonates with a good part of what Steve writes, but has been denying that to himself because he's chosen to live a life very differently. Thus he reacts emotionally to the post. In the second case, Acting like Godot, is very happy with what he's got now, so he doesn't feel attacked or takes what Steve wrote personally even though he disagrees with what Steve wrote.

It goes back to reinforce what Steve has written. If you react emotionally negatively to his blog post, it's most likely because a huge part of you agree with what he is saying and you're bothered by it because you're denying that to yourself. Otherwise, you can still completely disagree with what Steve writes without getting an emotional reaction if internally you truly don't agree with what Steve writes.

[moonrambler]

Originally Posted by praxis22

Now is not a good time to try to get into something new, better to find a safe, boring job with a regular pay check, bunker down and sit it out. Personally I would think a good time to get into something new would be in 3-5 years when employment picks back up again.

Well, one problem with this is there's really no such thing as a 'safe' job anymore.

[James81]

Originally Posted by praxis22

Now is not a good time to try to get into something new, better to find a safe, boring job with a regular pay check, bunker down and sit it out. Personally I would think a good time to get into something new would be in 3-5 years when employment picks back up again.

Now is the best time to start something new. Why? Because if you can survive and thrive in a recession, then you know you can survive anytime. People are given a golden opportunity at this time to have their business tested right off the bat (instead of enjoying success when things "pick up" and then suddenly having their legs ripped out from under them when they fail in a recession).

Now is the time to create a business that's built on a solid foundation.

[James81]

In my life, I've discovered that most truths tend to go against the grain of what's commonly accepted as truth.

For example, a few years ago everybody and their brother was buying a house. Why? Because it was easy to do so. Now what is happening? They are losing their homes and they can't sell them because they bought it at an inflated price. The result? What everybody else was doing was not what the smart thing to do really was.

NOW is the chance of a lifetime to buy a house. But very few people are.

Same with the stock market. It's this moment, when chips are down, that it's such a fantastically opportunity filled moment to invest because the potential of that investment is so much greater geared towards success.

And the same thing with business. Right now is the moment to act for that same reason...BECAUSE EVERYBODY ELSE IS SCARED TO ACT.

[MidasGirl]

Originally Posted by praxis22

Now is not a good time to try to get into something new, better to find a safe, boring job with a regular pay check, bunker down and sit it out. Personally I would think a good time to get into something new would be in 3-5 years when employment picks back up again.

Stinking thinking. Now is a good time, when everyone else is thinking it's not a good time. If you always go with the crowd, you'll always go down with them. But I did notice you are OK with boring. Luckily, people like you are good to have around cuz you get out of the way for the risk takers that just don't settle for 'boring but safe'. If everybody waited for things to turn around, they wouldn't.

[cacheborn]

Have you noticed how many people always complain how their job sucks and how they want to do something else? It seems that majority of working class fall into this category. And that's why weekends/holidays seem like a heavenly prospect.

In some countries, some jobs, like those in the government, are 'secure' in the sense that you cannot be fired very easily. And this is one of the main reasons why people opt for those. I have seen so many getting a job in their young age and sticking it out till retirement, no matter how much the job stinks. Sadly, it becomes a way of life. They cannot imagine leaving a fixed income job and trying something else.

[Dimond]

Originally Posted by James81

In my life, I've discovered that most truths tend to go against the grain of what's commonly accepted as truth. For example, a few years ago everybody and their brother was buying a house. Why? Because it was easy to do so. Now what is happening? They are losing their homes and they can't sell them because they bought it at an inflated price. The result? What everybody else was doing was not what the smart thing to do really was. And the same thing with business. Right now is the moment to act for that same reason...BECAUSE EVERYBODY ELSE IS SCARED TO ACT.

I so agree about not following what everyone else is doing. We're brainwashed from the time we're born on how to do everything and what's right and wrong, etc. etc. I very briefly considered buying the last time I moved. I'm SO glad I listened to myself regarding this. While everyone has been dealing with debt, losing their home and other issues, I've been relieved not to have to deal with that. I am more free now than if I owned a place. I LOVE having my own business. I've had over 125 jobs (for survival) and hated them. I'm running my third (main) business and I can't imagine ever not working for only myself.

Originally Posted by cacheborn

Have you noticed how many people always complain how their job sucks and how they want to do something else? It seems that majority of working class fall into this category. And that's why weekends/holidays seem like a heavenly prospect.

I am the only person I know who is barely affected by weekends/holidays like others are. I often prefer weekdays, but pretty much everyday is just a day. You can make it great or not. Holidays can offer obstacles sometimes, but other than that, they're also just days.

Live a PASSIONATE, Meaningful Life IN EVERY area otherwise it's all pointless. Just surviving isn't good enough. Temporarily yes, long-term never.

[MidasGirl]

Originally Posted by cacheborn

Have you noticed how many people always complain how their job sucks and how they want to do something else? It seems that majority of working class fall into this category. And that's why weekends/holidays seem like a heavenly prospect.

Yup. TGIF and ICBTIM (i can't believe tomorrow is monday) = pathetic statements.

[carenkh]

Originally Posted by praxis22

Now is not a good time to try to get into something new, better to find a safe, boring job with a regular pay check, bunker down and sit it out. Personally I would think a good time to get into something new would be in 3-5 years when employment picks back up again.

You will get a lot out of reading this article by Steve.

[freddy]

Originally Posted by Acting Like Godot

Exactly. And the same question needs to be asked of the self-employed. Such as those who think that they can just set up their own school and make $380,000.

Remember who first came up with that figure? The "pro-self-employed" camp. How come at that point you didn't chip in to ask: "So how many, percentage wise, are there in that non-fixed income group?"

I hope you understand that I am not advocating the salaried job as a superior choice over the self-employment option. I am not saying that either is necessarily superior to the other.

But some people here are saying that the self-employment option is superior to the salaried job, and their rationale just seems to be rather flawed to me (for all the reasons that I've pointed out).

I think that it would be better to say that whether the salaried job or the self-employment option is better, depends very much on your individual circumstances, including your skills, knowledge, education, capital, personal interests etc etc.

To hold out the self-employment option as automatically superior is just .... well, it seems very foolish to me.

Being self employed has many draw backs. And I have played around with the idea of going to work for a larger company doing similar type work. The biggest difference I see is the take home pay. You end up trading out your time for less money. So you make a choice of doing something you really like to do, verses making more money. Currently I’m sitting on the fence, hoping when it's the right time, life pushes me one way or the other. I could make a good argument for either job. But I’m finding as I get older, the window of opportunity starts to shut both job doors a little more.
So I think depending on your background and everything ALG listed in his above post. Steve’s blog is a bit self serving.

[James81]

I'm only saddened that we can't ever know how much Steve's book has brought in. I've always been curious how well self help/personal development books bring in.

[Jasper]

I liked the essence of the article, especially the beginning where a strong point is made that secure really isn't that secure.

Part of the article gave me the feeling that you feel that people who are on a fixed income must be terrible at managing money, and that if you make a flexible income, that doesn't matter, because you can just earn more if you get into a tight spot...

I think all those people complaining about not having enough money would probably feel that same way (most probably worse) if they were self-employed. I don't see the necessary link. If you spend more than you earn, or close to it, yeah unexpected expenses will suck.

For me personally, I make a fixed income, and although I do very much agree with the beginning part of the article, about being subject to another's whims, or not being able to earn more if you would need it, I feel as if the other side of the coin is not being addressed equally.

I earn a very nice salary. More than I can spend, so for me I've come to a point where I have money left over every month. So that means, I don't think (or worry) about it anymore. I just focus on doing what I love and making sure I get paid for my added value. The fact that one month I might add more value than I get paid and the other month perhaps a little less, doesn't bother me that much.
Money isn't the point of my life nor of my work. I passed the "i must survive" mark a while ago and now it's just more of the same.
I might not be a millionaire and I might not drive 3 cars at the same time, but I don't care. I care for feeling good and creating. And once you are able to easily survive, I don't care how I am paid.

Do I think I'll be self employed in the (near) future, probably. Does that make things easier? Not necissarily. Does it mean I'll have more to spend? I'm not sure yet.

There is good sides and bad sides to having a job, and also for being self-employed. To being on a fixed income and being on a variable income.

I think a lot of the "problems" you suggest have to do with money management in general and with desire for stuff.
And perhaps with the "spend it before you earn it" idea that seemed so normal just a few months ago.

Keep postin'!

[cacheborn]

Originally Posted by MidasGirl

Yup. TGIF and ICBTIM (i can't believe tomorrow is monday) = pathetic statements.

One of my favorite shows is Inside the Actor's Studio by James Lipton. I remember the interview of Dustin Hoffman. He was so passionate about his work. And he said the same thing. keep trying out different things till you find what you love to do. After watching it you realize why he is so good at what he does. Very inspirational interview.

[Leondegrance]

Originally Posted by Brickman

I picture a world in which everybody follows Steve's advice. Now we move twenty five years into the future, roads in disarray, bridges and infrastructure falling apart. And everyone sitting around with extended bellies and flies all over them like the people I see on Sunday morning TV. And all because we followed Steve's advice, and nobody wanted to be a sucker and work for a living.

I believe Steve intended for the idea to only exist within the monetary system. If we were to abolish the monetary system altogether, people would gradually return to farming their own land in order to attain sustainable living for themselves and their families. What you're describing sounds more like the initial chaos that would ensue within metropolitan areas following a sudden collapse of said system, because that is where most people who've come to depend solely on money and government for their basic survival needs reside.

A lot of Steve's articles are only relevant so long as the monetary system remains in place - be it generating passive income, turning what you love into a profitable business, manifesting wealth, etc... and I think he is fully aware of this.

Just my thought on the matter.

____________
Learn by doing

[ericabiz]

Originally Posted by Angela

Except that my hypnosis studio is also my home, so it would take something else, too.

Sorry...lost you there. What else would it take?

I work from home and we have a housekeeper come in every 2 weeks. She spends 5-6 hours cleaning our house (incl. office) for $110.00! It's one of the best business investments I make.

Maybe you are talking about something else it would take. Please fill in the blanks.

-Erica

[ericabiz]

This post encouraged me to send some tax documents I'd been putting off to my accountant with a note that said "I will pay you to deal with these."

He's happy to get paid; I am happy to not have to spend my time doing stupid tax work.

Interestingly, a strange synchronicity occurred. As soon as I made this decision, but before I had called him (I had it on my to-do list for this week), he called. Said, "Hey, I have your corporate 2008 taxes done. How are things going? Is there anything else I can help you with?"

He *never* calls. Thanks, LOA and the universe. Appreciated the endorsement of my decision!

I thanked him profusely for calling.

-Erica

[Ninja]

You're absolutely right, Steve. We need money, but a job may not be the best way to go about it. It could be a nice short-term solution (together with selling your stuff at dump prices or calling a shady loneshark who won't bother with checking your finances first), but long-term, it can bite you in the ass. I've seen this everywhere around me:

- My mother used to be a nurse, until she had a stroke. She can no longer do her job, so the cashflow has stopped as well.

- My father is a manager of a nursinghome that provides care to people in their own homes (not quite sure if I translated this right), but when his boss turned out to be a scammer, the whole company went belly-up and he was left in the dust, blinking and wondering what the **** just happened. He now has a new job and is LOVING it, but danger still lurks in the shadows.

- My father's new boss is an awesome guy and a jack-of-all-trades. He owns this carebusiness, but also a cleaningbusiness, a cateringcompany and lord knows what else. Unfortunately, they are not self-sufficient and he still needs to attent. His wife and daughters need to help out as well in the cleaningbusiness and there are times he has to operate on only 2 hours of sleep for 60 hours, just to keep everything running until he can afford to hire more managers like my dad.

I don't like any of the three scenarios above. My mother lost her income, because she could no longer do her work. My dad lost his, because the company he worked for went down the drain. He has a new job, but the same danger still exists. My father's boss thinks he owns business, but in my eyes, he just owns jobs. Sure, he can't get fired (except if you count bankrupty), and he doesn't have all his eggs in one basket, but at the expense of his time and health.

I will try to find a way to make money work for me, so I won't have to.

[Angela]

Originally Posted by ericabiz

Sorry...lost you there. What else would it take?

I work from home and we have a housekeeper come in every 2 weeks. She spends 5-6 hours cleaning our house (incl. office) for $110.00! It's one of the best business investments I make.

Maybe you are talking about something else it would take. Please fill in the blanks.

-Erica

I meant that it would take some very soft footed elves, or some heavy sedatives, for me to be able to sleep through cleaners coming in every night so I could wake up every morning to sparkling tidiness.

A periodic housekeeper might be a good idea, though! I was just saying that I miss that one aspect of working in an office -- coming in every morning and someone has tidied and cleaned and taken the trash out.

[kniyogi]

I am interested in a refutation of what Brickman says in reply to this blog post. If we take Steve's thesis to a logical conclusion, it means in a "perfectly conscious populace", there would not be anyone who wants to clean toilets, floors or pour concrete-- so who is going to take care of these necessary functions ? Or is the underlying thesis here that the human race will always be divided by "class" into -- the "smart conscious" people and the "intellectually challenged"/un-smart/un-conscious people ? If so, then this thesis should be made clear in the argument.

-KN

[praxis22]

Originally Posted by MidasGirl

Stinking thinking. Now is a good time, when everyone else is thinking it's not a good time. If you always go with the crowd, you'll always go down with them. But I did notice you are OK with boring. Luckily, people like you are good to have around cuz you get out of the way for the risk takers that just don't settle for 'boring but safe'. If everybody waited for things to turn around, they wouldn't.

This has nothing to do with being contrarian, more to do with "keeping your powder dry" so to speak. If you believe "the recovery" is here, then by all means go for it, I reckon you're mistaken and will regret it, but that's just me.

To my way of thinking if you can save for a while and not do anything stupid like putting any more money into the markets, then you'll have enough in a few years to either buy a house or engage a wealth manager to actually trade for you, etc. If money is what you love then now is a time to be cautious, the "paradox of thrift" be dammed

Can't say as I've ever been bored, though I may be boring, but I've never been a part of the crowd, or interested in making money. Seems to me that in world filled with as much information as this one, it would be a crime to waste time chasing paper when I could be learning instead.

For instance, the more I learn of risk, (and this book is probably the best on the subject: Amazon.com: Against the Gods: The Remarkable Story of Risk (0723812295630): Peter L. Bernstein: Books) the more I learn that it's never the things you see coming that keep you up at night. The best you can do when getting into something is ask yourself two questions, "do I know what I'm doing?" and "what's the worst that can happen?" Provided you don't know what you're doing and you're happy if the worst should happen then you're good to go. Everything else you deal with as it happens. It doesn't matter that you get knocked down, what matters is that you get back up again. The moment you decide to stay down it's over.

Wired 8.04: The Dumbass, The Daytrader, and the New Democracy
Anthony Elgindy - Wikipedia, the free encyclopedia

At the moment, going into the business end of the worst recession since the first world war, "safe but boring" has much to recommend it. Safe but boring will keep you alive and solvent. Just like the man with running shoes saying to the bloke next to him, "I don't have to out run the tiger, I just have to out run you" All you need to do at the moment is remain standing, once the dust settles then to the victor go the spoils. You can see a vivid demonstration of this with the remaining large commercial banks, (because there are no more investment banks) the ones that didn't fail get to carve up the business between them and with less competition they can charge higher fees. Financial Darwinism writ large.

The key to this is to understand your position in the great scheme of things, (nobody) It is enough to see far enough ahead to get out of the way of the irresistible force, it will decimate everything in it's path, all you need to be is one step outside of that.

If you have to look in the mirror and do the "rah rah" thing in the morning, then I hope it's working out for you. I maintain a simple faith, and make the rest up as I go along, for everything else there is the desiderata.

YMMV

[Savage]

Originally Posted by kniyogi

I am interested in a refutation of what Brickman says in reply to this blog post. If we take Steve's thesis to a logical conclusion, it means in a "perfectly conscious populace", there would not be anyone who wants to clean toilets, floors or pour concrete-- so who is going to take care of these necessary functions ? Or is the underlying thesis here that the human race will always be divided by "class" into -- the "smart conscious" people and the "intellectually challenged"/un-smart/un-conscious people ? If so, then this thesis should be made clear in the argument.

-KN

Already addressed that issue in a 2006 article:
If Everyone Awakens Will We All Starve?

So RTFB.

[MidasGirl]

Originally Posted by praxis22

This has nothing to do with being contrarian, more to do with "keeping your powder dry" so to speak. If you believe "the recovery" is here, then by all means go for it, I reckon you're mistaken and will regret it, but that's just me.


YMMV

I don't know if the recovery is here or not. But that is none of my concern. I don't depend on the government to come and save me. YMMV

[praxis22]

Originally Posted by MidasGirl

I don't know if the recovery is here or not. But that is none of my concern. I don't depend on the government to come and save me. YMMV

If you intend to profit from it, then how can it be none of your concern? Why else are you talking about risk?